Doors open for competition

PROFESSIONAL organisations preventing their members from competing against each other risk running foul of the Trade Practices Act.

This was made clear after the Real Estate Institute of WA was ordered to change its internal charter.

The Perth Federal Court found REIWA, whose membership comprises up to 85 per cent of WA’s real estate agents, had breached the Act by weakening competition in the local real estate industry.

It was admitted some of the rules and rules of practice adopted by REIWA had the effect of substantially lessening competition in the WA market and therefore breached the Act.

The offending rules and rules of practices have since been removed.

Now REIWA real estate agents can promote their services to property sellers even if they have signed with another agent and can also offer incentives such as prizes and reward points.

Franchise real estate agents now have greater flexibility as to whether they want to be REIWA members.

The court also found REIWA executive director Michael Griffith and the institute’s legal adviser Conal O’Toole, were “knowingly concerned” in the breaches.

After considering joint submissions from the Australian Competi-tion and Consumer Commission, REIWA and Mr Griffith, the court declared in consent orders that REIWA had breached the anti-competitive provisions of the Trade Practices Act.

The court has restrained REIWA from engaging in similar conduct in the future and ordered it set up a trade practice compliance program.

REIWA also admitted it entered into agreements with the South West Regional College of TAFE and the West Coast College of TAFE that fixed the student fee for a training course, again breaching the Act.

The court found REIWA legal adviser Conal O’Toole was knowingly concerned in the price fixing when he prepared the agreements with the TAFE colleges.

He was ordered in February to refrain from engaging in similar conduct in the future and was ordered to take part in a trade practices compliance program.

REIWA president Neville Fox said the institute had sought legal advice, acted on that advice and that advice had turned out to be wrong.

“It’s a significant learning experience for the Institute,” Mr Fox said.

ACCC chairman Allan Fels said the case highlighted the need for legal practitioners to comply with the Act when providing advice to clients.

“This case serves as an important reminder to professional bodies that they are subject to the Act and, in particular, highlights the pitfalls for professional bodies that do not ensure their own regulatory frameworks do not contravene the provisions of the Act,” he said.

“Further, the decision sends a clear warning to professional bodies about contracts or arrangements they enter into with others in connection with their professional activities,” he said.

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