Introduction

Given the facts of the case, the approach in the present advice will be to restrict the discussion to areas that are likely to be in issue should parties actually proceed to real litigation. There would, therefore, be no need to waste time in discussing whether there was a contract between Nick Nice (Plaintiff) on the one hand and Dodgy Travel Pty Ltd (Defendant) on the other. This choice is informed by the fact that the real points of contestations between the parties will be on other legal issues albeit closely related to the existence of a contract between them. Proceeding on this understanding, the Plaintiff can maintain a number of causes of actions. For the pre-contractual conduct of the defendant, the plaintiff has two causes of action including statutory remedies under Australian Consumer Law (ACL) as well as a claim common law remedies such as damages for negligence. In addition, the plaintiff also has remedies against the defendant for breach of contract which include damages as well as the equitable remedies of injunction and restitution.

From the pre-contractual conduct of the defendant

Claims under the ACL

Nick Nice would be able to maintain several causes of action in respect of Dodgy Travel’s contravention of section 18 of the Australian Consumer Law (ACL). Under that section, misleading conduct that induces the other party to enter into a contract is prohibited. To be applicable to contracts such as the one between the plaintiff and defendant in the present case, several preconditions have to be satisfied. A discussion of some of the preconditions may be necessary here. For instance, the person alleged to have contravened the section must have engaged in a conduct as opposed to just mere inaction. Section 4(2) Consumer and Competition Act (CCA) broadly defines what amounts to a conduct to include both positive and negative conduct. It follows from this broad definition that representations of fact, expressions of opinion or low as well as silence or non-disclosure are captured by the section. That silence or non-disclosure may constitute conduct has been affirmed in a number of judicial authorities including Software Integrators v Roadrunner Couriers.[1]

What transpired at the Expo culminating into Nick Nice making the deposit payment to lock in the holiday fits within what conduct as contemplated in the statute. For instance, the sheet given to Nick Nice at the expo made several representations of fact. It made a representation that there would be no more than 12 people in the tour. There was a representation that there would be a return flight back to Nick Nice’s home location. The tour price was represented to include all accommodation, meals as well as activities. The sheet represented that the family room of $1,500 per person would accommodate two adults and at least 3 children. Sally Samuels further represented to Nick Nice that the particular departure was very popular and was probably booking out on that particular day.

Nick Nice must further satisfy the requirement that the representations made by Dodgy Travel and/or its agent Sally Samuels at the expo were either misleading or deceptive. The statute has not defined what amounts to a conduct becoming misleading or deceptive but the courts have generally held that such conducts as leading others into error would suffice.[2] Section 4(1) is to the effect that statements made without any reasonable grounds for so making them would be construed as misleading or deceptive. Even non-disclosure of information may turn out to be misleading or deceptive conduct in appropriate circumstances. This is particularly in those cases where partial disclosure gives false impression. All these are conditions that can be discerned in the present case.

The subject representations can be said to have been misleading or deceptive as they led Nick Nice into error in several respects. He was led into error in thinking that there would be at most 12 people in the tour which is in sharp contrast the 20 people who were actually in the tour. He was also led into error in believing that his family would be booked in one hotel room contrary to the two separate rooms they were actually booked into. The general tenor is that Nick Nice was led into error on several fronts.

Claim for damages under section 236 ACL

For example, he can recover damages from the defendant under section 236 of the ACL provided he shows that he has suffered loss as a result of the defendant’s contravention of section 18 of ACL. Dodgy Travel is, of course, likely to raise the defense that Nick Nice has not suffered any loss. The success of such a defense must, however, be assessed with regards to the facts. For instance, there are little chances that Dodgy Travel will succeed on such a defense given that Nick Nice had to pay an additional $1,000 at the reception of the hotel when he was just about to check out. This amount was never contemplated in the arrangement he entered into with Dodgy Travel and it is a loss to him recoverable as damages from Dodgy. The same argument would apply to the additional $50 that Nick Nice had to incur to hire a taxi back to the airport as Dodgy had failed to organize one as represented. The extent of damages that Nick Nice can recover is, however, not limited just to the $1,000 and $50 additional expenses incurred but extends to compensation for any emotional stress that he may have had to endure as a result of the misleading and/or deceptive representations.

Dodgy would also be able to raise the defense against Nick’s claim for damages that Nick did not actually rely on the representations even if the some could have been misleading or deceptive. This defense emanates from the fact that damages under section 236 are only recoverable if there is causation as was held in Campbell v Backoffice Investments Pty Ltd (2009).[3]

Action for an injunction against Dodgy Travel

It is also open to Nick Nice under sections 233-234 of ACL to seek orders of injunction against Dodgy Travel. In such an action, Nick Nice would essentially be seeking to restrain Dodgy either by itself and/or its agents from demanding the $500 in any manner whatsoever.  This is in line with the fact that there was a post-contractual representation that Dodgy would forgo this sum which representation Nick Nice relied on. Claiming the money now from Nick Nice would, therefore, mean that the promise to offer the amount as a discount when Dodgy was in fact still intent on demanding the money was a misleading or deceptive action falling under section 18 ACL.

Claims under common law

The pre-contractual conduct of Dodgy Travel through its agent Sally Samuels as already discussed above also entitles Nick Nice to maintain action(s) under common law. The representations can be characterized as misrepresentation.

Claim for damages based on negligence

In making the representations when Nick Nice visited their stand at the expo, Dodgy Travel had a duty to exercise reasonable care to make those representations. Nick Nice is, therefore, entitled to maintain an action in negligence claiming for damages for Dodgy’s failure to discharge its duty to exercise reasonable care.  The case L Shaddock v City of Parramatta [4]of is instructive in deducing what Nick Nice will have to demonstrate in order to sustain a suit in negligence. For one, it set out that the misstatement alleged to have been negligently made must have been made by a person carrying on business on profession. This fits the present situation as there is no dispute that Dodgy Travel carries on a business.  The advice must have been given in the course of that business and it is information of a kind which requires skill. This requirement is also easily satisfied in the present case as the choice of a holiday place definitely requires the guidance of a skilled tour operator just as Dodgy had claimed to be one. Lastly, it must be established that the person giving the information knew or ought to have known that the recipient had the intention to rely on the information. Dodgy may indeed try to argue that it was not aware that Nick intended to rely on the information provided but such an argument is likely to succeed given that Nick Nice had indicated that he first needed to discuss the information in the sheet with his wife. By indicating that the only departure is on 30 April and that it was probably going to book out, Sally Samuels must have intended that Nick Nice rely on such information.  Nick would, therefore, easily establish a cause of action.

From breach of contract by the defendant

Besides the causes of action already discussed, it is also open to Nick Nice to pursue a claim(s) founded on breach of contract. He will essentially be claiming that the contract he entered into had certain terms which were not met by Dodgy Travel Pty Ltd.On the other hand, Dodgy will be putting up the defense that there were not such terms in the contract as Nick Nice may be claiming to have been breached. The first hurdle to surmount in maintaining an action for breach would be to establish that the terms alleged to have been breached were actually terms of the contract.

The information sheet and the conversation between Nick Nice and Sally Samuels at the expo suggest a number of representations that may as well be considered as terms or not. For instance, there was the information that the tour would have no more than 12 people. There was also information that the specific departure chosen by Nick Nice was a very popular one. That the family was going to be booked into one room. That the accommodation price was all inclusive .These are just some of the representations.  It is clear from the previous discussions that the actual tour turned out differently from all those representations.

Nick Nice would not succeed unless he establishes that these were actually terms of the contract and nothing else. Thus, Dodgy can challenge his claim on the basis that they were mere sales puffs or representations that were not meant to become terms of the contract. A determination as to whether they are indeed terms is, however, made following an objective test as was held in Ellul & Ellul v Oakes.[5] The ratio in that case is that the representation must have been made in the course of contractual dealing for the purpose of inducing the other party to act on it and the other party actually acted on it. There is no doubt that both the information sheet and the conversations with Sally Samuels were made in the course of contractual dealing as between the parties. They were intended to induce Nick Nice to enter into the contract and he indeed entered into the contract as a result.All these serves to show that the representations were terms of the contract. That the actual tour turned out to be different from what Nick Nice expected is, therefore, a breach of contract on the part of Dodgy for which Nick Nice can claim several remedies including damages.

In response, Dodgy can put up the defense that its responsibility for any loss is excluded by the statement included at the bottom of the receipt issued to Nick Nice when he paid the deposit. This defense is also unlikely to prevail given the time at which the statement came to Nick Nice’s attention. In Oceanic Sun Line v Fay it was held that a ticket issued after the conclusion of the contract cannot alter the terms of the contract.[6] It was also held in the same case that terms in such a ticket could only apply if the party seeking to rely on it did all that was reasonably necessary to bring those terms to the attention of the other party. The situation in the present case is not very different. The ticket was issued to Nick Nice when they had already concluded the contract. In addition, Sally Samuels did not take the necessary steps to bring the terms contained behind the receipt to Nick’s attention. The inescapable conclusion is, therefore, that the exclusion clause does not apply and Dodgy Travel cannot escape responsibility.

Conclusion

The foregoing discussion has shown that Nick can maintain several causes of actions. He can pursue statutory remedies under the ACL. He can also seek remedies for breach of contract. It has also been pointed out that the Dodgy travel is unlikely to succeed in the various defenses it may try to put up leaving Nick Nice with a high chance of success.

Bibliography

Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54

Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304

Ellul & Ellul v Oakes (1972) 3 SASR 377

L Shaddock v City of Parramatta(1981) 150 CLR 225

Oceanic Sun Line v Fay (1988) 165 CLR 197

Software Integrators v Roadrunner Couriers (1997) ATPR (Digest) 46-177

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