Case: Harris v Milfull [2002] FCAFC 442
Outcome: cited
great majority of cases concerning claims for damages pursuant to s 82 of the Trade Practices Act have been cases brought in reliance on the provisions relating to misleading and deceptive conduct, particularly s 52 , which is found in Pt V of the Trade Practices Act . Those cases fall into two classes. The first class concerns claims by people to whom representations amounting to misleading and deceptive conduct have been made. In such cases, the principal issue is often that of reliance. The question is whether the recipient of the representations relied on the truth of them in acting to his or her detriment, and suffered damage. In the second class of cases, the person claiming is not the person to whom the representations have been made, but a competitor of the person making the representations. This class of cases appears to have developed by analogy with the tort of passing off. A competitor of the person engaging in the misleading and deceptive conduct is permitted to claim profits lost by reason of sales of the competitor's products being diverted to those who have relied on the representations, and been misled by them into purchasing the first person's products instead of the competitor's. The existence of this class of cases might be said to be consistent with the proposition that, in determining who is entitled to claim damages pursuant to s 82 of the Trade Practices Act , that section is to be construed literally, so that no limit is to be imposed on the classes of persons who can trace loss and damage to some contravention by the person they sue of any of the provisions of Pt IV or Pt V of the Trade Practices Act . This is not necessarily the case. There do not appear to have been cases in which the net has been cast any wider than the class of competitors in the quasi-passing off situation. For instance, there appears to be no case in which a supplier of materials to the competitor has claimed for diminution of profits on the basis that, because the competitor lost sales, it ordered from the supplier less by way of materials to manufacture its products than it would have otherwise have done. In addition, it appears from Harris v Milfull [2002] FCAFC 442 that the principles relating to claims by shareholders that are derivative of those by the corporation in which they hold shares apply in relation to claims in respect of misleading and deceptive conduct. If it were the case that s 82 of the Trade Practices Act should be read as placing no limits on the classes of persons who can claim, it would surely be read as permitting claims by the shareholders, without regard to the principles barring derivative claims. With the single exception of the competitor category, relating to s 52 of the Trade Practices Act and other related sections, I have been unable to find any case in which a party whose interest is not protected directly by a provision of Pt IV or Pt V of the Trade Practices Act has been held to be entitled to claim damages pursuant to s 82 of the Trade Practices Act as a result of a contravention of a provision in relation to another party's protected interest. With the possible exception of Harris v Milfull (referred to in [10] above), I have not been able to find a case in which such a party has attempted to claim. The category of competitors in relation to misleading and deceptive conduct can be regarded as exceptional, because of the analogy with the tort of passing off, rather than as representative of any principle that s 82 applies to entitle any person who can trace loss or damage to a contravention of one of the relevant provisions to claim damages. To hold that s 82 , in conjunction with a provision of Pt IV , has such a broad reach would be a pioneering step. Before taking it, careful consideration of a number of factors would be necessary. I did not have the benefit of full argument about those factors.