Undesirable business practices; misleading conduct; use of disclaimers to avoid liability
Facts: Lachlan Elder, a real estate agent, published a two-page brochure describing a waterfront property in Sydney that was for sale. The brochure contained a survey diagram, provided by the seller's solicitors. On both pages of the brochure, Lachlan Elder inserted the following statement in small print: "All information contained herein is gathered from sources we believe to be reliable. However we cannot guarantee it's [sic] accuracy and interested persons should rely on their own enquiries." Butcher was given the brochure and relied on the information it contained without checking it. After agreeing to purchase the property, Butcher found that the survey diagram was inaccurate in a way that seriously affected how he could develop the property. Butcher wanted to avoid the contract and recover the deposit paid, relying on a breach of s 52 of the Trade Practices Act 1974 (Cth).
Issue: Had the real estate agent engaged in misleading or deceptive conduct or conduct 'likely to mislead or deceive'?
Decision: In a majority decision, the court held that Lachlan Elder had not engaged in conduct that amounted to a breach of s 52.
Reason: The disclaimer was printed in small writing, but it was clear and legible, and there was not a great deal of other information on the brochure. The disclaimer would have been noticed by anyone who had taken the trouble to read the brochure carefully. In such circumstances, the survey diagram should not have been relied on by Butcher. The court said (at [51]): "[I]t would have been plain to a reasonable purchaser that the agent was not the source of the information which was said to be misleading. The agent did not purport to do anything more than pass on information supplied by another or others. It both expressly and implicitly disclaimed any belief in the truth or falsity of that information. It did no more than state a belief in the reliability of the sources."
Note: Although this case concerns s 52 of the Trade Practices Act 1974 (Cth), it continues to be relevant with regard to the interpretation and application of s 18 of the ACL.