Galaxidis & Ors v CBFC Leasing Pty Ltd

The dispute in *Galaxidis & Ors v CBFC Leasing Pty Ltd* concerned the enforceability of a guarantee given by the appellants, Mr and Mrs Galaxidis, in favour of the respondent, CBFC Leasing Pty Ltd. The guarantee was in respect of a lease agreement entered into by a company controlled by the Galaxidis family, Galaxidis Pty Ltd, for the hire of certain equipment. The core of the dispute revolved around whether the guarantee was vitiated by misleading or deceptive conduct on the part of CBFC Leasing, in contravention of section 52 of the *Trade Practices Act 1974* (Cth) (now section 18 of the *Australian Consumer Law*). The matter came before the High Court of Australia on appeal from the Full Federal Court.

The High Court was required to determine whether CBFC Leasing had engaged in misleading or deceptive conduct in contravention of section 52 of the *Trade Practices Act 1974* (Cth) by failing to disclose certain information to the Galaxidis’s at the time they executed the guarantee. Specifically, the appellants contended that CBFC Leasing had a duty to inform them of the financial position of Galaxidis Pty Ltd and the risks associated with the lease agreement, and that its silence in this regard constituted misleading or deceptive conduct. The court also had to consider whether, if such conduct had occurred, it had caused loss or damage to the Galaxidis’s, and whether the guarantee should therefore be set aside.

Gummow ACJ and Crennan JJ held that CBFC Leasing had not engaged in misleading or deceptive conduct. Their Honours reasoned that section 52 of the *Trade Practices Act 1974* (Cth) does not impose a positive duty on a party to disclose all relevant information to another party, particularly where the parties are sophisticated and have access to independent advice. The court found that the Galaxidis’s were aware of the nature of the transaction and the potential liabilities they were assuming under the guarantee. There was no misrepresentation or concealment of material facts by CBFC Leasing that could be characterised as misleading or deceptive. The court emphasised that the appellants had not established that they relied on any alleged misleading or deceptive conduct, nor that such conduct caused them any loss.

The appeal was dismissed.