Bernstrom v National Australia Bank Ltd B49/2002

Bernstrom (the applicant) brought proceedings against National Australia Bank Ltd (the respondent) in the Federal Court of Australia. The dispute concerned the respondent's alleged contravention of s 52 of the *Trade Practices Act 1974* (Cth) (now s 18 of the *Australian Consumer Law*). The applicant alleged that the respondent engaged in misleading or deceptive conduct by representing that it would provide a loan facility to the applicant, when in fact it had no intention of doing so. The applicant sought damages for loss allegedly suffered as a result of relying on these representations.

The primary legal issue before the Full Federal Court was whether the applicant had established the necessary elements of a contravention of s 52 of the *Trade Practices Act 1974* (Cth). Specifically, the court had to determine whether the respondent's conduct was misleading or deceptive, or likely to mislead or deceive, in the context of the alleged representations about the loan facility. This involved an assessment of the respondent's state of mind and intentions at the time the representations were made, and whether those representations, viewed objectively, were likely to mislead a reasonable consumer.

The court considered the principles governing misleading or deceptive conduct under s 52. It emphasised that the test is objective, focusing on the effect of the conduct on the relevant audience. The court noted that a representation as to future conduct can be misleading if the maker of the representation does not have reasonable grounds for making it, or does not intend to fulfil it. In this instance, the court found that the applicant had not discharged the onus of proving that the respondent lacked the intention to provide the loan facility at the time the representations were made, nor that the representations were otherwise misleading or deceptive.

The appeal was dismissed.