Mikkelsen v Li

The case of Mikkelsen v Li involved a dispute over a share sale agreement, where the plaintiff, Mikkelsen, sought damages for misleading and deceptive conduct and negligent misstatement by the defendant, Li. The matter was heard in the Supreme Court of Victoria. Mikkelsen alleged that Li provided misleading information about the net profit of the business and made false representations, which induced him to enter into the share sale agreement. The primary judge ruled in favor of Mikkelsen, awarding him the purchase price of the shares and additional damages for negligent misstatement.

The legal issues before the court included whether the Australian Consumer Law (ACL) applied as the law of the Commonwealth or Victoria, the availability of contributory negligence reduction under the ACL, and the appropriate quantum of damages. The court had to determine whether the trial judge erred in applying the ACL as the law of the Commonwealth and whether the plaintiff's failure to undertake due diligence broke the chain of causation. The court also needed to assess the relative culpability of the parties in terms of contributory negligence and the causal link between the failure to take reasonable care and the loss or damage.

The court found that the trial judge erred in applying the ACL as the law of the Commonwealth, instead, the ACL as the law of Victoria was applicable. The court allowed the cross-appeal and held that contributory negligence was available for the negligent misstatement claim only. The court determined that the plaintiff's failure to undertake due diligence did not break the chain of causation, as the representations were highly misleading. The court also noted that there was a negligible causal link between the failure to undertake due diligence and the entry into the contract. The court allowed the cross-appeal and found that there should be no reduction of damages for contributory negligence. The court found that the plaintiff was not over-compensated and refused the leave to appeal on the quantum of damages. The parties consented to an order for the return of shares.