Politano v ACN 060 442 926 Pty Ltd [2000] FCA 882

Politano v ACN 060 442 926 Pty Ltd [2000] FCA 882

The respondents supplied misleading financial statements including profits from a sold segment of the business. The applicants reasonably relied on those statements in purchasing the business. Damages for misleading conduct include the sum paid for goodwill, plant, fittings, chattels, stock-in-trade, preliminary expenses (as proven), trading losses for two years, and pre-judgment interest under s 51A. Claims for interest paid to financiers, loss of earnings, and trading losses for the third year were not sufficiently proven and were disallowed.

Parties
First Applicant/second Cross Respondent: Bruno Politano; First Applicant/third Cross Respondent: Maria Teresa Politano; Second Applicant/first Cross Respondent: Fresh 'N Clean Pty Limited (ACN 078 797 994); First Respondent/cross Claimant: ACN 060 442 926 Pty Limited; Second Respondent: Joseph Michael John Farrugia; Third Respondent: Sandra Lee Farrugia; Fourth Respondent: John Cains; Fourth Cross Respondent: Giuseppe Politano
Jurisdiction
Australia
Judgment Date
26 June 2000
Procedural Posture
Civil / Judgment
Outcome
judgment for the second applicant against first, second, third respondents
Legal Topics
Misleading or Deceptive Conduct, Assessment of Damages, Duty of Care, Accessory Liability, Interest on Damages, Trading Losses, Goodwill Valuation
Trade Practices Misrepresentation Contract Tort Misleading or Deceptive Conduct Assessment of Damages Duty of Care Accessory Liability +3 more

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Parties

Bruno Politano

First Applicant/second Cross Respondent

Maria Teresa Politano

First Applicant/third Cross Respondent

Fresh 'N Clean Pty Limited (ACN 078 797 994)

Second Applicant/first Cross Respondent

ACN 060 442 926 Pty Limited

First Respondent/cross Claimant

Joseph Michael John Farrugia

Second Respondent

Sandra Lee Farrugia

Third Respondent

John Cains

Fourth Respondent

Giuseppe Politano

Fourth Cross Respondent

Procedural Posture

Civil / Judgment

Legal Issues

  1. 1 Whether financial statements supplied were misleading and deceptive under s 52 of the Trade Practices Act 1974 (Cth)
  2. 2 Whether damages should include interest paid on borrowed money and trading losses
  3. 3 Whether the assessment of damages should cover loss of earnings and preliminary expenses

Ratio Decidendi

The respondents supplied misleading financial statements including profits from a sold segment of the business. The applicants reasonably relied on those statements in purchasing the business. Damages for misleading conduct include the sum paid for goodwill, plant, fittings, chattels, stock-in-trade, preliminary expenses (as proven), trading losses for two years, and pre-judgment interest under s 51A. Claims for interest paid to financiers, loss of earnings, and trading losses for the third year were not sufficiently proven and were disallowed.

Court Disposition

judgment for the second applicant against first, second, third respondents

Orders

  • Judgment for the second applicant against first, second and third respondents for $441,380.16 including $84,252.84 interest under s 51A.
  • First, second and third respondents pay first and second applicants' costs.