State Bank of NSW v Fanny's Properties Pty Ltd (now known as Cessnock 6 Day Enduro Pty Ltd) and Anor.Hawkins v State Bank of New South Wales

The case involves the State Bank of New South Wales, Fanny's Properties Pty Ltd (now known as Cessnock 6 Day Enduro Pty Ltd), and Hawkins. The dispute concerns a contract for the purchase of nightclub land and equipment, with the liquidator of Fanny's Properties making a claim over a hotelier's licence. The primary legal issue before the court was whether the vendor had misled the purchaser about the liquidator's claim. Specifically, the court had to determine whether the vendor's failure to inform the purchaser about the claim constituted misleading and deceptive conduct under the Fair Trading Act 1987 (NSW) s 42. The court also examined whether the representation was with respect to a future matter and whether it was made by silence. Additionally, the court considered whether the vendor had reasonable grounds for making the representation and whether the purchaser suffered a loss as a result of the contravention of the Act.

The court's reasoning focused on the principles of misleading and deceptive conduct and the elements required to establish such conduct. It examined the nature of the representation, whether it was with respect to a future matter, and whether it was made by silence. The court held that the vendor's failure to inform the purchaser about the liquidator's claim constituted misleading and deceptive conduct. The court found that the representation was made by silence and that the vendor had reasonable grounds to believe that the claim would not be upheld. The court also determined that the purchaser had suffered a loss due to the contravention of the Act, as reliance on the representation played a role in the decision to purchase. Furthermore, the court applied the principles of issue estoppel as outlined in Port of Melbourne Authority v Anshun Pty Ltd (No 2), reinforcing that the vendor was estopped from denying the knowledge of the liquidator's claim.

In conclusion, the court found in favour of the liquidator and held that the vendor had engaged in misleading and deceptive conduct. The vendor's failure to inform the purchaser about the liquidator's claim constituted a representation by silence, and the purchaser suffered a loss as a result. The court's decision reinforces the importance of transparency in commercial transactions and the obligations of vendors under the Fair Trading Act. The final orders were made in favour of the liquidator, ensuring that the hotelier's licence was subject to the claim.