Section 42 of the TMA provides:
Trade mark scandalous or its use contrary to law
An application for the registration of a trade mark must be rejected if:
(a) the trade mark contains or consists of scandalous matter; or
(b) its use would be contrary to law.
It is fairly rare for oppositions to be based on sub-section 42(a) but there are examples:
POMMIEBASHER: not scandalous – Peter Hanlon  ATMO 45
KUNT: scandalous – Re Kuntstreetwear Pty Ltd (2007) 73 IPR 438
Sub-section 42(b), however, is commonly relied upon. Usually opponents contend that use of the applicant’s mark would be contrary to the consumer protection provisions of the Australian Consumer Law or would amount to passing off or both.
It is important to note that the requirement in s 18 of the Australian Consumer Law that the relevant conduct “mislead or deceive” is a higher standard than the “likely to deceive or confuse” required by s 60 of the TMA: CISCO Technology Inc v Commonwealth Scientific and Industrial Research Organisation  ATMO 26 at .
In Parkdale Custom Built Furniture Pty. Limited v Puxu Pty Limited (1982) 42 ALR 1, Gibbs J said in relation to s 52 of the Trade Practices Act 1974 (Cth), the predecessor to s 18 of the ACL:
The words of s. 52 require the court to consider the nature of the conduct of the corporation against which proceedings are brought and to decide whether that conduct was, within the meaning of that section, misleading or deceptive or likely to mislead or deceive . . . . . The words “likely to mislead or deceive”, which were inserted by amendment in 1977, add little to the section; at most they make it clear that it is unnecessary to prove that the conduct in question actually deceived or misled anyone. In McWilliams v. McDonalds (1980) 33 A.L.R. 394 it was rightly held by Smithers J. and by Fisher J. that to prove a breach of s. 52 it is not enough to establish that the conduct complained of was confusing or caused people to wonder whether two products may have come from the same source, and that Southern Cross Refrigerating Co. v. Toowoomba Foundry Pty Ltd (1954) 91 C.L.R. 592, a decision on the Trade Marks Act 1905 (Cth) as amended, is distinguishable: I need not add to what their Honours said on this subject (33 A.L.R.) at 397-8 and 412-3. I agree too with those learned judges that the court must decide objectively whether the conduct is misleading or deceptive or likely to mislead or deceive, and that evidence that members of the public have actually been misled is not conclusive: see at 399-400 and 413-4. I would add that evidence that members of the public were misled, not by any conduct of the defendant, but by other circumstances for which the defendant was not responsible, would be quite irrelevant.