Lau, S.W. v. Roymancorp Australasia Pty Ltd & Anor [1986] FCA 455

Lau, S.W. v. Roymancorp Australasia Pty Ltd & Anor [1986] FCA 455

Roymancorp contravened s.52 of the Trade Practices Act 1974 because Mr Ip, acting for Roymancorp, represented that Roymancorp had a lease with about two years and nine months to run while failing to disclose the lessor's active dispute and Supreme Court ejectment proceedings concerning renewal, and while discouraging Mr Lau from contacting the lessor. That misleading conduct induced Mr Lau to enter the transaction and make payments. Roymancorp's failure to carry on the restaurant after Mr Lau was forced to leave, resulting in a 24-day closure which significantly affected the goodwill being purchased, went to the root of the contract and entitled Mr Lau to rescind. Mr Ip knew the true...

Jurisdiction
Australia
Judgment Date
22 October 1986
Procedural Posture
Application Alleging Contraventions of the Trade Practices Act 1974 and Contractual Cross Claim / Judgment After Hearing
Outcome
Judgment for the applicant against both respondents; deposit repayment ordered; cross-claim dismissed; respondents to pay the applicant's costs.
Legal Topics
['misleading or Deceptive Conduct' 'representation as to Lease on Sale of Restaurant Business' 'inducement and Causation of Loss' 'termination and Rescission of Contract' 'forfeiture and Repayment of Deposit' 'personal Involvement in Contravention Under S.75 B']
['trade Practices' 'contract' 'sale of Business'] ['misleading or Deceptive Conduct' 'representation as to Lease on Sale of Restaurant Business' 'inducement and Causation of Loss' 'termination and Rescission of Contract' 'forfeiture and Repayment of Deposit' 'personal Involvement in Contravention Under S.75 B']

Case Brief

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Procedural Posture

Application Alleging Contraventions of the Trade Practices Act 1974 and Contractual Cross Claim / Judgment After Hearing

Legal Issues

  1. 1 ['Whether Roymancorp, through Mr Ip, engaged in misleading or deceptive conduct by representing that it held a lease without disclosing the dispute and Supreme Court ejectment proceedings concerning renewal of the lease.' 'Whether payments made by Mr Lau were induced by misleading conduct and were recoverable as damages.' 'Whether Mr Lau validly rescinded or terminated the agreement because Roymancorp failed to manage the business as a going concern pending completion.' 'Whether Roymancorp was entitled to forfeit the deposit or retain other payments.' "Whether Mr Ip was personally involved in Roymancorp's contravention of s.52 of the Trade Practices Act 1974." "Whether Roymancorp's cross-claim for alleged breaches of contract should succeed."]

Ratio Decidendi

Roymancorp contravened s.52 of the Trade Practices Act 1974 because Mr Ip, acting for Roymancorp, represented that Roymancorp had a lease with about two years and nine months to run while failing to disclose the lessor's active dispute and Supreme Court ejectment proceedings concerning renewal, and while discouraging Mr Lau from contacting the lessor. That misleading conduct induced Mr Lau to enter the transaction and make payments. Roymancorp's failure to carry on the restaurant after Mr Lau was forced to leave, resulting in a 24-day closure which significantly affected the goodwill being purchased, went to the root of the contract and entitled Mr Lau to rescind. Mr Ip knew the true...

Court Disposition

Judgment for the applicant against both respondents; deposit repayment ordered; cross-claim dismissed; respondents to pay the applicant's costs.

Orders

  • ['Judgment be entered in favour of the applicant against each of the respondents for damages in the sum of twelve thousand one hundred and sixty-two dollars seventy-five cents ($12,162.75).' 'The respondents and each of them give all such directions and sign all such authorities as may be necessary to effect...