Forensic jousting, page-8

Volf

There is recent information on the Class Action at http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/single/2018/2018fca1219.

The link basically provided information that Maurice Blackburn would go down the path that I suspected that they would. However, the wording jolted me into considering a simple defence built around the fact that a contract provision can only be deemed to be "unfair" if it is considered not to be “reasonably necessary”.

Absence of a $1Buy provision in Radio Rentals' contracts is “reasonably necessary”, because it results in the contract retaining the status of a Consumer Lease, which vests ownership of the goods in Radio Rentals. Consequently, it facilitates recovery of the goods if leases are terminated before expiry. Recovering goods sold (not leased) would be difficult for Radio Rentals, because Section 50 of the National Credit Code prohibits taking a mortgage over essential household goods. Also, easy recovery of goods is important, because about 40% of Rent Try $1Buy leases are terminated early. Easy recovery of those goods to be re-contracted to new lessees is a material expense factor, and hence avoiding the transactions becoming sale of goods by instalments is “reasonably necessary”.

What is “reasonably necessary” is the factor that swung the ANZ class action in ANZ's favour. For me, the wonder is that years of litigation and millions of dollars are going to be spent on a point that could be resolved by a competent judge in a few minutes, provided he had some idea of recovery metrics. That is, the number of customers and leases for a typical year, and what percentage of the goods were recovered. This should make it obvious that Radio Rentals is unlike a typical retailer who routinely needs to recover a very small percentage of the total sales.