Kang v Kim

In the matter of *Kang v Kim*, heard before Judge Nicholls in the District Court of New South Wales, the dispute concerned allegations of misleading and deceptive conduct in contravention of the *Australian Consumer Law* (ACL). The plaintiff, Mr Kang, alleged that the defendant, Mr Kim, had made false representations regarding the profitability of a business opportunity, inducing Mr Kang to invest a significant sum of money. Mr Kang sought to recover his losses, arguing that the representations were material to his decision to invest and were demonstrably untrue.

The central legal issue before the Court was whether Mr Kim's conduct constituted misleading or deceptive conduct under section 18 of the ACL. This required the Court to determine if Mr Kim had, in trade or commerce, engaged in conduct that was misleading or likely to mislead Mr Kang. Specifically, the Court had to assess the nature of the representations made, their truthfulness, and whether they were likely to have caused a reasonable person in Mr Kang's position to be misled into making the investment.

Judge Nicholls reasoned that the test for misleading or deceptive conduct under the ACL is objective, focusing on the likely effect of the conduct on a reasonable consumer. The Court found that Mr Kim had made specific representations about projected profits and the financial performance of the business that were not substantiated by any reliable evidence. These representations, being optimistic and unqualified, were likely to mislead a prospective investor into believing that the business was a sound and profitable venture. Consequently, the Court concluded that Mr Kim had contravened section 18 of the ACL.

The Court ordered that Mr Kim pay damages to Mr Kang in an amount representing the losses incurred by Mr Kang as a result of his investment.