Case: Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199
Outcome: applied
may be so but its consequence is that Austcorp's submission fails at its threshold. Austcorp conducted itself in trade and commerce as a promoter of the resort. It did so in clear language using its exact name. It also associated itself by the use of the logo on the promotional material. The logo was not used in a legal document by lawyers. It was used in trade or commerce by Austcorp to convey its association with the project, whatever may have been the legal formalities and structures in which subsidiaries of Austcorp may have participated. The message which Austcorp wished to pass to the public was, that it, as the ultimate owner of the brand, was responsible for the development. It cannot accept the credit and refuse to take responsibility under the Trade Practices Act for its conduct: cf: see Gardam v George Wills &amp; Co [1988] FCA 194 ; (1988) 82 ALR 415 at 427-428 per French J; Cassidy v Saatchi &amp; Saatchi Australia Pty Ltd [2004] FCAFC 34 ; (2004) 134 FCR 585 at 593 [39] per Moore and Mansfield JJ, 599 [65] per Stone J; see too Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 at [40] , [48] per Keane JA (Williams JA and Atkinson J agreeing at [1], [145]). As Keane JA observed the presence of a logo and name in a brochure or similar material can mean that a reader will be entitled to conclude that the contents of the brochure state the reasons for the involvement of the person whose logo and name were used. Yet, despite the care and deliberation with which it was prepared, Austcorp submitted that the brochure was marketing material that contained a degree of puffery in the sense that Davies and Einfeld JJ had explained in General Newspapers Pty Limited v Telstra Corporation [1993] FCA 473 ; (1993) 45 FCR 164 at 178; Gummow J agreeing at 194. They said that in the ordinary course of commercial dealings, "... a certain degree of 'puffing' or exaggeration is to be expected. Indeed, puffery is part of the ordinary stuff of commerce". A puff is something that is not meant to be taken seriously or acted on: see also Downey [2005] QCA 199 at [92] per Keane JA. So, the confidence which the brochure exuded could not reasonably have been understood as boundless or applicable in all circumstances. The applicants relied on the analysis by Keane JA in Downey [2005] QCA 199 at [107] - [108] where he found that a representation that an established hotel operator, Radisson, considered the project was a guaranteed success would have been easily seen as of importance to an investor. The role which a representation can play in the formation of a state of mind is critical. The brochure was designed by Austcorp, with the considerable expertise of Mr Chappell and Mr Hung with a view to attracting investors. Indeed, it was critical for Austcorp's purposes to obtain sales of the remaining 30% of the units referred to in the brochure to make their project a commercial success. The brochure was not a mere puff intended to be treated by purchasers or potential purchasers as something which could be put to one side when the contract for sale arrived. The brochure, rather, was expressed in unqualified, optimistic and prospective terms. It was intended to lead investors to make a decision to purchase based on the belief that the investment was a sound one. I agree with the observations of Keane JA in Downey [2005] QCA 199 at [92] : "In the ordinary course of commercial behaviour some results are guaranteed and some are not. The concept of "guaranteeing a result" is not something that is usually associated with puffery but with the making of a firm commitment for which responsibility will be taken. The phrase 'guaranteed success' cannot be construed as a puff." After extensively reviewing the authorities in NMFM Property Pty Ltd v Citibank Ltd [2000] FCA 1558 ; (2000) 107 FCR 270 at 550 [1244] Lindgren J concluded that an act is done "on behalf of" a corporation for the purpose of s 84(2) if either the actor engaged in the conduct intending to do so as representative of or for the corporation, or the actor did so in the course of the corporation's business, affairs or activities. He also concluded that it is not necessary to show that the actor engaged in the conduct for the benefit of the corporation: see too Walplan Pty Ltd v Wallace [1985] FCA 479 ; (1985) 8 FCR 27 at 37-38 per Lockhart J, (Sweeney and Neaves JJ agreeing); Downey [2005] QCA 199 at [56] - [60] per Keane JA. In the context of the unqualified powerful assertions in the representations, the terms of cl 20.9 were inconspicuous and part of the "fine print" of the contract in the sense referred to by Mason J in Puxu 149 CLR at 210-211. As Jacobson and Bennett JJ said in National Exchange 61 IPR at 437 [50] (applied by Keane JA in Downey [2005] QCA 199 at [83] ): "A document which, when read as a whole, is factually true and accurate may still be capable of being misleading if it contains a potentially misleading primary statement which is corrected elsewhere in the document but without the reader's attention being adequately drawn to the correction."