FEDERAL COURT OF AUSTRALIA
Fletcher v Nextra Australia Pty Ltd [2015] FCAFC 52
Citation: Fletcher v Nextra Australia Pty Ltd [2015] FCAFC 52 Appeal from: Nextra Australia Pty Limited v Fletcher [2014] FCA 399 Parties: MARK TIMOTHY FLETCHER v NEXTRA AUSTRALIA PTY LTD (ACN 070 924 677) File number: QUD 263 of 2014 Judges: MIDDLETON, MCKERRACHER AND DAVIES JJ Date of judgment: 10 April 2015 Catchwords: CONSUMER LAW – promotional flyer published by franchisor of newsagent franchise – online blog article critical of flyer – online blog authored by director and co-owner of rival franchise group – s 18 Australian Consumer Law – misleading or deceptive conduct – whether publication of article on the blog was conduct in trade or commerce – whether the allegedly misleading or deceptive representations, as pleaded, were established at trial – whether the alleged representations were as to matters of opinion which were honestly held
Held: appeal dismissed
Legislation: Competition and Consumer Act 2010 (Cth) Sch 2, s 18
Trade Practices Act 1974 (Cth) s 52Cases cited: Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304
Chilcotin Pty Ltd v Cenelage Pty Ltd [1999] NSWCA 11
Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594
Coulton v Holcombe (1986) 162 CLR 1
Fasold v Roberts (1997) 70 FCR 489
Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82
Haig v Minister Administering National Parks and Wildlife Act 1974 (1994) 85 LGERA 143
Houghton v Arms (2006) 225 CLR 553
Madden v Seafolly Pty Ltd (2014) 313 ALR 1
Overton Investment Pty Ltd v Murphy [2001] NSWCA 183
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191
Plimer v Roberts (1997) 80 FCR 303
Robin Pty Ltd v Canberra International Airport Pty Ltd (1999) 179 ALR 449
Seafolly Pty Ltd v Madden (2012) 297 ALR 337
SingTel Optus Pty Limited v Australian Football League [2012] FCA 138
Toben v Jones (2012) 298 ALR 203
Thompson v Palmer (1933) 49 CLR 507
Universal Music Australia Pty Ltd v Cooper (2005) 150 FCR 1
University of Wollongong v Metwally (No 2) (1985) 59 ALJR 481
Village Building Co Ltd v Canberra International Airport Pty Ltd (2004) 139 FCR 330Date of hearing: 26 February 2015 Place: Brisbane Division: GENERAL DIVISION Category: Catchwords Number of paragraphs: 102 Counsel for the Appellant: Mr C Golvan QC with Mr B Gardiner Solicitor for the Appellant: The Law Offices of Barry Fried Counsel for the Respondent: Mr MM Varitimos QC with Dr GC Dempsey Solicitor for the Respondent: Cranston McEachern
IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY
GENERAL DIVISION
QUD 263 of 2014
ON APPEAL FROM THE FEDERAL COURT OF AUSTRALIA
BETWEEN: MARK TIMOTHY FLETCHER
AppellantAND: NEXTRA AUSTRALIA PTY LTD (ACN 070 924 677)
Respondent
JUDGES:
MIDDLETON, MCKERRACHER AND DAVIES JJ
DATE OF ORDER:
10 APRIL 2015
WHERE MADE:
BRISBANE
THE COURT ORDERS THAT:
1.The appeal be dismissed.
2.The appellant pay the costs of the respondent,…
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- AGLC
- Fletcher v Nextra Australia Pty Ltd [2015] FCAFC 52
- Case
- [2015] FCAFC 52
- Decision Date
CaseChat Overview and Summary
In the case of Fletcher v Nextra Australia Pty Ltd, the respondent, Nextra Australia, pursued a claim against the appellant, Mr Fletcher, alleging misleading or deceptive conduct in contravention of section 18 of the Australian Consumer Law. The dispute arose from an article posted by Mr Fletcher on his online blog, which was critical of a promotional flyer published by Nextra Australia. The blog was authored by Mr Fletcher, who was also the director and co-owner of a rival franchise group. The primary judge found in favour of Nextra Australia, and Mr Fletcher appealed the decision.
The legal issues before the court included whether the publication of the blog article constituted conduct in trade or commerce under section 18 of the Australian Consumer Law, whether the allegedly misleading or deceptive representations, as pleaded, were established at trial, and whether the alleged representations were matters of opinion which were honestly held. The court had to determine if the blog article made false or misleading representations, and if so, whether these representations were made in the course of trade or commerce. Additionally, the court needed to assess if the representations were factual or opinionated, and if the latter, whether they were honestly held.
The court found that the blog article did indeed constitute conduct in trade or commerce, as Mr Fletcher's multiple business interests, including his directorship and ownership of newsXpress, a separate blog, and his own newsagent business, supported this conclusion. The court held that the blog article made misleading or deceptive representations, such as suggesting that newsagents had not switched to Nextra or News Extra, and that some franchisees were insolvent due to the Nextra franchise system. The court also determined that the representations were not honestly held opinions, as they were based on false information. Consequently, the appeal was dismissed, and Mr Fletcher was ordered to pay the costs of the respondent.
In summary, the court found that Mr Fletcher's blog article constituted misleading or deceptive conduct in trade or commerce, and that the primary judge's findings were correct. The appeal was dismissed, and Mr Fletcher was ordered to pay the respondent's costs.
The legal issues before the court included whether the publication of the blog article constituted conduct in trade or commerce under section 18 of the Australian Consumer Law, whether the allegedly misleading or deceptive representations, as pleaded, were established at trial, and whether the alleged representations were matters of opinion which were honestly held. The court had to determine if the blog article made false or misleading representations, and if so, whether these representations were made in the course of trade or commerce. Additionally, the court needed to assess if the representations were factual or opinionated, and if the latter, whether they were honestly held.
The court found that the blog article did indeed constitute conduct in trade or commerce, as Mr Fletcher's multiple business interests, including his directorship and ownership of newsXpress, a separate blog, and his own newsagent business, supported this conclusion. The court held that the blog article made misleading or deceptive representations, such as suggesting that newsagents had not switched to Nextra or News Extra, and that some franchisees were insolvent due to the Nextra franchise system. The court also determined that the representations were not honestly held opinions, as they were based on false information. Consequently, the appeal was dismissed, and Mr Fletcher was ordered to pay the costs of the respondent.
In summary, the court found that Mr Fletcher's blog article constituted misleading or deceptive conduct in trade or commerce, and that the primary judge's findings were correct. The appeal was dismissed, and Mr Fletcher was ordered to pay the respondent's costs.
Orders
Orders of the court
1. The appeal be dismissed.
2. The appellant pay the costs of the respondent, to be taxed if not agreed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
This argument is not persuasive. It is unrealistic to take words in isolation. It is unrealistic to view the questions asked in that Article as being merely points of advice on which readers may wish to conduct further queries. The content of the questions asked must be taken in context of the statement in the closing paragraph, which colours the entire Article, and which says:… The decision on which marketing group to join should be based on facts, provable facts. The nextra flyer I have seen is not about facts. Indeed it contains some false and misleading information. Further, it uses fear to try and generate interest in nextra …(emphasis added) Further, the sentences to which a great deal of the case was directed, (extracted above (at 67])) are immediately followed by the statement: “[t]his is important as the details provided on the flyer are misleading and deceptive”. The case theory that the Article did no more than raise questions, which underlies a number of Mr Fletcher’s submissions, must be firmly rejected. The minor departures between the pleading and the finding are totally insignificant. Falsity was always at the heart of the pleaded case with regard to this representation. The conclusion reached by the primary judge was open as a matter of impression in construing the Article as a whole. The finding was well within the pleaded case. Ground 2(d) – testimonials in the Flyer out of date In determining whether the Article represented that the testimonials in the Flyer were out of date, the primary judge focussed on the fact that Mr Fletcher’s Article stated that “… the details provided on the flyer are misleading and deceptive” and that the Flyer “… contains some false and misleading information”. The primary judge said (at [60]-[62]) that the reference to “details” would be “read by a reasonable reader as including the testimonials on the Flyer” and therefore the Article carried the representation that the testimonials in the Flyer were either false or out of date. Mr Fletcher again argues that it is not open to switch from the general to the specific, that is, that the assertion in broad terms that the details in the Flyer were misleading and deceptive could not have led to a conclusion that the Article also represented that the testimonials themselves were false or out of date. As already noted, there is nothing in this point. It was entirely open to the primary judge to conclude that all of the questions raised by Mr Fletcher were rhetorical, that is, intended to suggest a specific answer. As such, the questions were capable of constituting representations. The better point for Mr Fletcher is that the Article makes no reference to the testimonials in the Flyer. Mr Fletcher says that there was no evidence, or any finding, as to how many Flyers were distributed, the extent of the distribution, what the likely readership was or the state of relevant knowledge of readers. The Flyer was not appended to the Article. The Flyer was never published or distributed electronically. There was no evidence identifying the extent of the readership of the Article who would have had knowledge of the Flyer. Mr Fletcher says Nextra’s case at trial was that the meaning of the Article should be determined “by looking at it as though the [Flyer] were not being read in conjunction with it”.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
The Flyer is set out in full on the immediately following pages, followed by Mr Fletcher’s Article commenting on the Nextra Flyer. THE PRIMARY JUDGMENT In addition to the Like for Like Representation, Nextra pleaded four other representations at trial. The first was that the Article represented that some or all of the newsagents had not in fact switched to Nextra or News Extra. The second was that Mr Fletcher had represented that one of the franchisees listed in the Flyer was insolvent, and such insolvency was caused by the Nextra franchise system. It was also asserted that Mr Fletcher’s Article suggested that the testimonials contained in the Flyer were either false or out of date. Finally, it was asserted that Mr Fletcher’s Article conveyed that the Nextra franchise system did not in fact improve the gross profit of any of the franchisees listed in the Flyer. None of these statements was true, according to Nextra. Each was said to contravene s 18 ACL. The appeal, more so than the trial, was complicated by the superfluous pleading by Nextra (at least insofar as representations of fact were concerned) that there was no reasonable basis to support the representations. That pleading was unnecessary because making a false representation of fact is sufficient to constitute a contravention of s 18 ACL. In Global Sportsman Pty Ltd v Mirror Newspapers Ltd (1984) 2 FCR 82 (at 88) the Full Court said:[i]f a corporation is alleged to have contravened s 52(1) by making a statement of past or present fact, the corporation’s state of mind is immaterial unless the statement involved the state of the corporation’s mind. Nonetheless, as will be seen, it was quite clear on the information before the Full Court that the parties understood, and ran their cases on the basis, that the representations in the Article were partly or mostly representations of opinion and partly representations of fact. The first question the primary judge considered was whether Mr Fletcher’s actions in posting the Article on his Blog constituted conduct in trade or commerce for the purposes of s 18 ACL. Her Honour referred to Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 and cited the passage in the joint decision of Mason CJ, Deane, Dawson and Gaudron JJ (at 602-604). Her Honour noted (at [30]) that the question of whether Mr Fletcher’s conduct in respect of the Article was “in trade or commerce” was complicated by his multiple business interests. Her Honour focussed on the fact that Mr Fletcher was a director and part owner of newsXpress (which operates a separate newsXpress blog). He was also a newsagent in his own business, and owned 100% of Tower Systems International Australia Proprietary Limited which sold point of sale software for newsagents (and also operated a blog). The primary judge noted that Nextra submitted that Mr Fletcher, through the Blog, promoted his commercial interests, (in particular the newsXpress franchise and Tower software), and, in any event, that Mr Fletcher through the Article sought to attack Nextra so as to protect his commercial interests.
Ratio Decidendi
Legal Principle Established
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