McDonald & Higgins

In *McDonald & Higgins*, the parties were the applicant, McDonald, and the respondent, Higgins. The dispute concerned the validity of a deed of release and a subsequent settlement agreement, which McDonald sought to have set aside on the grounds of misleading and deceptive conduct. The matter came before Moore J of the Federal Court of Australia.

The primary legal issues before the Court were whether Higgins had engaged in misleading or deceptive conduct in contravention of section 18 of the Australian Consumer Law (Schedule 2 to the *Competition and Consumer Act 2010* (Cth)), and whether the deed of release and settlement agreement were therefore voidable. Specifically, the Court had to determine if Higgins had made representations about future matters that were not justified by reasonable grounds, and if McDonald had relied on these representations to its detriment.

Moore J found that Higgins had indeed engaged in misleading and deceptive conduct. His Honour reasoned that the representations made by Higgins concerning the future performance of certain contractual obligations lacked reasonable grounds, as there was no objective basis for such optimism at the time the representations were made. Consequently, the deed of release and settlement agreement, having been entered into on the basis of these misleading representations, were voidable at the election of McDonald.

The Court ordered that the deed of release and settlement agreement be set aside.