The Australian Competition and Consumer Commission has instituted proceedings in the Federal Court, Perth against the Real Estate Institute of Western Australia Incorporated (REIWA), its Executive Director, Michael Griffith and various other parties.
The ACCC has taken action in relation to two categories of conduct. Price fixing of real estate training course The ACCC alleges that in June and July 1997, REIWA distributed an agreement to five colleges of TAFE in Western Australia in relation to a training course known as Certificate III in Property Services. The agreement contained a clause by which the colleges agreed not to provide the training course to students at a fee less than $780.
The agreement was entered into with two colleges, South West Regional College of TAFE and West Coast College of TAFE (then known as North Metropolitan College of TAFE). The ACCC alleges that in distributing and entering into the agreement, REIWA have contravened the price fixing provisions of the Trade Practices Act. The ACCC claims that the agreement had the purpose or effect of fixing the price students would pay for the training course.
The ACCC also alleges that the two colleges had entered into illegal agreements and that REIWA's Executive Director, Michael Griffith and REIWA's legal adviser, Conal O'Toole were involved in the agreements. The ACCC is seeking orders against all parties including declarations, findings of fact, injunctions, costs and orders requiring the publishing of public notices and the institution of trade practices compliance programs. The ACCC is also seeking penalties against REIWA, Mr Griffith and Mr O'Toole.
REIWA Rules and Rules of Practice The ACCC also alleges that certain of the REIWA Rules and Rules of Practice for member real estate agents are anticompetitive. While REIWA has taken action to address some of the matters of concern to the ACCC, the ACCC believes that there have been serious contraventions of the law which ought to put before the Court.
The ACCC believes that the REIWA Rules and Rules of Practice which the ACCC has raised in the Court proceedings, had the effect of: requiring that where any one member of a franchise group wishes to become a REIWA member, all franchisees of that group were also required to be members; preventing member real estate agents from approaching vendors who are dealing exclusively with another agent; and preventing member real estate agents from offering certain incentives or inducements to consumers.
The ACCC alleges that these rules contravene section 45 of the Act which prohibits agreements which have the purpose or effect of substantially lessening competition in a market. The ACCC is seeking orders, amongst others, preventing REIWA and Mr Griffith from giving effect to the rules in question, requiring REIWA and Mr Griffith to publish public notices and requiring REIWA to implement a trade practices compliance program.
The ACCC is also seeking penalties against REIWA and Mr Griffith. A directions hearing for both matters has been scheduled for 9.15am on 23 July 1998.