The Law Handbook 2024

Chapter 7.2: Consumer protection laws 689 c the goods consisted of a vehicle or trailer acquired for use principally in the transport of goods on public roads. However, this definition does not apply if the person acquired goods: a for the purpose of re-supply; or b for the purpose of using them up or transforming them, in trade or commerce: i in the course of a process of production or manufacture; or ii in the course of repairing or treating other goods or fixtures on land (s 3(2) ACL). If a person is claimed to be a consumer in any proceeding, then it is presumed that they are a consumer unless the contrary is established (s 3(10) ACL). While it is intended that the ACL’s consumer protections apply across the entire economy, there are some exemptions. For example, insurance contracts cannot bemade the subject of relief under the ACL or the ASIC Act, except in relation to the prohibition on unfair contract terms in the ASIC Act (s 15 Insurance Contracts Act 1984 (Cth)). Also, Part 3–2 of the ACL, which covers consumer guarantees, does not apply to insurance contracts (s 63(b) ACL). Contracts for the supply of electricity and gas are also excluded from some aspects of coverage (see ss 35, 36, 39 Electricity Industry Act 2000 (Vic); ss 42, 43, 46 Gas Industry Act 2001 (Vic); and the Energy Retail Code). Misleading or deceptive conduct Section 18 of the ACL states that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. The effect of section 18 is the same as that of section 52 of the previous TP Act and, as such, the existing jurisprudence relating to section 52 remains applicable under the ACL. Definition The terms ‘misleading’ and ‘deceptive’ are not defined in either Act, and the courts have not given a precise definition of misleading or deceptive conduct. The overall impression created by the alleged conduct determines whether it is likely to lead a significant number of people into error or has the tendency to deceive such persons. In general, misleading someone may include conduct ranging from lying to them, to making false or inaccurate claims, to creating a false impression, to leading them to a wrong conclusion, to omitting important information. Importantly, it is not necessary to establish that the trader intended to mislead or deceive. A person or corporation may have engaged in conduct that was misleading or deceptive even if they have acted honestly and reasonably. Test An objective test is used to decide whether conduct is misleading or deceptive. The court or tribunal will consider whether the conduct was likely to mislead or deceive members of the class or group of persons to whom the conduct was directed. Silence Silence may constitute misleading or deceptive conduct, but this depends on the circumstances of the case. For example, the courts have held that a failure to disclose information is not misleading where it was not deliberately withheld. Silence or omission might be considered misleading if it can be shown that there is a reasonable expectation of disclosure (s 2(2) ACL; see Demagogue Pty Ltd v Ramensky [1992] FCA 557). Recent cases have held that ‘the test of reasonable expectation is not satisfied by an appeal ‘to vague notions of fairness or some concept of optimal disclosure’ ( ACCC v AGL South Australia [2014] FCA 1369 at [24]; ACCC v LG Electronics Pty Ltd [2017] FCA 1047). In the ACCC v LG Electronics matter, the court held that in the context of consumers complaining about faulty televisions, there was no reasonable expectation that the consumer guarantee rights in the ACL would be disclosed. Puffery ‘Puffery’ is enthusiastic or exaggerated claims used by advertisers to promote products and services and it is obvious that the claims should not be taken seriously. The courts have held that ‘puffery’ does not constitute misleading or deceptive conduct. Generally, a statement is considered to be ‘puffery’ if no reasonable person would take it seriously or act upon it. Examples of puffery include phrases such as ‘making your dreams come true’ or ‘best ever’.