Legal advice – misleading and deceptive August 6, 2021
- Mr Paltos sought damages under s 236 of the Australian Consumer Law. While the measure of damages under s 82 of the Trade Practices Act 1974 (Cth) (which is relevantly in similar terms to s 236) is not necessarily the same as for negligence (see Murphy v Overton Investments Pty Ltd (2004) 216 CLR 388;  HCA 3), Mr Paltos formulated his claim under this provision in the same manner as he did for breach of retainer and duty. However, it should be noted that the test for causation that inures in the word “by” found in s 82 adopts the common law “common-sense concept” discussed in March v E & MH Stramare Pty Ltd (1991) 171 CLR 506;  HCA 12: see Wardley Australia Ltd v Western Australia (1992) 175 CLR 514;  HCA 55 at 525 per Mason CJ, Dawson, Gaudron and McHugh JJ. The test of causation in s 5D of the Civil Liability Act is not necessarily the same: Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420;  HCA 48 at -. Nevertheless, in this case it was not suggested that there was any material difference in the application of the provisions.
- Whilst I find that it is likely that Mr McCaffery said to Mr Paltos during the currency of the retainer that the Put and Call Option Agreement did not apply to him “yet” or “at this time”, this was misleading and deceptive conduct. There was a limited suite of documents in issue. Bartier Perry had all of the documents and was being asked to provide advice to Mr Paltos about the appropriate and possible means available to him to transfer on the best terms possible his interest in the Partnership to Mr Milevski, whether immediately, upon termination of the Partnership, or after its dissolution. In that context, it was a dangerously incomplete statement of the rights Mr Paltos enjoyed to advise him that “the Put Options do not help [you, Mr Paltos]” yet or at this time. Whilst literally true, this advice was misleading and deceptive, in that it was apt to mislead Mr Paltos about the nature of his legal rights.
- The true position was that Mr Paltos arguably enjoyed valuable rights under the Put and Call Option Agreement. If Mr Paltos remained unable to work in the Partnership for a period of six months he would at that time, but for a limited period only, be able to exercise the put option granted by the Put and Call Option Agreement. Non-misleading advice would have been that the exercise of the put option may be financially advantageous to Mr Paltos and that he should seek accounting advice about that question. Acting in a non-misleading way, Bartier Perry should have advised Mr Paltos that the put option arguably survived the dissolution of the Partnership. Bartier Perry failed to give that advice.
- Bartier Perry’s conduct was misleading and deceptive.