Morellini v Adams

In the case of Morellini v Adams, the dispute centred around a share transaction that the plaintiff alleged was induced by misleading or deceptive conduct. The defendant had induced the plaintiff to purchase shares in a company, and the plaintiff sought relief under section 77(1) of the Fair Trading Act 1987 (WA). The court was tasked with determining the scope of its power to grant relief, the necessity for the plaintiff to demonstrate the quantum of loss, and the interpretation of 'refund' and 'return' under section 77(3)(d). Additionally, the court had to consider the ordinary measure of damages under section 79 of the Act, the justification for departing from these measures, and the impact of latent negative factors and subsequent events on the value of the shares. The court also examined whether the plaintiff was 'locked in' to the property and the issue of causation.

The legal issues included the scope of the court's power to grant relief under section 77(1) of the Fair Trading Act 1987 (WA), whether the plaintiff was required to demonstrate the quantum of loss, the meaning of 'refund' and'return' under section 77(3)(d), and the application of the ordinary measure of damages under section 79 of the Act. The court had to determine whether latent negative factors and subsequent events affecting the value of the shares should be considered, and whether the plaintiff was 'locked in' to the property. Additionally, the court had to examine the causation issue.

The court concluded that the plaintiff did not need to demonstrate the quantum of loss to be entitled to relief. The court also interpreted 'refund' and'return' to mean that the plaintiff should be restored to the position they would have been in had the misleading or deceptive conduct not occurred. The court found that the ordinary measure of damages under section 79 of the Act was not a strict rule and could be departed from if justified. The court considered latent negative factors and subsequent events affecting the value of the shares, as well as the issue of the plaintiff being 'locked in' to the property. The court also addressed the causation issue, finding that the defendant's conduct was a significant contributing factor to the plaintiff's decision to purchase the shares.

The court ordered that the defendant refund the purchase price of the shares to the plaintiff, less any dividends received, and that the defendant pay the plaintiff's costs of the proceeding.