Burke v LFOT Pty Ltd

The High Court of Australia considered an appeal by Burke and Hanave against LFOT Pty Ltd (formerly Jagar Projects Pty Ltd). The dispute arose from LFOT's misleading and deceptive conduct in contravention of section 52 of the *Trade Practices Act 1974* (Cth) during a property sale. LFOT had misrepresented the income generated by the property, leading Hanave, the purchaser, to suffer a loss. LFOT was ordered to repay the sum obtained from Hanave, but a cross-claim sought contribution from Burke, who had acted as solicitor for Hanave and had allegedly provided negligent advice.

The central legal issues before the High Court were whether a solicitor who gave negligent advice should be required to contribute to a loss suffered by their client as a consequence of another party's misrepresentation, particularly when that loss could have been avoided by careful advice from the solicitor. The court also had to determine whether the principles of equitable contribution, which typically require co-ordinate liability, were compatible with the obligations imposed by the *Trade Practices Act* for breaches of section 52.

The High Court reasoned that awarding contribution in this case would be inconsistent with the policy of the *Trade Practices Act*, as it would allow a party in breach of section 52 to profit from its contravention. The court found that LFOT's conduct misled Burke and Hanave, causing Hanave to overpay for the property. While Hanave's loss was quantified as the difference between the property's value and the purchase price, which LFOT was ordered to repay, the court held that it would be inequitable for Burke, who gained nothing and was misled by LFOT, to be compelled to pay LFOT. The court emphasised that relief under section 82 of the Act is not restricted to astute individuals, and a plaintiff's failure to uncover misleading conduct does not absolve the contravening party.

Consequently, the High Court allowed the appeal, setting aside the orders of the Full Court of the Federal Court. The court ordered that the cross-claim for contribution against Burke be dismissed, meaning LFOT would not receive any contribution from Burke.