Prosperity Group International Pty Ltd v Queensland Communication Company Pty Ltd (No 3)

Prosperity Group International Pty Ltd, the plaintiff, sought relief against Queensland Communication Company Pty Ltd (the third respondent), along with other defendants, primarily for misleading or deceptive conduct under the Trade Practices Act 1974 (Cth). The plaintiff alleged that the third respondent, through its agent, made representations that were not part of the written contract but were nevertheless treated as contractual terms. The plaintiff claimed reliance on these representations, which it argued amounted to misleading or deceptive conduct.

The legal issues centred on whether the plaintiff had indeed relied on the alleged misleading representations and if the third respondent was liable for these representations made by an agent before the third respondent was incorporated. Additionally, the court had to determine whether the third respondent was liable for the conduct of its predecessors and if the statutory provisions regarding assignment of contracts were applicable to this situation.

The court found that the plaintiff had relied on the misleading representations made by the agent, which were not incorporated into the written contract. Despite this, the representations were treated as formal terms of the contract. The court held that the third respondent, having received the benefits of the contracts, was also bound by the agent’s conduct and thus liable for misleading or deceptive conduct. The court rejected the third respondent's argument that it was not bound by the agent's conduct because it had not existed at the time the contract was signed. Furthermore, the court ruled that the third respondent received both the burden and benefit of the contracts, and thus could not claim protection under the statutory provisions for assignment of contracts.

The court ordered the third respondent to pay damages to the plaintiff, declared certain contracts void, and restrained the other respondents from enforcing those contracts. The third respondent was also granted a set-off against the damages, reducing the net liability to $617.40. The cross claims of the third, fourth, and fifth respondents were dismissed, except for the set-off.