Legal Actions for Misleading Information: Australian Commercial Laws

This document discusses the possible legal actions that can be taken against misleading information in Australian commercial laws. It explores the Competition and Consumer Act 2010 and the rights of consumers. The document also includes a case study and the implications of providing false and misleading advertisements.

Running Head: Australian Commercial Laws
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Australian
Commercial Laws
Student Name:

Australian Commercial Laws 1
Question 1
The legal system has been mainly divided into three parts by Professor Hart who provided
three different stages to analyse and identify the legal system. However, the laws are
classified into two parts that are primary laws and secondary laws where the basic formation
of laws is depended. The report will focus upon the Indian Legal System which will be
compared with the legal system or the legal framework of Australia. The Indian legal system
was originated from the constitution of India and the constitution was formed in the year
1950 by Dr B. R Ambedkar. 1 The powers of the constitution are taken by various countries
such as United Kingdom, United States of America etc. The constitution of India clearly
defines the working of government as well as the rights and duties of the citizens of the
country. The constitution of India has laid down the policies and procedure of forming the
laws in the country. On the basis of such policies and procedures, the government of India
has the right to form and implement such laws in the country. Such laws are made in the
parliament of the country, where the laws are proposed by the government of India in the
form of bills. If the bill gets accepted by the majority of the members in the parliament than
the bill gets formulated into law.
The bill can be presented by the government which has to pass by the two parliamentary
bodies that are ‘Lok Sabha’ and ‘Rajya Sabha’. 2 The bill can be presented by any member of
the parliament whether he/she is supporting the government of the country or he/she is in
opposition. After passing of such bill from both the houses of the parliament the bill is
presented in front of the president of the country and after the signature of the president of the
country the bill becomes law. 3 The constitution of India has given rights to the court of law
1 Amanda Perry-Kessaris, Global Business, Local Law: the Indian legal system as a communal resource in
foreign investment relations (Routledge, 2016).
2 Mahabir Prashad Jain. Outlines of Indian legal history. (NM Tripathi Private Ltd. 2017).
3 Rajan et al, Science and democracy: making knowledge and making power in the biosciences and beyond. New
York (Routledge 2015).

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to protect the rights of every citizen of the country and the court has the right to penalize the
people who have violated the rights of other people, such punishments are given on the basis
of laws which are made by the government and parliament of the country.
The rule of recognition helped the makers of the constitution in India in providing various
fundamental policies which are necessary for the development of the country. The rules of
recognition are the rules which are being defined as the primary and secondary rules. Primary
rules are the rules which are clearly defined by the constitution of the country whereas
secondary rules are the judgements given by the court of law. The constitution of India has
made in such a manner that it has wholeheartedly adopted the rule of change where the laws
can be updated, deleted and created in a constitutional manner. The Indian legal system
completely follows the rules of adjudication where the courts are diversified on the basis of
criminal courts, family courts and various other courts. 4 The courts have also the process of
hierarchy where the individual can apply to the higher courts of justice. Hence it can be noted
that the Indian legal system complies with all the provisions under Hart's three-part system of
law.
In the case of Australia, it can be noted that the three-part system of law also applies to the
legal system of Australia. It can also be noted that the legal system of Australia and the legal
system of India are quite similar to the legal system of both the countries are inspired by
English legal system.5 The constitution of Australia has given right to form laws in the
Australian Parliament. The legal system of Australia has duly adopted the rule of recognition
where the laws are being discussed by the members of parliament that are between the House
of Representative's laws and Senates. The primary laws are being made to protect the rights
of the people and secondary laws are made by the court of law which is applicable to each
4 Sujit Choudhry, Madhav Khosla, and Pratap Bhanu Mehta, The Oxford handbook of the Indian constitution
(Oxford University Press, 2015).
5 Tom Campbell, and Jeffrey Goldsworthy. Judicial power, democracy and legal positivism (Routledge, 2017).

Australian Commercial Laws 3
and every citizen of Australia. 6 The legal system in Australia has also implemented the rules
of change where the government of Australia can update, delete and add new laws for the
benefit of the country. The laws can only be changed in the parliament only after having a
clear discussion between the government and opposition of the country. Based upon such
discussion the laws are amended, added and deleted in a constitutional manner. The legal
system of Australia is different from the legal system of India but it has also certain
similarities as they are adopted and influenced by the English legal system. The legal system
in Australia also follows the rules of adjudication as the country has been following and
maintaining two different kinds of courts which deal in civil cases and another type of court
which deal in criminal cases. 7 The decisions made by the higher courts are enforceable on the
lower courts. 8 The decision of the courts is on the basis of the primary laws made by the
parliament of the country. However, the primary laws are applicable to each and every citizen
of the country but the secondary laws are the judgement given by the court of law which is
being identified and followed by every citizen of the country. All three principles of Hart has
played an important role in creating the legal system of Australia which has helped the
country to grow in a positive manner.
6 Shimon Cowen. ‘God, religious tradition and the Australian constitution’ (2015) 59 (3) Quadrant 62.
7 Adrienne Stone and Elisa Arcioni, ‘Australian Constitutional Culture and the Social Role of the Constitution’
(2016) 14 (1) .60-79.
8 George Williams and Daniel Reynolds, ‘The racial discrimination act and inconsistency under the Australian
constitution.’(2015) 36 Adel. L. Rev. 241.

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Question 2
Issue
What are the possible legal actions that must be taken by Sandra against the jjNet for
providing misleading information?
Rule
The above case study basically focuses upon Competition and Consumer Act 2010.9 The
Australian Consumer Laws are mentioned under the schedule 2 of the act where all the rights
of the consumers are explained in detail. The case study focuses upon the contractual
relationship with Sandra and jjNet. The above act deals in the relationship between a
consumer and the supplier of goods and services.10 The relationship between Sandra and jjNet
arises when there is a contractual relationship with each other hence the Contract Review Act
1980 is also applicable in the case study which arises the contractual obligation between the
parties. 11 The reason for the implementation of the Competition and Consumer Act 2010 by
the government of Australia in order to protect the interest of the consumers of the country.12
The product sold by the supplier to the customer of goods and services must also follow the
provisions of the Sale of Goods Act 1986 (Qld) where the provision of implied term is
mentioned in the contract of sale. Such contract includes the provisions relating to the quality
of goods and services to be sold to the customers.13 The act establishes certain standards
which should be followed by the supplier of the goods and services.14 The above act also
9 Competition and Consumer Act 2010
10 Howells, Geraint, and Iain Ramsay Handbook of research on international consumer law (Edward Elgar
Publishing 2017).
11 Evan McKendrick and Liu. Contract Law: Australian Edition. (Macmillan International Higher Education.
2017).
12 Lauren Bianchi, ‘Consumer law: Changes to Australian consumer law: Key benefits for vulnerable
consumers’ (2018) 50. LSJ: Law Society of NSW Journal,’ 71.
13 Sale of Goods Act 1986 (Qld)
14 James Keeves, ‘Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd’
(2016) 340 (38) Adel. L 503.

Australian Commercial Laws 5
mentions punishments to given to the supplier of the goods and services if certain standards
are not followed by the supplier. The relation between the supplier and consumer establishes
when there is a valid contract between the parties. As per the Contract Review Act 1980, the
parties to contract that is the supplier of goods and services and the consumer has the right to
enforce the terms and conditions of the contract. 15 Such a contract is enforceable by the court
of law when all the elements of the valid contract are included in the contract between the
consumer and supplier. It can also be noted that the contract between the parties should
provide all the necessary information to the contract. It can also be understood that a contract
cannot be formed on the basis of misrepresentation of facts between the parties. A
misrepresentation is an act done by one party to contract by providing misleading information
to the party in order to enable the party to enter into the contract. 16 A contract which is made
on the basis of misrepresentation is considered to be an invalid contract. 17 A misleading
advertisement is an advertisement which is made on the basis of providing wrong and
incorrect information about the product in the form of advertisement whether it is a digital
advertisement or the advertisement in the form of paper and pamphlets. The main and the
basic purpose of such advertisement are to attract more and more customers in a wrongful
manner in order to provide a tough competition to their competitors.
As per the Competition and Consumer Act, 2010 various provisions are described under the
act which provides provisions to provide misleading information to the customers, which
enables the customers to purchase more and more of their products and services, which will
also result in providing tough and unfair competition to their customers. The act protects the
15 Contract Review Act 1980
16 Ewan McKendrick and Qiao Liu. Contract Law: Australian Edition (Macmillan International Higher
Education 2015).
17 Shumank Deep, Deepak Singh and Syed Aqeel Ahmad. ‘A review of contract awards to the lowest bidder in
Indian construction projects via a case-based approach.(2016) 5 (1) Open Journal of Business and Management
159.

Australian Commercial Laws 6
rights of the customers where the misleading information is provided to them. The also
includes the provision of punishment to the suppliers in providing misleading information to
the customers.
In order to counter such misleading information to the customer's various provisions such as
section 18(2) and section 29(3) of the Australian Consumer Laws which are mentioned in
schedule two of Competition and Consumer Act, 2010 is formed where the government of
Australia has prohibited the use of such false and misleading advertisements to the consumers
of the country.
Such laws can be understood in detail by understanding the case study of Singtel Optus Pty
Ltd v Australian Competition and Consumer Commission18 where the Australian court orders
the company to pay $3.6 million in penalties in providing misleading information to the
customers regarding the internet and broadband services to the customers. The company was
also penalised for $5.26 million by the court of law. 19 The court has considered that Singtel
Optus has provided false and misleading information to the customers by using deceptive
practices to gain more and more customers. Such misleading information has resulted in
breach of provisions mentioned in the Australian consumer law and the rights of the
consumers were also breached as well hence the company is liable to pay penalties
under Competition and Consumer Act 2010 as the company followed unfair trade practices
which have resulted in decrease in the customer base of the competitors in an unfair
manner20.
18 [2012] FCAFC 20
19 Lexology, Globe business media group (2018) < https://www.lexology.com/library/detail.aspx?g=46cac7c5-
c732-4001-b553-98f620b75935>.
20 ACCC, Full federal court orders Optus to pay $3.6 million penalty (2018) <https://www.accc.gov.au/media-
release/full-federal-court-orders-optus-to-pay-36-million-penalty>.

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Application
As per the given case scenario, it can be understood that Sandra a customer of jjNet, has read
an advertisement regarding the internet plan of $59.99 per month which will include a
modem and a phone without any extra cost. It was promised in the advertisement that the
customers of such product will get the speed of ‘100 megabits per second’ and the customer
will get such speed up to 10 GB per month. After using such product for three months
Sandra realised that the phone she was using was having battery problems and she was not
even receiving the internet speed of 100 megabits per second as she was promised by the
service provider. She also observed that whenever she recharged with extra internet package
the speed suddenly went up to 100 megabits per second. It can also be observed that the
company named has also violated the implied term of Sale of Goods Act 1986 (Qld) where
the quality of goods and services were not up to the quality as shown in the advertisement.
Hence it can be observed that the advertisement she saw violated the rights and she has the
right to file a suit against the company as the company has violated section 29 of the
Australian consumer law. Sandra has the right to seek reimbursement from the jjNet company
as the court may order penalty to the company as it could be observed from the case study of
Singtel Optus Pty Ltd v Australian Competition and Consumer Commission where the court
of law has ordered the company to pay $5.6 million as a penalty.

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Conclusion
It can be observed and concluded that information given by the internet providing company
gave false information to Sandra who has violated the contract. The company has also
violated the implied terms of the Sale of Goods Act 1986 (Qld) which makes the company
liable for its actions, hence it can be recommended that Sandra has the right to sue the
company and can claim for damages as the information provided to Sandra was
misrepresented.