Scoway Pty Ltd v Faxon Pty Ltd

Scoway Pty Ltd brought an action against Faxon Pty Ltd and others, seeking damages for misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1987 (NSW). The plaintiff, Scoway, had purchased a business known as 'McGinty’s Irish Bar and Restaurant' based on representations made by the defendants that were later found to be false. The defendants failed to adequately respond to the claims, leading to findings of liability in favour of the plaintiff. The primary legal issue was whether the defendants' conduct constituted misleading and deceptive conduct under the relevant legislation. The court found that the defendants' false representations constituted misleading and deceptive conduct, as established in the case of Accounting Systems 2000 (Developments) Pty Ltd v CCH Australia Ltd. The court further found that the plaintiff was entitled to damages of $586,321.00, as supported by expert evidence.

The court determined that the plaintiff acted reasonably in continuing to operate the business until it could be sold, mitigating potential greater losses. The defendants' failure to contest the evidence or appear at the hearing resulted in the court accepting the plaintiff's claimed loss. The court also considered ancillary issues such as costs and cross-claims between the respondents, ultimately dismissing most cross-claims and awarding costs accordingly.

In conclusion, judgment was entered in favour of the plaintiff against all respondents for $639,538.87 in damages, with costs awarded against the defendants. Additionally, the fifth respondent was awarded $200,000.00 against the fourth respondent, with the fourth respondent to bear the costs of that cross-claim. The cross-claims by the third and fourth respondents were dismissed with costs. This decision comprehensively addressed the primary claims and ancillary matters, providing a clear resolution to the litigation.