On appeal from the High Court, a key issue in this case related to a claim by McIntyre and Williams that Fonterra had made false statements about McIntyre and Williams’ rights in relation to share purchases. There was an issue of whether Fonterra had therefore breached section 9 of the Fair Trading Act 1986 (FTA) by giving misleading or deceptive advice.
The Court of Appeal held that when conduct merely induces uncertainty about the true position, section 9 will not be breached. When misleading conduct induces a positive (incorrect) understanding, liability may arise. That being the case, the Court of Appeal dismissed Fonterra’s appeal.
The case is also notable for the Court of Appeal’s refusal to accept evidence of entire agreement clauses in contracts as relevant to the inquiry around breach of section 9. Such clauses were relevant only to causation or remedial discretion under the FTA.