Sections 18 and 29(1) of the Australian Consumer Law
31 Section 18(1) of the Australian Consumer Law (schedule 2 to the Competition and Consumer Act 2010 (Cth)) ("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.
32 Section 29(1) of the ACL provides that:
A person must not, in trade or commerce, in connection with the supply or possible supply of goods or services or in connection with the promotion by any means of the supply or use of goods or services:
…
(b) make a false or misleading representation that services are of a particular standard, quality, value or grade; or
…
(g) make a false or misleading representation that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits;
…
33 The interpretation of section 18 of the ACL (and its predecessor, s 52 of the Trade Practices Act 1974 (Cth) ("TPA")) is governed by well settled principles. The provision requires the Court to determine: "whether conduct is misleading or deceptive, having regard to all the contextual circumstances within which something was said or done" (Complete Technology Integrations Pty Ltd v Green Energy Management Solutions Pty Ltd [2011] FCA 1319 ("Complete Technology") at [75]).
34 The interpretation of sub-ss 29(1)(b) and (g) of the ACL (and the predecessor of s 29, s 53 of the TPA) does not differ materially from the interpretation of section 18. In ACCC v Dukemaster Pty Ltd [2009] FCA 682 ("Dukemaster") at [14] Gordon J considered s 53(e) of the TPA, which required a representation to be "false or misleading", while s 52 of the TPA required that a representation be "misleading or deceptive". Gordon J found that, as recognised in cases where both allegations were made, there was no "meaningful difference" between a representation which is "false or misleading" and one which is "misleading or deceptive", and such aspects of the conduct are treated mutatis mutandis (Dukemaster at [14], citing Foxtel Management Pty Ltd (2005) 214 ALR 554 at [94]; ACCC v Target Australia Pty Ltd (2001) ATPR 41-840; ACCC v Harbin Pty Ltd [2008] FCA 1792; ACCC v Prouds Jewellers Pty Ltd [2008] FCAFC 199 at [42]).
35 The principles relevant to this proceeding include the following:
(a) conduct is misleading or deceptive if it induces, or is capable of inducing error (Johnson Tiles Pty Ltd v Esso Australia Ltd (2000) 194 FCR 564; [2000] FCA 1572 at [63] (French J with whom Beaumont and Finkelstein JJ agreed));
(b) conduct is not misleading or deceptive simply because it causes confusion or wonderment in members of the public (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191 ("Parkdale v Puxu") at 199 (Gibbs CJ) and 209 (Mason J); Campomar Sociedad Limitada v Nike International Ltd (2000) 202 CLR 45 ("Campomar v Nike") at 85; Astrazeneca Pty Ltd v GlaxoSmithKline Australia Pty Ltd [2006] FCAFC 22 ("Astrazeneca") at [38] and Singtel Optus Pty Ltd v Telstra Corporation Ltd [2004] FCA 859 ("Singtel v Telstra") at [76]);
(c) when considering conduct directed to, or representations made to, the public at large or a section thereof, it is necessary to:
(i) identify the relevant target audience;
(ii) consider what characteristics a reasonable or ordinary member of the relevant target audience would have; and
(iii) consider whether the misconceptions or deceptions alleged to arise from the impugned conduct or representations would, or would be likely to, arise in a reasonable or ordinary member of the relevant target audience;
(Complete Technology at [75], citing Peter Bodum A/S v DKSH Australia Pty Ltd (2011) 280 ALR 639 at 679 (Greenwood J with whom Tracey J agreed).)
(d) there is no express requirement to prove reputation in any aspect of a product (including its get up, trademarks, signs or logos) in order to succeed in a claim for breach of sections 18 and 29(1)(b) and (g), although such reputation may be an element of establishing that consumers are likely to be misled or deceived by the respondent's use of similar features (see Hansen Beverage Co v Bickfords (Australia) Pty Ltd (2008) 251 ALR 1; [2008] FCAFC 181 ("Hansen v Bickfords") at [44]-[47] (Tamberlin J), [51] (Finkelstein J), [67] (per Siopis J)) or an element of establishing whether any similarity between the relevant marks is, in fact, deceptive (see Mars Australia Pty Ltd v Sweet Rewards Pty Ltd (2009) 81 IPR 354; [2009] FCAFC 174 at [22]-[30]).
36 The effect of the conduct or representations on "reasonable" or "ordinary" members of the target audience must be considered (Parkdale v Puxu at 199 (Gibbs CJ) and 209 (Mason J); Campomar v Nike at 85). The class may include a wide range of people, including the inexperienced and the gullible, but the ordinary or reasonable member will have particular characteristics referable to the particular sector of trade or commerce where the conduct takes place (Parkdale v Puxu at 199 (Gibbs CJ); National Exchange Pty Ltd v ASIC (2004) 49 ACSR 369 ("National Exchange") at [18]; Astrazeneca at [34], [37]).
37 The application of the reasonable person test:
(a) requires only that a "not insignificant number" of persons "in fact, or by inference, have been misled, or are likely to be misled" by the conduct or representations (Hansen v Bickfords at [46] (Tamberlin J) and [67] (Siopis J), citing Conagra Inc v McCain Foods (Aust) Pty Ltd (1992) 33 FCR 302 at 380-301 (French J));
(b) means that extreme or fanciful reactions to the conduct or representations are not to be taken into account (Campomar v Nike at 86; and National Exchange at [18]); and
(c) allows for the fact that reasonable people can come to differing views about what conduct or representations may mean, but recognises that if any of those reasonable views are consistent with being misled or deceived, the conduct will breach the section (National Exchange at [24]).
38 The impugned conduct must be viewed in context, having regard to the relevant surrounding facts and circumstances, and as a whole (see Taco Co of Australia Inc v Taco Bell Pty Ltd (1982) 42 ALR 177 at 199 (Deane and Fitzgerald JJ) ("Taco Co v Taco Bell"); Parkdale v Puxu at 199 (Gibbs CJ)).
39 It suffices that "dealing" or "negotiations", rather than an actual purchase, are induced by the conduct (Tec & Tomas (Aust) Pty Ltd v Matsumiya Computer Co Pty Ltd (1984) 1 FCR 28; (1984) 53 ALR 167 at 177). The fact that the consumer will or may learn the true position prior to entering into an agreement in respect of the goods or services which are the subject of the false, misleading or deceptive conduct, does not mean that there has been no infringement of the ACL (Singtel v Telstra at [42]; ACCC v Telstra (2004) 208 ALR 459; [2004] FCA 987 at [58]).
40 It is not necessary to establish that a particular person has been misled or deceived in order to establish a breach of the sections, although "evidence of actual misleading or deception and of steps taken in consequence thereof" may be significant (Astrazeneca at [33], [52]). The test of whether conduct is misleading is objective and the court must determine the question for itself (Trade Practices Commission v Optus Communications Pty Ltd (1996) 64 FCR 326; (1996) 34 IPR 176 (TPC v Optus) at 186 (Tamberlin J) quoting Taco Co v Taco Bell at 202-203 (Deane and Fitzgerald JJ); Medical Benefits Fund of Australia Ltd v Cassidy (2003) 135 FCR 1; [2003] FCA 289 at [43] (Stone J with whom Mansfield J relevantly agreed)).
41 An accurate disclaimer or qualification will not negate the misleading nature of conduct if it would not have come to the attention of a reasonable consumer in the target audience or that consumer would, in any event, be left with an erroneous assumption (TPC v Optus at 188-189 (Tamberlin J)).