This book is only available in PDF format 
Published: 8 August, 2005
Pages: 116

Introduction

Consumer and competition law in New Zealand has undergone comprehensive reform over the past two decades. This process of review has taken place for a number of reasons. One has been to reflect and adapt to the changing nature of markets and technology in the modern era.

The traditional common law regime based on contractual remedies was developed during a time when most trade took place in local markets. The goods were more basic and easily understood, and the merchants and buyers knew each other within a community in which reputation was important. These provided natural controls against misleading conduct or a failure on the part of the supplier to address problems with goods and services.

As the complexity of modern goods and services has increased, so has the gulf between the knowledge of the consumer and that of the supplier. For example, most consumers are now at a significant disadvantage when trying to assess the comparative merits of highly technical electronic goods. Consumers may also purchase goods from a range of suppliers that they may never come in contact with (national and global markets have particularly developed with the advent of the internet and sites such as Trade Me). Competition and the profits at stake have also increased in these modern markets, changing the incentives for business behaviour.

During this process of change in the way people do business, legislation has been introduced to provide protections to the consumer. Growing international trade and the desire to create closer economic relations with trading partners have also influenced the content of those reforms.

In this booklet we examine how some key pieces of trade practices legislation now impact on traders and providers of goods and services in New Zealand. The focus is primarily on the impact of the Fair Trading Act 1986 (the “FTA”) and the Consumer Guarantees Act 1993 (the “CGA”). The paper is set out in the following sections:

• Introduction: This part contains a discussion of the background to the FTA and its underlying policies, an overview of its structure, and a discussion of its relationship with the Australian Trade Practices Act.
• When is someone “in trade”: Part 1 contains an analysis of the requirements that the defendant must be “in trade”
• Misleading and deceptive conduct: Part 2 addresses the central issue of what constitutes misleading and deceptive conduct for the purposes of the FTA.
• Strict liability: The strict liability nature of the provisions of the FTA is examined in Part 3.
• Unfair practices: Part 4 contains an overview of other sections of the FTA prohibiting unfair practices, and controlling consumer information and product safety.
• Jurisdiction: Part 5 addresses the jurisdiction of the courts and tribunals to hear and determine FTA disputes and also contains a detailed analysis of when the FTA will apply to conduct with an overseas element.
• Relationship with other statutes: In Part 6 there is a discussion of the relationship between the FTA and other key statutes including the Contractual Remedies Act.
• Criminal enforcement: The criminal enforcement provisions of the FTA and the policies and methods of the Commerce Commission are addressed in Part 7.
• Civil remedies: Part 8 contains an overview of the civil remedies that are available under the FTA and how to handle issues of confidentiality when they arise.
• Defences: The defences to a criminal action under the FTA are discussed in Part 9 along with the conduit defence and limitation issues.
• The CGA: The rights and obligations set out in the CGA are covered in Part 10.
• Advertising Standards: Part 11 contains a discussion of the role of the Advertising Standards Bureau and the Advertising Standards Complaints Board.