The High Court considers misleading statements in website headers

In Godfrey Hirst NZ Limited v Cavalier Bremworth Limited [2014] NZCA 418 the Court of Appeal considered a Fair Trading Act dispute between New Zealand's two largest carpet manufactures in relation to representations in advertising commonly known as "headliners" and the terms and conditions attaching to them, know as "qualifiers".

Godfrey Hurst claimed that a number of headline representations made by Cavalier Bremworth on its website with respect to warranties for Cavalier's Habitat range of carpets were misleading or deceptive under the Fair Trading Act.  This was because the warranties were significantly qualified by terms and conditions on a separate webpage (even though a hyperlink to the separate webpage displaying the warranties booklet was available)

The Court of Appeal accepted that the representations in relation to the warranties on Cavalier’s website were misleading and not corrected by the qualifying information.  The key findings were:

  1.  The "consumer" encompasses all the consumers in the class targeted by the alleged misleading representations, except any outliers.   In these circumstances, Cavalier’s website was targeted at a broad range of consumers, not just those that were knowledgeable or sophisticated.

  2. Consumers are expected to exercise a reasonable degree of common sense in understanding the qualifiers.  In this instance, the dominant message of the headline was misleading following a comparison with the warranties booklet.  The description of the warranties on the website as “limited” and a link to the warranties booklet was not enough to make the qualifying information prominent.   Also, the warranties booklet was too complicated for consumers to understand what was covered by the warranties.

  3. Where there is a glaring disparity between the headline and the qualifying information, it is necessary for the maker of the statement to draw the consumer’s attention to the true position in the clearest possible way.