ISSUE 1 - Was the conduct of the defendant misleading or deceptive within the meaning of the Trade Practices Act 1974 (Cth)
11The plaintiff has brought its claim pursuant to the Trade Practices Act 1974. Its cause of action relies upon representations made by the defendant which it alleges were in breach of section 52 of the Act. Section 52 is found within Part V of the Act. That Part is styled "Consumer Protection". The section, which is clearly wide ranging in its scope, relevantly provides:
52(1) A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
12In considering section 52 I must bear in mind the provisions of section 51A in the following terms:
51A Interpretation
(1) For the purposes of this Division, where a corporation makes a representation with respect to any future matter (including the doing of, or the refusing to do, any act) and the corporation does not have reasonable grounds for making the representation, the representation shall be taken to be misleading.
(2) For the purposes of the application of subsection (1) in relation to a proceeding concerning a representation made by a corporation with respect to any future matter, the corporation shall, unless it adduces evidence to the contrary, be deemed not to have had reasonable grounds for making the representation.
(3) Subsection (1) shall be deemed not to limit by implication the meaning of a reference in this Division to a misleading representation, a representation that is misleading in a material particular or conduct that is misleading or is likely or liable to mislead.
13As the defendant's Case Summary observes in paragraph 11, section 52 of the Trade Practices Act "simply sets a standard of conduct for corporations in trade and commerce - enjoining them not to engage in conduct that is misleading or deceptive or likely to be so. If a corporation transgresses that standard of conduct, then it opens itself up to the remedies in Part VI of the Act." Section 82 of the Act relevantly provides that:
a person who suffers loss or damage by conduct of another person that was done in contravention of a provision of Part...........V....... may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention.
14There is no issue that the defendant was a corporation involved in trade or commerce. The principal issue in the case is whether or not its conduct in making the representations that it did it to the plaintiff, misled or deceived it or were likely to do so. If the representations are found to be of the type proscribed by the Trade Practices Act, then Agreed Issues (ii), (iii) and (iv) will fall to be determined. I would add that there is no issue that the conduct of the defendant's employees is to be regarded as its conduct by virtue of the operation of section 84 of the Trade Practices Act 1974.
15What then precisely were the representations made by the defendant? It seems to me that the evidence allows me to conclude that there were four in total. The first was an oral representation made on 30 November 2010 by a member of the defendant's staff at Adelaide airport, that certain items of luggage had been taken off flight QF667 from Brisbane to Adelaide (that is that the items had been "bumped") and would be transported on a later flight and then be delivered to Mr Wilkins (Agreed Fact (v)). In the circumstances that existed and given the evidence of Mr Wilkins, which I accept, that the media box did not find its way onto the baggage carousel at Adelaide airport, it was on balance reasonable for him to assume that his media box had been "bumped " onto the next available flight. The defendant in paragraph 15 of its Case Summary concedes that this is so. The second representation was made on 1 December 2010 and was referred to in paragraph 12 of the affidavit of Mr Wilkins sworn 25 January 2013. He there deposes that on the morning of 1 December he spoke with an employee of Qantas Baggage Service. He told the defendant's employee that the media box was still missing and provided the person with details of the relevant baggage tag number. His evidence, which was unchallenged, was that the Qantas staff member said to him words to the effect, "We will try and track down your missing baggage". The third representation made by the defendant to the plaintiff, was also made on 1 December 2010. It was made orally, this time by Ms Morris and was that the defendant would pay for the cost of the hire of a replacement camera until Mr Wilkins camera was located (Agreed Fact (ix)). The fourth representation was made on 3 December 2010 when the defendant via Ms Morris forwarded an email to Mr Wilkins apologizing for any inconvenience that he had been caused and confirming that Qantas were "continuing to search for your camera". The plaintiff argues that this email confirmed for Mr Wilkins his belief that the media box remained in the custody of Qantas (that belief having been formed by the three earlier oral representations), notwithstanding that its precise location remained a mystery. It is the plaintiff's case that the totality of the representations made by the defendant objectively conveyed to Mr Wilkins the meaning that it would cover the plaintiff's hire costs until the missing media box, which remained in its custody and control, was located. The forming of such a belief by Mr Wilkins is, in my view, plainly reasonable in the circumstances, and one is left to ask rhetorically, given the content of the four representations made, what other conclusion Mr Wilkins could possibly have come to.
16The plaintiff further relies on what is says was the defendant's failure to disclose to Mr Wilkins that the media box had in fact been delivered to Adelaide on 30 November, in circumstances where Qantas knew or ought reasonably to have known that this was the position, and that this failure to disclose amounted to misleading or deceptive conduct, or to conduct likely to mislead or deceive within the meaning of s 52 of the Trade Practices Act. The plaintiff contends that this failure to disclose amounted in effect to a false representation by Qantas that the media box remained in the custody, care and control of Qantas although it was not able to be immediately located.
17As I comprehend the plaintiff's case it is not advanced on the basis that these representations, viewed in their totality were intentionally or deliberately misleading, but rather that they were negligently or carelessly made and that consequently the plaintiff was misled. It is also contended by the plaintiff that the defendant's failure to disclose the whereabouts of the media box (given that knowledge was in the defendant's possession or was at least reasonably ascertainable) when considered together with the oral and written representations made, amount together in all the circumstances to conduct that is misleading or deceptive or likely to be so.
18The essence of the defendant's case on the other hand is that the representation made by Ms Morris on 1 December 2010 was neither misleading nor deceptive because at the time that she made it she meant what she said and had the authority to make good on the representation. The defendant submits that the question of whether a statement is misleading or deceptive is to be determined by reference to the state of mind of the maker at the time of the representation being made. Further, the defendant submits that the failure to disclose case must fail as Qantas was not aware and could not have known that the media box had indeed been transported to Adelaide on 30 November 2010. That is, that Qantas could not disclose that which it did not know.
19I must determine therefore whether I am satisfied on balance that the defendant's conduct as is agreed, or which the evidence allows me to conclude took place, amounts to conduct that was deceptive or misleading or conduct likely to be deceptive or misleading.
20In Principles of Contract Law (Paterson, Robertson and Duke, 3rd Edition, 2009) the authors set out at paragraph [33.45] a clear and succinct description of the types of conduct that may be misleading or deceptive within the meaning of the legislation. That paragraph is in the following terms:
Conduct is regarded as "misleading" if it has the capacity to lead into or cause error. (Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1998) 79 ALR 83). Error occurs when a person is led to believe things that are not true or correct (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191). The courts have not attempted to define the words "misleading or deceptive" any further and in Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd Lockhart J stated that "there is no need or warrant to search for further words to replace those in the section itself"(at 93). In Demagogue v Ramensky (1992) 110 ALR 608 Black CJ set out the approach to be adopted when determining whether conduct is misleading or deceptive:
"Consistently with regard to the natural meaning of the terms of s 52, the question is whether in the light of all the relevant circumstances constituted by acts, omissions, statements or silence, there has been conduct which is or is likely to be misleading or deceptive. Conduct answering that description may not always involve misrepresentation"
In order to determine whether conduct is misleading or deceptive it is important to pay close attention to the context in which the conduct occurred. As Gibbs CJ noted in Parkdale Custom Built Furniture v Puxu Pty Ltd (at 199):
"The conduct of a defendant must be viewed as a whole. It would be wrong to select some words or act which, alone, would be likely to mislead if those words or acts, when viewed in their context were not capable of misleading".
21There is no requirement that the misleading or deceptive conduct be intentional or fraudulent. It may be negligent (see for example Coleman v Gordon M Jenkins and Associates [1988] FCA 393, per Einfeld J) or it may be by a completely innocent misrepresentation (see for example Greco v Bendigo Machinery Pty Ltd (1985) ATPR 40-521). Conduct is likely to mislead or deceive if that is a "real or not remote chance or possibility regardless of whether it is less or more than fifty per cent": see Tillmans Butcheries Pty Ltd v Australasian Meat Industry Employees Union (1979) 42 FLR 331 at 346 per Deane J. As the Federal Court observed in Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 87:
Section 52(1) is concerned with the effect or likely effect of conduct upon the minds of those by reference to whom the question of whether the conduct is or is likely misleading or deceptive falls to be tested The test is objective and the court must determine the question for itself
22The defendant's argument focuses mainly upon the representation made by Ms Morris on 1 December 2010 and it contends that such representation merely conveyed a state of mind of the maker (Ms Morris) and that so long as she genuinely and honestly believed what was represented at the time, and it was within her authority to make the representation, then the representation is incapable at law of constituting misleading or deceptive conduct. Putting aside my view that there was more than one representation made by the defendant as outlined above, this aspect is one that has assumed some importance in the proceedings. The plaintiff submits that the defendant's view of the law on this issue is incorrect. It argues that for the defendant to avoid its representation being misleading or deceptive in the circumstances of the present case, such representation needed an "adequate foundation": Global Sportsman Pty Ltd v Mirror Newspapers Pty Ltd (1984) 2 FCR 82 at 88 per the Court. Where a corporation makes a representation through an employee with authority to make it, expressing the state of mind of the corporation, it conveys the meaning that the maker had an adequate basis for that state of mind. The plaintiff relies on the following extract from Global Sportsman in support of its submission (at 88):
If a corporation is alleged to have contravened s.52 (1) by making a statement of past or present fact, the corporation's state of mind is immaterial unless the statement involved the state of the corporation's mind. Whether or not s.52 (1) is contravened does not depend upon the corporation's intention or its belief concerning the accuracy of such statement, but upon whether the statement in fact contains or conveys a meaning which is false; that is to say whether the statement contains or conveys a misrepresentation. Most commonly, such a statement will contain or convey a false meaning if what is stated concerning the past or present fact is not accurate; but a statement which is literally true may contain or convey a meaning which is false.
Many statements, for example, promises, predictions and opinions, do involve the state of mind of the maker of the statement at the time when the statement is made. Precisely the same principles control the operation of s. 52(1) with respect to the making of such statements. A statement which involves the state of mind of the maker ordinarily conveys the meaning (expressly or by implication) that the maker of the statement had a particular state of mind when the statement was made and, commonly at least, that there was basis for that state of mind. If the meaning contained in or conveyed by the statement is false in that or in any other respect, the making of the statement will have contravened s. 52(1) of the Act. Compare Lyons v. Kern Konstructions (Townsville) Pty Ltd (1983) 47 A.L.R. 114
23The plaintiff's argument simply put is that where it is proven that the promise conveying a state of mind lacked any basis or "adequate foundation", then the representation is capable of constituting misleading or deceptive conduct. It then argues that given the totality of the evidence and particularly the information and knowledge within the defendant's possession at the time of the representations, that in all the circumstances there was no adequate foundation for the representations made in this case, and that accordingly the representations are capable of amounting to misleading or deceptive conduct within the meaning of the Act. In my view, the terms of section 51A of the Act, coupled with the authority of Global Sportsman make this contention by the plaintiff one that is beyond dispute.
24Much was made both in the parties' case summaries and in their written submissions concerning the question of the defendant's silence or failure to disclose relevant details to the plaintiff as to the whereabouts of its media box. It does not appear controversial that mere silence without more cannot amount to misleading or deceptive conduct, unless the prevailing circumstances give rise to a reasonable expectation that if a relevant fact exists it will be disclosed. However where the misleading conduct is alleged to consist of statements/representations and non-disclosure or silence together, then plainly it is not a case of mere silence (see Townsend v Collova [2005] WASC 4 at [120]). Silence or non-disclosure can be misleading when combined with other factors such as the provision of incomplete information. In Rhone-Poulenc Agrochimie SA v UIM Chemical Services Pty Ltd (1986) 12 FCR 477, the Full Court of the Federal Court held that the provision of incomplete information will be misleading or deceptive conduct if it creates an erroneous impression because the omission is material. The plaintiff's contention here is that the defendant's silence and failure to disclose information within its possession (being that the media box had in fact been delivered to Adelaide airport) when coupled with the oral representations made by its representatives, does in the circumstances of this case amount to misleading or deceptive conduct or conduct that was likely to mislead or deceive. The failure of the defendant to disclose to the plaintiff information within its possession did, it is argued by the plaintiff, create an erroneous impression in it, being that the defendant would continue to search for his media box, and that until it was found it would cover the costs associated with his obtaining replacement equipment. There is in my view considerable force to this submission.
25The defendant has pointed to what it describes as "judicial disagreement" as to whether silence must be intentional for it to be misleading or deceptive and argues that in the circumstances here, it could not be so described. The plaintiff strongly disputes this submission and says that CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd [2004] VSCA 232 stands as good authority for the proposition that intention is not a necessary element in the Court's determination of whether the non-disclosure of information was misleading or deceptive. There the Victorian Court of Appeal rejected the submission that intention is a necessary element for silence, where it involves "non-disclosure", to be misleading or deceptive under s 52, as being "wrong in law". Further, the plaintiff has referred me to the decision of Hammerschlag J in Green v AMP Financial Planning Pty Ltd [2008] NSWSC 1164. In that decision His Honour approved of what the Victorian Court of Appeal had said in CCP Australian Airship Ltd (supra) and endorsed the proposition that intention is not a necessary element for the non-disclosure of information to be misleading or deceptive. He said the following (at [143]-[149]).
143. The defendants submitted that conduct which consists of remaining silent cannot constitute misleading or deceptive conduct within the meaning of s 52 as affected by ss 4(2)(a) or (b) and (c) of the TP Act unless the silence was intentional. They put that the plaintiffs' case failed at the outset because it was not established (nor was it suggested) that AMP Capital's failure to tell them of the decision was deliberate.
144. Support for this submission is to be found in a number of first instance decisions including the decisions of Finkelstein J in Costa Vraca Pty Ltd v Berrigan Weed & Pest Control Pty Ltd & Anor [1998] FCA 693; (1998) 155 ALR 714 and Merkel J in Johnson Tiles Pty Ltd & Ors v Esso Australia Ltd & Anor [1999] FCA 477; (1999) ATPR 41-696.
145. The proposition is derived from a construction of ss 4(2)(a) or (b) and (c) of the TP Act which proceeds as follows: ss 4(2)(a) and (b) provide that a reference to engaging in conduct is to be read as a reference to the doing of or the refusing to do any act; s 4(2)(c) provides that a reference to refusing to do an act includes a reference to refraining (otherwise than inadvertently) from doing that act; accordingly, for refraining to be conduct (within the meaning of the TP Act) it must be otherwise than inadvertent, that is, deliberate.
146. The proposition has, however, been expressly rejected in Victoria by the Court of Appeal in CCP Australian Airships Ltd v Primus Telecommunications Pty Ltd [2004] VSCA 232; (2005) ATPR 42-042. Nettle JA said at [34] with respect to it that:
"the misleading and deceptive quality of remaining silent inheres in the non-disclosure of information; not in any refusal to provide it. Consequently, it does not follow from the fact that a failure to act must be intentional in order to be actionable, that silence must be intentional in order to be actionable."
147. I am bound to follow the decision of the Victorian Court of Appeal, as an intermediate appellate Court in another jurisdiction on a matter of common legislation, unless I am convinced that it is plainly wrong: Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22; (2007) 230 CLR 89 at [135]; Tillman v Attorney-General (NSW) [2007] NSWCA 327; (2007) 178 A Crim R 133 at [25], [104].
148. Far from being convinced that the decision is wrong, it seems to me that it is correct.
149. Accordingly, I reject the submission that for silence to be actionable misleading conduct it must be deliberate.
26I am persuaded that in the present proceedings I am bound to follow Green v AMP Financial Planning Pty Ltd (supra) and I therefore reject the defendant's submission that non-disclosure of information must be deliberate or intentional to be actionable misleading or deceptive conduct under section 52 of the Trade Practices Act.
27I have finally concluded that the various representations made by the defendant to the plaintiff were negligently or carelessly made. Neither the Qantas staff at Adelaide airport nor Ms Morris intended to deliberately mislead or deceive the plaintiff. The fact is however that the defendant had available to it records that would, if examined, have revealed the true state of affairs, that is that the plaintiff's media box was at all relevant times in Adelaide and had been delivered there on QF667. Even if the staff at the airport could not reasonably have known this on 30 November 2010, there is no basis upon which it could be asserted that Ms Morris could not have been possessed of the information on the 1 or 3 December 2010 being the dates upon which she made the further representations on behalf of the defendant to the plaintiff. As has been earlier observed, it is clear that a negligent and even an innocent representation can amount to deceptive or misleading conduct within the meaning of section 52 of the Trade Practices Act.
28I have further concluded on balance that the conduct of the defendant when viewed in its totality and in the context of the prevailing circumstances did objectively amount to misleading or deceptive conduct or conduct that was likely to mislead or deceive. The plaintiff was in my view entitled to assume and infer that the media box remained in Qantas care, that they would locate it and in due course deliver it to him, and that in the meantime the cost involved by him in rehiring equipment would be a cost to be borne by Qantas. The plaintiff was further entitled to reasonably assume that Qantas would disclose to it that which its records revealed, being that the media box had reached its destination. Clearly some closer examinations of the defendant's own records would have enabled it to do so. Regrettably, as the cross examination of Ms Morris revealed this did not occur, or if it did, it did not occur to an appropriate standard such that Mr Wilkins was informed. I am satisfied on the evidence that if Mr Wilkins had been properly informed as to the fact that the media box had been delivered to Adelaide on QF667 then he would have formed the view that it had been taken by someone else from the baggage carousel and either stolen or lost. In those circumstances I am satisfied in accordance with his affidavit evidence that he would have contacted ISM and left it to them to determine the steps to be taken regarding a replacement camera and equipment, rather than for the plaintiff to enter into independent hire and purchase contracts at its own cost.
29This was not a case of mere silence. This was a case of non-disclosure of material facts coupled with the making of positive representations by the defendant to the plaintiff that together created in the plaintiff an erroneous impression as to a state of affairs, being that the defendant would reimburse it the costs involved in his obtaining substitute equipment so that he could undertake the filming task for which he had been engaged. I have concluded that this conduct was misleading and deceptive within the meaning of the Trade Practices Act.