Nadinic v Cheryl Drinkwater as trustee for the Cheryl Drinkwater Trust

The appeal concerned a dispute between Nadinic and Cheryl Drinkwater, as trustee for the Cheryl Drinkwater Trust, arising from a joint venture and a subsequent deed of settlement. Nadinic alleged that Ms Drinkwater engaged in misleading or deceptive conduct in contravention of consumer law, and also sought to recover GST input tax credits. The matter came before the Court of Appeal of New South Wales.

The primary legal issues before the Court of Appeal were whether Ms Drinkwater's conduct in relation to the financial position of an entity being acquired under the deed of settlement was misleading or deceptive, and whether Nadinic was entitled to claim GST input tax credits.

The Court of Appeal found that Ms Drinkwater's conduct was indeed misleading or deceptive. It reasoned that while Nadinic may have misunderstood the financial position of the acquired entity, Ms Drinkwater participated in causing that misunderstanding, was aware of it, and failed to correct it. This failure to correct a known misunderstanding, in circumstances where there was a duty to speak or at least not to mislead, constituted misleading or deceptive conduct. The Court also considered the claim for GST input tax credits, but the outcome of the appeal was determined by the findings on the misleading or deceptive conduct.

Ultimately, the Court of Appeal dismissed Nadinic's appeal and ordered that Nadinic pay the respondent's costs of the appeal.