Australian Securities and Investments Commission v Latitude Finance Australia (No 2)

The case of Australian Securities and Investments Commission v Latitude Finance Australia (No 2) involved allegations that Latitude Finance Australia Pty Ltd and Harvey Norman Holdings Limited had engaged in misleading or deceptive conduct under sections 12DA(1), 12DF(1) and 12DB(1)(a), (i) and (g) of the Australian Securities and Investments Commission Act 2001 (Cth). ASIC alleged that the defendants had prepared, published and broadcast, or caused to be prepared, published and broadcast, advertisements that promoted the purchase of home and electrical goods from Harvey Norman stores by equal monthly payments over 60 months on “no deposit” and “no interest” terms. The case was heard in the Federal Court of Australia.

The primary legal issues the court had to decide were whether the representative advertisements conveyed misleading or deceptive impressions to ordinary and reasonable consumers. Specifically, the court had to determine whether the advertisements gave the impression that the only material terms of the payment method were those referred to in the promotion, and whether they gave the impression that consumers would only be liable to pay the price of the goods by way of 60 equal monthly payments, or that any fees or charges would be relatively insubstantial. The court also had to consider whether these impressions were misleading or deceptive.

The court examined the evidence provided by ASIC, which included affidavits from analysts and consumers, as well as documentary evidence. ASIC relied on the testimony of consumers who had been misled by the advertisements, and on analysis conducted by ASIC staff. Latitude, on the other hand, provided evidence from their own staff, including a Program Leader and a Senior Manager of Remediation and Regulation Analytics, who provided insights into the training and data analysis related to the advertisements. The court weighed the evidence and concluded that the advertisements did indeed convey misleading impressions to consumers. The court found that the advertisements did not adequately disclose the fees and charges associated with the promotion, which were significant and not insubstantial as implied by the advertisements.

The court ordered that the parties bring in agreed draft orders or, if agreement cannot be reached, competing draft orders, giving effect to these reasons, by 4.00 pm on 28 October 2024. Entry of orders is to be dealt with in accordance with Rule 39.32 of the Federal Court Rules 2011.