Muollo v Creative Engineering Design Limited CA240/04

In the Court of Appeal of New Zealand, Ms. Justine Muollo appealed against a decision made by Keane J in the High Court, which found her personally liable for $53,276.00 for misleading and deceptive conduct in breach of the Fair Trading Act 1986, along with interest, and costs and disbursements. Ms. Muollo was a director of companies that carried on business as producers and distributors in Wellington. The appeal centred on the High Court's finding that Ms. Muollo's email to CEDL on 27 July 2002 constituted misleading and deceptive conduct contrary to the Fair Trading Act. The Court of Appeal held that the High Court judgment contained errors in assuming that Ms. Muollo's email was a contractual promise or undertaking by her personally, and that there was no evidential foundation for finding that Ms. Muollo was intent upon immediate advantage only. The Court of Appeal found that there was no evidential basis for the finding of a personal breach of the Fair Trading Act, and thus the appeal must be allowed and all orders made against Ms. Muollo in the High Court were quashed. The orders against CEDL remained undisturbed.

This case highlights the importance of distinguishing between contractual promises and promises under the Fair Trading Act, as well as the need for evidence to support findings of misleading or deceptive conduct. The Court of Appeal's decision provides guidance on how such cases should be assessed and the standards that must be met for a finding of misleading or deceptive conduct under the Fair Trading Act.