Jewelsnloo Pty Ltd v Sengos

Jewelsnloo Pty Ltd (the purchaser) appealed to the Court of Appeal of New South Wales against a decision of the primary judge concerning a contract for the sale of a business. The dispute centred on whether the purchaser had relied on representations made by the vendor, Sengos, regarding the business's sales figures, and whether there had been a misrepresentation by silence regarding the previous owner's intention to compete.

The Court of Appeal was required to determine two primary legal issues. Firstly, whether the purchaser had relied on the vendor's representations concerning the business's sales figures, particularly in light of a clause in the contract stating the purchaser did not rely on such representations and that the bargain was struck on the basis of a discounted price in return for this non-reliance. Secondly, the Court had to consider whether the vendor had made any misrepresentation by silence, specifically concerning the previous owner's intention not to compete with the business, and whether any expectation of disclosure of such an intention was reasonable.

The Court of Appeal upheld the primary judge's findings. It reasoned that the express contractual term, which stipulated that the purchaser did not rely on the vendor's representations and that the price was discounted accordingly, was effective. This clause precluded the purchaser from later claiming reliance on those representations. Regarding the alleged misrepresentation by silence, the Court found that there was no reasonable expectation that the vendor would disclose the previous owner's intention not to compete. Therefore, no misrepresentation by silence occurred.

The appeal was dismissed, and the purchaser was ordered to pay the costs of the appeal.