Australian Competition and Consumer Commission v Harris Scarfe Australia Pty Ltd

The Australian Competition and Consumer Commission (ACCC) brought proceedings against Harris Scarfe Australia Pty Ltd for making misleading representations in its sale catalogue and television commercial. Harris Scarfe conducted a mid-season clearance sale in October 2006 across its stores in South Australia, Tasmania, and Victoria. The ACCC alleged that the sale catalogue and the television commercial made misleading representations about the discounts offered during the sale. Harris Scarfe argued that the representations, if made, were not misleading or deceptive.

The legal issues before the court included whether Harris Scarfe made specific misleading representations about discounts in its sale catalogue and television commercial and, if so, whether those representations contravened sections 52 and 53(e) of the Trade Practices Act 1974 (Cth). The court had to consider the context, emphasis, and clarity of the representations made in the advertisements.

The court found that Harris Scarfe made several misleading representations in the sale catalogue, including about home entertainment, audio, cameras, cordless phones, personal care, and kitchen appliances. These representations contravened sections 52 and 53(e) of the Trade Practices Act. However, the court did not find that Harris Scarfe made the storewide discount representation or the 20% off storewide representation as alleged by the ACCC. The court considered the emphasis and context of the representations, including the use of footnotes and asterisks, and concluded that these were not sufficient to negate the misleading effect of the representations in the catalogue.

In its reasoning, the court noted that the relative size and prominence of text, as well as the context provided by footnotes, were important in determining whether a representation was misleading. The court held that the footnote disclaimer in the catalogue, while present, was not prominent enough to negate the misleading effect of the headline discounts.

The court ordered that Harris Scarfe be restrained from including pictures or descriptions of non-discounted goods in future advertisements representing specified discounts. Additionally, Harris Scarfe was required to maintain its trade practices compliance program for three years from the date of the order.