NEUBERT & NEUBERT AND ORS

In the matter of *Neubert & Neubert and Ors*, Benjamin J of the Supreme Court of New South Wales considered an application for an order that a deed of settlement be set aside. The applicants, Mr and Mrs Neubert, sought to invalidate a settlement agreement entered into with their former business partners, the respondents, alleging that the deed was procured by misleading and deceptive conduct. The core of the dispute revolved around the alleged misrepresentations made by the respondents concerning the financial health and future prospects of the business, which the applicants claimed induced them to enter into the settlement on disadvantageous terms.

The primary legal issue before the Court was whether the respondents had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of section 18 of the Australian Consumer Law (Schedule 2 to the *Competition and Consumer Act 2010* (Cth)). This involved determining whether the statements made by the respondents regarding the business's financial position and future profitability constituted representations of fact or opinion, and if they were indeed misleading in the circumstances. The Court also had to consider whether any such misleading conduct caused loss or damage to the applicants, thereby entitling them to have the deed set aside.

Benjamin J analysed the evidence presented by both parties, paying close attention to the specific statements made by the respondents and the context in which they were communicated. His Honour applied the principles established in cases concerning misleading and deceptive conduct, focusing on whether the representations, viewed objectively, were likely to lead a reasonable person in the position of the applicants to form an incorrect belief about the business. The Court considered the applicants' reliance on these representations and whether this reliance was reasonable. Ultimately, Benjamin J found that the respondents' conduct did not amount to misleading or deceptive conduct as defined by the Australian Consumer Law, and therefore the applicants had not established grounds to set aside the deed of settlement.