Unconscionable And Misleading Conduct: How The Trade Practices Act Is Used And The Duty To Advise

Abstract

Section 52 of the Trade Practices Act 1974 (Cth), in contrast with most obfuscatory legislative drafting, is simplicity itself. The Section says that: A corporation shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive. Section 52 has no criminal sanction. Its sanctions are damages, injunction and the granting of a wide range of "other orders" under s.87 of the Act. Other more specific sections of the Act, in particular s.53 and s.53a, which involve conduct which would, in all usual circumstances, also infringe s.52, give rise to both civil and criminal sanctions. One of the most relevant aspects of s.52 is that it impacts not only on the principal offender but upon those who aid and abet or counsel or procure a breach of the section or who are "knowingly concerned" in such a breach. Usually this means that not only is a company liable for misleading or deceptive conduct engaged in by it but also the Director, Officer or Employee involved in such conduct is personally liable for its consequences. The writer has elsewhere described s.52 as a section which has changed the length of the Chancellor's Foot in but Twenty Three Words, such has been its impact in the fields of tort, contract and in areas as diverse as company law and defamation. Allied with the topic of misleading or deceptive conduct is that of "unconscionable conduct" - a concept stemming from the 1983 High Court decision in Amadio and codified in various similar but slightly differing statutes, the most well known of which is s.52a of the Trade Practices Act.