04/11/2016, 12:50:PM
04/11/2016, 12:50:PM
Can statements of opinion be misleading?
In consumer and business transactions a statement by a person which concerns the past, present or future, is a statement of belief or judgement by the person and not an assertion of truth. If the person’s statement is inaccurate it will not be misleading. Statements of opinion by a person genuinely hold a fact which the person believes at that time of the opinion is expressed. When a person does not hold that belief of fact and just provides an opinion wantonly, the statement made, may likely mislead or deceive the other party.
Where claims are raised against a party for misleading statements of opinion, careful review of the facts of that situation are required to determine if the statement expressed was genuinely held or was misleading.
As example, in Adams v Classic Autocraft (Aust) Pty Ltd (1985) a quotation was given to restore a vehicle. The quotation was inaccurate as to the extent of the work that was necessary to restore the car to its proper pristine condition, and was an incorrect statement of fact and misleading.
Then in Westsub Discounts Pty Ltd v IDAPS Australia Ltd (1990) representations made by the supplier of goods that certain computer hardware and software would fulfil the client’s requirements were implied statements of fact. The hardware and software was not sufficient for the client’s needs, and the representations made by the supplier were misleading.
To establish a misleading statement of opinion, it needs to be proved in the absence of admission by the person that made the statement, that they lacked the belief of fact to be inferred.
As example, in Holt v Biroka Pty Ltd (1988) the defendant made promises with reckless indifference to their fulfilment. The defendant when making those promises was confused and disorganised, which demonstrated that there was no reasonable expectation that the defendant could fulfil the promises made. Therefore, in such circumstance the promises made was misleading.
Where a person makes a promise and has a present intention to make good that promise and the means to do so and does not believe it will be carried out, then that promise may mislead. However, if the promisor just has a mere failure to fulfil the promise on other grounds, the promise made will not be misleading.
If a person provides a statement of opinion which is false as to matters of fact, it may be a misleading statement.
In another example, the court held in National Australia Bank v Nobile (1988) that the statement of opinion by the bank manager to the guarantors of a business, that it was operating satisfactorily, was not misleading, because the manager was aware of the business circumstance and believed that fact. However, this situation may have been different if the guarantors were more aware of the financials of the business at the time the bank manager provided the statement of opinion.
Then in RAIA Insurance Brokers Ltd v FAI General Insurance Co Ltd (1993) a report was prepared by the insurance broker. The report expressly stated it was an appraisal of a new policy with the expressed opinions of the broker. The report also impliedly expressed that is was based on a rational foundation of superior knowledge and expertise of the broker. The court held that as a number of assertions in the report by the broker had no foundation, those assertions were misleading.
Generally, in consumer and business transactions, where are statement of opinion is genuinely held by the person giving that statement, it will not be misleading. However, caution is always suggested to the party giving the statement of opinion, that if they do not have a belief or judgement on the opinion that is given, it is wise not to give that statement.
Where a statement of an opinion has been proffered by one party to another in consumer or business transactions, it is prudent for the receiver of that information to confirm that the opinions that have been expressed are properly supported to avoid loss and raising a later claim against that party. So always take that extra step, and if you are not sure, call me, and get that legal advice to protect your legal rights and interests.
The comments in the aforementioned do not constitute legal advice and are general in nature, and if legal advice is required please contact: John Melis at Legal AU Pty Ltd (03) 9999 7799
Legal AU Pty Ltd Lawyers are “Liability limited by a Scheme approved under Professional Standards Legislation.”
