MindChamps Preschool Limited v M & W Zaki Pty Limited ATF the Zaki Group Trust

The parties to the case were MindChamps Preschool Limited (the plaintiff) and M & W Zaki Pty Limited ATF the Zaki Group Trust (the defendants). The plaintiff had entered into an agreement for the acquisition of nine childcare centres from the defendants on 1 September 2016. The plaintiff alleged that the fourth and fifth defendants engaged in misleading and deceptive conduct on behalf of themselves and other defendants, inducing the plaintiff to execute the agreement. The plaintiff subsequently terminated the agreement and sought recovery of the deposit. The court was required to determine whether the fourth and fifth defendants had made certain representations to the plaintiff before the execution of the agreement, and if so, whether those representations were misleading. The court also needed to consider whether the plaintiff had relied upon any representations made, what loss was caused by any misleading or deceptive conduct of the defendants, and what relief should be given, including the return of the deposit. Alternatively, the court had to consider whether the circumstances occasioned relief for negligent misrepresentation.

The court considered the evidence and found that the fourth and fifth defendants had indeed made certain representations to the plaintiff. However, the court found that the plaintiff had not relied on those representations in entering into the agreement. The court held that the plaintiff was not entitled to recover the deposit or any other relief on the basis of misleading and deceptive conduct. The court also found that the defendants had not breached any of their obligations under the agreement, including their due diligence process obligations or their exclusivity obligations. Therefore, the defendants were not required to return the deposit. The court dismissed the plaintiff's claims in their entirety.

The court ordered that the plaintiff pay the defendants' costs of the proceeding, to be agreed or assessed. The court also ordered that the deposit held in escrow be released to the defendants. The court did not make any other orders in relation to the agreement for the acquisition of the nine childcare centres.