Zheng v Cai

In *Zheng v Cai*, the High Court of Australia considered a dispute between the appellant, Mr Zheng, and the respondent, Ms Cai, concerning the enforceability of a settlement agreement reached in prior Family Court proceedings. The core of the dispute revolved around whether Ms Cai had been induced to enter into the settlement agreement by misleading or deceptive conduct on the part of Mr Zheng.

The High Court was required to determine whether the primary judge had erred in finding that Mr Zheng had engaged in misleading or deceptive conduct in contravention of section 18 of the Australian Consumer Law (ACL), and if so, whether that conduct had caused Ms Cai to enter into the settlement agreement. A further issue was whether the Family Court had erred in exercising its discretion to set aside the settlement agreement on the basis of this contravention.

The Court analysed the nature of the representations made by Mr Zheng regarding his financial position, finding that they were indeed misleading or deceptive. Crucially, the Court held that the Family Court had correctly applied the principles of causation in determining that Ms Cai would not have entered into the settlement agreement had she been aware of Mr Zheng's true financial circumstances. The High Court affirmed that the Family Court had the power to set aside the settlement agreement under section 79 of the *Family Law Act 1975* (Cth) where it was procured by misleading or deceptive conduct.

The High Court dismissed the appeal, upholding the decision of the Full Court of the Family Court which had affirmed the primary judge's orders setting aside the settlement agreement.