Stone v Chappel (No 2)

Stone (the applicant) sought to recover damages from Chappel (the respondent) for breach of contract and misleading or deceptive conduct. The dispute arose from a contract for the sale of a business, where the applicant alleged the respondent had misrepresented the business's financial performance. The matter was heard by the Full Court of the Supreme Court of South Australia.

The central legal issues before the Full Court were whether the respondent had engaged in misleading or deceptive conduct in contravention of consumer protection legislation, and whether this conduct, or a separate breach of contract, had caused the applicant loss. The court was also required to determine the appropriate orders for costs, given the outcome of the substantive claims.

The Full Court found that while the respondent had engaged in misleading or deceptive conduct, this conduct had not caused the applicant the loss claimed. The court reasoned that the applicant had failed to establish a causal link between the misrepresentations and the damages sought, and that the applicant's own actions and decisions were the primary cause of the financial difficulties experienced by the business post-acquisition. Applying the general rule that costs follow the event, the court ordered that the applicant pay the respondent's costs of the appeal and the costs of the trial, save for those costs attributable to the successful claim of misleading or deceptive conduct.