Consumer Protection and Product Liability Law

This article discusses the Australian Consumer Law and Section 4, which prohibits misleading and false statements by corporations engaged in trade and commerce. It analyzes the Awad v Twin Creeks Properties Pty Ltd case and its relevance to Section 4. The case involved a dispute between a couple and a developer over false representations made regarding the development of a property. The court held that the developer had reasonable grounds for making the representations, and the couple failed to prove otherwise.

Consumer Protection and Product Liability Law

Table Of Contents
Introduction....................................................................................................................3
The Law S4 Of The Australian Consumer Law.............................................................3
Background Of The Case........................................................................................5
Law Regarding The Case........................................................................................5
Facts Of The Case...................................................................................................5
The Final Decision..................................................................................................6
Relevance Of This Decision With Section 4 Of The ACL.....................................8
Conclusion......................................................................................................................8
Reference List.................................................................................................................9

Introduction
The Australian Consumer Law known as the ACL represents for the principal
provisions for the protection of the consumers that is practised nationally within the
Australia. It is a single, national law, and that is applied in the similar manner in every
state and territory of the nation. The ACL furthermore provides for the prohibition of
the deceptive or any sort of misleading conducts during the practices of trade or
commerce within the nation.
The present task will emphasize basically on the S4 of the Australian Consumer Law
and will discuss and make the relevant analysis of the principles and the legal issues
that are associated with this specific legislation.
The Law S4 of the Australian Consumer Law
As a result of the broad cooperative reform that was carried out by distinct territory
and the state governments and also the Commonwealth, there came to be the existence
of the Australian Consumer Law1.This law prohibits for the misleading and making of
the false statements by the corporations that are indulged in the trade and the
commercial activities within the distinct state and territories of the nation.
This Commonwealth Australian Consumer Law is basically a specific schedule to the
CCA (Competition and Consumer Act 2010), and the same also replaces for the Trade
Practices Act (TPA) 1974. This entire law is administered by the Australian
Competition and Consumer Commission (ACCC).
As per the Section 51A of the Trade Practices Act 1974, which has presently been
replaced by the S4 of the ACL, if any sort of representations without any specific and
reasonable ground (regarding the acts or decisions to be made in the near future) is
made, then that representation is considered to be as misleading2. If a person
demonstrates for a representation regarding a future matter and does not provide for
the reasonable grounds regarding the matter, then that specific representation is taken
to be as a fact of misleading. In a case where a buyer is relying upon a specific
representation and on the other hand, the person who is making the representation has
1 Evans, Phil. "The building and construction industry code of conduct (WA)."
Brief 44, no. 6 (2017): 22.
2 Bruce, Alex. "Labelling Illogic: Food Animal Welfare & the Australian
Consumer Law." Austl. Animal Protection LJ 8 (2012): 5.

until and unless the adduced requisite evidences to the contrary, such representations
are considered to have no dependable grounds at all.
In regard to the court proceedings, any such matter that relates to the
misinterpretations in relation to some future matter, where the representations made
by the seller is relied by the buyer, will be only considered to have the established
reasonable grounds if the person making for such representations have enough
evidences to be provided regarding the representations made and claimed by him. In
the simpler words, the person making the representations while presenting for the
court proceedings requires to bring about the convincing and adequate evidences in
front of the court which could be stated to be the one upon which the representations
that were made are actually based upon. Once the evidences have been brought in
front of the Court of Law, then the court makes the decision regarding rhe resonability
of the claims that were made, based upon the facts that are evident from the evidences
that are presented3.
It is a very common fact that at the time of making the advertisement of a product,
service, or even a specific property, or even for the concern of raising the funds and
capital for the same issue the financial forecasts are made in such a manner that can
serve for the means of appeal towards the potential buyers or even the investors. But it
has been found that in certain cases the forecasts that have been made actually do not
turn out to be real which certainly rises for the consequences that end up on the legal
platform4. Due to the fact that these representations of the forecasts which are in
general made by the businesses are heavily relied upon basically by the potential
buyers regarding making the purchasing decisions and even the investors regarding
whether or not to make a specific investment, so when these statements of forecasts
are inappropriate then that turns to mislead the investors and the buyers and thus are
considered to be the deceptive conduct as per the Australian Consumer Law (ACL)
and may even end up with some severe legal consequences. The section 4 of this
Australian Consumer Law covers the representations that misleads in regard to the
concerns of the future matters and must be considered with the adequate care5.
3 Lewins, Kate. "Cruise Ship Operators, Their Passengers, Australian Consumer
Law and State Civil Liability Acts-Part 1." Austl. & NZ Mar. LJ 29 (2015): 93.
4 Allsop, James. "Class actions." Brief 44, no. 4 (2017): 19.
5 Loughnan, Arlie, Shae McCrystal, Elisa Arcioni, Matthew Conaglen, Emily
Crawford, Tanya Mitchell, Joellen Riley et al. "EDITORIAL BOARD (2015)."
(2015).

In relation to the determination of the fact that whether or not the forecasts that have
been made are misleading, it is much essential and necessary to emphasize on the fact
that how much care was actually taken by the one who originally made the statement
at the time of doing. While the concern is of the statements that are made regarding
some future matters, then a specific representation is considered to be as misleading if
the one who is associated with the making of the statement do not have any
reasonable or specific ground in context to the making of that statement during the
time when the specific representation was actually made6. Also the maker of the
representation is considered of not having any specific and reasonable ground till the
requisite evidences are cited in relation to the statement of forecast that has been
made.
In this context, we may consider here for the Awad v Twin Creeks Properties Pty Ltd
[2012] NSWCA 200 to have an enhanced understanding of this specific section of the
Australian Consumer Law.
Background of the Case
This was a case at the New South Wales Court of Appeal, and considered for the fact
that if the developers could remove the burden charged on them by proving that they
had the requisite and reasonable grounds regarding the making of a specific future
representation by the means of producing the evidences for the concern that they had
reasonable grounds regarding the making of that statement7.
Finally the court stood for the decision that the developers had the reasonable
grounds regarding the making of that particular future statement by the means of
citing the requisite evidences that established for the fact that the developers did really
on the reasonable grounds for the making of that specific future statement.
Law Regarding the Case
The section 51A of Trade Practices Act 1974 which is now equivalent to that of the
section 4 of Competition and Consumer Act 2010 is the law that can describe the
6 Pearson, Gail. "Enforcement and Effectiveness of Consumer Law in Australia."
In Enforcement and Effectiveness of Consumer Law, pp. 75-97. Springer, Cham,
2018.
7 Couston, Greg, and Natalie Treloar. "Risk management: Closed files, ongoing
risks." Law Society Journal: the official journal of the Law Society of New South
Wales 52, no. 1 (2014): 50.

exact concern for this particular case. As per the law, when an individual makes any
specific representation without any reasonable ground regarding some future matter,
then such a kind of representation is equivalent to that of misleading. The very while
when a potential buyer is relying on a specific representation, the individual who is
actually associated with the making of that specific statement must have the requisite
and the reasonable grounds for making the same statement unless any specific
evidence is cited to the contrary8.
Facts of the Case
Mrs and Mr Awad made the purchase of a particular vacant piece of land from a
specific developer, the Twin Creeks Properties Pty Ltd. The claim of Mrs and Mr
Awad was that they relied on a specific number of facts that were brought forward to
the couple both in the promotional material and added to that the same was also stated
orally by an agent who represented on behalf of the Twin Creeks Properties Pty Ltd.
There were two serious matters that were related to the statements that were made
from the end of the developers9. The initial representation was that the entire
development would comprise of some at least 177 distinct residential lots and the size
of each such plot would be approximately one acre. Added to that the additional
representation that was made Peppers Retreats, Resorts and Hotels would remain in-
charge of the management of the resort hotel that was proposed and would also take
care of the distinct recreational facilities and the other spots like that of the restaurant
within the Twin Creeks Properties Pty Ltd.
But the fact that was brought forward by the Awads was that the entire representations
that were made by the Twin Creeks Properties Pty Ltd were actually false. In this
context, the Awad couple claimed that due to the deceptive conduct of the developers
and their misleading attitude, this Mrs and Mr Awad were entitled to nullify the
contract for sale that they have signed with the Twin Creeks Properties Pty Ltd and
would also go to the extent of re-transferring the property to the developer with the
charges of providing for the false representations.
8 Roy, Alpana, and Althaf Marsoof. "Negligent omissions as a basis for holding
online hosts liable for infringements of trade mark rights: an Australian perspective."
(2016).
9 Sutton-Brady, Catherine, Patty Kamvounias, and Tom Taylor. "A model of
supplier–retailer power asymmetry in the Australian retail industry." Industrial
marketing management 51 (2015): 122-130.

Initially (at the first instance) it was held by the Court that the representation that was
related to the management of the hotel facilities and the other amenities was a
deceptive conduct and was also misleading10. Though the court as a factor of concern
did not permit the nullification of the contract of sale but again the court sanctioned
for the payment of the damages that were incurred to the Awad couple.
But both the parties did the further appeal to the New South Wales Court of Appeal
and handed down for the final decision.
The Final Decision
Regarding the issue of the 177 residential, the demand of the Awads was that there
had been a representation that related to the fact that there were 177 lots, however, in
reality the developer did not had any specific intention of proceeding in the manner
that was mentioned in the promotional brochure. Also the fact was that the application
that was lodged by the developer for the purpose of approval regarding the
construction of villas to the Council mentioned the approval for only 80 numbers of
such villas and even that was rejected by the Council. In such a situation, it was
mentioned in the brochure material that the developer would build 177 residential
villas11.
However, the court had accepted for the evidence that was provided by the director
belonging to the company of the developer and stated for the fact that rejection of the
approval had in no manner affected the proceedings of the entire project. It was also
found that there was the planning approval for the 177 lots where each measured one
acre, and with that, the oral evidence given by the director of the Twin Creeks
Properties Pty Ltd was very clear that the intention of the developer at the time while
the specific representation was made was to proceed with the project for 177
residential lots.
Again, in the issue that was related to the Peppers Retreats, the court accepted for the
oral evidence that was provided by the director, that in spite of the fact that the
application of the plan consisting of 80 villas (to comprise hotel and resort), there was
a strong financial standing in relation to the developers. Furthermore, the director also
10 Paterson, Jeannie Marie, and Gerard Brody. "“Safety Net” Consumer Protection:
Using Prohibitions on Unfair and Unconscionable Conduct to Respond to Predatory
Business Models." Journal of consumer policy 38, no. 3 (2015): 331-355.
11 Fitzsimons, James. "Private protected areas in Australia: current status and future
directions." Nature Conservation 10 (2015): 1-23.

added for the fact that the intention of the developers was still the same that the
Peppers Retreats would manage for the hotels and bars at their site.
The court emphasized on the fact that if the developer could produce for the evidences
that were contrary then they could defend themselves and claim for having the
reasonable grounds regarding the making of such representations. Thus, the burden
and liability regarding both the issues were removed from the person who made the
statements of the representation that was in question. But the major decision to be
taken by the court in context to this case was may or may not base on the evidences
that were provided in front of the court the reasonable grounds were there in
existence. The evidences that were provided to the court must have the particular
tendency of establishing for the fact that there were certain reasonable grounds in
relation to the making of such representations. Finally, the court held for the fact that
the developer had produced for the evidence regarding having the reasonable grounds
for the making of the representations and also added that the Awads had to prove that
the grounds that were cited by the developers were not reasonable. Also, due to the
fact that the Awad couple was in a position where they could not deny or contradict
for the evidence that was presented to the court and as a result the proposal rose by
Mrs and Mr Awad failed in the court and consequently the appeal made by the
developer was successful.
Relevance of This Decision with Section 4 of the ACL
The decision that made in response to the Awad v Twin Creeks Properties Pty Ltd
[2012] NSWCA 200 highlights for the fact whenever there is a representation that is
made regarding the future matters, and then there must be certain specific reasonable
grounds that can support for the making of such representations. In this case, the
developer company did not go for making any representation that was based on any
kind of assumption and thus was also able to produce for the justified and reasonable
grounds regarding the making of such representations. Thus this case law provided for
the effective demonstration of the entire matters that are stated in the section 4 of the
Australian Consumer Law12.
12 Thampapillai, Dilan, Vivi Tan, Claudio Bozzi, and Anne Matthew. Australian
commercial law. Cambridge University Press, 2015.

By their very nature, the forecasts are the statements that are made regarding the
matters that are to take place in the near future. But the matter that must be concerned
while making such forecasts is that there must have some justified and reasonable
grounds regarding the making of such representations that are related to the matters of
the future, if that fails to have the reasonable grounds, then such representations for
the future can be considered as the misleading or the deceptive deeds and can end up
even with the legal consequences and may even hamper the entire reputation of the
organizations that are associated with the making of such representations.
Conclusion
Thus from the above assignment it is very clear that when an organization is involved
either in raising the funds or even with the sale of certain products or services, then it
must ensure the fact that if it makes any representation regarding the future then that
must be having certain reasonable grounds behind that so that the people who are
buying the products or even planning to invest can found that the representations that
were made mainly to be relevant with the present and can invest or purchase for the
products and services in a satisfactory manner.

Reference List
Alex, Bruce. "Labelling Illogic: Food Animal Welfare & the Australian Consumer
Law." Austl. Animal Protection LJ 8 (2012): 5.
Kate, Lewins. "Cruise Ship Operators, Their Passengers, Australian Consumer Law
and State Civil Liability Acts-Part 1." Austl. & NZ Mar. LJ 29 (2015): 93.
Phil, Evans. "The building and construction industry code of conduct (WA)." Brief
44, no. 6 (2017): 22.
James, Allsop. "Class actions." Brief 44, no. 4 (2017): 19.
Arlie, Loughnan, Shae McCrystal, Elisa Arcioni, Matthew Conaglen, Emily
Crawford, Tanya Mitchell, Joellen Riley et al. "EDITORIAL BOARD (2015)."
(2015).
Gail, Pearson. "Enforcement and Effectiveness of Consumer Law in Australia."
In Enforcement and Effectiveness of Consumer Law, pp. 75-97. Springer, Cham,
2018.
Greg,Couston, and Natalie Treloar. "Risk management: Closed files, ongoing
risks." Law Society Journal: the official journal of the Law Society of New South
Wales 52, no. 1 (2014): 50.
Alpana, Roy, and Althaf Marsoof. "Negligent omissions as a basis for holding online
hosts liable for infringements of trade mark rights: an Australian perspective." (2016).
Catherine, Sutton-Brady,Patty Kamvounias, and Tom Taylor. "A model of supplier–
retailer power asymmetry in the Australian retail industry." Industrial marketing
management 51 (2015): 122-130.
Jeannie Marie, Paterson, and Gerard Brody. "“Safety Net” Consumer Protection:
Using Prohibitions on Unfair and Unconscionable Conduct to Respond to Predatory
Business Models." Journal of consumer policy 38, no. 3 (2015): 331-355.
James, Fitzsimons. "Private protected areas in Australia: current status and future
directions." Nature Conservation 10 (2015): 1-23.
Dilan, Thampapillai, Vivi Tan, Claudio Bozzi, and Anne Matthew. Australian
commercial law. Cambridge University Press, 2015.