Burg Designs Pty Ltd v Wolki [1999] FCA 388

Burg Designs Pty Ltd v Wolki [1999] FCA 388

The respondents made material misrepresentations (or failed to correct outdated/misleading representations) as to the profitability and trading position of the business being sold. These misrepresentations induced the applicants to enter into the contract, lease, and guarantees. The exclusion clause in the contract did not negate reliance or bar relief under the Fair Trading Act. Loss suffered by the applicants resulted from these misrepresentations, entitling them to setting aside of the guarantees ab initio, setting aside of the lease from handover, and damages including the purchase price (less salvage value) and business losses.

Jurisdiction
Australia
Judgment Date
09 April 1999
Procedural Posture
Civil / Final Judgment
Outcome
Judgment for the applicants. Guarantees set aside ab initio, lease set aside from handover date, and damages awarded.
Legal Topics
['misrepresentation' 'misleading and Deceptive Conduct' 'reliance' 'damages' 'exclusion Clauses' 'without Prejudice Privilege']
['trade Practices' 'fair Trading' 'contract Law' 'evidence'] ['misrepresentation' 'misleading and Deceptive Conduct' 'reliance' 'damages' 'exclusion Clauses' 'without Prejudice Privilege']

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Procedural Posture

Civil / Final Judgment

Legal Issues

  1. 1 ['Whether the respondents engaged in misleading or deceptive conduct contrary to s 42 of the Fair Trading Act 1987 (NSW) and s 52 of the Trade Practices Act 1974 (Cth)' 'Whether the applicants relied on misrepresentations in entering into contract, lease, and guarantees' "The effect of an exclusion clause ('no reliance') in the contract" 'Whether damages should be awarded and the method of quantifying them' 'Whether without prejudice privilege applies to certain conversations']

Ratio Decidendi

The respondents made material misrepresentations (or failed to correct outdated/misleading representations) as to the profitability and trading position of the business being sold. These misrepresentations induced the applicants to enter into the contract, lease, and guarantees. The exclusion clause in the contract did not negate reliance or bar relief under the Fair Trading Act. Loss suffered by the applicants resulted from these misrepresentations, entitling them to setting aside of the guarantees ab initio, setting aside of the lease from handover, and damages including the purchase price (less salvage value) and business losses.

Court Disposition

Judgment for the applicants. Guarantees set aside ab initio, lease set aside from handover date, and damages awarded.

Orders

  • ['Applicants to bring in, on a date to be fixed, short minutes of orders to reflect the reasons of the Court.' 'Damages assessed at $218,614.00 plus interest under s 51A of the Federal Court of Australia Act 1976, calculated at the Supreme Court of NSW rates on $190,000 from 2 August 1994 and on the full amount from...