HEGYI v RAVESI

The parties to this dispute were the appellant, Mr. Hegyi, and the respondent, Mr. Ravesi. The matter concerned an appeal from a decision of the Magistrates' Court of Victoria. 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)). Mr. Hegyi alleged that Mr. Ravesi had made representations that were false or misleading concerning the profitability of a business that Mr. Hegyi subsequently purchased.

The primary legal issue before the court was whether Mr. Ravesi had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the *Trade Practices Act 1974*. This involved determining whether the representations made by Mr. Ravesi about the business's financial performance were, in fact, misleading, and whether Mr. Hegyi had relied on those representations to his detriment. The court also considered the nature of the representations and whether they were statements of fact or mere expressions of opinion or future expectation.

Judge Street found that the representations made by Mr. Ravesi regarding the business's profitability were indeed misleading. The court reasoned that Mr. Ravesi had presented projections and statements of past performance in a manner that created a false impression of the business's actual financial standing. The legal principle applied was that a representation, even if not demonstrably false at the time it was made, could be misleading if it created an erroneous impression in the mind of the recipient. The court emphasised the objective test of whether the conduct was likely to mislead or deceive a reasonable member of the target audience.

Ultimately, the appeal was allowed, and the decision of the Magistrates' Court was set aside. The court ordered that the matter be remitted to the Magistrates' Court for re-hearing on the question of damages.