QVB Pharmacy Pty Ltd v Le [2022] NSWSC 1612

The first defendant provided the 2017 financial statements and Other Documents for the purpose of facilitating the sale of the Business, knowing they would be given to prospective purchasers. In doing so he conveyed representations that the information was accurate. The 2017 financial statements and some of the Other Documents were materially false and inaccurate, including by significantly overstating trading income and profitability. The Pharmacy, through Mr Galettis, relied on those documents and the Armstrongs valuation based on them, and would not have purchased the Business if the true position had been disclosed. Clause 37.3 of the sale contract did not exclude or limit liability...

Jurisdiction: Australia
Judgment Date: 01 December 2022
Procedural Posture: Claim for Damages for Misleading or Deceptive Conduct Under S 18 and S 236 of the Australian Consumer Law in Connection With the Sale of a Pharmacy Business / Principal Judgment After Hearing; Proceedings Against the Second Defendant and the Second Defendant's Cross Claim Were Settled Before the Hearing on the Basis of Dismissal
Outcome: Judgment for the first plaintiff in the sum of $1,027,163.52; the first defendant is to pay the plaintiffs' costs, with liberty to apply for variation of the costs order.
Legal Topics: ['misleading or Deceptive Conduct in Sale of a Business' 'financial Statements and Business Records Supplied to Prospective Purchaser' 'no Transaction Case' 'reliance' 'proportionate Liability' 'assessment of Damages' 'pre Judgment Interest']

['consumer Law' 'australian Consumer Law' 'misleading or Deceptive Conduct' 'damages' 'sale of Business'] ['misleading or Deceptive Conduct in Sale of a Business' 'financial Statements and Business Records Supplied to Prospective Purchaser' 'no Transaction Case' 'reliance' 'proportionate Liability' 'assessment of Damages' 'pre Judgment Interest']

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Procedural Posture

Claim for Damages for Misleading or Deceptive Conduct Under S 18 and S 236 of the Australian Consumer Law in Connection With the Sale of a Pharmacy Business / Principal Judgment After Hearing; Proceedings Against the Second Defendant and the Second Defendant's Cross Claim Were Settled Before the Hearing on the Basis of Dismissal

Legal Issues

1 ['Whether the first defendant, by providing the 2017 financial statements and Other Documents for use in negotiations for the sale of the Business, conveyed representations that the information accurately reflected the financial state of the Business and was accurate.' 'Whether those representations were false, misleading or deceptive or likely to mislead or deceive contrary to s 18 of the Australian Consumer Law.' 'Whether the Pharmacy relied on the representations and would not have purchased the Business if the true position had been disclosed.' "Whether clause 37.3 of the sale contract provided a defence or limited the first defendant's liability under the Australian Consumer Law." 'Whether the second defendant was a concurrent wrongdoer and whether any reduction should be made for proportionate liability or settlement credit.' 'How damages should be assessed, including loss on goodwill, loan interest and pre-judgment interest.']

Ratio Decidendi

Court Disposition

Judgment for the first plaintiff in the sum of $1,027,163.52; the first defendant is to pay the plaintiffs' costs, with liberty to apply for variation of the costs order.

Orders

['Judgment for the first plaintiff in the sum of $1,027,163.52.' "The first defendant is to pay the plaintiffs' costs." 'Grant liberty to apply should any party seek a variation of that costs order.']