Compliance Requirements For A Sea Food Restaurant In Australia

Laws applicable to the business of a restaurant

Question:

Discuss about the business law in Australia.
 

My family and I run a sea food restaurant and now fish to call it the "Catch of the Day." There are various compliances that are required to be made.

The main issue in the given situation is: (i) Under the Australian Law what are different compliances that have to be met for a restaurant business?

For any business, it is necessary that it abides by the laws and compliances that regulate it. The compliance procedure in the first place requires the identification of the law and regulations that apply to the business and areas where there is a risk that a breach of these regulations may occur.  The various laws those are applicable to the business of restaurant which are; (i) contract law; (ii) fair trading, consumer protection and trade practice; (iii) anti-discriminatory, employment and privacy; (iv) licensing, industry code and standards.

There are regulatory compliances which are imposed externally by law and the enforcement and administration of which are done by government, industry association, regulator and any other such bodies that are outside the company. The company other then this has to comply with its own internal management rules and contract. There are various proactive investigations and fining which is made due to the breach of compliances by the Australian Securities and Invest Commission (ASIC) and Australian Competition Commission (ACC).

Compliance by the restaurant shall ensure that there is the minimization of risk of breaking the law, and the corresponding penalty that is attached to it can be avoided.  There is heavy fine that is paid by the organizations which ignore or avoid compliance. Two examples where the company failed to comply with the regulations are (i) In the case ACCC v Singtel Optus Pty. Ltd. (ACCC v Singtel Optus Pty. Ltd, [2011]) The court opined that the campaign "Think Big" in relation to broad band, and internet services that were launched by it were in nature misleading, and thus a fine was imposed on them; and (ii) in the case of ACCC v. Visy (ACCC v Visy Industries Holdings Pty Limited, [2007]) the court had opined that though the company’s corporate culture was in compliance with the Trade Practice Act (now Competition and Consumer Act 2010) however the Trade Practice could have been in Sanskrit for all the notice that was given to it.

one of the compliance was under the Sale of Goods Act, and Australian Consumer Law, and the other was under the Competition and Consumer Act 2010. Thus, the restaurant has to ensure that there is no breach of compliance and one of the breaches that need to be avoided is misleading or deceptive conduct under Sale of Goods Act and Australian Consumer Law.

In the case of ACCC v. Coles Supermarkets Australia Pty Ltd. the federal court had opined that the bread that the Coles were selling as freshly baked was actually par-baked outside the Supermarket and frozen, and some of it was even done abroad. However, the bread was advertised as "Baked Today, Sold Today" and "Freshly Baked in Store," this was considered to be misleading, and the company was fine (Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd, [2015]).

External and internal regulatory compliances

Thus to ensure that such cost is avoided toward payment of penalty there should be compliance to both the Sale of Goods Act and the Australian Consumer Law.

Establishment of the business in the first place requires the business name's registration with ASCI, industrial agreements, and tax registration. Thus, the name of the restaurant has to be registered in the first place. The brand name of the company can be registered as a trademark as well though the same is not compulsory there is significant protection which is provided by the registration of the name of the business.

There is exclusive right which the business obtains at the registration as the trademark. Under the classification of 45 numbers of services restaurant, the business can be registered under 43 classifications. Thus in order to ensure that there is no other business in the Australia with the same name only registration of the company is sufficient however trademark ensures the exclusive right to the business.

Another compliance that needs to be ensured is with respect to property, at the time of buying or leasing a property ascertaining the fixtures and chattels of the property need to be determined. Though it may seem to be an easy determination however the same can get very complicated for the court to decide in the case of Australian Provincial Assurance Co Ltd v Coroneo(Australian Provincial Assurance Co Ltd v Coroneo, [2016]) the New South Wales Supreme Court opined with respect to the seats that were bolted to the floor whether they were fixtures or chattels. It was ultimately held by the court that these were not fixtures but chattels, and test that was laid down was that determination was whether the fixture was for a purpose that is permanent or temporary. 

There is the business of pizza that Manny and Bella own in the name of Perfect Domino Pizza. The wanted a heavy duty oven which they wanted to buy from Tuscan. They made the manager of Tuscan know that they required an Oven that would bake thirty pizzas an hour and this they informed the manager. The manager informed Bella and Manny that the Tuscan XX will be able to fulfill this required. Manny and Bella even before receiving this order advertised it as the MB Oven for their restaurant. The after installation discovered that it was only 12 pizzas that the oven could deliver in an hour, and there was no reliability. There was the loss of the company profit due to this, and when they went to Tuscan, they refused to listen to them.

The issues that arise in this case are whether (i) there has been a breach under the Sale of Goods Act?, (ii) any misleading or deceptive conduct by the seller?; (iii) is there a case against Bella and Manny for (a) trademark infringement and (b) misleading conduct.

Solution

Various statutory obligations have been provided under the Australian Consumer Law, which has been imposed upon the supplier and manufacturer of goods with respect to advertising and marketing(Merrilees and Cotman, 1976), liability towards product, guarantee related to the quality and safety of the product. The guarantee consumer protection has been made available to the consumer who either purchase, lease or hire service or goods the cost of which is $40 000 or less or which the consumer has acquired for purposes that are for domestic, household or personal use (Anderman, 2007).

Examples of companies that failed to comply with regulations

The Section of the Australian Consumer Law prohibits the conduct that is either deceptive or misleading in nature. This section is designed for the protection of the rights of the consumer. When an individual makes another make an error through his conduct then it would be misleading or deceptive (Miller (2010) 241 CLR 357 at 368 [15] per French CJ and Kiefel JR Google Inc (2013) 249 CLR 435 at 465 [92] per Hayne J.).

Along with section 18, there is also a breach under section 29 for misleading or false representation for which Manny and Bella can sue.

There has been misrepresentation by the Company through its Manager stating that the oven could perform whereas in reality the oven was underperforming thus Manny and Bella would receive compensation for this misrepresentation as well.

There can also lie a case against Bella and Manny for misrepresentation as the oven that they bought from Tuscan XX was advertised by them as MB Oven.

It has been stated under the Sale of Goods Act that the purpose of which the goods have been brought it should be fit reasonably for it. Three essential requirements that are observed are (Merrilees and Cotman, 1976): (i) the buyer had informed the seller the particular purpose for which the good was being bought; (ii) the skill and judgment of the seller was relied upon, and (iii) the type of product is one which the seller supplies usually. Since Bella and Manny had already informed the manager of Tuscan there requirements and then placed reliance on the knowledge and skill. The ovens were a product that the store usually dealt it. Therefore, there has been a breach by the seller for the product's reasonable fitness (Jain, n.d.).

The Sale of Goods Act also further states that where the sale of goods has commenced post discussion with the seller, then it is required that the product should match the description. Even if there was an inspection of goods by the buyer, there is still a claim for damages that exists (Beale v. Taylor, [1967]). Also, it has been stated that there shall be a breach of the products merchantable quality and fitness when it is on the recommendation of the seller that the purchase of the product has been made. (David Jones v. Willis, [1934]).

The Trade Mark Act Section 17 (Anderson and Gallini, 1998) states that trade mark is a sign that a service of good uses to distinguish itself. The companies intellectual property right is protected the moment the name of the business is registered, and this provides a protection across Australia. Infringement of trademark would when a deceptively similar sign is used which is similar to the registered trademark of belonging to another with respect to goods that are similar or identical to each other (Banerji, 2011).

Manny and Bella have named their restaurant as "Perfect Domino Pizza", and this name has an uncanny similarity to the pizza giants "Dominoes" and both are selling products that are identical hence a case for breach of the trade mark can be bought against them.  

Reference

ACCC v Singtel Optus Pty. Ltd [2011]FCA 87.

ACCC v Visy Industries Holdings Pty Limited [2007]FCA 1617.

Anderman, S. (2007).The interface between intellectual property rights and competition policy. Singapore: IP Academy.

Anderson, R. and Gallini, N. (1998).Competition policy and intellectual property rights in the knowledge-based economy. Calgary: University of Calgary Press.

Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2015]FCA 330.

Australian Provincial Assurance Co Ltd v Coroneo [2016]38 SR (NSW) 700 a.

Banerji, M. (2011).Raising the bar: trade mark oppositions in Australia.Journal of Intellectual Property Law & Practice, 6(12), pp.850-852.

Beale v. Taylor [1967]1 WLR 1193 (Court of Appeal) Seller - BTC - 1110.

Corones, S. (2011). The Australian consumer law.Rozelle, N.S.W.: Thomson Reuters (Professional) Australia.

David Jones v. Willis [1934]HCA 47 - 52 CLR 110.

Intellectual property law.(2005). Commonwealth Law Bulletin, 31(4), pp.163-167.

Jain, S. (n.d.). Contracts of Sale: Terms, Conditions and Warranties with Special Reference to Sale of Goods Act, 1930. SSRN Electronic Journal.

Merrilees, B. and Cotman, N. (1976).An Economic Analysis of Consumer Protection Law.The Australian Quarterly, 48(1), p.79.

Miller, R. (2011). Miller's Australian Competition and Consumer Law annotated. Pyrmont, N.S.W.: Thomson Reuters (Professional) Australia.

Nottage, L. (2010). The New Australian Consumer Law: What About Consumer ADR?.QUT Law Review, 9(2).

Ventose, E. (2015). Patent protection for isolated genes in Australia.Journal of Intellectual Property Law & Practice, 10(3), pp.148-150.

YEUNG, K. (2005). Does the Australian Competition and Consumer Commission Engage in "Trial by Media"?*. Law Policy, 27(4), pp.549-577.