The Law S4 of the Australian Consumer Law
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.
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 Law.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As per the Section 51A of the Trade Practices Act 1974, which has presently been replaced by the S4 of the ACL, if any sort of representations without any specific and reasonable ground (regarding the acts or decisions to be made in the near future) is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 misleading. 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 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 presented.
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 platform. 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 care.
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 made. 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.
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 statement.
Background of the Case
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.
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 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 contrary.
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 developers. 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.
Law Regarding the Case
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 misleading. 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.
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 villas.
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 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.
Facts of the Case
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.
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 Law.
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.
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