AUSTRALIA Law and Practice Contributed by: Joachim Delaney and Ranjani Sundar, HFW
Although Section 29 uses “false or misleading” rather than “misleading or deceptive”, the Australian courts have held that there is no material difference between the two phrases ( ACCC v Dukemaster Pty Ltd [2009] FCA 682; ACCC v Coles Supermarkets Australia Pty Ltd (2014) 317 ALR 73; REA Group Ltd v Fairfax Media Ltd [2017] FCA 91, [13]) and claimants often plead breaches of both provisions. Common law misrepresentation overlaps with the statutory provisions and is relevant in circumstances where the statutory provisions do not apply, including where the claims exceed the monetary limits stipu - lated. Common law misrepresentation involves (i) the giving of false information by a party (or their agent) to an innocent party before a contract is made; and (ii) the statement inducing the innocent party to enter into a contract. A misrepresentation may be innocent, neg - ligent or fraudulent with the crucial difference being whether the person making the statement believed the statement to be true at the time of making the statement. 1.2 Causes of Action After Receipt of a Bribe The decision of the Supreme Court of the United King - dom in FHR European Ventures LLP & Others v Cedar Capital Partners LLC [2014] UKSC 45 (FHR) resolved the debate in the UK surrounding the rightful owner of a bribe that has been paid to an agent. The Supreme Court unanimously held that where an agent accepts a bribe or secret commission, it is held on trust for the agent’s principal who is entitled to a proprietary interest in the benefit. Whilst English law is not bind - ing in Australian courts, the decisions are nonetheless persuasive and it is likely that the findings in the FHR case would apply equally in Australia. An example of the application of this principle is found in Twigg v Twigg (2022) 402 ALR 119 at 186; [2022] NSWCA 68 [184] where it was observed by Brereton JA (Bell CJ and Payne JA, agreeing) that “In my judgment, a claim for proprietary relief against an accessory is within the analogy: it is a claim for the accessory to account for the trust property it has received, by restoring it to the trust. As the Supreme Court of the United Kingdom has observed, ‘the expression equitable accounting can encompass both proprietary and non-proprietary claims’. The defaulting party is ‘liable, at the option of
the cestuis que trust, to account either for the value... or... for the thing itself...’ (emphasis added).” The causes of action available to claimants whose agent has received a bribe include: • “Mareva” or freezing orders, and proprietary injunc - tions to freeze the bribe/commission and their traceable proceeds; • false accounting offences that exist at both the Commonwealth level and state/territory level; • criminal actions for domestic bribery under Divi - sions 141 and 142 of the Criminal Code when Commonwealth public officials are involved, or under state and territory legislation which makes it a crime to bribe public officials and private indi - viduals; • criminal actions for bribery of foreign public offi - cials under Section 70.2 of the Criminal Code; and • claims for breach of fiduciary duty where an agent is the fiduciary of the principal. 1.3 Claims Against Parties Who Assist or Facilitate Fraudulent Acts It is well established in Australia that a third party can breach a trust either by “knowing receipt” or “know - ing assistance” ( Barnes v Addy (1874) 9 Ch App 244 (“ Barnes ”)). When either is established, this will create a constructive trust in favour of the claimant ( Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 (“ Farah ”); Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41). Liability for knowing receipt is a category of construc - tive trusteeship which depends on the defendant having received and become chargeable with trust property, and having knowledge of the breach before parting with the property ( Barnes , 251–252). Liability for knowing assistance is more complicated and, following the Australian High Court’s decision in Farah , can be imposed if one of the following catego - ries of knowledge can be established: • actual knowledge; • wilfully shutting one’s eyes to the obvious;
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