Devenish v Jewel Food Stores Pty Ltd

Devenish (the applicant) brought proceedings against Jewel Food Stores Pty Ltd (the respondent) in the Supreme Court of New South Wales, alleging that the respondent had engaged in misleading or deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth). The applicant sought damages for losses allegedly suffered as a result of this conduct. The High Court of Australia considered the appeal from the Full Federal Court's decision.

The central legal issue before the High Court was whether the respondent's conduct in advertising the sale of a business, which included representations about its profitability and turnover, constituted misleading or deceptive conduct under s 52 of the Trade Practices Act. Specifically, the court had to determine if the representations made were false or misleading, and if so, whether the applicant had suffered loss or damage as a consequence of relying on those representations.

The High Court, in a joint judgment, found that the representations made by the respondent regarding the business's profitability and turnover were indeed misleading. The court applied the principles established in cases such as *Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd*, emphasizing that conduct is misleading if it leads a reasonable person into error. The court reasoned that the advertising material, when viewed as a whole, created a false impression of the business's financial performance, and that the applicant had reasonably relied on these representations when deciding to purchase the business. Consequently, the applicant had suffered loss and damage.

The High Court allowed the appeal, setting aside the order of the Full Federal Court and remitting the matter to the Federal Court of Australia for determination of the quantum of damages to be awarded to the applicant.