Wormald v Maradaca Pty Ltd

The appeal and cross-appeal concerned allegations of misleading or deceptive conduct in connection with the sale of shares in a private company. The primary judge had found that the seller, Wormald, had engaged in misleading or deceptive conduct by silence, specifically by failing to disclose certain information to the purchaser, Maradaca Pty Ltd. The Court of Appeal, comprising Bathurst CJ, Bell P, and Payne JA, was required to determine whether the primary judge had erred in characterising a specific representation as an "assurance" and whether the purchaser had a "reasonable expectation" of certain disclosures. Furthermore, the court had to consider whether any misleading or deceptive conduct found was causative of the loss or damage suffered by the purchaser.

The Court of Appeal found that the primary judge had erred in their findings. The court reasoned that the purchaser was an experienced commercial participant and that, as a matter of common sense causation, the loss sustained was attributable to a calculated risk taken by the purchaser, rather than any misleading or deceptive conduct on the part of the seller. The court concluded that the specific representation did not provide an assurance and that the purchaser did not have a reasonable expectation of the disclosures that were not made.

Consequently, the appeal and cross-appeal were allowed, and the judgments and orders of the Court below were set aside. The Court ordered that the first respondent (Maradaca Pty Ltd) pay the second appellant (Wormald) $114,639.00 plus interest, and also pay the first cross-appellant $30,289.00 plus interest, and the second cross-appellant $55,072.00 plus interest. The Further Amended Statement of Cross-Claim was dismissed with costs, and the first and second respondents were ordered to pay the appellants’ and cross-appellants’ costs.