Domaine Homes (NSW) Pty Ltd has today undertaken to the Federal Court, without admission of liability, to refund 260 new home buyers approximately $1.9 million of Goods and Services Tax payments plus interest following Australian Competition and Consumer Commission legal action, ACCC Chairman, Professor Allan Fels, announced today.
"The average refund for each consumer is approximately $7,300", he said.
"The ACCC commenced an investigation into Domaine's implementation of the GST in 2000 after receiving a number of complaints from consumers in relation to the promotion of Domaine's 'Guaranteed Fixed Price' contracts in 1999 and the subsequent charging of additional GST payments on those contracts.
"When the ACCC commenced its investigation it identified a total of 313 Domaine customers whom it was concerned had been incorrectly charged GST above the fixed contract price. During the course of its investigation, Domaine refunded GST to 22 of these customers, but did not agree to refund the remaining 291 customers.
"On 11 July 2001, the ACCC instituted legal proceedings against Domaine, Mr Robert Grant, the Managing Director of Domaine, and Mr Terry Sofos, Contracts Manager employed by Domaine, seeking redress for the remaining 291 customers. The ACCC alleged in its action that Domaine had breached sections 51AB, 52, and 53(e) of the Trade Practices Act. The ACCC took a representative action on behalf of seven Domaine customers seeking refunds and compensation, and injunctions requiring Domaine to refund the remaining customers the GST which they had paid.
"Under the terms of settlement, Domaine will refund approximately $1.9 million of GST with interest at 7.25 per cent, calculated from the date the GST was paid to Domaine by the customers. The settlement establishes a regime whereby these refunds will be paid to the customers over the next six weeks.
"Domaine has also agreed to pay:
- an additional $5,000 to each of the seven customers on whose behalf the ACCC took the representative action to reimburse them for other potential losses; and
- $150,000 as a contribution towards the ACCC's legal costs.
"The ACCC is satisfied that this settlement is a very positive outcome for Domaine's customers as it will ensure that they obtain their refunds, with interest, within the next six weeks, rather than having to wait until a contested hearing which was not likely to occur until the end of 2002".