Brecher v Barrack Investments Pty Limited (No 2) [2020] FCA 911

FEDERAL COURT OF AUSTRALIA

Brecher v Barrack Investments Pty Limited (No 2) [2020] FCA 911 File number: NSD 1507 of 2017

Judge: THAWLEY J

Date of judgment: 29 June 2020

Catchwords: CONSUMER LAW – claim under Competition and Consumer Act 2010 (Cth) Sch 2, Australian Consumer Law (ACL) that respondents engaged in misleading or deceptive conduct – where parties established a corporate vehicle to operate radiology practices – whether respondents made misrepresentations as to the history, workload and planned expansion of a medical centre – whether respondents made misrepresentations regarding independence of lawyers and nature of proposed venture – where applicants' evidence not reliable – claim dismissed CONSUMER LAW – claim under ss 20 and 21 of the ACL that respondents conduct was unconscionable – whether respondents withheld information from applicants – whether respondents encouraged applicants to execute documents without legal advice – where applicants were not in a position of special disadvantage – where applicants chose to execute documents without legal advice – claim dismissed EQUITY – claim that third respondent breached fiduciary duty owed to applicants – whether fiduciary duty arose before entering into a formal agreement – whether third respondent was a "promoter" owing fiduciary duties – whether fiduciary duties existed on the basis of a "prospective partnership" or because of a "special vulnerability" of the applicants – claim dismissed CONSUMER LAW – claim that the cross-respondents engaged in misleading or deceptive conduct under the ACL – whether cross-respondents' representations regarding pre-existing radiology practice were misleading – whether cross-respondents provided incorrect profit and loss statement and balance sheet to respondents – where balance sheet was materially incorrect – where it was not established that the cross-claimant would not have entered into transaction if related-party loan had been disclosed on balance sheet – cross-claim dismissed CONTRACTS – claim that first cross-respondent breached "no-conflict" covenant in agreement – where first cross-respondent engaged in work for radiology practices without authorisation – where entitlement to damages for breach properly rested with corporate vehicle in liquidation rather than the cross-claimants – cross-claim dismissed