Why the Days of being Sprung with a 10% Surcharge at the End of your Meal may be Over By Trish Cassimatis & David McCrostie | November 2010 Area of Expertise | Commercial Disputes & Insolvency
Summary In Australian Competition and Consumer Commission v Gourmet Goody’s Family Restaurant Pty Ltd; Australian Competition and Consumer Commission v Helmos Enterprises (NSW) Pty Ltd Ltd, [2010] FCA 1216, the Federal Court of Australia held that Steersons Steakhouse and Georges Bar and Grill had contravened the Trade Practices Act 1974 (Cth) by failing to identify in a prominent way and as a single figure, the single price for menu items.
Who Does This Impact? Every supplier of goods or services, particularly restaurants and their patrons as the decision impacts on the way in which dishes are routinely priced on restaurant menus.
What Action Should Be Taken? Suppliers must be clear in the way they price their goods or services. A single price must be easily identifiable and prominently displayed on the goods or services provided. If different prices are being charged for certain days of the week, the prices must be still be prominently displayed and as a single figure and price.
Facts Steersons Steakhouse and Georges Bar and Grill stated in small print at the bottom of their menus that a 10% surcharge applied on Sundays and public holidays. It was alleged by the ACCC that the restaurants failed to identify in a prominent way and as a single figure, the single price for menu items and were thereby in contravention of section 53C of the Trade Practices Act (Cth).
Law Section 53C(1) of the Trade Practices Act 1974 (Cth) provides that: A corporation must not, in trade or commerce, in connection with: (a) the supply or possible supply of goods or services to a person...make a representation with respect to an amount that, if paid, would constitute a part of the consideration for the supply of the goods or services unless the corporation also: (b) specifies, in a prominent way and as a single figure, the single price for the goods or services; ...
Declarations The ACCC’s applications to the Court were fast track applications because the restaurants largely admitted the allegations against them.
TURKSLEGAL
TUR K A L E R T
1
Why the Days of being Sprung with a 10% Surcharge at the End of your Meal may be Over by Trish Cassimatis & David McCrostie
The Court declared that the prominent Sydney restaurants had contravened section 53C of the Trade Practices Act in the following ways: •
by publishing menus that stated the price of menu items but qualified that price in small print at the bottom of the menus that a 10% surcharge applied to Sundays and public holidays; and
•
by publishing menus on Sundays and public holidays without specifying, in a prominent way, and as a single figure, the single price of menu items on Sundays and public holidays.
Pecuniary Penalties For the first time, the Federal Court made pecuniary penalty orders pursuant to section 76E of the Trade Practices Act. Steersons Steakhouse and Georges Bar and Grill were ordered to each pay pecuniary penalties in the sum of $13,200 plus $1,500 towards the ACCC’s costs. Whilst the pecuniary penalties ordered may appear low given the maximum pecuniary penalty is $1.1 million, these figures were agreed between the parties as a suitable pecuniary penalty as the restaurants rectified their menus within two weeks of receiving infringement notices from the ACCC and the restaurants accepted their culpability at an early stage. Further, the restaurants were restrained for five years from publishing and supplying menus to customers on Sundays and public holidays without specifying, in a prominent way and as a single figure, the single price of goods offered on these days.
For more information, please contact: Trish Cassimatis
David McCrostie
Lawyer T: 02 8257 5783 trish.cassimatis@turkslegal.com.au
Partner T: 02 8257 5711 david.mccrostie@turkslegal.com.au
Sydney | Level 29, Angel Place, 123 Pitt Street, Sydney, NSW 2000 | T: 02 8257 5700 | F: 02 9239 0922 Melbourne | Level 10 (North Tower) 459 Collins Street , Melbourne, VIC 3000 | T: 03 8600 5000 | F: 03 8600 5099 Insurance & Financial Services | Commercial Disputes | Workers Compensation | Business & Property
www.turkslegal.com.au
2
This Tur kAler t is cur rent at iits ts d date ate o off p public u b l i c at ation. i o n . Wh While i l e eve everr y c aare re h has as be een e n ttak a k en e n iin n tthe he p preparation re p a rat i o n of o f tthis h i s Tu Turr kkAler Aler t it do es not constitute legal advice and a n d should s h o u l d not n o t b e relied re l i e d up u p on o n for fo r this t h i s pur p u r p ose. o s e. Sp ecific e c i f i c legal l e g a l advice a dv i ce should s h o u l d b e sought s o u g ht on o n par p ar ticular matters. Tur ksLegal do es not ac accept ce p t re resp spo onsibilit n s i b i l i t y fo forr aany ny eerr ro rors r s iin n o orr o om m iissions s s i o n s ffrom ro m tthis h i s Tu Turr kkAler Al e r tt.. Th This i s Tu Turr kkAler Al e r t iiss co copyr py r iight ght and no par t may b e repro duced in a ny fo r m w i t h o u t t h e p e r m i s s i o n o f Tu r k s Le g a l . Fo r a ny e n q u i r i e s, p l e a s e co nt a c t t h e a u t h o r o f this Tur kAler t. © Tu r k s Le g a l 2 01 0