Relevant to: Misrepresentation - Inducement, onus to disprove inducement, and scope of damages for deceit
Issue: Was a misstatement as to the occupancy rate of a tourist resort a material factor in the decision to purchase it, and if so, who bore the onus of establishing/disproving inducement? And if it was, could the Goulds recover property they personally parted with when the actual sale was to Gould Holdings, a company that they set up for that purpose?
Held: The Goulds bore the onus of establishing both misrepresentation and inducement, but once they established that the misrepresentation was made with in the intention to induce, Vaggelas had the evidentiary onus of proving that the statement did NOT, in fact, induce them. As they failed to do this, and since the rights of the company to sue were now worthless, the measure of damages for deceit included the full measure of loss due to their reliance on the statement, even unforeseeable losses.
Relevant to: Misrepresentation - Fraudulent Misrepresentation and scope of damages, relevant factors to discretionary equitable rescission.
Issue: Could Kruger rescind the contract for the fruit business on the grounds that one of the material factors was a misrepresentation as to the stores weekly turnover, despite the fact that the business had devalued substantially in the interim period, caused in part by Kruger abandoning the store part-way through the action - and if so, could he claim damages for losses suffered during that interim? Additionally, what was the effect of the contractual warranty as to the stores turnover?
Held: The warranty allowed for a breach of contract claim IF he chose to affirm, rather than rescind, but was not a bar to rescission. As far as rescission went, he could still substantially restore the store, which was all equity required, as he had only taken 20 pounds or so worth of stock, which could be repaid for, and the devaluation had been to not be his fault, but rather than of the defendant's failure to take over the store after it was abandoned, combined with a nearby supermarket that had just opened. Kruger was also awarded interest, Conveyancing costs, and legal costs.
Relevant To: ACL s 18 - scope of 'misleading and deceptive conduct', whether rescission was appropriate.
Issue: Did the sale of a licensed restaurant with 128 seats (both facts being true) that did not disclose that it was actually only licensed to seat 84 constitute misleading conduct, and if so, to what, if any, extent was it the cause of the loss/what was the appropriate remedy when the buyer failed to make proper enquiries, and the business ultimately carried on with 128 seats for a substantial time, losing money in the process. Finally, to what extent, if any, was the exclusion clause effective to limiting this statutory duty?
Held: Yes, it was misleading and deceptive conduct - silence can constitute misleading conduct when circumstances give rise to a duty to disclose information, and the mere fact that enquiries COULD have revealed the truth was not sufficient to prevent that duty from existing. As the misleading conduct was one of the factors that induced the purchaser to buy the restaurant, remedies could be awarded to mitigate that loss that stemmed from the purchase - but the restaurant had changed so much (new staff, reduced goodwill, etc.) that rescission would not appropriate, and damages were ordered instead, with the amount and scope remitted to the trial judge. Finally, the exclusion clause was held to be ineffective at ousting the statutory protections - that could only occur if it were considered sufficient evidence that the conduct had not actually been relied on.
Relevant To: Duress, Misrepresentation, Frustration
Issue: Did the misrepresentation/duress of a recently reformed company's identity and supposed 'losses', leading to inevitable bankruptcy and default if the other party didn't lower their rates, constitute grounds for voiding the agreement to lower those rates? And if so, could the defendants rely on the frustration of the entire contract as a defense, having only entered into the agreement as a reserve against a situation that had not arisen?
Held: Yes, it did - while it did not meet the complete coercion of will required to constitute duress (the only pressure was ordinary commercial pressure - there was no protest, and the settlement was treated as binding by both parties), it was held to constitute fraudulent misrepresentation, as they had fraudulently laid the groundwork for the innocent misrepresentations of the banker who had conveyed the information to the other party. Further, the contract had not been frustrated, as there was no evidence that it only been entered into as a reserve.
Relevant to: Damages - Mitigation, Remoteness
Issue: Could Burns recover lost profits as a result of the warranted engine having not been fully reconditioned, despite having not been able to properly repair it, and instead having used it for less lucrative local hauling, rather than terminating the agreement as the contract permitted?
Held: Yes, he could, but ONLY up until the point where it was obvious that he was making a loss - the defendant knew he was using it for interstate hauling, so the second limb of Hadley v Baxendale applied to losses suffered in the first year and until it was clear that the engine was broken, he could not repair it, and MAN would not pay for it to be repaired. However, after that stage, he was not "entitled to hang on and charge the appellant with the profits of a business which he himself had abandoned and with losses which he need never have incurred". Though Brennan's dissent notes that it was not unreasonable to carry on, having already complained unsuccessfully, since he would have been left in debt if he'd terminated with no way out - and he should not be punished for his impecuniousity.
Relevant to: Damages - Restitutionary, Onus, Loss of a Chance
Issue: Could Amann Aviation recover all expenditure in preparation for fulfilling a 3 year aerial surveillance contract with the Commonwealth government, who wrongfully repudiated it, despite the fact that it would have lost them money, because of the high probability of renewal? And if so, should the possibility that the Commonwealth have been able to lawfully terminate the contract be factored in to reduce the damages?
Held: Yes, they could - as evidenced by the previous contractor being able to effectively force the government's repudiation, they would have been in a very strong position, and had a chance of real value - and the government had precluded an accurate assessment of damages through their breach, they should not be permitted to benefit from it. Further, while the onus is on the plaintiff to prove any losses as a result of the breach, there is always a presumption (of varying strength, dependant on the circumstances) that a contract would have at least covered expenses. The chances of termination were held to be sufficiently low (20%) that it should not have been considered relevant when discounting the damages.