Section 18 of the Australian Consumer Law (“ACL”) is found in Schedule of the Competition and Consumer Act 2010 (Cth), and it prohibits misleading or deceptive conduct in business or trading activity. An alleged breach of section 18 is one of the most common allegations that can be brought against a business by its customers or other people it deals with. Damages are available for breach.
Whether conduct is misleading or deceptive, or is likely to mislead or deceive, is an objective question of fact that the court must determine. The central question is whether the impugned conduct, viewed as a whole, has a sufficient tendency to lead a person exposed to it into error; that is, to form an erroneous assumption or conclusion about some fact or matter.
Conduct is likely to mislead or deceive if there is a real and not remote possibility that it will do so, regardless of whether it is more or less than a 50 per cent chance. It is not sufficient that impugned conduct merely has a tendency to cause confusion or wonderment. Something more is required. It is not necessary to prove an intention to mislead or deceive, nor that the impugned conduct misled or deceived anyone in fact. While evidence that a person was, in fact, misled may be probative, it is not essential and does not itself establish a contravention of the prohibition to which section 18 gives effect. Further, conduct may be found to be misleading or deceptive, or likely to mislead or deceive, even where the persons to whom the conduct was directed were not actually misled or deceived. A person will engage in misleading or deceptive conduct by passing on misleading information given to him or her by others, unless that person disclaims any belief in the truth or falsity of that information. Whether a corporation that publishes or passes on the misleading representation of another has itself engaged in misleading or deceptive conduct will depend on whether it would appear to ordinary and reasonable members of the relevant class of persons that the corporation has adopted or endorsed that representation.
Allegations of breach of section 18 of the ACL call for the impugned conduct to be assessed as a whole, in all of the circumstances that attend it. To look merely at isolated parts of a person’s conduct without considering their effect as a whole is to invite error. While it is necessary to consider allegations of misleading or deceptive conduct as pleaded, such consideration must extend to all of the relevant surrounding facts and circumstances. Those relevant circumstances include the person or persons to whom the conduct was directed. In considering conduct towards a class of persons, the court must isolate by some criterion or criteria a representative member of the class for assessment.