VAN ZEGGEREN v BORG [1996] NSWCA 544

VAN ZEGGEREN v BORG SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

MEAGHER, SHELLER and COLE JJA 9 July 1996, 9 July 1996

[1996] NSWCA 544 DECEIT — necessity to prove loss — interest entitlement.

Cole JA The appellant, who was the defendant in proceedings before Herron DCJ, alleged, when sued by the respondent for the balance of purchase price payable under an agreement for the sale of shares, that the respondent had been guilty of fraud. There were two categories of fraud alleged. The first was that the respondent had induced the appellant to enter into the agreement for sale of the shares in a business which conducted a real estate agency by overstating assets and understating liabilities. Loss was said to be occasioned thereby. Those allegations of fraud were not established and there was no challenge to that finding on appeal. The second category of fraud was that respondent had induced entry into the agreement by representing that he was in ill health such as to make it necessary that he retire from the business, and that he would not in the future be engaged in real estate business in opposition to the appellant, except in so far as he may be employed by others as a real estate agent. That allegation succeed before Herron DCJ. However, Herron DCJ held that the appellant had not established any consequential loss. Nonetheless his Honour awarded nominal damages of $200 for the plaintiff's "breach of the contract by reason of his fraud". The result thus was that the plaintiff respondent was successful and obtained a judgment in the sum of $26,285 being the balance of purchase price for the shares plus interest of $17,496 on his claim. The appellant was successful on the cross-claim which alleged fraud, obtaining a judgment of $200. Each party was ordered to pay his own costs.