Analysis & Discussion into Australian Consumer Law Part 1

Ariel Galapo, barrister, begins his series into Australian Consumer Law. In part 1, he delves into s 18, where he provides an analysis into the terminology used. 

The ACL – section 18

Schedule 2 of the Competition and Consumer Act 2010 (Cth) contains the Australian Consumer Law (ACL).

Part 2-1 of the ACL sets out the general prohibitions in relation to misleading and deceptive conduct.

Section 18 (within Pt 2-1) of the ACL is the general prohibition that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Part 3-1, Division 1 of the ACL (ss 29-38) sets out the prohibitions in relation to specific conduct in relation to false or misleading representations. These provisions do not apply to conduct involving the supply of financial services and products. Similar Provisions exist in ss 12DA , DB and DC of the Australian Securities and Investment Commission Act 2001 (Cth).

Engaging in conduct which is false or misleading and deceptive entitles the innocent party to injunctive relief (ss 232-235) or to damages suffered by a party in reliance on the misleading conduct or representations (s 236).

The plaintiff taking the action under s 18 ACL must prove the infringement on the balance of probabilities (TPC v Vaponordic (Aust) Pty Ltd (1975) 6 ALR 248).

“in trade or commerce”

The misleading or deceptive statement must have been made “in trade or commerce” for s 18 ACL to apply.

Section 4(1) ACL defines “trade or commerce” broadly as: “trade or commerce within Australia or between Australia and places outside Australia”.

Examples where the Court found statements to be “in trade or commerce” include:

• Emails concerning child car-safety restraint devices sent to retailers who were existing or potential customers as the emails were directed at influencing retailers: Infa-Secure Pty Ltd v Crocker (No 3) [2018] FCA 605.
• Representations made by a College providing training and accreditation in a handbook for medical practitioner trainees were found to be in trade or commerce: Shahid v Australasian College of Dermatologists [2008] FCAFC 72.
• Advertisements promoting get-quick-rich seminars through investing in real estate were found to be in trade or commerce: ACCC v Kaye [2004] FCA 1363.

Examples where the Court found statements not to be “in trade or commerce” include:

• Statements made by the seller of a property regarding descriptions of renovations to the property provided through his agent to the buyer and also online, were found not have been made in trade or commerce, as the court determined that the sale of the family home did not occur in trade or commerce: Williams v Pisano [2015] NSWCA 177.
• Statements by a fashion designer made on Facebook that another designer had plagiarized her designs: Madden v Seafolly Pty Ltd [2014] FCAFC 30.
• Where a business had ceased to trade and its live website continued to contain false claims: ACCC v SMS Global Pty Ltd [2011] FCA 855.

Recent cases on “trade or commerce” will be analysed in future articles.

Misleading and deceptive conduct

Misleading and deceptive conduct can be direct or indirect, and involve expressed or implied representations or statements (Pt 3-1 Div 1 ACL). The conduct can also be by omission (refraining from doing something) (s 18 ACL).

It must be noted that s 18 refers to “conduct” unlike the sections comprising Pt 3-1 Div 1 which are specifically concerned with “representations” or statements about goods or services (see s 29 ACL). Conduct may include marketing, advertising, promotional activities, packaging, labelling and even gift vouchers. Conduct may in turn include warranties in a contract which are not representations (see Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd (1993) 42 FCR 470).

Silence

Silence may amount to misleading or deceptive conduct, even if the omission is unintentional. However, where there is no requirement on behalf of the infringing party to disclose information, misleading or deceptive conduct will not be established. In Elevate NSW Pty Ltd v Canada Bay Private Hospital Pty Ltd [2019] FCA 1248, even though the respondent failed to disclose that premises taken over by the applicant did not have an occupancy certificate, it was not a fact known to the respondent and thus deceptive or misleading conduct was not established.

In subsequent articles, I will discuss the following sub-topics:

• The divide between what has been found or not found to be in “trade or commerce”
• Intention to mislead or deceive
• The test of whether conduct is misleading or deceptive
• Ambiguous representation or mere confusion
• Reliance on the representation
• Using disclaimers as a shield against their misleading or deceptive conduct

Ariel Galapo is a Barrister at Frederick Jordan Chambers specializing in Competition and Consumer Law, Commercial Law and Equity. Ariel brings a wealth of legal knowledge as a legal editor with Thomson Reuters for 10 years. His editorial portfolio was wide and extensive and included leading legal texts such as: Trade Practices Law: Competition and Consumer Law by former Justice Dyson Heydon AC, Miller’s Australian Competition and Consumer Law Annotated, Federal and High Court suite of publications by Justice Flick and Commercial Damages by Sydney Jacobs. You can contact Ariel via email at agalapo@fjc.net.au