Misleading and Deceptive Conduct

Misleading and Deceptive Conduct

In Australia, the Australian Consumer Law (“ACL”) provides for various consumer protections. The ACL is found in Schedule 2 of the Competition and Consumer Act 2010, and provisions such as Section 18 regarding misleading and deceptive conduct also work to protect businesses in relation to other businesses’ conduct.

One such provision is Section 18 of the ACL, which provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.[1]

Trade or Commerce is defined to mean:

Trade or commerce means … trade or commerce within Australia … and includes any business or professional activity whether or not carried on for profit.

Conduct is defined as the doing of or the refusing to do any act, including:

• The making of, or the giving effect to a provision of, a contract or arrangement; or
• The arriving at, or the giving effect to a provision of, an understanding; or
• The requiring of the giving of, or the giving of, a covenant…

A party’s conduct must be considered as a whole, so the context and surrounding circumstances is relevant, and key in determining whether a representation is made “in trade or commerce”.

To be able to commence a proceeding for deceptive and misleading conduct, the following generally needs to be established:

1. The other party’s conduct and/or representations were misleading and/or deceptive or likely to mislead and/or deceive;
2. The representations were made in trade or commerce; and
3. The representations and/or the other party’s conduct was relied on; and
4. As a result of the reliance on the other party’s representations and/or conduct, loss has been suffered.

‘Misleading and deceptive conduct’ is not defined in the ACL save as to say that it is conduct that is, or is likely to be, misleading or deceptive.

Reliance on the Representations

To make an argument for both misleading and deceptive conduct, it must be proven that those misleading and deceptive representations were relied on and that reliance caused the damages that relief is being sought from.

Essentially, there must be evidence to prove a causal link between the misleading and deceptive conduct and the damage or losses suffered. If the Court is satisfied that the other party misled and/or deceived, misleading and deceptive representations were relied on, and those misleading and deceptive representations caused loss, then generally relief will be available under the ACL.

However, where a party is found to have failed to exercise reasonable care, the court may reduce any amount awarded to them after having regard to how significantly they contributed to their own loss.

Relief for Misleading and Deceptive Conduct under the ACL

Upon obtaining a judgment, there are statutory remedies such as injunctions, damages or other orders that the Court may deem appropriate.

When considering claims for misleading and deceptive conduct against an entity such as a company, it is important to note that the individuals involved in the relevant “conduct” may also be held responsible.

As is common, there are various exceptions to the application of the ACL. Publication of matter by an information provider (such as newspaper articles and news broadcasts), as well as provision of financial services and products is generally not covered by misleading and deceptive conduct provisions.

[1] Competition and Consumer Act 2010 (legislation.gov.au)

If you require advice or assistance with a matter involving misleading and deceptive conduct, contact the experienced team at Miller Sockhill Lawyers on 07 5444 4750.

Read further articles published by our experienced team including Important Updates for Unfair Contract Terms: What You Need to Know and Unconscionable Conduct.