This article is from the Australian Property Journal archive
THE corporate watchdog has filed an appeal with the Federal Court, arguing a trial judge should have found Quantum Housing Group engaged in unconscionable conduct in its dealings with investors participating in the National Rental Affordability Scheme.
Last month, the Federal Court slapped Quantum Housing with a $700,000 fine for sending a series of misleading letters and emails to at least 450 investors who had rental dwellings in the NRAS.
The Court also ordered Quantum’s director, Cheryl Howe to pay $50,000 in penalties and disqualified her from managing a corporation for three years.
The Australian Competition and Consumer Commission had also alleged that the conduct engaged in by Quantum was unconscionable conduct. However, the Court decided against this, concluding that the admitted conduct did not depend on exploiting vulnerability on the part of investors.
Between February 2017 and July 2018, Quantum was alleged to have pressured the investors to terminate their arrangements with their existing property managers and instead use property managers approved or recommended by Quantum.
The Western Australia based company failed to tell investors that it had commercial links with the property managers it recommended, and Quantum also told some investors that their existing property manager had not properly managed their property’s compliance with the NRAS, when this was not true.
“We are appealing this decision in order to seek clarity from the Full Federal Court on whether the Australian Consumer Law requires there to be special disadvantage on the part of the target or victim of alleged unconscionable conduct for that conduct to be unconscionable in breach of the ACL,” ACCC chair Rod Sims said yesterday.
“The ACCC’s view is that Parliament did not intend that it would be necessary to establish special disadvantage or any taking advantage of a special disadvantage for conduct to be unconscionable and in breach of the Australian Consumer Law.”
