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 its easier to just list whats 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
ORourke).
c. Provision of professional services (lawyers, accountants, 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. Advertisements for wine describing them as Big Mac = not misleading,
members 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 members 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
Nikes 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
verify details, not source, merely passing 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 terms 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 plaintiffs
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 defendants 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 defendants 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
wouldnt 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 defendants mortgage documents without
first informing her that the terms 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 arms 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 terms, a communication by agent to whomever should be the
recipient. It is full of assurance; nothing in its terms 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 DECP)
b. If advertise special price and then qualify in small print that cant
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 DECP).
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 DECP).
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 wont 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 makers 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 passing 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 its 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 youre on a good thing, stick to it said by John
Laws (a prominent media personality) competitors
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 products 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 advertise their own product by comparing it to another
companys product.
2. Court only insists that the advertiser 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 its up to the consumer to decide if they want to
pay more (Gillette v Energizer).
a. If the advertisement is a why pay more? type of advertisement
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.

8.

c. Basically they say that you have to have some scientific basis for
saying what youre saying. Need to be able to substantiate your
claim.
Pictures (dolphin on tuna product), promoting that it doesnt 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 ACCCs arsenal is a substantiation notice:
a. They can serve a notice on an advertiser and require them to
show proof of the claim.
b. Onus on maker of claim in this circumstances dont have to wait
for a court case.

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

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 members 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 Campomars product
was branded as a Nike product, as it was next to other Adidas
fragrances. Hence it is misleading.
Held: Campomars produce was misleading due to the similarities.

Apand v Kettle Chip Co (1994) The average person would have

thought that Apands Country Kettle Chip would have been Kettles.
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 McDonalds 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. McWilliams Wines v
McDonalds System of Australia (1980) claimed deceptive conduct
because of McWilliams wine Big Mac name was dismissed
because a reasonable person would not consider McDonalds 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.

Advertisements: 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 didnt. 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 advertisement
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 admitted that it engaged in misleading conduct.

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 passing 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.

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 terms, refusing to enforce and or all terms, 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 terms 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

No ticket scalping was not allowed

Werent 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.
McWilliams Wines Pty Ltd v McDonalds 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 respondents
product.