Hsiao v Fazarri

The High Court of Australia considered an appeal from the Supreme Court of Victoria concerning a dispute between the appellant, Mr. Hsiao, and the respondent, Mr. Fazarri. The core of the disagreement involved allegations of misleading and deceptive conduct in contravention of the *Australian Consumer Law* (ACL) in relation to the sale of a business. Mr. Hsiao claimed that Mr. Fazarri made representations about the business's financial performance that were false and induced him to purchase it.

The High Court was required to determine whether the representations made by Mr. Fazarri concerning the business's profitability and turnover constituted misleading or deceptive conduct under section 18 of the ACL. Further, the Court had to consider whether Mr. Hsiao had established that he relied on these representations when deciding to purchase the business and whether the alleged contraventions caused him loss. The Court also examined the scope of the defence of contributory negligence in the context of misleading and deceptive conduct claims.

The Court's reasoning focused on the objective assessment of whether the representations were likely to mislead or deceive a reasonable consumer in the circumstances. It was held that the representations made by Mr. Fazarri, particularly regarding the business's financial performance, were indeed misleading and deceptive. The Court found that Mr. Hsiao had relied on these representations and that they caused him loss. The defence of contributory negligence was considered, but the Court ultimately found that while Mr. Hsiao may have had some responsibility for conducting due diligence, this did not negate the primary misleading conduct of Mr. Fazarri. The principles applied included those relating to the interpretation of section 18 of the ACL and the assessment of causation and damages in such claims.

The High Court allowed the appeal in part, finding that Mr. Hsiao had established a contravention of the ACL and that he had suffered loss as a result. However, the Court reduced the amount of damages awarded to Mr. Hsiao to reflect a degree of contributory negligence on his part.