Written by The recent case of QVB Pharmacy Pty Ltd v Le [2022] NSWSC 1612 considered a claim of damages for misleading and deceptive conduct in connection with the sale of a pharmacy in the QVB.
The plaintiffs were the purchasers, who alleged that the defendants made representations during negotiations in contravention of s 18 of the Competition and Consumer Act 2010 (Cth) Sch 2 – Australian Consumer Law (“the ACL”). They thus sought damages in accordance with s 236 of the ACL.
The plaintiff’s case was that some of the financial statements and ‘Other Documents’ provided to them were inaccurate, wrong or false, and that by providing these incorrect documents, the defendants had engaged in misleading and deceptive conduct. During the negotiations, the plaintiffs obtained independent valuation of the Business but this was based on the false 2017 financial statements and they claimed that they relied on this opinion in making their offer, which they alleged they would not have made had they known the true position of the business.
The defendants argued that the 2017 financial statements were unaudited and they were not asked to confirm the accuracy of the financial documentation and that they did not make any warranty or representation that the financial statements were accurate.
The Court held that QVB Pharmacy Pty Ltd had relied upon the accuracy of the documents provided to it for the purpose of determining the sum of money that it would offer to pay for the Business. However, those documents were false and accurate, critically in respect of the annual sales of the business. Hence, as the representations made were misleading and deceptive, the Pharmacy was entitled to damages corresponding to the loss consequent on those misrepresentations.