A recent Victorian Supreme Court has held that liability for misleading or deceptive conduct under the ACL cannot be defeated by contractual provisions seeking to impose a time limit on bringing such claims. Conversely, decisions of the New South Wales Supreme Court to date have held that there can be time or money limits on such claims. To date, no Australian appellate court has considered this issue and until then, the law remains unsettled and parties to Victorian contracts should carefully consider this decision before seeking to enforce purported time limits on misleading or deceptive conduct claims.

Brighton Australia Pty Limited (Brighton) was engaged by Multiplex Constructions Pty Limited (Multiplex) as a plasterwork subcontractor in a NAB building project at Melbourne’s Docklands.

Brighton argued that it entered into 2 subcontracts in reliance on representations made by Multiplex that were misleading or deceptive in contravention of section 18 of the Australian Consumer Law (ACL). Clause 46 of the subcontracts sought to impose a time bar to prevent Brighton from bringing a claim unless it gave Multiplex a form of prescribed notice within 7 days.

A referee appointed by the Court (Referee) found that even if the alleged representations had been made by Multiplex (the Referee found that they had not), Brighton would have been “absolutely barred” from bringing the claim because it had not done so within the 7 day period stipulated in clause 46.

Brighton submitted that clause 46 was void for illegality because it had the effect of excluding liability under section 18 of the ACL. Brighton also relied on Henjo Investments Pty Limited v Collins Marrickville Pty Ltd (1988) 39 FCR 546 in which it was held that it wold be contrary to public policy to allow consumer protection remedies to be ousted by private agreement.

It was common ground that a clause excluding liability would not be effective in preventing a claim under section 18 of the ACL. However, Multiplex argued that clause 46 comprised a temporal procedural limitation that did not exclude the operation of section 18 of the ACL, but merely regulated it, and was therefore enforceable. Multiplex relied on the decisions of the New South Wales Supreme Court in Lane Cove Council v Michael Davies & Associates [2012] NSWSC 727, Firstmac Fiduciary Services Pty Ltd v HSBS Bank of Australia Ltd [2012] NSWSC 1122 and Owners SP 62930 v Kell & Rigby Pty Ltd [2009] NSWSC 1342.

Justice Riordan in the Supreme Court of Victoria stated the relevant issue to be whether the no exclusion principle:

  • is limited to the exclusion of the statutory norm in section 18 of the ACL; or
  • extended to the remedy in section 236 and in particular to the right to commence an action within 6 years after the relevant date under section 236(2).

Justice Riordan found that:

  • any attempt to restrict the remedy in section 18 by limiting the time in which an action can be brought is an “unacceptable interference with the public policy underpinning the provisions”; and
  • it would be inconsistent with the public purpose of the ACL to leave claimants uncertain about whether Courts, on a case-by-case basis, will determine contractual time limits to be so unreasonable as to be unenforceable.

While Riordan J expressly appreciated that his conclusion differed from the decisions in the Supreme Court of New South Wales which Multiplex relied on, His Honour stated that it was consistent with the observation of Ball K in Omega Air Inc v CAE Australia Pty Ltd [2015] NSWSC 802 that it is reasonably arguable that the parties cannot contract out of the 6 year limitation period.