Case: Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199
Outcome: applied
More recently, in McGrath v Australian Naturalcare Products Pty Ltd [2008] FCAFC 2 , 165 FCR 230 the Full Court revisited the construction of s 51A(2). Emmett J, one of the members of the Full Court, there observed: [44] Under s 51A(1) of the Trade Practices Act , a representation is to be taken to be misleading if it is a representation with respect to any future matter and the maker of the representation does not have reasonable grounds for making the representation. Under s 51A(2) , the maker of the representation with respect to any future matter is to be deemed not to have had reasonable grounds for making the representation unless it adduces evidence to the contrary. However, if evidence is adduced by a representor to the effect that the representor had reasonable grounds for making the representation, the deeming provision will not operate. Where the representor adduces such evidence, it is then a matter for the Court to determine, on the balance of probabilities in the ordinary way, whether or not the representor had reasonable grounds for making the representation. This is understood to be the same approach that His Honour had previously expressed. In McGrath Allsop J also referred to the views previously expressed by Emmett J in Universal Sports and continued: [192] If evidence is adduced by the representor that is said to be evidence to the contrary, it will be for the Court to determine whether it is to the contrary in the sense just discussed. If it is, the deeming provision will cease to operate. That was the view of Emmett J, as understood by Keane JA [Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199]. That is my view. That was not, however, an expression of the view that the legal or persuasive onus has been changed by s 51A(2) , as some of the judgments in the "trend of established authority" referred to by Keane JA have stated. For instance, if evidence "to the contrary" is adduced by the representor, and if the representee itself adduces evidence tending to the lack of reasonable grounds, the matter might be equally poised. In such a case, there has been evidence "to the contrary" adduced by the representee, thereby eliminating the operation of the deeming provision, and, on the totality of the evidence, the proof of the reasonableness (or lack thereof) of the grounds is evenly balanced. Section 51A(2) does not, in my view, mean that in those circumstances the representor has not met an onus. The section does not cast the legal or persuasive onus, in such a case, on the representor. Its terms do not say so. The enactment history makes clear that the terms were deliberately chosen not to say so. Keane JA, despite his reference to the "trend of established [first instance] authority", does not say so. In my respectful view, to the extent that decisions such as IMB Group (1999) ATPR 41-704 ; Blacker [2000] FCA 681 ; Kaye [2004] FCA 1363 ; Lewarne [2007] FCA 1136 and Emerald Ocean [2006] ATPR 42-096 say, or may be taken as saying, that the legal or persuasive onus of proof is shifted to the representor by s 51A(2) , they are wrong. None examined the enactment history of s 51A. If it be thought, contrary to my reading of Keane JA's reasons, that his Honour's reference to Kaye [2004] FCA 1363 as "established authority" was a conclusion that s 51A(2) effected a reversal of the legal and persuasive onus of proof, I would be driven to the respectful view that his Honour was plainly wrong for the reasons that I have given. Perhaps not surprisingly, Emmett J also agreed with Allsop J as to the operation of s 51A(2): [2008] FCA 2 at [6] , 165 FCR at 233 4. The third member of the Full Court, Stone J, considered that the issues thrown up by s 51A(2) were best left to be resolved by a Full Court where there had been full argument and where the outcome depended on the view taken of the section: [2008] FCAFC 2 at [76] , 165 FCR at 247 8. 118 Reliance was placed upon the information communicated by Mr Wieland to Mr Mellor and thereafter communicated to the Applicants. Mr Mellor, it may be accepted, was for these purposes but a " convenient medium " through whom the Respondents were communicating their representations: cf Barton v Croner Trading Pty Ltd [1984] FCA 195 ; (1984) 3 FCR 95 at 107 per Bowen CJ, Beaumont and Wilcox JJ; Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 at [46] per Keane JA (Williams JA and Atkinson J agreeing).