Jewelsnloo Pty Ltd v Sengos (No 2) [2016] NSWSC 61

TRADE AND COMMERCE – contract to purchase business – vendors made misrepresentation to the plaintiff concerning the turnover of the business – whether plaintiff relied upon the representation in entering into the contract to purchase the business – held plaintiff did not rely upon misrepresentation
TRADE AND COMMERCE – vendors had benefit of restraints of trade deed with prior vendor that prevented prior vendor from competing with vendors – whether prior vendor had made misrepresentation to the plaintiff concerning intention to compete with the plaintiff – whether prior vendor and vendors had made misrepresentations to the plaintiff concerning the subsistence of the deed and the plaintiff’s entitlement to the benefit of the deed – held representations not made – whether prior vendor and vendors had made representations to the plaintiff by silence by failing to inform the plaintiff that the vendors had released the prior vendor’s obligations under the deed – held representations not made
INTELLECTUAL PROPERTY – passing off – whether business had necessary goodwill or commercial reputation – goodwill or commercial reputation established – whether ordinary customers would be deceived by conduct of relevant defendants – conduct of relevant defendants found to be passing off
RESTITUTION – plaintiff claimed order setting aside purchase of business on ground that plaintiff entered into the contract because of misleading and deceptive conduct by vendors – plaintiff claimed order for rescission under s 243 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) – plaintiff delayed in claiming order – plaintiff continued to operate business – plaintiff did not elect to rescind or offer to return business to vendors – plaintiff would not have been entitled in any event to an order setting aside the purchase as restoration of the status quo had become impossible because of plaintiff’s actions
DAMAGES – misleading or deceptive conduct – plaintiff not entitled to damages as claims dismissed – consideration of plaintiff’s claim for damages equal to the purchase price paid by the plaintiff for the business – plaintiff chose not to tender evidence of the difference between the purchase price and the market value of the business – applicable principles considered – plaintiff would not have been entitled to damages claimed in any event because the evidence established that the business had a value at the date of purchase and the plaintiff did not establish that it lost the benefit of the entirety of the purchase price
DAMAGES – passing off – Exemplary, punitive and aggravated damages – plaintiff claimed damages instead of an account of profits – plaintiff did not prove it suffered any loss caused by the passing off – plaintiff not entitled to compensatory damages – plaintiff claimed exemplary damages for tort of passing off – applicable principles considered – plaintiff not entitled to exemplary damages

David Jay appeared for the successful defendants