Misleading and deceptive conduct is conduct that is likely to mislead or deceive. Simple definition, sure, but how this phrase has been interpreted and applied by the courts requires further analysis.

Section 18 of the Australian Consumer Law (ACL), 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.”

It is up to the courts to determine whether certain conduct falls within that statutory definition. When doing so, courts consider a number of things, including the following:

Silence can amount to misleading and deceptive conduct

Here, the court will examine the context in which the silence occurred. If, for example, a vendor of a business took a potential purchaser through 95% of the trade debts of a company, but omitted the largest one, that silence as to the debt may amount to misleading and deceptive conduct. This can also arise when a person has made a statement but fails to qualify it sufficiently.

The conduct at the time it occurred

The courts have found that making a promise and then later not keeping it is not misleading conduct unless the promise was not genuinely made in the first place. When considering this, the relevant time of examination is the time that the promise was made. Accordingly, if the misleading conduct consists of making a statement about the future, the person making the statement can defend by proving that he or she had reasonable grounds for believing that the prediction was correct, even if that transpired not to be the case.

A ‘mere conduit’ will not be liable

If a person is simply passing on information, and it ought to be clear to the receiving party this is the case, they will not be liable for breach of this statutory provision.

There need not be an intention to mislead

While ‘deception’ by its nature, involves a guilty mind, this is not the case with misleading, and a party can be liable even if the misleading conduct was unintentional.

The conduct must be ‘in trade or commerce’ to attract the section

Courts look at the context of the conduct, as the false or misleading statement must have been done ‘in trade or commerce’ for the Act to apply.

E.g. stating on an Internet dating profile that you have ‘the body of an Adonis’ may indeed be false and mislead poor unsuspecting persons to date you, but is not an action done in trade nor commerce and, thus, would not attract the provision of section 18 of the ACL (but you probably shouldn’t do this anyway!).

Conclusion

If you have been damaged by another’s misleading and/ or deceptive conduct, or are concerned about your own liability, you should consult a commercial lawyer, call LegalVision on 1300 544 755.

Emma Jervis

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