Australia Federal Court rejects appeal made by Competition and Consumer Commission alleging false representations by telecom company

Federal Court of Australia: Wigney, O’Bryan and Jackson JJ rejected an appeal made by the Australian Competition and Consumer Commission (ACCC) against a telecom company, holding that its conduct was not misleading and, therefore, not violative of the Australian Consumer Law (ACL).

The respondent is a retailer of mobile, internet and telephone services which it supplied to customers on a prepaid basis. The ACCC alleged that the respondent’s description of the prepayment on its website and brochures involved misleading conduct or false or misleading representations violative of the ACL. The ACCC allegations concern the Prepayment Representations, which was challenged for falsely representing that if the prepayment is not used by the customer on the cancellation of the service, it would be returned to them, when in fact it was being forfeited by the respondent. The primary judge had dismissed the ACCC’s case, and it appealed against that decision in the present appeal.

J Kirk SC with E Bennett served as counsel for the appellant, while B Walker SC with V Brigden represented the respondent.

The Court observed that “the central question is whether the impugned conduct, viewed as a whole, has a sufficient tendency to lead a person exposed to the conduct into error (that is, to form an erroneous assumption or conclusion about some fact or matter).” The Court agreed with the reasoning of the primary judge in holding that the Prepayment Terms disclose that unused prepayment will be forfeited to the respondent on cancellation, and such representations were, therefore, not misleading or false. The word ‘Prepayment’ in itself is silent on how any balance would be treated at the end of the contract.

The Bench rejected the ACCC’s characterisation of the Prepayments Terms as a “long, wordy, complex and dull clause,”  holding that it contains a clear statement that the prepayment will be forfeited to TPG when the customer cancels the service, contradicting the central tenet of the ACCC’s case. Since the pages of the respondent’s website and brochure relied upon by the ACCC did not make any misleading representations, the Court dismissed the appeal with costs. [Australian Competition and Consumer Commission v TPG Internet Pty Ltd., [2020] FCAFC 130, decided on 30-07-2020]

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