MLL217 Study Guide - Final Guide: Objective Test, Survey Methodology, Contributory Negligence
2 Jun 2018
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The Nature of Misleading Conduct
The hegemony of Section 18
▪ Section 18 broadly interpreted - regulates negligent misstatements, pre-contractual
misrepresentations, deceit, injurious falsehood, passing off and other false claims in
advertising
▪ Section 18 is often pleaded in preference to common law torts
▪ Section 18 liability is broader; unnecessary to show an intention to deceive or
negligence
▪ Any interested individual can apply for an injunction to prevent repetition of
the conduct
▪ A wider range of remedies are available under the ACL
▪ Liability can be imposed on persons involved in the contravention
Continuing relevance of common law torts
▪ Section 18 applies only to conduct in trade or commerce – no application to private
conduct
▪ Exemplary damages not available under the ACL
▪ Note: damages not recoverable for personal injury caused by contravention of s 18
(and other provisions in Part 3-1) unless smoking related: ss 137C, 137E of the CCA
Passing Off
Elements, as stated by Lord Diplock in
Erven Warnink BV v J. Townsend & Sons (Hull) Ltd:
▪ A representation that the Defendant's business, goods or services are those of
another or associated with that other;
▪ Made by a trader in the course of trade;
▪ Calculated to injure the business or goodwill of another;
▪ State of mind
▪ Causes actual damage or will do so.
Locus standi for breach of s 18
▪ Not limited to consumers
▪ Re false claims in advertisements any person can obtain an injunction (s 232)
including:
▪ Consumers
▪ Consumer groups
▪ ACCC
▪ Takes action on behalf of individuals
▪ Very rare that an individual will take action
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Business competitors
▪ Principal group of users of Section 18
▪ Clear that it is available to them since:
▪ Hornsby Building Information Centre v Sydney Building Information
Centre (1978)
▪ s 18 is not limited to consumers despite the heading of the
schedule, as there are no private users, and they initiated
proceedings for their own interests, and not the interest of
consumers
▪ Parkdale Custom Built Furniture v Puxu (1982)
▪ High Court rationale:
▪ will enhance consumer protection,
▪ they are more likely to afford litigation,
▪ more likely to seek injunctions to prevent repetition of
conduct and corrective advertising.
▪ emphasised that s 52 WAS directed at the protection of
consumers and not unfair practices per se
Business competitors
▪ Conduct must be likely to lead consumers into error in their capacity as
consumers
▪ Emphasis on consumers when companies initiate proceedings
▪ Hornsby Building Information Centre v Sydney Building Information
Centre
▪ Parkdale Custom Built Furniture v Puxu
▪ Damage to the competitor insufficient
▪ But note that to claim damages (s 236), the applicant must have
suffered loss.
The nature of the prohibition in s 18
▪ Section 18 prohibits conducts that leads, or is likely to lead, into error the person or
persons to whom it is directed
▪ Likely means a has the capacity or tendency to mislead – not necessary to show
that any person has actually been misled
▪ Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd per Gibbs CJ
▪ Likely means a has the capacity or tendency to mislead, a real or not remote
chance or possibility, does not have to be > 50%.
▪ Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd
▪ McWilliams Wines Pty Ltd v McDonalds System of Australia Pty Ltd
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find more resources at oneclass.com
▪ s 18 does not extend to conduct which might be regarded as oppressive but which
does not convey information such that they might be led into error
▪ ACCC v Oceana Commercial Pty Ltd
The nature of the prohibition in s 18
▪ Liability is strict – Defendant liable even if acting honestly and reasonably
▪ Bridge Stockbrokers and Moore v Bridges
▪ Plaintiff does not need to show an intention to deceive or negligence
▪ S& I Publishing Pty Ltd v Australian Surf Life Saver Pty Ltd
▪ But a breach of s 18 more easily found where corporation intended to deceive
▪ Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd
▪ Also, exceptional cases where intention to deceive relevant; e.g. future
statements; opinions; accessorial liability (see Topic 5)
The nature of the prohibition in s 18
▪ MC that is never communicated to anybody cannot contravene the section
embodying the requirement of communication to a person or persons
▪ Representation? What type of representation?
▪ Silence can amount to MC in a greater range of circumstances than common law
▪ SGIC v GIO
▪ Henjo Investments v Collins Marrickville
▪ No. of seats in restaurant case
▪ Generally s 18 involves an oral or written representation but also
encompasses conduct more generally
Proving misleading conduct
Approach:
1. The conduct was engaged in by the Defendant
2. The conduct conveyed a certain meaning
3. The conduct was misleading or likely to mislead
- Objective test
Proving misleading conduct
1. The conduct was engaged in by the Defendant
▪ Must be proven with a sufficient degree of precision for courts to then assess
whether they were misleading in the circumstances
▪ Obvious where express
▪ More difficult where not express
▪ Circumstantial evidence
find more resources at oneclass.com
find more resources at oneclass.com
Document Summary
Business competitors: principal group of users of section 18, clear that it is available to them since, hornsby building information centre v sydney building information. Business competitors: conduct must be likely to lead consumers into error in their capacity as consumers, emphasis on consumers when companies initiate proceedings, hornsby building information centre v sydney building information. Centre: parkdale custom built furniture v puxu, damage to the competitor insufficient, but note that to claim damages (s 236), the applicant must have suffered loss. Approach: the conduct was engaged in by the defendant, the conduct conveyed a certain meaning, the conduct was misleading or likely to mislead. Proving misleading conduct: the conduct conveyed a certain meaning. If ambiguous, court will admit evidence of surrounding circumstances. If problematic, may be more likely to be a breach. If directed at the public, may be sufficient that a significant number of people may be mislead: telstra corporation ltd v sun alliance insurance australia limited.
