Rafferty v Time 2000 West Pty Ltd (No 5)

Rafferty and Karaville Holdings Pty Ltd, trading as Madgwicks, sought relief under the Trade Practices Act 1974 (Cth) against several respondents, including Time 2000 West Pty Ltd and others. The applicants alleged that the respondents had contravened sections 51AD and 52 of the Act by engaging in misleading or deceptive conduct, and that the fifth respondent was knowingly involved in the contravention. The applicants sought compensation for moneys paid under the agreements, and for the contracts to be set aside. The respondents denied the allegations and argued that the applicants were not entitled to relief because they had not proved an amount of loss or damage.

The court held that the applicants were entitled to compensation for the moneys paid under the agreements, as the fifth respondent was the owner and controller of the corporate respondents, and the corporate respondents were associated with the fifth respondent. The court found that it was appropriate to treat the second, fourth, and fifth respondents as having received the moneys, and that they were jointly and severally liable for repayment to the applicants under section 87(2)(c) of the Act. The court also held that a similar order could be made under section 87(1) to compensate the applicants for loss or damage incurred in entering into the agreements. The court found that the applicants were not entitled to a Sanderson order, as it was not necessary for the applicants to join the sixth respondent, and the second to fifth respondents did not suggest that the sixth respondent was solely liable.

The court ordered that the Heads of Agreement, the Joint Venture and Shareholders' Agreement, and the Rights Agreement be set aside. The first, second, fourth, and fifth respondents were jointly and severally liable to repay the applicants the moneys paid under the agreements, plus interest. The shares of Santora in Time 2000 West Pty Ltd were to be cancelled, and Rafferty was to resign as a director of Time 2000 West Pty Ltd upon payment by the respondents. The second and fourth respondents were to pay the applicants' costs, and the fifth respondent was to pay the applicants' costs after 31 August 2009. The applicants' claims against the sixth respondent were dismissed, and the applicants were to pay the costs of the sixth respondent. The cross-claim by the third respondent against the first applicant was dismissed, and the third respondent was to pay the first applicant's costs of the cross-claim. The cross-claim by the second to fifth respondents against the sixth respondent was dismissed, and the second to fifth respondents were to pay the costs of the sixth respondent in relation to the cross-claim.