Residual Assco Group Ltd v Spalvins

The High Court of Australia considered an appeal from the Supreme Court of Victoria concerning the enforceability of a settlement agreement. The appellant, Residual Assco Group Ltd, sought to enforce a settlement agreement against the respondent, Mr. Spalvins, which had been reached in the context of earlier litigation. Mr. Spalvins resisted enforcement, alleging that the settlement agreement was voidable due to misleading and deceptive conduct.

The central legal issue before the High Court was whether Mr. Spalvins could avoid the settlement agreement on the grounds that he was induced to enter into it by misleading or deceptive conduct, despite the agreement containing a "non-reliance" clause. This clause stipulated that Mr. Spalvins had not relied on any representations made by Residual Assco Group Ltd or its representatives in entering into the settlement. The court also had to consider the interaction between the general law of contract, specifically the principles of misleading or deceptive conduct under consumer protection legislation, and the express terms of a settlement agreement.

The High Court held that the non-reliance clause did not preclude Mr. Spalvins from alleging misleading or deceptive conduct. The Court reasoned that such a clause could not operate to prevent a party from relying on statutory prohibitions against misleading or deceptive conduct, which are designed to protect consumers and the integrity of commercial dealings. The Court affirmed that where misleading or deceptive conduct has occurred, a party may be entitled to relief, such as setting aside a contract, notwithstanding a non-reliance clause. The Court distinguished between representations of fact and representations about the future, and the effect of the non-reliance clause on each.

The High Court allowed the appeal, setting aside the orders of the Supreme Court of Victoria and remitting the matter to that court for determination of the further questions arising from the finding that the settlement agreement was voidable.