Bull market dispute resolved by disclaimer in cattle log

It is very common to read about plaintiffs who have commenced misleading and deceptive conduct actions complaining that they have been sold a complete load of bull.  It is less common for those cases to involve actual bulls.

However, the New South Wales Court of Appeal last week considered a misleading and deceptive conduct case concerning the purchase at auction of an Angus bull rather prosaically named “K34”.  The case provides some useful lessons (of which you can say that you herd them here first) about the value of contractual disclaimer provisions (and the way in which courts will assess an overall course of commercial conduct which includes both statements made, and statements disclaimed).

The facts (aka “Fantastic. Great move. Well done purchasing an Angus”)

The auction cattle log, sorry, catalogue stated that K34’s sire was a stud bull named “Granite Ridge Thomas”.  The relevance of this fact was that  if K34’s sire was a stud bull, then K34 was also a stud bull for breeding purposes, and was accordingly more valuable than a mere “commercial” bull.

The catalogue also contained a general disclaimer in the following terms:


Whilst all due care and attention has been paid to accuracy in the compilation of this catalogue and the information neither the vendors, selling agents or representatives thereof assume any responsibility what so ever for the correctness, use or interpretation of the information included herein.

The buyer of K34 was aware that no DNA test had been performed on K34, but made the purchase at auction on the basis that, as the catalogue stated, K34 was a stud bull rather than a commercial bull. However, the buyer’s initial elation diminished when K34 took a DNA test and it turned out he was 100% not that bull.  Not only did Granite Ridge Thomas lack the new-age sensitivity to attend at the birth of K34, he had also lacked the old-age sensitivity to attend at the conception of K34.  So, could the buyer recover damages on the basis of the misleading statement of paternity in the catalogue?

The decision

Although the buyer succeeded at first instance in the District Court, that decision was overturned in the Court of Appeal.  (Whether the advice given to the buyer about his prospects of holding onto the judgement on appeal was unduly bullish is something about which we cannot, of course, comment).

The Court of Appeal confirmed the importance of the principle that “when determining whether conduct was misleading or deceptive, it is necessary to consider that conduct from the perspective of a reasonable person in the position of the person complaining of it”.  Here, the buyer was an experienced breeder of Angus cattle, and the evidence showed that when the buyer sold its Angus cattle, it included an equivalent disclaimer in his own catalogue.  Equally, the buyer’s principal accepted in cross-examination that:

““things . . . can go wrong that people don’t always anticipate” in relation to the joining of a bull “with a mob of cows””.

It was also important that the catalogue did contain a guarantee that K34 (and all bulls sold at the relevant auction) “have been put through our in-house evaluation process and have been vet checked and fertility tested”.  The Court of Appeal found that the guaranteed statements could be treated as statements of “certain fact”, whereas statements covered by the disclaimer which the seller was not prepared to guarantee (including the paternity of K34) should be treated as statements of honestly held belief or opinion. Accordingly:

“The disclaimer clause was important, not because it excluded liability which otherwise arose, but because it was an integral part of the [sellers’] conduct”.

It was also important in reaching this ultimate finding that, “the disclaimer was (i) in a prominent part of the catalogue, (ii) presented in a prominent fashion, and (iii) expressed in clear terms”.  These are all useful indicators about how disclaimers should be presented in the context of promotional (or contractual documentation) as a whole.

Lessons from the case

This decision should not be understood as meaning that a disclaimer will always provide protection against misleading and deceptive conduct – as some of the cases say, a commercial party cannot shout a representation, but whisper the disclaimer, and expect to be protected by the disclaimer (especially where the shouts and whispers are directed at consumers rather than, as here, another experienced commercial parties).

However, the decision does provide a useful reminder of the importance of analysing the whole of conduct which is alleged to be misleading and deceptive, and of analysing that conduct from the perspective of the person to whom it is directed, not from the perspective of the maker.  That is, it is not just important to analyse the words which are written or spoken, but in cases like the present, to consider also the people with whom those words are likely to lead to beef.

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December 23
Commercial Law Competition and consumer law Litigation and dispute resolution