Lifting the joint venture veil : liability of related entities for misleading conduct of agents engaged by joint venture partners

At common law, a corporation may be liable vicariously for the conduct of its appointed agents, employees or directors. This generally requires the agent or employee to be acting in the course of his or her agency or employment and, in the case of representations, to have actual or implied authority to make the representations. The circumstances in which a corporation may be liable for the conduct of its agents, employees or directors is broadened under the Australian Consumer Law (ACL) to where one of these parties engages in conduct “on behalf of” the corporation. As the decision in Bennett v Elysium Noosa Pty Ltd (in liq) demonstrates, this may extend to liability for the misleading conduct of a salesperson for the joint venture to parties who are not formal members of the joint venture, but where the joint venture activities are within the course of the entity’s “business, affairs or activities”.

Misleading conduct arising from public statements : establishing the knowledge base of the target audience

Despite the very substantial body of primary sources and secondary literature on Australia’s much-litigated statutory provisions proscribing misleading or deceptive conduct, the courts have provided little in the way of assistance about how to establish the knowledge base of the target audience at whom the public statement was directed. The purpose of this case note is to compare and contrast two recent decisions of the High Court of Australia that highlight the difficulties faced by applicants in attempting to establish a contravention of the relevant legislation where conduct is directed at a segment of the public or the public as a whole.

Unfair terms in residential land contracts : will the Australian consumer law improve a buyer’s bargaining position?

The prohibition on unfair contract terms in standard form consumer contracts has the potential to significantly impact on the terms of contracts for the sale of land. The definition of ‘consumer contract’ includes contracts for the sale or grant of an interest in land to an individual wholly or predominantly for personal or domestic use. Therefore, a contract for the purchase of a residence for personal occupation by the buyer, as opposed to a purchase for investment purposes, will be a consumer contract potentially attracting the application of the unfair terms provisions. Significant consumer protection mechanisms already exist in most state jurisdictions requiring disclosure of relevant matters to the buyer and providing remedies for the provision of misleading conduct. Minimal evidence of unfair terms in land contract was presented to the Productivity Commission Inquiry into the Australian Consumer Policy Framework raising the question as to whether there is an identified problem of unfair terms in real estate contracts and if so, whether the same economic and ethical rationales justify regulatory intervention. This article examines what effect if any the introduction of the unfair contract provisions will have on the enforcement of residential land contracts and the viability of previously accepted conditions if challenged as being “unfair terms”. The article concludes that despite the existence of several potentially unfair terms in some land contracts, the intervention of the rules of equity to overcome perceived hardship or unfairness to buyers from strict enforcement of terms means the unfair terms provisions are only likely to operate on terms untouched by those principles. In the authors’ view the scope for operation of the unfair terms provisions will be limited to terms untouched by the principles of equity and consumer protection legislation making it unlikely that there will be any significant realignment of the contractual obligations and rights of buyers and sellers of land.

Misrepresentation

Elements, types, rescission, exclusion clauses and impact of legislation

What’s in a name : Is there a right to terminate a contract for purchase of a unit if the name changes?

The significance of the proposed name of a building to buyers of units off the plan has received recent attention in Queensland and the ACT with differing results. In Gough v South Sky Investments Pty Ltd the Queensland Court of Appeal concluded that the name of the building was not an essential term of the contract and rejected a claim by a number of buyers to terminate their contracts because of the change of name from Oracle to Peppers. In contrast, Rares J in the Federal Court decision of Madison Constructions Pty Ltd v Empire Building Group (ACT) Pty Ltd considered that the name of the building in a proposed development could potentially form the basis of misleading conduct about the association of the seller with a particular development corporation.

Forrest v ASIC : a ‘perfect storm’

The policy objectives of the continuous disclosure regime augmented by the misleading or deceptive conduct provisions in the Corporations Act are to enhance the integrity and efficiency of Australian capital markets by ensuring equality of opportunity for all investors through public access to accurate and material company information to enable them to make well-informed investment decisions. This article argues that there were failures by the regulators in the performance of their roles to protect the interests of investors in Forrest v ASIC; FMG v ASIC (2012) 247 CLR 486: ASX failed to enforce timely compliance with the continuous disclosure regime and ensure that the market was properly informed by seeking immediate clarification from FMG as to the agreed fixed price and/or seeking production of a copy of the CREC agreement; and ASIC failed to succeed in the High Court because of the way it pleaded its case. The article also examines the reasoning of the High Court in Forrest v ASIC and whether it might have changed previous understandings of the Campomar test for determining whether representations directed to the public generally are misleading.

Australian Consumer Law Commentary and Materials [5th Ed.]

"The Australian Consumer Law came into operation on 1 January 2011 as a single national law. It replaced 17 different pieces of Commonwealth, State and Territory legislation relating to consumer protection. Its introduction meant that for the first time, consumers throughout Australia had the same rights and remedies and correspondingly, businesses had the same obligations and responsibilities towards consumers without the barrier of confusing and expensive local variations in the law. Australian Consumer Law: Commentary and Materials contains up-to-date material on the Australian Consumer Law, and in particular the fifth edition incorporates: a revised treatment of unconscionability, taking account of the changes to Part 2-2 of the ACL that became effective in 2012; other State and Federal provisions relating to unfair terms and cases such as Kakavas v Crown Melbourne, ACCC v Lux Distributors, Director of Consumer Affairs v Scully and PT Ltd v Spuds Surf; a comprehensive treatment of the impact of Google v ACCC, Forrest v ASIC and ACCC v TPG – the trilogy of decisions that provide the most recent insights into the High Court’s thinking on aspects of the prohibitions of misleading conduct in the ACL and the Corporations Act 2001; numerous decisions of note; and the possible impact of the Harper Review."--publisher website

Real estate agents, brochure and misleading or deceptive conduct

The decision of the High Court in Butcher v Lachlan Elder Realty Pty Ltd [2004] HCA 60 involves issues that affect every person who is induced to buy real estate in Australia by statements in sales brochures distributed by real estate agents. One of these issues is the extent to which estate agents unwittingly engage in misleading or deceptive conduct under s 52 of the Trade Practices Act 1974 (Cth) (‘the Act’) when they distribute sales brochures that contain untrue or misleading statements prepared by others. A further issue is the extent to which agents can escape liability by relying on disclaimers about the authenticity of false statements contained in brochures prepared by them.

Misleading and deceptive conduct at an auction

An unusual factual situation recently arose for consideration by Lindsay J of the Federal Circuit Court. In Carter v Delgrove Holdings Pty Ltd [2013] FCCA 783, an application was brought by the owners of a residential property in Western Australia, the Carters, for damages for misleading or deceptive conduct under s 18 of the Australian Consumer Law (“ACL”) and for damages for breach of contract arising from an auction of their house. Delgrove Holdings Pty Ltd was a trustee of a family trust with Mr Ilahi being a director and shareholder of the company as well as a beneficiary under the family trust. It was established that Delgrove Holdings Pty Ltd engaged in the business of property acquisition for the purposes of generating rental income...

Exposing and addressing tobacco industry conduct in low-income and middle-income countries

The tobacco industry's future depends on increasing tobacco use in low-income and middle-income countries (LMICs), which face a growing burden of tobacco-related disease, yet have potential to prevent full-scale escalation of this epidemic. To drive up sales the industry markets its products heavily, deliberately targeting non-smokers and keeps prices low until smoking and local economies are sufficiently established to drive prices and profits up. The industry systematically flaunts existing tobacco control legislation and works aggressively to prevent future policies using its resource advantage to present highly misleading economic arguments, rebrand political activities as corporate social responsibility, and establish and use third parties to make its arguments more palatable. Increasingly it is using domestic litigation and international arbitration to bully LMICs from implementing effective policies and hijacking the problem of tobacco smuggling for policy gain, attempting to put itself in control of an illegal trade in which there is overwhelming historical evidence of its complicity. Progress will not be realised until tobacco industry interference is actively addressed as outlined in Article 5.3 of the Framework Convention on Tobacco Control. Exemplar LMICs show this action can be achieved and indicate that exposing tobacco industry misconduct is an essential first step.

Codes of conduct for mobile device use in meetings : an exploratory analysis

The present paper addresses the findings of a preliminary investigation into policy and codes of conduct pertaining to the use of laptops and PDA’s in business meetings. The purpose of this study was to conduct a review of policies or codes of conduct pertaining to the use of laptops and PDAs in meetings. The investigation included academic literature, policy searches in the public domain of the Internet, as well as personal contact with target industries (large corporations – N=1000 + employees). The results highlight the dearth of policy and codes of conducts pertaining to the use of laptops and PDA’s in business meetings. Consequently, given the growing interdependence between mobile technologies and the contemporary workplace, there exists an opportunity for communication professionals to further research and develop policy and codes of conduct in this area. Implications for corporate communication policies and practices are also discussed.

Neural differentiation potential of human bone marrow-derived mesenchymal stromal cells: misleading marker gene expression

Background In contrast to pluripotent embryonic stem cells, adult stem cells have been considered to be multipotent, being somewhat more restricted in their differentiation capacity and only giving rise to cell types related to their tissue of origin. Several studies, however, have reported that bone marrow-derived mesenchymal stromal cells (MSCs) are capable of transdifferentiating to neural cell types, effectively crossing normal lineage restriction boundaries. Such reports have been based on the detection of neural-related proteins by the differentiated MSCs. In order to assess the potential of human adult MSCs to undergo true differentiation to a neural lineage and to determine the degree of homogeneity between donor samples, we have used RT-PCR and immunocytochemistry to investigate the basal expression of a range of neural related mRNAs and proteins in populations of non-differentiated MSCs obtained from 4 donors. Results The expression analysis revealed that several of the commonly used marker genes from other studies like nestin, Enolase2 and microtubule associated protein 1b (MAP1b) are already expressed by undifferentiated human MSCs. Furthermore, mRNA for some of the neural-related transcription factors, e.g. Engrailed-1 and Nurr1 were also strongly expressed. However, several other neural-related mRNAs (e.g. DRD2, enolase2, NFL and MBP) could be identified, but not in all donor samples. Similarly, synaptic vesicle-related mRNA, STX1A could only be detected in 2 of the 4 undifferentiated donor hMSC samples. More significantly, each donor sample revealed a unique expression pattern, demonstrating a significant variation of marker expression. Conclusion The present study highlights the existence of an inter-donor variability of expression of neural-related markers in human MSC samples that has not previously been described. This donor-related heterogeneity might influence the reproducibility of transdifferentiation protocols as well as contributing to the ongoing controversy about differentiation capacities of MSCs. Therefore, further studies need to consider the differences between donor samples prior to any treatment as well as the possibility of harvesting donor cells that may be inappropriate for transplantation strategies.