V Pty Ltd owned a small business which it wished to sell. P was in the market to buy such a business. During negotiations V informed P that the local council was proposing to build a new car park which was expected to attract a substantial number of new shoppers to the area. In fact, the council had no such plans. A car park had never been discussed by the council.

P decided to buy the business. The main reason for P’s decision was the healthy state of the business’s accounts (which were accurate). However, P was also  persuaded by the potential for increased trade suggested by the car park proposal. P made no enquiries with the local council. A simple phone call would have established that there were no plans to build a car park.

P has been operating the business for six months and has just discovered the truth about the car park. P wants to keep the business, but feels that a premium was paid based on the information about the car park. Consider the likely success if P sued V for each of the following causes of action.

(a) Fraud (deceit);

b) breach of s 18 ACL; and

(c) negligent misstatement

Bathurst Regional Council v Local Government Financial Services Pty Ltd (No 5)at para 3.16 reveals how one set of facts can give rise to multiple causes or claims of action.

Answer rating: 100% (QA)

a Fraud deceit iFraud is described as wrongful conduct that ranges from downright theft to not discl... View the full answer