Friend v Brooker & Anor

In *Friend v Brooker & Anor*, the High Court of Australia considered a dispute concerning the interpretation and application of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) in the context of a franchise agreement. The applicant, Mr Brooker, alleged that the respondent, Mr Friend, had engaged in misleading or deceptive conduct in contravention of section 52 of the Act. Specifically, Mr Brooker claimed that Mr Friend had made false or misleading representations about the profitability of a franchise business and the level of support that would be provided to franchisees.

The central legal issue before the High Court was whether Mr Friend's conduct constituted misleading or deceptive conduct within the meaning of section 52 of the *Trade Practices Act 1974* (Cth). This required the Court to determine whether the representations made by Mr Friend were, in fact, misleading or deceptive, and whether they were made in trade or commerce. The Court also had to consider the extent to which Mr Brooker's reliance on these representations was relevant to establishing a contravention of the Act.

The High Court analysed the evidence presented, focusing on the precise nature of the representations made by Mr Friend and the context in which they were communicated to Mr Brooker. The Court reiterated the established principles for assessing misleading or deceptive conduct, emphasizing that the test is objective and considers whether the conduct has the capacity to mislead or deceive a relevant section of the public. The Court found that the representations made by Mr Friend regarding the profitability of the franchise were not substantiated by reasonable grounds and were therefore misleading. The Court also considered the implied promise of support and found that the level of support provided fell short of what was represented, constituting misleading conduct.

The High Court allowed the appeal, finding that Mr Friend had contravened section 52 of the *Trade Practices Act 1974* (Cth). The matter was remitted to the Federal Court of Australia for the determination of appropriate remedies.