Italform Pty Ltd v Sangain Pty Ltd

Italform Pty Ltd and Antonio Foini (the appellants) appealed a decision of the Supreme Court of New South Wales concerning allegations of misleading and deceptive conduct under the *Trade Practices Act 1974* (Cth) (now the *Australian Consumer Law*). The dispute arose from a contract for the sale of a business, where the purchasers (the respondents) alleged that oral assurances made by the vendor regarding the business's profitability were misleading and deceptive, despite a written contractual term stating that the purchasers had not relied on any representations made by the vendor.

The central legal issue before the Court of Appeal was whether the purchasers could establish misleading or deceptive conduct under the *Trade Practices Act* when they had expressly acknowledged in the written contract that they had not relied on any representations made by the vendor. This required the court to consider the weight to be given to such contractual disclaimours in the context of misleading and deceptive conduct provisions, and whether a party could still be found to have engaged in such conduct even if the other party had contractually disclaimed reliance on representations.

The Court of Appeal affirmed the trial judge's finding that the vendor had engaged in misleading and deceptive conduct. The court reasoned that a contractual term disclaiming reliance does not automatically negate a finding of misleading or deceptive conduct. Instead, the court must assess the overall circumstances, including the nature of the representations made, the sophistication of the parties, and the context in which the contract was formed. The court found that the oral assurances were indeed misleading and that the purchasers had, in fact, relied on them, notwithstanding the contractual clause. The presence of the disclaimer did not absolve the vendor from liability for its misleading conduct.

Consequently, the appeals by Italform Pty Ltd and Antonio Foini were both dismissed with costs.