Gott and Ors v Toogood and Ors (No.2)

This matter concerned a dispute between the applicants, Gott and Ors, and the respondents, Toogood and Ors, before Judge Jarrett of the Supreme Court of Queensland. The core of the dispute involved allegations of misleading and deceptive conduct in contravention of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) and the *Fair Trading Act 1989* (Qld) (now the *Australian Consumer Law*). The applicants sought damages arising from their purchase of a business, alleging that representations made by the respondents regarding the business's profitability were false and misleading.

The primary legal issues before the Court were whether the respondents had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of the relevant legislation. Specifically, the Court had to determine whether the representations made about the business's financial performance were factually accurate and whether, if inaccurate, they were made knowingly or recklessly, or without reasonable grounds. The Court also considered the causal link between any misleading conduct and the loss suffered by the applicants.

Judge Jarrett found that the respondents had engaged in misleading and deceptive conduct. The Court's reasoning focused on the evidence presented, which indicated that the financial statements and representations provided by the respondents did not accurately reflect the true profitability of the business. The Court applied the principles established in cases concerning misleading or deceptive conduct, emphasizing that the test is objective and considers whether the conduct has a tendency to lead a person into error. The Court concluded that the applicants had relied on these representations to their detriment, establishing the necessary causal connection for a claim for damages. The Court ordered that the respondents pay damages to the applicants, the quantum of which was to be determined.