Federal Court judge Justice Angus Stewart has dismissed an attempt by Fuji Xerox Australia to set aside a lawsuit launched by corporate watchdog the Australian Competition & Consumer Commission (ACCC) over the printing company’s alleged unfair contracts with small business customers.
In October 2020, the ACCC began Federal Court proceedings against Fuji Xerox Australia alleging that nine types of its standard form small business contracts contained 173 unfair contract terms, including automatic renewal terms, excessive exit fees and unilateral prices increases. The terms have been used in contracts between Fuji Xerox and its small business customers for the supply of printing goods and services and technical assistance since at least October 2018, the commission said.
“Fuji’s contract terms came to the ACCC’s attention via complaints from small businesses, including a complaint from the Australian Small Business and Family Enterprise Ombudsman, concerning standard form contracts used across the printing industry more generally,” said the ACCC.
Fuji Xerox has denied the allegations and argued in Federal Court that the lawsuit should be dismissed. As part of its evidence, Fuji Xerox Australia solicitor Mr Wilks told the court:
“There are approximately 23,500 current contracts that have been entered into by FX and customers that are based on, or negotiated from, the template contracts referred to in the amended originating application. Many of the customers will have entered into more than one contract with FX.
“FX does not know which of the existing contracts are “small business contracts” within the meaning of the relevant provisions. That is because FX does not classify, and has not in the past had a process of classifying, any given customer as a small business or otherwise at the time of entering into or renewing a contract with that customer. FX does not make enquiries about, or prepare or maintain records of, how many persons a customer employs at the time of contracting or the time of any renewal.
“Also, FX does not have a ready means of determining which of the existing contracts are “standard form contracts” within the meaning of the relevant provisions. FX does not classify, and has not in the past had a process of classifying, individual contracts as standard form contracts or otherwise. Also, FX does not keep records going specifically to the question of whether an individual customer has been given an effective opportunity to negotiate terms or whether an individual customer did in fact negotiate terms different from those in the template documents.
“FX considers it likely given the breadth of the customer base, the number of contracts entered into and the variety of circumstances in which contracts are entered into that each of the versions of the template documents at issue would have been used as a basis for concluding some contracts with customers that, at the time the contract was entered into, employed fewer than 20 employees, and that at least some of those contracts were standard form contracts as defined.”
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| The Honourable Justice Angus Stewart Federal Court of Australia |
Justice Stewart’s ruling, handed down in Federal Court on Wednesday, states: “The respondents’ application for summary dismissal is dismissed with costs":
Consumer Law ; Practice and Procedure
Australian Competition and Consumer Commission v Fuji Xerox Australia Pty Ltd [2021] FCA 153
CONSUMER LAW - unfair contract terms in Pt 2-3 of the Australian Consumer Law - whether finding that terms are unfair is possible without identifying particular contracts between identified parties - whether declaratory and injunctive relief in relation to unfair terms finding is possible or permissible in the absence of findings that the contracts are small business contracts and standard form contracts PRACTICE AND PROCEDURE - application by respondents for summary dismissal - whether applicants have no reasonable prospect of successfully prosecuting the proceeding - where applicants seek declarations and injunctions concerning the use by the respondents of template forms of contract said to be "small business contracts" and "standard form contracts" containing "unfair terms" as defined in Pt 2-3 of the Australian Consumer Law - where the contracts in question have not been identified - whether there is a real and not a hypothetical or theoretical question - whether there is a "matter" as required by s 39B(1A)(c) of the Judiciary Act 1903 (Cth) to enliven the jurisdiction of the Court - whether s 78B of the Judiciary Act 1903 (Cth) enlivened - application dismissed with costs
03 MAR 2021 | STEWART J
The full judgement can be found here.
The case will now continue in Federal Court, with the matter listed for further case management on 21 April 2021.
