Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd

What happened?

Parkdale made a lounge suite, the "Rawhide", whose appearance and design were copied from Puxu's "Post and Rail" (or "Contour") suite. The suites were near enough identical to look at. Parkdale labelled its chairs before delivery with a label about 6.35 centimetres square identifying itself as the manufacturer, in accordance with trade practice; Puxu's chairs were labelled the same way. There was no false labelling and no false description. A suite cost about $1,500.

Puxu said that selling a virtually identical-looking suite was misleading or deceptive conduct contrary to s 52 of the Trade Practices Act 1974 (Cth).

What did the Court decide?

It was not. Parkdale's appeal was allowed.

There was evidence of actual deception, and the Court did not brush it aside; it examined it. Two purchasers bought Rawhide chairs believing them to be Puxu's — but "in each case ... the labels had been removed from the chairs, and there is no suggestion that the appellant had been in any way responsible for their removal", and "in each case a salesman employed by the retailer gave misleading information to the buyer" (Gibbs CJ at 197). His Honour drew the general point at 199: "evidence that members of the public were misled, not by any conduct of the defendant, but by other circumstances for which the defendant was not responsible, would be quite irrelevant."

On whose reaction counts, the Chief Justice accepted that a class of consumers "may include the inexperienced as well as the experienced, and the gullible as well as the astute", but held that s 52 "must ... be regarded as contemplating the effect of the conduct on reasonable members of the class": its "heavy burdens ... cannot have been intended to be imposed for the benefit of persons who fail to take reasonable care of their own interests". What is reasonable "will of course depend on all the circumstances", and here the potential purchasers of a $1,500 suite "would, if acting reasonably, look for a label, brand or mark if they were concerned to buy a suite of particular manufacture" (at 199).

Mason J reached the same result by the same route while conceding more to Puxu: he was "prepared to infer" that the close resemblance could cause a mistake, and that "[i]t seems unlikely that an ordinary purchaser would notice the very slight differences" (at 210). What decided it was the label — and his Honour was careful that this is not a general answer. "There may be situations where to exploit mistaken views of the public would contravene s 52 and would not be corrected by an inconspicuous accurate representation made in e.g. a concealed label or the 'fine print' of a contract" (at 211). Here the expense and importance of the purchase made looking for the label the reasonable thing to do.

Why does this case matter?

Because of what it does to a plaintiff's best evidence. Puxu had witnesses who were actually deceived, which is what a party in these cases works hardest to find, and it did not help — because the deception was traced to a retailer's salesman and to labels somebody else had removed. Before you put a deceived customer in the witness box, trace what actually misled them, because the other side will.

The label is the second thing to take away, and it cuts both ways. Here it was decisive, and that turned on the price and significance of the purchase making it reasonable to look for one. Mason J's qualification is the part students forget: a small accurate label does not automatically cure conduct that exploits a mistaken impression, and in a different market it would not have.

Exam and application relevance

Define the class exposed to the conduct before you assess the conduct, and then describe that class concretely — what they were buying, what it cost, what they would do before buying it. The standard is not an abstraction; in Parkdale the answer came from the fact that people spending $1,500 on furniture look at labels.

Handle evidence of actual deception in two steps. First, it is relevant but not conclusive: the question is objective. Second, and more usefully, ask what caused it. Deception produced by something the defendant was not responsible for — a retailer's patter, a removed tag — does not count at all.

And view the conduct as a whole. Gibbs CJ warned against selecting words or acts that would mislead in isolation when in context they would not.

Check your understanding

Your client has three customers who were genuinely confused. What do you need to establish about each before their evidence assists?