Mahmut and Anor v Inghams Enterprises

The High Court of Australia considered an appeal by Mahmut and Anor (the appellants) against a decision of the Full Federal Court concerning alleged breaches of the *Trade Practices Act 1974* (Cth) by Inghams Enterprises (the respondent). The dispute arose from the respondent's alleged misleading and deceptive conduct in relation to the sale of a poultry farm business.

The central legal issues before the High Court were whether the respondent had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 52 of the *Trade Practices Act 1974* (Cth). Specifically, the court had to determine whether representations made by the respondent regarding the profitability and operational capacity of the business were false or misleading, and if so, whether these representations caused loss or damage to the appellants.

The High Court, in its joint judgment, affirmed the principles established in previous cases concerning misleading and deceptive conduct. It held that the test for misleading or deceptive conduct focuses on the effect of the conduct on the relevant section of the public, rather than the intention of the party engaging in the conduct. The court found that the representations made by the respondent, when viewed in their entirety and in the context of the transaction, were likely to mislead a reasonable purchaser into believing that the business was more profitable and viable than it actually was. The court also considered the issue of causation, finding that the misleading representations were a material cause of the appellants' decision to purchase the business and their subsequent financial losses.

The High Court allowed the appeal, setting aside the orders of the Full Federal Court and remitting the matter to the Federal Court for determination of the quantum of damages.