The High Court today granted the Australian Competition and Consumer Commission's special leave application to appeal in its unconscionable conduct case against CG Berbatis Holdings Pty Ltd & others in relation to conduct by the landlords at the Farrington Fayre Shopping Centre.
The central issue to the ACCC's appeal is the appropriate application, in the commercial context, of equitable principles of unconscionability for the purposes of section 51AA of the Trade Practices Act 1974.
The ACCC instituted proceedings in this matter in April 1998 in the Federal Court, Perth against the landlords of the shopping centre formerly known as Farrington Fayre namely CG Berbatis Holdings Pty Ltd, GPA Pty Ltd and P&G Investments Pty Ltd (the landlords). The ACCC alleged that the landlords had dealt with their small business tenants, Mr and Mrs Roberts, Mr and Mrs Ternent and Mr and Mrs Raitt, in an unconscionable manner in contravention of section 51AA of the TPA. Section 51AA prohibits unconscionable conduct in commercial transactions.
On 20 September 2000 declarations were made by the Federal Court that the landlords had engaged in unconscionable conduct in contravention of section 51AA of the TPA towards Mr and Mrs Roberts and that Mr George Atzemis, Mr Con Berbatis and Ms Anna Maria Heijne, and their representative Brian Sullivan Property Pty Ltd and its director Mr Brian Sullivan had been directly or indirectly knowingly concerned in or party to the conduct. The allegations against Mr and Mrs Ternent and Mr and Mrs Raitt were dismissed.
The landlords appealed, with the ACCC cross-appealing, and on 27 June 2001 the Full Federal Court upheld the appeal by CG Berbatis Holdings Pty Ltd and dismissed the ACCC's cross appeal. The ACCC then sought leave to appeal to the High Court
The ACCC submitted that special leave should be granted in this case because the interpretation of how equitable principles of unconscionability (which evolve over time) should be applied in trade or commerce pursuant to section 51AA of the Act, is a matter of public importance. It has particular significance to retail and commercial tenancies and small businesses across Australia.
"There are currently six matters before the High Court involving the ACCC and the Trade Practices Act", ACCC Chairmen, Professor Allan Fels, said today. "This is a demonstration of how seriously the High Court takes the application of the Act to business and the ACCC looks forward to having the application of section 51AA of the Act clarified by the High Court".