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Case 1 - Cleanaway

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Contract Writer:  Cleanaway Brisbane

Original agreement as per contract front page:  Waste bin to be left on clients premises for 3 years A$24.00 collection fee when client calls Cleanaway to collect bin

Resulting charges and unexpected results after 3 years: A$45.80 per collection. A$4.00 per week bin rental. A$5.00 per month admin fee. A$0.90 per collection fuel levy. Contract automatically rolled over after 3 years without contacting customer to ensure that a rollover was required.  A$350.00 fee charged to cancel the contract during the 4th year.

•  Clause 3.3 We may vary a Rate at any time during the Term and especially if:

  (i) You exceed estimated weights or volumes shown in the Form

  (ii) the Environmental Protection Authority Levy on Waste disposal changes; or

  (iii) there are Changes to the Consumer Price Index 

• Clause 3.7 We may, at our discretion, impose an administration charge in connection with our services
• Clause 4.1 If our Agreement is shown as permanent in the Form, subject to clause 4.3(a), it will automatically be renewed at the end of each term for a further Term unless either of us gives written notice to the other at least 60 days before the end of that Term.
• Clause 4.4 If: (a) you terminate our Agreement early rather than by giving proper notice under either clause 4.1 or 4.2...

  You must pay us damages  calculated by multiplying Your total average Monthly Charge for the period between the commencement date by half the number of complete months left in the term.

• Clause 3.3 might just as well read "We may vary a Rate at any time by any amount we feel like, without any reason whatsoever". The phrase "especially if" means that whilst the three situations given may be used as a reason to vary the rates, those reasons do not have to be used at all. This clause gives Cleanaway absolute control of pricing. 
• Cleanaway claim that the A$4.00 / week bin rental is covered under clause 3.3 however this is not correct. The original contract did not include a rental fee. By introducing a rental fee Cleanaway are not "varying a rate" per clause 3.3. The "Rate" is clearly stated in the original contract  as $24.00 per collection and Cleanaway have used this clause to increase the rate by over 90%. The bin rental was introduced, and we do not find any clauses in the Cleanaway contract which allow them to "introduce" a fee other than the administration charge in clause 3.7.
• Signing the Cleanaway contract opens the client to Cleanaway imposing a discretional administration charge per clause 3.7. There is no cap on this charge and no requisite for Cleanaway to justify the charge. Fortunately for the company who signed the above contract Cleanaway only imposed an A$5.00 per month admin charge. They could just as easily have imposed a $1,000 per month admin charge or more.
• The "fuel levy" charge is also not covered by the contract conditions, however most people would agree that fuel prices have risen over the past 3 years and would not object to paying the nominal "fuel levy" to help cover fuel increases not foreseen when the contract was signed. Since the addition of a fuel levy can be justified by the increase in fuel prices, that leaves little to explain the over 90% increase in collection charges and the addition of two other charges which were not deemed necessary by Cleanaway when the contract was signed.
• The automatic rollover clause is legal in Queensland and indeed all states of Australia. Victoria has passed legislation to abolish these types of clauses in "consumer contracts", but don't go as far as to make them illegal in business to business contracts. We believe the European Union legislates against these types of clauses in consumer and business to business contracts, but we have not yet verified this. Whilst the clause is legal, a more courteous approach would be to contact the customer prior to rolling over the contract.
• Clause 4.4 - What damages? The contract above already passed it's original expiry date, and if the client had contacted Cleanaway in writing just 10 months earlier, Cleanaway would have had to remove the bin from the premises anyway. Cleanaway got an extra 10 months of business from the customer and chose to penalise the customer to the tune of A$350.00. The real sting is that the original agreement stated that the only charge would be A$24.00 when (and if) the customer called Cleanaway to collect the bin, but Cleanaway used their introduced and increased charges in the calculation of the cancellation fee .

• The company involved sent a letter to Cleanaway to advise their managers of the situation.
• A letter was also sent to the new owners of Cleanaway, Transpacific Industries Group Ltd to advise them of what their latest acquisition was doing.
• No response was received from Transpacific Industries Group Ltd.
• Cleanaway sent two representatives to meet with the company. The representatives made no attempt to explain how the above situation developed, no apology for the way Cleanaway was behaving and no offer to refund the "cancellation fee". According to the company, the Cleanaway reps seemed more interested in gathering information as to what had alerted the customer to the introduced and increasing fees. No follow up reply was received after the meeting, so we must assume that no action has been taken by Cleanaway to resolve the issues.