Westfield agrees to settle with ACCC

17 June 2004

Countries: Australia

Westfield Holdings has agreed with the ACCC to settle on a no-admissions basis a long-running litigation involving allegations of misleading and deceptive conduct and unconscionable conduct under the Trade Practices Act.

The dispute centred on a complaint by a retailer in one of Westfields Queensland shopping centres which was initially investigated by the ACCC in 1999. The retailer had alleged that misrepresentations had been made by Westfield executives during pre-lease negotiations. In March 1999 the ACCC notified Westfield in writing that it had fully investigated the matter and concluded that Westfield had not contravened any provision of the Trade Practices Act and did not intend to take the investigation further.

Despite this, the retailer proceeded with the claim before the Queensland Retail Shop Leases Tribunal.

In June 2001 Westfield and the retailer negotiated a compromise and, subject to a formal deed of release being signed, the proceedings were to be terminated.

Solicitors for Westfield submitted a deed of release to the solicitor for the retailer and after discussions a final deed was agreed upon.

In July 2001 the ACCC alleged the terms of the deed of release were intended to prevent any further investigation by the ACCC. Westfield disputed this given the company had fully co-operated with the ACCC in its earlier investigation and the compromise between the retailer and Westfield was agreed only after the ACCC had advised Westfield that it had completed its investigation.

This case prompted the Property Council of Australia, following consultation with the ACCC, to recommend a revised standard release clause to be used by its members in settling disputes with retailers. This has been used by Westfield for the past two years.

Throughout this matter Westfield denied it had breached the Trade Practices Act. Westfield maintained it had never intended to prevent any further investigation by the ACCC based on the ACCCs own written advice that it did not intend to take the investigation further.

Westfield was confident it would have been successful in the litigation and this view was supported by advice of senior counsel.

The time and expense involved in pursuing the matter in court led Westfield to make a commercial decision to settle on a without admissions basis.