Professional Liability Guide

PROFESSIONAL LIABILITY GUIDE

The decision of Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd is illustrative of the difference between the two concepts, in which Lockhart J said:

‘The two words, “misleading” and “deceptive”, are plainly not synonymous. That is not to say that each word may not catch some of the same conduct and that there may not be some degree of overlap. “Mislead” does not necessarily involve an element of intent and it is a word of wider reach than “deceive”. However, it is difficult, in my opinion, to read the word “deceive” in s 52 other than as involving some degree of moral turpitude as it does in ordinary English usage. Trickery, craft and guile, though not essential elements of liability, are typically at the heart of this second element of the statutory provision directed to the protection of the public from unfair trading practices.’ 132 French CJ and Kiefel J in Miller and Associates Insurance Broking Pty Ltd v BMW Australia Finance Limited gave a simpler interpretation of ‘misleading’, describing it as something that leads or is likely to lead into error. 133 In the context of professionals, the application of the prohibition is broad. It can apply to any advice, 134 statements of opinion, documents prepared or other representations made during a professional engagement. It can apply to statements of past or present fact, statements of opinion or future matters (subject to reasonableness, about which more is said below), as well as potentially to conduct by silence. Further, it is not necessarily limited to conduct or representations made by a professional to a client but is of equal application beyond a retainer if other factors exist. Statements of fact The most common and straightforward form of misleading or deceptive conduct involves a representation of a past or present fact. If the representation is incorrect, it will invariably be misleading. This is illustrated by the decision of Gates v City Mutual Life Assurance Society Ltd , 135 in which the appellant (Gates) was induced to take out a total disability cover insurance policy with the respondent (City Mutual) based on a representation by his insurance agent that benefits would be paid under the policy if he was unable to carry on his usual occupation as a carpenter. In fact, benefits were only payable if he was rendered unable to carry on any gainful employment. The conduct of City Mutual (by its agent) was held to be false – and therefore misleading – in contravention of section 52 of the TPA. (Gates’s appeal ultimately failed as he was unable to prove any losses flowing from the breach.) Statements of opinion A case often cited when deciding whether a statement of opinion is misleading or deceptive is Global Sportsman Pty Ltd v Mirror Newspapers Ltd, in which the Full Court unanimously said: ‘The non-fulfilment of a promise when the time for performance arrives does not of itself establish that the promisor did not intend to perform it when it was made or that the promisor’s intention lacked any, or any adequate, foundation. Similarly, that a prediction proves inaccurate does not of itself establish that the maker of the prediction did not believe that it would eventuate or that the belief lacked any, or any adequate, foundation. Likewise, the incorrectness of an opinion (assuming that can be established) does not of itself establish that the opinion was not held by the person who expressed it or that it lacked any, or any adequate, foundation.

132 (1988) 39 FCR 546. 133 (2010) 241 CLR 357. 134 Bartier Perry Pty Ltd v Paltos [2021] NSWCA 158. 135 (1986) 160 CLR 1.

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