Misleading Or Deceptive Conduct - Structured Answer m4y4p

Misleading or Deceptive Conduct – Structure of Answer 1. The main issue: “[Plaintiff] can bring an action for a contravention of s18 of the ACL.” a. False or misleading representations s18 i. A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. 1. Falsely represent that goods are of a particular standard, quality, value, grade, style or model, or have had a particular history or previous use (s 53(a)) 2. Falsely represent that goods are new a. Car described as new but was in fact 2 years 9 months old (Annand v TPC). b. Misleading conduct as to nature, manufacturing process, characteristics or suitability for purpose of goods/services i. A person shall not, in trade or commerce, engage in conduct that is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose or the quantity of any goods 2. Is the conduct in “trade or commerce”? a. Most things will occur in “trade or commerce” so it’s easier to just list what’s NOT trade and commerce: i. Personal tractions (private sale of property) (Argy v Blunts) 1. However, if lending money at commercial interest rates, or investing in property may come within “trade and commerce”. ii. Olympic selection (amateur sport) (Forbes v Aust Yachting Federation) iii. Educational and political campaigns (Orion v RSPCA (Vic)) iv. Misleading statement by one employee to another in the course of construction work on building site (Concrete v Nelson) b. Must take place “in” trade and commerce i. Not merely connected with or incidental to trade or commerce (Hearne v O’Rourke). c. Provision of professional services (lawyers, ants, doctors etc) can come within “trade and commerce” (Bond v Theiss). d. Government policy statements or announcements are unlikely to occur in trade or commerce (Unilan Holdings v Kerrin). i. But if designed to encourage commercial transaction with crown, may come within. e. The trade or commerce complained of does not need to be that of the defendant (Houghton v Arms). 3. Is the conduct misleading or deceptive? a. The test for whether conduct is misleading or deceptive is an objective test. i. Whether the conduct is likely to mislead a reasonable member of the class at which the conduct is directed. ii. Not enough for the conduct to merely cause a person to be confused or uncertain. 1. ments for wine describing them as “Big Mac” = not misleading, of class would only wonder, not be misled (McWilliams v McDonalds) iii. STATE THE CLASS OF PERSONS. iv. In advertising context:

1. Identify a hypothetical individual, an ordinary or reasonable representative member of the class, who takes reasonable care of their own interests (Campomar v Nike). 2. Disregard conduct that is: (Campomar v Nike) a. Extreme or fanciful (eg extreme or fanciful assumptions); and b. Merely causes wonderment or confusion. b. In answer, address: i. Context in which the conduct occurs;\ 1. Ie, the target audience. If advertising was targeted at children or travel agents ii. Nature of target audience (are they dumb/unsophisticated or smart/sophisticated?); 1. Initial question to be answered is whether the misconceptions or deceptions alleged to arise are properly attributable to the ordinary or reasonable of the classes of prospective purchasers (Campomar v Nike). 2. The more vulnerable the target audience, the greater the likelihood of there being misleading conduct. iii. Whether private negotiations between buyers/sellers, or conduct directed at public at large; 1. If to public at large, wider class, easier to show reasonable member likely to be misled iv. Focus on erroneous assumption by audience, as opposed to conduct of the defendant. v. Each case turns on its own facts. Case examples: vi. Copying and selling unauthorised copies of very expensive furniture = target audience: people looking to buy expensive furniture, sophisticated purchasers, would have checked authenticity = not misleading (Parkdale v Puxu) vii. Manufacturing fragrance sold as “Nike Sports Fragrance” but not made by Nike, sold in pharmacies beside other fragrances including Adidas = target audience: prospective purchasers of mass-marketed product for general use, not particularly sophisticated = misleading, likely to be misled that was made by Nike or under Nike’s licence (Campomar v Nike) viii. Small real estate business makes mistake placing swimming pool inside freehold but in fact it was partly outside freehold, was very expensive property, had disclaimer saying “do not guarantee accuracy” = target audience: purchasers of expensive property, very sophisticated = not misleading because reasonable purchaser in class that small suburban real estate agent would not independently details, not source, merely ing info on (Butcher v Lachlan Elder). ix. Offer to shareholders to buy shares at a very good price, but fine print says payment in instalments over 15 years (so not that good a deal after all) = target audience: mum and dad investors, not sophisticated = misleading representation even though literally true, qualified in fine print which was not sufficiently conspicuous (National Exchange v ASIC). c. Specific types of conduct that may be misleading i. Misrepresentation 1. Misrepresentation by car salesman to consumer about entitlement to vehicle lease (Gardiner v Suttons)

2. Misrepresentation by bank manager about financial position of principal under guarantee given by plaintiff (Nobile v NAB) 3. Misrepresentation given by real estate agent as to redevelopment potential of land (Argy v Blunts) 4. Misrepresentation by insurance salesman to consumer about breadth of policy (Gates v City Mutual Life Assurance Society) 5. Misrepresentation about company subject to takeover bid and its future intentions (Poseidon v Adelaide Petroleum) 6. Misrepresentation by owner of commercial property about upon which property leased to existing tenant (Krakowsi v Eurolynx) 7. Includes negligent misrepresentation (Warnock). ii. Silence 1. Arises where the plaintiff alleges it would not have contracted with the defendant if certain information had been brought to the plaintiff’s attention. That is, the defendant was silent when it should have said something. 2. Need to address 3 key issues in answer: a. First, does the defendant’s silence amount to conduct under its s 4(2) TPA definition? i. Expansive definition which includes “refraining” from doing an act. ii. Does not include inadvertent acts. Therefore, failure to disclose information must be deliberate, not inadvertent (Rhone-Poulenc v UIM Chemical) b. Second, does the conduct amount to more than ‘mere’ silence? i. In “silence alone” cases (where only issue is the fact that the defendant did not disclose something): 1. There must be deliberate proof of a subjective intention to mislead (otherwise than inadvertently) (Costa Vraca v Berrigan Weed) 2. Pilot forgotten or negligent when spraying crops, killed crops = conduct not deliberate (Costa Vraca v Berrigan) 3. Recklessness or conscious indifference to making a correct statement may be equivalent to the intention required by s 4(2) TPA (Johnson Tiles v Esso) ii. In “silence plus other conduct” cases (eg half-truths etc): 1. No intention to mislead is necessary; defendant has strict liability (Demagogue v Ramensky). 2. Test: did the circumstances give rise to a reasonable expectation on the part of a purchaser that information known to the vendor would be disclosed? (Demagogue v Ramensky) 3. Where plaintiff makes known intention for using site and defendant knows of something that would prevent the land being put to that use (especially when frank disclosure on other disadvantages) = misleading not to disclose,

sufficient silence (Noor al Houda v Bankstown Airport) 4. Where demutualisation of society prepares prospectus advocating the “yes” case but not the “no” case, the failure to put the “no” case is misleading because full and fair disclosure is required (Fraser v NRMA Holdings). c. Thirdly, whether the defendant’s silence was the cause of the error complained of? i. Must be causation. ii. Not sufficient for plaintiff to show it was in error, but wouldn’t have been if defendant had disclosed (Lam v Ausintel). iii. Changing Circumstances (Subsequent Changes) 1. It may be misleading conduct not to disclose changes that occurred during a transaction (Gregg v Tasmanian Trustees). 2. Misleading to ask plaintiff to sign defendant’s mortgage documents without first informing her that the differed significantly from what they had earlier agreed to (Gregg v Tasmanian Trustees). a. The change gave rise to a reasonable expectation that the changes and their effect would be disclosed. b. Will be a duty to disclose where there is a significant imbalance in the parties’ knowledge and understanding of the transaction (ACCC v Keshow). i. Where parties not at arm’s length. 3. Misleading not to correct a representation that was true when made but has subsequently become false (Wildsmith v Dainford). iv. Puffery 1. Puffery is statements which are not expected to be taken literally or treated seriously. 2. Section 52 does not prohibit the expression of exaggerated opinions, or the making of grandiose claims, in contractual negotiations or advertising where the audience is not likely to be misled by them (Stuart Alexander v Blenders). 3. Will be puffery where preliminary, hyperbolic, superlatives, high level of generality that is not a representation of fact, devoid of meaning (Lymquartz v Elizabeth Bay). 4. However, likely not to be puffery where a reasonable reader/viewer of the statement would assume, from the specificity of the words, that they were intended to be relied upon (Eveready v Gillette). v. Exclusion clauses 1. “all representations not included in contract are excluded” = does not exclude misleading conduct, contrary to public policy to enforce the disclaimer (Collins v Henjo) 2. “purchaser acknowledges that vendor has not made any representation on which purchaser relies”, but used its name prominently, indeed exclusively in association with the information, and did not allude even distantly to another source. The brochure itself and everything in it is, on its own plain , a communication by agent to whomever should be the recipient. It is full of assurance; nothing in its is a suggestion to the

effect that agent did not really know the position and left the recipient to draw his own conclusions. The brochure is full of conclusions. It makes comments, plainly put forward as the comments of R & H, and expressed as conclusions. = disclaimer not effective (Jainran v Boyana) 3. “conditions apply” a. will be misleading when conditions are unexpected or unreasonable (Bayswater Car Rental v DE) b. If special price and then qualify in small print that can’t actually get that special price because of the time of year = misleading, reasonable member of the target audience would construe ad to mean special rate available for reasonable period after ad appeared (Bayswater Car Rental v DE). c. The fact that a member of the public could have discovered the true position if they had made proper inquiries does not relieve liability (Bayswater Car Rental v DE). 4. Use of an elucidator (asterisk) (Astrazeneca v GlaxoSmithKline) a. “Virtually all or a majority of asthma patients would achieve total control of their symptoms with Serentide Total Control*” b. Elucidator then explained that “only 41% achieved total control, 71% achieved substantial relief” c. The question is: are elucidators sufficient to clarify or correct any claim that might be misleading or exaggerated in a headline statement? i. Depends on the nature of the target audience (are they smart or dumb?) 1. GPs are not going to fall for a bold headline statement – won’t buy unless sure it will be effective. ii. Elucidator must be clear however. vi. Statements about the future 1. Particularly during pre-contractual discussions, it is common for statements to be made by one of the parties about what will, or will not, occur in the future. 2. Effect of s 51A(1) is to deem a representation as to a future matter as misleading when its maker does not have reasonable grounds to make it. 3. Effect of s 51A(2) is to reverse the onus of proof where a corporation makes a representation as to a future matter (it must adduce evidence to the contrary). 4. Where a vendor represents that purchaser can rent the property for a certain amount = representation as to future matter (Ting v Blanche) a. Does not lose its character as a future representation merely because it represents the maker’s present state of mind. 5. Where made highest bid at auction but refuse to sign contract = make representation as to future matter (Futuretronics v Gadzhis) a. Winning bidder must show it had reasonable grounds that would perform the promise. 6. NOTE: only applies to person making statement. Cannot be accessorily liable under s 75B. (Quinlivan v ACCC). vii. Contractual promises

1. Where a contractual promise has not been performed, the remedies available for breach of contract should be adequate to compensate the innocent party. 2. Where the contract is unenforceable, or loss is suffered by a third party, or claim under contract is prohibited by an exclusion clause, innocent party may try to use s 52 TPA. 3. A contractual promise about an existing matter will contravene s 52 where the facts are not as promised and this misleads someone whom the promisor knew would rely on that promise. 4. Where a contractual promise is about some future matter, failure to perform will not contravene s 52 (Sportsman v Mirror Newspapers). a. However, can still contravene s 52 where circumstances amount to a misrepresentation. viii. Copying Get-Up and Design 1. Otherwise dealt with at common law by an action for ing off. 2. Complaint may be: a. Using same name of existing business; or b. Using same product of existing business; or c. Copying marketing and advertising of existing business; or d. Copying existing product. 3. Using same name or product of existing business a. Bridge Stockbrokers v Bridges = on the borderline between merely confusing and misleading, held to be misleading. i. If you have same name as someone established in the same business, choose another name! (Even if it’s your own name) b. Less likely to be misleading if it is merely a descriptive trade name, not distinctive of any particular business (Hornsby BIC v Sydney BIC) c. Copying a purely descriptive name is not misleading. i. But note: names that were once purely descriptive can acquire a secondary meaning over time, which will mean it is no longer descriptive, but distinctive, and therefore will be misleading if copied (S&I Publishing v Australian Surf Life Saver). 1. Name of sport can become distinctive (here, “Triathlon Sports” magazine versus “Triathlon and Multi Sports” magazine) = not misleading, used different colours, font, sizes, images etc. 2. Another example, “Roses Only” versus “Roses Plus” = roses obviously descriptive, but “Roses Only” had acquired a secondary meaning distinctive of that company, which was likely to be misleading when another business called “Roses Plus” came along (Roses Only v Mark Lyons) d. Copying a partly descriptive, partly distinctive name will be misleading. e. Copying an invented name will be misleading. 4. Copying marketing and advertising of existing business

a. Chips with distinctive texture and flavour due to style of cooking (kettle cooking), stylised cauldron image on advertising/packaging = if a competitor uses similar symbols or logos on packaging etc, likely to lead to impression of common business association, which is misleading (Kettle Chip Co v Apand). b. Use of slogan in advertising and then copied substantially by competitor = likely to mislead reasonable consumer (R&C Products v S C Johnson) i. “When you’re on a good thing, stick to it” said by John Laws (a prominent media personality) … competitor’s slogan “When you find a better thing, switch to it” also said by John Laws = John Laws had been associated in the minds of the public with Mortein, so was misleading. c. Although intention to mislead is not a requirement of s 52 contravention, it will be easier to show it is misleading where that intention exists, or can be inferred because of the use of similar or identical words of an existing campaign (like “Fat Terminator” versus “Fat Blaster” etc). i. Court will not tolerate a deliberate strategy to free-ride on existing product’s ubiquity. 5. Copying Existing Product a. Numerous products have similar designs because only one design is most practical (Parkdale v Puxu) b. But even where design of the product is not based on utility or practicality, hard to show misleading if potential purchasers (target audience) are aware that there are “look-alike” brands (Dr Martens v Rivers) i. Doc Martens distinctive footwear with a Z welt, widely known. Rivers created a look-alike but distinguished their product, and used different branding. Held = not misleading. ix. Comparative Advertising 1. Where competitors their own product by comparing it to another company’s product. 2. Court only insists that the r compares apples with apples, and that the claim is true (Gillette Australia v Energizer Australia) 3. Comparative advertising that invites comparison based on price (“is the extra worth it?”) is fine – it’s up to the consumer to decide if they want to pay more (Gillette v Energizer). a. If the ment is a “why pay more?” type of ment that compares prices of a cheaper brand with a more expensive brand = not misleading, consumer attuned to value for money (Country Road v Najee). x. Green Advertising 1. In the world of advertising, green is the new black! 2. Two ACCC publications: a. ‘Green Marketing and the TPA’ b. ‘Carbon claims and the TPA’

3. 4. 5. 6. 7.

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c. Basically they say that you have to have some scientific basis for saying what you’re saying. Need to be able to substantiate your claim. Pictures (dolphin on tuna product), promoting that it doesn’t harm dolphins Nappy ‘100% biodegradable’ but has plastic components = likely to be misleading ‘Environmentally friendly’ car tyres: substantiation? ‘Every Saab is Grrrreeen’ ‘carbon emissions neutral’ 17 native trees would be planted for each Saab vehicle sold; only offset emissions for a single year, not over life of vehicle LG s 87B undertaking: a. Labelling of energy efficiency of air conditioners; b. Higher energy consumption than rated; compensation for purchasers for potential increase in operating costs One of the new weapons in the ACCC’s arsenal is a substantiation notice: a. They can serve a notice on an r and require them to show proof of the claim. b. Onus on maker of claim in this circumstances – don’t have to wait for a court case.

4. Overall: contravention? Prohibition of Misleading or Deceptive Conduct Section 18  

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A person o Legal and natural persons, including corporations Must not, in trade or commerce o The Act was not intended to cover all conduct of the business but only the “conduct … towards persons… with whom it may have dealings … activities or transactions which of their nature bear a trading or commercial character” Concrete Constructions v Nelson (1990) CACL 13.50 Engage in conduct that is misleading or deceptive or is likely to mislead or deceive o “Must convey a meaning inconsistent with the truth… although a statement which is literally true may nevertheless convey another meaning which is untrue, and be proscribed accordingly” World Series Cricket v Parish (1997) CACL 13.60 o Objective Test by the Courts (ACCC v Party, Competitor v Competitor)  Whether the conduct under consideration will mislead ordinary or reasonable of the class to whom the representation is directed.  Campomar Sociedad, Limitada v Nike International Ltd (2000) CACL 13.60 Issue: Consumers believing a product is produced by Adidias. The average person would have thought that Campomar’s product was branded as a Nike product, as it was next to other Adidas fragrances. Hence it is misleading. Held: Campomar’s produce was misleading due to the similarities.

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Apand v Kettle Chip Co (1994) The average person would have thought that Apand’s Country Kettle Chip would have been Kettle’s. Hence it is misleading.  Forrest and Fortescue Metals Ltd v ASIC (2012) CALC 13.61. ASIC alleged that Forrest and Fortescue engaged in misleading or deceptive conduct by announcing that it had made “binding agreements” with Chinese companies. Held: Not misleading as announcing was only showing what they intended to do.  McWilliamsWines Pty Ltd v McDonald’s System of Australia Pty Ltd (1980) CACL 13.90. McWilliams wanted to produce wine under the name “Big Mac”. Held: Conduct that merely tends to cause confusion will not ordinarily be sufficient to constitute misleading or deceptive conduct. There will be no misleading or deceptive conduct if comparisons between two products of the same name will avert the connection between the two products. McWilliam’s Wines v McDonald’s System of Australia (1980) claimed deceptive conduct because of McWilliam’s wine ‘Big Mac’ name – was dismissed because a reasonable person would not consider McDonald’s selling a wine product. Parkdale Custom Built Furniture v Puxu (1982) CACL 13.100. Both producers produced furniture which were similar in shape, design and appearance. Held: There will be no misleading or deceptive conduct if there is a slight difference between two products. Products were always labelled to be different. *If Puxu were prevented from manufacturing suites this will cause Parkdale to have a monopoly. 

ments: “rely on any meaning which was reasonably open to a significant number of the newspaper readership” Talmax Pty Ltd v Telstra Corporation (1997) CACL 13.62 It misled that Telstra was sponsoring someone they didn’t. Basically means if a significant number of readers would have been misled o ACCC v Turi Foods (2012) CACL 13.65. Turi Foods was a producer of free range food and claimed that chickens enjoyed “free roaming” Held: Misleading general public about “free roam chickens” but the facts were that they were not. The ment implied that they are free to roam, hence it was misleading and deceptive conduct.

o Harvey Norman v ACCC: HN distributed catalogues showing the broadcast of 3D TV of the AFL. Issue: The broadcast was not available in all areas where catalogues were distributed. Held: HN were using deceiving and misleading conduct. 

eBay International AG v Creative Festival Entertainment Pty Ltd (2006) Promoter wanted to stop ticket scalping by refusing entry of ticket sold at a profit. Held: FCA held that the promoted had engaged in mislead or deceptive conuct because it did not have reasonable grounds for representing that a ticket sold for profit would in all cases be discovered or cancelled. Misleading Adviice – Clients v advisers. Also applies to firms who rely on complex financial instruments and financial services Wingecarribee Shire Council v Lehman Brothers (2012) CALC 13.130 Securities (SCDO) were misled to be a suitable investment during GFC for risk averse investors. They also deceptively stated that in the event of a GFC, these securities were not risky, but indeed was. Hence, misleading

o Misrepresentations in Pre-Contractual Agreements (Party v Contracting Party)  Parties should be clear when to be legally bound, during negotiations or after contract and should be explicitly expressed.  If the party intends to not continue with the contractual agreement after the other party is incurring expenses and/or doing work in reliance to the contract and continues to do so, knowing the other party is incurring expenses, this amounts to misrepresentation. BBB Constructions v Aldi (2012)  Pre-contractual agreements are not limited only to consumers and public at large, but dealings with businesses. Bevanere v Lubidineuse (1985) CALC 13.150 Deceptive actions by the principle of the appellant company, in charge told the other company that the first in charge would not leave the company, and relied on this idea to continue the purchase of the business and the contract, P already knew the employee intended to leave. During pre negotiations P misrepresented the employment of head employee.  ACCC v Metricon Qld Pty Ltd (2012) ACCC alleged that Metricon distributed brochures containing misleading information. Held: Metricon itted that it engaged in misleading conduct.

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Byers v Dorotea Pty Ltd (1986) CALC 13.160 Representations were made to the homebuyers. Representations were untrue. Held: Applicants were induced into entering into contracts by misleading statements.

o Scenario-based Misrepresentations  Mere Puffs  Will not breach s18  Opinions, Predictions and Promises  Will breach s18 if the person did not genuinely hold their opinion or did not intend to fulfil their promise.  Will breach s18 if the person has a disadvantage and relied on the opinion or promise to be true under the disadvantage. Zhang v VP302 (2009)  Silence or Non-disclosure o Does an average reasonable person in the business would have thought a certain implication and information based on the facts? o Is there a need to disclose this information?  Companies are not compelled to disclose information that would assist decision making (in regards to market strategy, financial, economic, operations) o The person relied on the disclosed information and the nondisclosed information would be related to a term of the contract  The party knew this and still have not disclosed information o The non-disclosure leads to a serious detriment to the person. o Objective Test Miller and Associates v BMW Aus Finance (2010) CACL 13.173. Miller the insurance broker did not disclose a non-cancellable policy to BMW. Borrower defaulted and Lender wanted to seek money. Held: The courts unanimously held that the broker had not engaged in misleading or deceptive conduct. BMW had chances to ask about it but chose not to. S52 of TPA did not require party to disclose info that would enable another party of equal bargaining power and competence to avoid the consesquences of carelessly disregarding its own interests.

Henjo v Collins Marrickville (1988) CALC 13.171. Henjo were selling a restaurant. Agent led buyer to believe that it could seat 128 people. However, legally the restaurant was only liscensed to seat 84 people. Held: The vendor keeping silent had engaged in misleading conduct as business knew that it was subjet to serious limitations upon its lawful seating capacity. Issue of fault and intention (causal link) o There needs to be a causal link between the misleading conduct and damage. No need to prove the defended at fault or intended to mislead or deceive. This is a strict liability imposed on misrepresentation o There is no liability if: Yorke v Lucas (1985) CACL 13.174 (the exception – merely transmitting info)  the information is received from another firm  it is clear that the firm is not the source of information  firm is genuinely merely ing on information from the source.  Breaches 1. Provision of incomplete facts: a statement that is literally true but is misleading without the consideration of other facts will breach s18 2. Failure to disclose changed circumstances will breach s18 3. Failure to disclose information where applicant had reasonable expectation in all disclosed circumstances will breach s18 o Exclusion Clauses  Explicit exclusion clauses for s18 are void. s18 still applies.  However, exclusion clause can be used as a factor in proving that misconduct has not occurred. It must be used in accordance with other factors to rebut misrepresentation. Butcher v Lachlan Elder Realty Pty Ltd (2004) CACL 13.177. Butcher wanted to purchase a property which featured a pool. However, the pool was on govt. property. Disclaimer included that real estate agent did not have expertise to know. Held: does not result in misleading conduct.

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o News and Media Section 19  Exempts certain information providers from misleading and deceptive conduct (news and media agencies)  Does not extend to advertising  Does not extend to contractual agreements made, even if the contract relates to publication ACCC v Channel Seven Brisbane (2009) Remedies for breach of s18 May recover the amount of loss or damage caused by misleading conduct.

Individuals involved in the contracvention liable for damages (aided and abetted, induced, knowingly involved in any way in the contravention. Declare (CALC13.900) contract void, varying the , refusing to enforce and or all , directly refunds of money or return of property, and directing rapeis or render services. Other enforcement provisions(CALC 13.930): under takings, substantiation notices, public warning, non-punitive orders, adverse publicity order, order disqualifying director.

Example: The threshold elements of ACL s 18 (“person”, “acting in trade or commerce” “engage in conduct”) are not in issue. The key question is whether the company has engaged in conduct that is misleading or deceptive or is likely to mislead or deceive. Conduct will be misleading or deceptive if it induces error, or is capable of inducing error, in an ordinary reasonable person. Objective test McWilliams wines v mcdonalds. There are three representations in issue: a “little piece of paradise” – this is mere puff under the common law and under the ACL (it is clearly hyperbole, no-one would be misled). b and (c) “all appliances will be European” and “every house will have a view of the lake” (NB 1. these could have been of the contract – see discussion in Chapter 9 – but we are only considering claims under the ACL here. NB 2. a breach of a term does not ipso facto mean the person in breach has engaged in misleading conduct. That would only be the case where, at the time of making the contract, the person did not intend to do what he or she promised.) Under the ACL these two statements may be misleading even though they concern the future (and are therefore not statements of fact). Where the representations are about the future (“all appliances will be European” and “each house will have a view of the lake”) ACL s 4(1) shifts the onus onto the representor to prove that he or she had “reasonable grounds” for making the statement. If he or she cannot do this, there is a breach of s 18. Here it is clear that these statements misled or deceived Daniel and Hannah. They were “led into error”. The remedies are damages under s 236. The company is liable as well as the employees who aided, abetted, counselled or procured the contravention: ACL s 2(1). There are a range of other orders available under s 243, including declaring whole or part of the contract void, but Daniel and Hannah will probably (or would have to) be satisfied with damages. Note also in relation to the “appliances” representations, the company may have breached the specific false representations provisions of the ACL: s 29(1)(a). Breach would make the company liable for civil penalties of up to $1.1m and $220,000 for individuals: s 151(1).

Case study in book: Ebay International AG v Creative Festival Entertainment Pty Ltd 2006

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No ticket scalping was not allowed Weren’t able to check every ticket

Held – the relevant condition conveys a misleading representation that Creative is legally entitled to and would detect and cancel any ticket which is resold for profit and the holder of that ticket would be refused entry; applicant entitled to relief in the form of a declaration and injunction. McWilliam’s Wines Pty Ltd v McDonald’s System of Australia Pty 1980  

Named a wine “Big Mac” Mcdonalds sued

Held – Even though the advertising might cause confusion or wonder in the mind of a person as to whether or not there was a business connection, such a person was not misled by the advertising into believing there was a connection and accordingly there was no contravention of s18 Parkdale custom built furniture Pty Ltd v Puxu Pty Ltd 1982 

Very similar lounge suit, could only separate under close inspection

Held – So closely resembles the product of another manufacturer that a prospective purchaser would be likely to be misled, but which is properly labelled with the name of its own manufacturer is not, generally speaking, conduct which is prohibited. Apand v The kettle chips 1994 

Apand brought out “country kettle” after

Held – at the time the appellants chips came onto the market, the name “kettle” had obtained a secondary meaning distinctive of the respondent’s product.