In this practice area
Claims under the Australian Consumer Law for misleading or deceptive conduct, false representations, unconscionable conduct and unfair contract terms.
When these claims arise
Misleading or deceptive conduct claims are among the most common causes of action in Australian commercial litigation. They arise in business sales, franchise and distribution arrangements, investments, property transactions, supply contracts and advertising disputes between competitors. They are often pleaded alongside claims in contract or negligence because they can reach pre-contractual statements that the contract itself does not cover.
Businesses also face consumer law claims from customers and, in some cases, investigations by the ACCC, ASIC or NSW Fair Trading.
The legal framework
Section 18 of the Australian Consumer Law, in Schedule 2 of the Competition and Consumer Act 2010 (Cth), 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. The ACL applies as a law of NSW through the Fair Trading Act 1987 (NSW). Intention is not required, and silence can be misleading where there is a reasonable expectation of disclosure. Representations about future matters, such as forecasts and promises, are taken to be misleading unless the person had reasonable grounds for making them. For financial services, a parallel prohibition sits in section 12DA of the Australian Securities and Investments Commission Act 2001 (Cth).
A person who suffers loss because of a contravention may recover damages under section 236 of the ACL. The action must be commenced within six years after the day on which the cause of action accrued. The court may also make other orders under sections 237 and 243, including declaring a contract void, varying it or ordering a refund, and may grant injunctions. Related provisions prohibit unconscionable conduct and false or misleading representations about goods and services, and regulate unfair contract terms in standard form consumer and small business contracts. Proportionate liability can apply to damages claims for misleading or deceptive conduct.
How these matters typically run
The critical questions are what was said or done, what the claimant understood, whether it relied on the conduct, and what loss followed. Contemporaneous documents, such as information memoranda, emails, financial forecasts and marketing material, carry significant weight. Entire agreement and non-reliance clauses do not automatically defeat a claim, but they can be relevant to whether reliance occurred.
Claims can be brought in the Federal Court, the Supreme Court or the District Court, depending on value and related claims. Expert evidence is often needed to quantify loss.
How we act
We act for claimants and respondents. We identify precisely which representations are said to be misleading, test the evidence of reliance and loss, and consider whether other parties share liability before proceedings are commenced.