Aquatic Air Pty Ltd v Siewert

The appeal concerned a dispute arising from the sale of shares in two companies. The appellant, Aquatic Air Pty Ltd, sought to set aside share sale agreements and claim damages, alleging misleading and deceptive conduct by the respondents, Mr. and Mrs. Siewert. The core of the dispute revolved around representations made concerning the goods and services tax (GST) liability of the companies and employee entitlements. A cross-appeal also addressed the validity of an option to sell a property, which had been exercised without payment of a required deposit. The matter was heard by Macfarlan and Ward JJA, and Emmett AJA.

The court was required to determine several legal issues. Firstly, whether representations were made regarding the GST liability of the companies, and if so, whether these representations were false, particularly in light of section 38-10(5) of the *A New Tax System (Goods and Services Tax) Act 1999* (Cth). Secondly, the court had to consider whether representations concerning employee and redundancy entitlements were made and if they were false. Thirdly, the court examined whether causes of action, including those arising under the *Competition and Consumer Act 2010* (Cth) and the *Australian Securities and Investments Commission Act 2001* (Cth), could be validly assigned, specifically in relation to section 477(2)(c) of the *Corporations Act*. Finally, the court had to determine if the exercise of an option to sell a property was valid without the payment of a deposit, and whether a contractual right to vary the price extended to waiving this deposit requirement.

The court dismissed the appeal and the cross-appeal. Regarding the GST representations, the court found that the warranties relied upon by the appellant did not establish that representations as to GST liability were made. Furthermore, even if such representations were made, the court concluded, by reference to section 38-10(5) of the *A New Tax System (Goods and Services Tax) Act 1999* (Cth), that the companies were not liable for GST, meaning the representations, if made, were not false. The court also found that the causes of action were not validly assigned. On the cross-appeal, the court held that the option to sell the property had not been validly exercised because the contractual requirement for a deposit had not been met, and the right to vary the price did not extend to waiving the deposit.

Consequently, the appeal and cross-appeal were dismissed. The appellant was ordered to pay 85 per cent of the costs of the first and second respondents for the appeal.