Mavrideros v Mack

In *Mavrideros v Mack* [1998] NSWCA 286, the New South Wales Court of Appeal considered an appeal concerning the enforceability of a guarantee. The appellant, Mr. Mavrideros, sought to set aside a guarantee he had provided to the respondent, Mr. Mack, in relation to a loan made by Mr. Mack to a company. The central dispute revolved around whether Mr. Mavrideros had been induced to enter into the guarantee by misleading or deceptive conduct on the part of Mr. Mack.

The Court of Appeal was required to determine whether Mr. Mack 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) (now section 18 of the *Australian Consumer Law*). Specifically, the court had to assess whether Mr. Mack had made representations about the financial position of the company and the security of the loan that were false or misleading, and whether Mr. Mavrideros had relied on these representations to his detriment when providing the guarantee.

The Court found that Mr. Mack had made representations concerning the company's financial stability and the security of the loan that were not supported by the evidence. It was held that these representations, made in circumstances where Mr. Mavrideros was seeking assurance before providing the guarantee, constituted misleading or deceptive conduct. The Court applied the principles established in cases concerning section 52 of the *Trade Practices Act*, focusing on the objective nature of misleading conduct and the requirement for reliance by the party alleging contravention. The appeal was allowed, and the guarantee was set aside.