Comasters Law Firm and Notary Public | Misleading and Deceptive Conduct
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Misleading and Deceptive Conduct

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This article discusses in some detail misleading and deceptive conduct under the Australian Consumer Law.

 

The Australian Consumer Law (‘ACL’), which forms part of the Competition and Consumer Act 2010 (Cth) aims to protect consumers and ensure fair trading in Australia. The ACL provides a broad prohibition on misleading and deceptive conduct in trade or commerce. Section 18 of the ACL prohibits a person, in trade or commerce, from engaging conduct that is misleading or deceptive or is likely to mislead or deceive. Although Section 18 appears in the ACL, the section is not limited to consumer transactions or dealings. Many of the cases on misleading and deceptive conduct are business-to-business cases.

 

It is illegal for a business to engage in conduct that misleads or deceives or is likely to mislead or deceive consumers or other businesses. This law applies even if you did not intend to mislead or deceive anyone or no one has suffered any loss or damage as a result of your conduct. A contravention of the prohibition under Section 18 is subject to remedies including injunctions, damages and compensatory orders.

 

WHAT IS “MISLEADING” OR “DECEPTIVE” CONDUCT?

The terms “misleading” and “deceptive” are not defined in the ACL and the courts have not given a precise definition of misleading and deceptive conduct. It is the overall impression created by the alleged conduct that determines whether it is likely to lead a significant number of people into error or has the tendency to deceive such persons. The notion of intention is irrelevant in finding misleading and deceptive conduct, what is significant is how the “business conduct” – that is, any statements or actions made by the business – could affect thoughts and beliefs of the consumer.

 

WHAT IS “CONDUCT”?

‘Conduct’ includes actions and statements such as:

  • Advertisements
  • Promotions
  • Quotations
  • Statements
  • Any representation made by a person.

 

Silence can also be regarded as conduct that could be misleading or deceptive. This will, however, depend on the circumstances of each case. Silence can be misleading or deceptive only when:

  • A person fails to alert another to facts known only to them, and the facts are relevant to the decision;
  • Important details a person should know are not conveyed to them; or
  • A change in circumstances where information already provided was incorrect.

 

Promises, opinions and predictions can also be misleading or deceptive if the person making the statement knew it was false, did not care whether it was true or not or had no reasonable grounds for making it.

 

WHAT IS “IN TRADE OR COMMERCE”?

The misleading and deceptive conduct alleged must occur in “trade” or “commerce”. The courts have interpreted this broadly to cover any kind of commercial activity. However, it is not “in trade or commerce” if it is:

  • Private one-off sale;
  • Internal communications within an organisation;
  • Regulatory activity by government bodies;
  • Government information in a non-commercial context; or
  • Political statements

 

Being “in” trade or commerce means the conduct must be trading or commercial in nature and not merely incidental to trade or commerce.

 

WHAT ARE THE REMEDIES AVAILABLE?

Misleading or deceptive conduct may lead to civil remedies provided under Chapter 5 of the ACL. Some examples include:

  • Injunctions: to stop a business from engaging in misleading or deceptive conduct, or to require a business to do certain things;
  • Damages: the claimant can apply to the court to get compensation for the loss or damage suffered, or likely to be suffered as a result of the misleading and deceptive conduct of the business;
  • Non-punitive orders: such as public warning notices against traders who have been given court orders for misleading and deceptive conduct; and
  • Ancillary Orders: which can be ordered by the Court at its discretion, including but not limited to specific performance, varying the contract or providing repairs.

 

WHAT IS THE TIME LIMIT TO BRING AN ACTION UNDER SECTION 18 OF THE AUSTRALIAN CONSUMER LAW?

You must bring an action based on misleading and deceptive conduct within six (6) years of the occurrence of the cause of action.

 

HOW CAN WE HELP YOU?

Being experienced in the field of Consumer Law, we can help by:

  • Advising you on your rights and the issues relating to misleading and deceptive conduct; and
  • Taking actions for breaches and making claims under Australian Consumer Law.

 

Comasters can advise on your rights and obligations under the Australian Consumer Law. We can also advise on claims and possible legal remedies for breaches under the Australian Consumer Law.

© Comasters April 2015.

 

Important: This is not advice. Clients should not act solely on the basis of the material contained in this paper. Our formal advice should be sought before acting on any aspect of the above information.