Too good to be true? Godfrey Hirst v Cavalier Bremworth.

Author:Loming, Jennifer

Misleading and deceptive conduct - Fair Trading Act (FTA)

"Get unlimited broadband for $75 a month!" "Join Sky and get Sky Sport free!". Consumers are constantly bombarded with advertisements and offers from traders. Sometimes the offers seem too good to be true, until you read the fine print.

The FTA prohibits misleading or deceptive conduct and false representation. The relevant provisions being section 9 which prohibits misleading and deceptive conduct generally and section 13 which prohibits false or misleading representations.

A breach of these sections of the FTA is a criminal offence and if found to be in breach the offender can face fines up to a maximum of $600,000 for a company and up to $200,000 for an individual.

Godfrey Hirst v Cavalier Bremworth

The Court of Appeal decision in the case of Godfrey Hirst NZ Limited v Cavalier Bremworth Limited [2014] NZCA418 is a significant case concerning misleading conduct and a reminder to traders that it is not good enough to hide information in fine print, or where consumers need to hunt for it. The case involved a claim by Godfrey Hirst NZ Limited (GH) against Cavalier Bremworth Limited (CB) with regard to its headline warranties statement made by CB on its website relating to its "Habitat Collection" range of synthetic carpets which was manufactured by INVISTA (Australia) Pty Limited, the manufacturer of the synthetic fibres used in the carpets. The warranties posted on the website include "lifetime stain and soil resistance", "25 years fade resistance", "15 years abrasive wear" and "Lifetime Anti-static protection" - such warranties were then qualified by a hyperlink access to a "Limited Warranties" booklet contain the full terms and conditions (and limitations) of the warranties.

GH claimed consumers would have to delve too far into the fine print to know the limitations of the warranties (for instance, the terms and conditions contains qualifications that carpets installed by landlords in rental residential dwellings are excluded from the lifetime stain resistance warranty, stains by non-food and non-beverage substances, including ink and bleaches are excluded).

CB's defence pointed to the asterisks used to draw consumers' attention to the detailed terms and conditions. However, the Court of Appeal did not consider that the hyperlink to the warranties booklet averted the misleading dominant message. The Court of Appeal concluded that although consumers might notice some of the warranties are limited,...

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