27 August 2014

Fair Trading: Godfrey Hirst (NZ) v. Cavalier Bremworth

The dominant headline message in any advertisement must not be misleading the Court of Appeal ruled.  It is a breach of the Fair Trading Act to bait advertising with misleading headlines to attract custom and then heavily qualify in the fine print what is on offer.
Budget airlines and car hire companies have been notorious for advertising cheap deals which on closer examination prove to be anything but cheap.  The Court of Appeal set out rules governing headline messages when considering a legal challenge to Cavalier Bremworth’s 2013 launch of its new Habitat range of synthetic carpets.  Its advertising highlighted the resistance of this new carpet to wear and to stains, emphasising what it called “superb warranties” offered in support of the new product.  The fine print qualified these warranties out of existence.
The Court of Appeal said media campaigns must be judged from the perspective of all those targeted by an advertisement, excepting those consumers who are unusually stupid or whose reactions to the advertisement are extreme or fanciful.  In reading an advertisement, consumers are expected to take some reasonable care in interpreting the message.  But advertisers are still required to pitch an advertisement at the level expected of their target market bearing in mind the knowledge and acumen of customers they seek to attract.
The Court of Appeal was heavily critical of Cavalier’s 2013 advertising campaign.  The dominant message promised stains would wipe off easily, the carpet would not soil in its lifetime, the carpet would hold its colour for 25 years, the carpet would not crush under heavy foot traffic but would spring back and through its lifetime the carpet would be anti-static.  This dominant message was heavily qualified in a separate 23 page warranties booklet: the warranty was provided by a third party, not Cavalier; the warranties did not apply to carpet supplied for time-share properties or rental properties; the warranty did not extend for 25 years but reduced after 15 years; the warranty lapsed if the purchaser did not regularly vacuum the carpet and have it professionally steam cleaned every two years.  Excluded from the warranty against staining was virtually everything that conceivably could cause a stain, with that stain exclusion itself incorrectly cross-referenced to the wrong page of the warranty booklet.
In deciding whether a particular advertisement is misleading, it is the “dominant message” or “general thrust” which is critical, the Court of Appeal said.  It is not a case of separately analysing each individual statement; it is the overall impression which counts.  Any significant qualification from the headline message must be sufficiently prominent to come to the attention of targeted customers.  The greater the disparity between the headline message and the qualifying information, the greater is the requirement to draw customers’ attention to the true position in the clearest way possible.
Given that advertisements are designed to attract custom, it is no defence to a complaint about a misleading advertisement to say any customer would be made aware of all qualifications and exclusions by the point of sale; it is a breach of the Fair Trading Act to use a misleading headline message to draw a customer into a website or physical store and then later disclose the true position.
Godfrey Hirst (NZ) Ltd v. Cavalier Bremworth – Court of Appeal (27.08.14)
14.034