Impact of the Fair Trading Act 1986

In concluding this chapter, it remains to note the other statutory reform affecting Hedley Byrne liability in New Zealand, which is contained in the Fair Trading Act 1986. By far the most important section is section 9 which provides that ‘No per­son shall, in trade, engage in conduct that is misleading or deceptive or is likely to mislead or deceive'.

So far as liability for negligent misstatement generally is concerned (ie, ignor­ing situations affected by the Contractual Remedies Act 1979), it has been argued that the effect of the above provisions, and their Australian counterparts, which in effect create a statutory strict liability tort, is to render the common law action more or less redundant for many practical purposes.^[1523] A discussion of this matter is obviously beyond the scope of this chapter, but it is perhaps worth pointing out one important reason why in New Zealand it may be advantageous for the plaintiff to pursue, if only in the alternative, the common law action. Unlike in Australia, there is no right to damages for loss caused by misleading conduct. An award can only be made under section 43, which, as the Court of Appeal has stressed,^[1524] gives the courts a discretion not only as to whether to make a monetary award but also as to its quantum. Thus, even where an award is considered appropriate, there is no entitlement to full recovery in respect of the loss suffered.^[1525]

However, the main feature of the Fair Trading Act for the purposes of this chap­ter is that no attempt was made to harmonise the new scheme of remedies with the reforms of the general law of misrepresentation effected by the Contractual Remedies Act. It seems that the very existence of the latter, and in particular the right to recover damages under section 6 as if the misrepresentation were a breach of contract, was completely overlooked in the rush by the new Labour government to copy the Australian Trade Practices Act 1974 (Cth). Parliament's intention just seven years earlier to rationalise and simplify the law of misrepresentation was thus unwittingly undermined. Nowadays, where a pre-contract misrepresentation is made ‘in trade', the representee will often be able to pursue alternative causes of action under both statutes with a view to choosing the most advantageous award of damages. Although the award is discretionary, sometimes this might be the Fair Trading Act damages assessed in accordance with, or by analogy to, the tort measure.^[1526]