Victorian Court of Appeal considers relationship between freedom of expression and misleading and deceptive conduct

Noone, Director of Consumer Affairs Victoria v Operation Smile (Australia) Inc & Ors [2012] VSCA 91 (11 May 2012) Summary

The Court of Appeal has found that operators of a complementary medicine centre specialising in treatment of cancer engaged in misleading or deceptive conduct in trade or commerce in making representations about the efficacy of their treatments. In so doing, the Court overturned a Supreme Court decision. In the decision, the Court considers the relationship between freedom of expression, as protected in the Victorian Charter, and misleading and deceptive conduct.

Facts

Operation Smile and the other respondents in this case were operators of a clinic providing alternative treatments for a number of illnesses including cancer. The clinic made a number of claims on its website about the effectiveness of the treatments it offered.

Following an investigation, the Health Services Commission of Victoria concluded that the treatments at the clinic had either no benefit or were unproven, and it expressed concern at the costs being incurred by vulnerable cancer patients for “seemingly ridiculous” and undignified treatments.

The Commission referred the matter to Consumer Affairs Victoria, who brought proceedings alleging that statements on the website were misleading and deceptive in representing that they were effective in treating cancer and had scientific support.

At first instance in the trial division of the Supreme Court, Justice Pagone held that the statements were not misleading or deceptive, essentially because he determined that readers of the statements would understand them as expressions of opinion that did not have support from conventional medicine.

At trial, a question arose about the interpretation of section 9(1) of the Fair Trading Act 1999 (Vic) – the section that prohibits misleading and deceptive conduct – in light of the protection of freedom of expression in the Charter. However, Justice Pagone did not find it necessary to answer the question.

Decision

The substance of the decision is a lengthy, and at times critical, review by Justice Nettle of statements made by the clinic and the trial judge’s findings that they were not misleading or deceptive (with Chief Justice Warren and Acting Justice Cavanough concurring).

The Court of Appeal overturned the findings of the trial judge in relation to every statement, essentially on the basis that the statements were assertions of fact rather than opinion, or that if opinions they claimed to have a rational basis or support in scientific research, neither of which was true.

Relevantly for Charter watchers, the judgments consider two Charter questions raised by the appellant, namely:

• whether the interpretation of section 9 of the Fair Trading Act should be affected by the Charter, specifically sections 15 (freedom of expression) and 32 (the interpretive provision); and
• whether section 9 of the Act is inconsistent with section 15 of the Charter.

In considering these questions, the two judgments – a joint judgment of Chief Justice Warren and Acting Justice Cavanough and a judgment by Justice Nettle – take different approaches.

Chief Justice Warren and Acting Justice Cavanough decline to answer the Charter questions, other than to reject an argument made in the hearing that the Charter required section 9 to be read to include a mental element rather than being a strict liability provision as had previously been considered.

The joint judgment considers that the meaning of section 9 is well settled in relation to its mental element, and that section 32 of the Charter does not permit a departure from this settled meaning. The judges declined to consider whether there were other possible constructions of section 9, taking into account freedom of expression, as they had not been raised in this case and were not necessary to decide it.

The joint judgment also refuses to consider the making of a declaration of inconsistent interpretation as no party had asked for it, and the appropriate notices had not been given (although the Attorney-General was already intervening in the case under section 34 of the Charter). While the joint judgment notes that the judges saw great force in the reasoning of Justice Nettle that section 9 is compatible, they declined to express a concluded view on the question.

Justice Nettle considers at length the relationship between freedom of expression and section 9 of the Fair Trading Act. Justice Nettle first notes the authorities to the effect that similar provisions do not infringe the common law or constitutional protections of free speech. He then considers whether the Charter right to freedom of expression protects misleading and deceptive conduct in trade and commerce and, if this speech is caught, whether the internal limitations clause in section 15(3) of the Charter permits a limitation on expression such as that in section 9.

Section 15(3) of the Charter provides that:

Special duties and responsibilities are attached to the right of freedom of expression and the right may be subject to lawful restrictions reasonably necessary

(a) to respect the rights and reputation of other persons; or

(b) for the protection of national security, public order, public health or public morality.

Justice Nettle considered the United Kingdom, Canadian and United States authorities on the nature of permissible limitations on freedom of expression, coming to the conclusion that section 9 is Charter compatible. Accordingly, there was no need to change the interpretation of the section on Charter grounds.

As part of this analysis, Justice Nettle considered the nature of “rights” of other persons that may justify limitations on freedom of expression, including an excursion into obscure jurisprudential theory that will interest some people (you know who you are). For the rest of us, it is enough to know that these “rights” should not be limited to human rights or legally enforceable rights, but may extend to other imperatives or interests of society, such as the protection of consumers from misleading and deceptive conduct.

Finally, without deciding the issue, both judgments give an insight into the approach that the judges may take to the vexed question of whether the general limitations provision, section 7(2), has a role in the interpretive task in section 32 of the Charter, following the High Court decision in Momcilovic.

Justice Nettle indicates that in his opinion there is no majority view from the High Court on the role of section 7(2), and that therefore the Court of Appeal should deal with the point that it thinks is correct. In his view that would mean following the Court of Appeal decision in Momcilovic – that section 7(2) has no role – until the High Court determines that this is incorrect.

By contrast, the joint judgment, while acknowledging that there is no binding authority from the High Court on the issue, indicates that it reads the High Court judgments as split 4:3 in favour of a role for section 7(2). In their view, this may be enough to permit the Court of Appeal to depart from the usual rule of following its own decisions and to not follow its decision in Momcilovic.

Commentary

While the Charter points in this case were probably not very controversial, the Court of Appeal provides clarity on aspects of freedom of expression, and particularly the nature of permissible limitations on expression. Once again the court follows relevant UK authorities, but also seeks to align Charter rights cases with Australian common law human rights cases.

The judgment is probably Justice Nettle’s most extensive on the Charter, and demonstrates the thoroughness and rigour of his Honour’s anaylsis.

The decision also gives some indication that there may be a difference of opinion on the Court of Appeal about how to deal with the High Court judgment in Momcilovic as it relates to sections 7(2) and 32 of the Charter.

This decision is available online at: http://www.austlii.edu.au/au/cases/vic/VSCA/2012/91.html

Hugh Mannreitz is a Melbourne-based lawyer.