Krakowski & Anor v Eurolynx Properties Ltd

The High Court of Australia heard an appeal concerning the purchase of a strata title unit in a shopping centre for $1.56 million. The appellants, David Krakowski and Henia, contended that the Full Court had erred in its findings regarding misrepresentation and misleading conduct. The respondents included Eurolynx Properties Ltd and Mallesons Stephen Jaques.

The appeal raised four principal issues for determination. Firstly, whether the Full Court applied the incorrect legal test in assessing whether a misrepresentation made during the transaction was fraudulent, and if the evidence supported a finding of fraud. Secondly, if fraud were established, whether rescission of the contract for fraudulent misrepresentation was available and should have been granted. Thirdly, the appellants challenged the Full Court's decision regarding the application of section 87 of the Trade Practices Act, arguing that the remedy of setting aside the transaction should have been made available. Finally, the appeal concerned the answers provided to requisitions, with the appellants arguing that misleading conduct in this regard caused additional loss by denying them an opportunity to rescind the contract, even for innocent misrepresentation.

The appellants argued that the answer to a requisition seeking details of all tenancies and related agreements was misleading. This answer, which stated a copy of the lease was included in the contract, failed to disclose a material side agreement that varied the lease terms concerning rent and tenant incentives. This omission, the appellants contended, constituted misleading conduct under section 52 of the Trade Practices Act, causing damage by preventing rescission of the contract.