a) Alice was the manager of the advertising department of Suburban Newspapers Ltd, which published a weekly newspaper circulating in the northern suburbs of Sydney. The newspaper published an advertisement for Discount Stores Limited, which conducted a large store in Gordon. The advertisement said that Discount Stores' prices for Ajax microwave ovens were "up to 20% cheaper than anywhere else".

The advertisement was published in the edition of the newspaper published on 1 November. It was booked to be published also on 8 and 15 November.

Alice was instructed to look over all advertisements prior to publication and to bring the advertisement to the attention of the Managing Director if she became aware of "anything that might get us into strife from a trade practices or fair trading point of view". Alice read the advertisement on 30 October. As she could see nothing wrong with it, and as it was placed by an advertising agency which had assured Suburban Newspapers Ltd that it carefully vetted all advertisements placed by it, Alice authorized the publication of the advertisement.

On 3 November Alice received a telephone call from Fred, who insisted that the price savings claimed were exaggerated. As Fred regularly called making similar complaints which had so far proved to be groundless, she regarded him as a "crank" caller and took no action. On Saturday 6 November she received a call purporting to be from the manager of the home appliances section of a large department in Chatswood claiming, as later proved to be the case, that it was selling Ajax microwaves at the same price as that advertised by Discount Stores. Alice then decided to advise the Managing Director that the advertisement should not be repeated, but as she was just catching up on some back work and was hurrying to go to a lunch engagement, she forgot to leave a message for him. The advertisement was repeated in the 8 November edition of the newspaper but was not published in the 15 November edition.

The Australian Competition and Consumer Commission is considering instituting a prosecution against Suburban Newspapers Limited and Alice, both of whom seek your advice as to their position.

b) Superior Furniture Ltd manufactures and extensively advertises the popular Jungle model leather lounge suite. It normally is sold only in the more expensive furniture stores and retails at about $5,000. Each piece in the suite is clearly labelled "Jungle furniture manufactured by Superior Furniture Ltd".

Copycat Ltd produces a suite which is to outward appearances identical to the Jungle suite, but is made of poorer quality leather which deteriorates much more quickly than that used by Superior. The Copycat suite bears no labelling carrying a brand name or identifying the manufacturer. However, on a few occasions buyers acquiring stock for more upmarket stores have, while in a hurry, mistaken the Copycat product for the Jungle suite, and some retail purchasers have complained of poor quality to Superior, only to discover that they had in fact purchased the inferior product.

Superior has complained vigorously to Copycat, which however maintains that it is perfectly entitled to act as it has.

Advise Superior.

c) Joe was a professional accountant, who liked to spend his weekends and holidays renovating his home. He has on four previous occasions purchased a run-down house, lived in it for several years and, when it had been renovated to his satisfaction, sold it as he lost interest in the house once it needed no further work from him. On each occasion, he sold the house for considerably more than he had paid for it, thus enabling him to purchase his next house in a more expensive suburb and also to invest a small amount in the share market.

He was particularly proud of his most recent house as it had been in very poor condition when he purchased it and he had restored it so lovingly that Realty Ltd, a real estate agency he engaged to sell it, told him he could expect to sell it for about $1,200,000, which would be $400,000 more than he had originally paid for it.

The house was advertised by Realty Ltd in an advertisement describing it as "an exquisite residence in a wonderful location for discerning buyers".

Mary saw the advertisement and inspected the house. Fred, the manager of Realty Ltd, told her the house was in a location much sought after by buyers seeking a quiet and leafy neighbourhood. Mary replied that that was exactly what she wanted as she was a novelist who worked at home and needed peace and quiet for her work. Joe, who was standing by during this conversation, said nothing.

Mary signed a contract to buy the house for $1,300,000.

Six weeks later the contract was completed and Mary moved into the house. She was delighted with the purchase for the first two months, until her next door neighbour, who had been on an extensive overseas tour, returned home. She was then horrified to discover that this neighbour was a professional bagpipe player, who frequently spent many hours practising in his backyard. She also then discovered from another neighbour that Joe had found the noise so disturbing that, complaints by him and others to the police and local council having produced no results, he had taken two months off from work so that he could complete his renovations more quickly, thus enabling him to place the house on the market 12 months earlier than he had planned.

Mary complains that she has been unable to write a word since the return of the bagpipe player. Her income has declined, her health has deteriorated and she has suffered much mental anguish.

Advise Mary as to what remedies (if any) are available to her under the Trade Practices Act or the Fair Trading Act against Joe, Fred and Realty Ltd.

Elegant Liquor Ltd has a contractual right to continue for 5 years to use the advertisements featuring Johnson. Johnson had in fact been a connoisseur of brandy as well as of wine, but two years after this period commenced, Johnson became a total abstainer from all alcoholic drinks and developed a high profile in a society which argued publicly for prohibition of the sale of all alcoholic drinks. Johnson asks Elegant Liquors to cease using the advertisements and offers to return the money he was paid for them. Elegant Liquors insists on continuing to run the advertisements.

"Any notion that s 52 [of the Trade Practices Act] was, as it were, capable of infinite expansion was brought to a halt by the decision of the High Court in Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594." (Harland, "Misleading or deceptive conduct: the breadth and limitations of the prohibition" (1991) 4 JCL 107 at 114.)