Hachem v Cimijotta

In *Hachem v Cimijotta* [1996] NSWCA 237, the New South Wales Court of Appeal considered a dispute arising from a contract for the sale of a business. The appellant, Mr Hachem, was the vendor and the respondent, Mr Cimijotta, was the purchaser. The core of the disagreement concerned whether the purchaser was entitled to terminate the contract due to alleged misrepresentations made by the vendor regarding the business's financial performance.

The Court of Appeal was required to determine whether the representations made by the vendor concerning the business's turnover and profitability constituted misleading or deceptive conduct in contravention of the *Trade Practices Act 1974* (Cth) or the *Contracts Review Act 1980* (NSW). A further issue was whether the purchaser had validly rescinded the contract based on these alleged misrepresentations.

The Court found that the vendor's representations were not mere statements of opinion but were presented as statements of fact. It was held that the vendor had engaged in misleading and deceptive conduct by making representations about the business's financial performance that were not supported by reasonable grounds. The Court applied the principles of statutory interpretation relating to misleading and deceptive conduct, emphasizing the need for representations to be factually accurate or based on reasonable grounds. The purchaser's rescission of the contract was therefore deemed valid.

The Court of Appeal dismissed the appeal and affirmed the primary judge's decision, upholding the purchaser's right to terminate the contract and recover his deposit.