Business Custodians Ltd v Upintheair Pty Ltd (formerly Coffs Colour Printers Pty Ltd) [2015] NSWDC 249

Business Custodians Ltd v Upintheair Pty Ltd (formerly Coffs Colour Printers Pty Ltd) [2015] NSWDC 249

The Court accepted the plaintiffs' evidence that the defendants represented that the business had printing sales and net profit sufficient to satisfy the stipulated requirement of more than $400,000 net profit, and found that the disclosed figures were misleading because machinery sales and Olympicon invoices were improperly included or masked by fictitious printing invoices. The plaintiffs relied on the misrepresentation in purchasing the business and were entitled to $205,000 for reduced value plus interest. The claim for ongoing loss of profits failed because causation was not sufficiently proved and such an award would amount to double compensation. The consultancy agreement was not...

Jurisdiction
Australia
Judgment Date
03 November 2015
Procedural Posture
Civil Proceedings Concerning Contract for Sale of Business, Alleged Misrepresentation, Breach of Warranty, Vendor Finance and Consultancy Agreement Cross Claim / Principal Judgment After Hearing
Outcome
Verdict for the plaintiffs against the defendants on the Statement of Claim; judgment for the second plaintiff against the defendants in the sum of $113,164.97; verdict for the cross-claimants for the vendor finance cross-claim, otherwise verdict for the cross-defendants on the Cross-Claim.
Legal Topics
['sale of Business' 'misrepresentation of Trading Figures' 'breach of Contractual Warranties' 'consultancy Agreement' 'vendor Finance' 'interest' 'set Off' 'damages']
['contract Law' 'australian Consumer Law' 'civil Procedure'] ['sale of Business' 'misrepresentation of Trading Figures' 'breach of Contractual Warranties' 'consultancy Agreement' 'vendor Finance' 'interest' 'set Off' 'damages']

Case Brief

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Procedural Posture

Civil Proceedings Concerning Contract for Sale of Business, Alleged Misrepresentation, Breach of Warranty, Vendor Finance and Consultancy Agreement Cross Claim / Principal Judgment After Hearing

Legal Issues

  1. 1 ["Whether the defendants misrepresented the business's printing sales and net profit before the sale of the business." 'Whether fictitious invoices and Olympicon invoices were included in the disclosed trading figures and profit and loss statements.' 'Whether the plaintiffs relied on a condition that the business had net profit over the preceding 12 months exceeding $400,000.' 'Whether the plaintiffs were entitled to damages for reduced value of the business and/or loss of ongoing profits for breach of warranties.' 'Whether the consultancy agreement should be enforced in favour of Mr Jamie McKinnon.' 'Whether the vendor finance of $100,000 and interest were payable to Upintheair Pty Ltd.' "Whether the vendor finance claim could be set off against the plaintiffs' claim."]

Ratio Decidendi

The Court accepted the plaintiffs' evidence that the defendants represented that the business had printing sales and net profit sufficient to satisfy the stipulated requirement of more than $400,000 net profit, and found that the disclosed figures were misleading because machinery sales and Olympicon invoices were improperly included or masked by fictitious printing invoices. The plaintiffs relied on the misrepresentation in purchasing the business and were entitled to $205,000 for reduced value plus interest. The claim for ongoing loss of profits failed because causation was not sufficiently proved and such an award would amount to double compensation. The consultancy agreement was not...

Court Disposition

Verdict for the plaintiffs against the defendants on the Statement of Claim; judgment for the second plaintiff against the defendants in the sum of $113,164.97; verdict for the cross-claimants for the vendor finance cross-claim, otherwise verdict for the cross-defendants on the Cross-Claim.

Orders

  • ['Verdict for the plaintiffs against the defendants on the Statement of Claim.' 'Judgment for the second plaintiff against the defendants in the sum of $113,164.97.' 'Verdict for the cross-claimants for the vendor finance cross-claim, otherwise verdict for the cross-defendants on the Cross-Claim.' "The...