Craig Hargraves Investments P/L (ACN 008 185 117) v Australian Business Insurance Advisors P/L (ACN 081 402 379)

Craig Hargraves Investments P/L (the appellant) appealed a decision of the District Court of South Australia, which had entered judgment in favour of Australian Business Insurance Advisors P/L (the first respondent). The dispute arose from a Deed of Sale where the appellant agreed to purchase client files from the first respondent. The purchase price was to be paid in instalments, subject to a reconciliation process. After paying the first instalment, the appellant learned that the second respondent had been banned from providing financial services. The appellant withheld the second instalment, alleging actionable misrepresentation and misleading or deceptive conduct by the respondents, and counterclaimed for loss and damage. The first respondent sued for the outstanding purchase price.

The appeal raised several legal issues for determination by the Full Court of the Supreme Court of South Australia. These included whether the appellant was out of time to conduct the contractual reconciliation, whether the respondents had engaged in misleading or deceptive conduct, whether the trial judge erred in rejecting expert and other evidence regarding the value of the acquired assets, and whether the appellant had failed to prove it suffered any loss as a result of the ASIC banning order.

The Full Court dismissed the appeal. It held that the trial judge's findings were open on the evidence. The court found that the Deed's reconciliation provisions made time of the essence, and the appellant had failed to complete the reconciliation within the stipulated timeframe, thus not being relieved of its obligation to pay the balance of the purchase price. Furthermore, the trial judge was entitled to find that there was no misleading or deceptive conduct, as the representations made were accurate at the time and, in any event, the appellant had not relied on them, having declined the opportunity to review documents relating to the ASIC investigation and proceeding with the purchase in spite of any concerns. The court also affirmed the trial judge's rejection of the appellant's expert evidence on asset valuation, finding it did not establish a relevant impairment in value, and that the appellant had failed to prove substantial loss, save for a limited amount awarded for mitigation efforts.