Li v Mikkelsen

The case of Li v Mikkelsen involved a dispute between the plaintiff, Li, and the defendant, Mikkelsen, over the sale of shares in a business. The plaintiff claimed that the defendant had engaged in misleading or deceptive conduct by making representations regarding the working capital contribution and the purchase of shares in the business. Li sought specific performance of the share sale contract or, in the alternative, damages for the loss of profits resulting from the defendant's conduct. The case was heard in the Federal Court of Australia.

The primary legal issues before the court were whether the defendant had made misleading or deceptive representations, and if so, whether these representations induced the plaintiff to enter into the share sale contract. The court had to determine the appropriate remedy for the plaintiff, either specific performance of the contract or damages for loss of profits. The court also had to assess the valuation of the business and the net profits that the plaintiff had lost due to the defendant's conduct.

The court found that the defendant had indeed made misleading or deceptive representations regarding the working capital contribution and the purchase of shares. The representations were material and induced the plaintiff to enter into the share sale contract. The court held that specific performance was not an appropriate remedy, as the defendant was unable to provide the necessary working capital. Instead, the court awarded damages to the plaintiff for the loss of net profits resulting from the defendant's conduct. The court calculated the damages based on the business valuation and the lost net profits, taking into account the evidence provided by both parties.

The court ordered the defendant to pay the plaintiff damages in the amount of $1,200,000, representing the loss of net profits due to the defendant's misleading or deceptive conduct. The court also ordered the defendant to pay interest on the damages from the date of the breach of contract until the date of judgment. The court did not order specific performance of the share sale contract, as the defendant was unable to provide the necessary working capital.