Australian Competition & Consumer Commission v Dateline Imports Pty Ltd

In the case of Australian Competition & Consumer Commission v Dateline Imports Pty Ltd, the Australian Competition and Consumer Commission (ACCC) appealed a decision by the primary judge which found that Dateline Imports Pty Ltd had not contravened sections 52 and 53 of the Trade Practices Act 1974 (Cth) by making false representations about the contents of their product, Keratin Complex. The primary judge had ruled that the ACCC had not proved that Keratin Complex contained formaldehyde, a substance which had been banned in Ireland. The ACCC argued that the primary judge had misunderstood the expert evidence and mischaracterised the representations made by Dateline Imports. The ACCC further appealed the primary judge's finding that Dateline Imports had reasonable grounds for making the representations.

The legal issues before the court were whether the primary judge erred in finding that the product did not contain formaldehyde, and whether the primary judge was correct in finding that Dateline Imports had reasonable grounds for making the representations. The court considered the meaning of "formaldehyde", the "effective life" of the product, and whether the primary judge had erred in finding that testing of the product had to be undertaken within the product's "effective life". The court also considered whether a reasonable ground for making a representation is that it is true, and whether the representation should be considered in light of the grounds known and whether those grounds were objectively reasonable.

The court found that the primary judge had misunderstood the expert evidence and mischaracterised the representations made by Dateline Imports. The court held that the presence of methylene glycol and unreacted formaldehyde molecules in a complex aqueous solution was necessarily formaldehyde. The court also found that the primary judge had erred in finding that testing for the presence of formaldehyde had to be undertaken within the product's "effective life". The court held that the representations made by Dateline Imports were misleading or deceptive conduct under sections 52 and 53 of the Trade Practices Act 1974 (Cth). However, the court found that Dateline Imports had reasonable grounds for making the representations, as they were based on expert evidence that the product did not contain formaldehyde.

The appeal was allowed in part, and the declarations made on 18 November 2014 were varied to include that the first respondent had reasonable grounds for making representations that Keratin Complex did not contain formaldehyde, among other things. The question of penalty, if any, in respect of the contraventions was remitted to Rangiah J for hearing and determination. The cross-appeals were dismissed, and the cross-appellants were ordered to pay the cross-respondent's costs of the cross-appeal.