AKRON SECURITIES LTD v CHARLES [1997] NSWCA 9

AKRON SECURITIES LTD v CHARLES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

GLEESON CJ, COLE and BEAZLEY JJA 17 September 1997

[1997] NSWCA 9

Trade practices — Remedies — Appropriate remedy — contract declared void ab initio — whether damages a more appropriate remedy — Trade Practices Act 1974 (Cth) s87.

Akron Securities Ltd v Iliffe (1997) 41 NSWLR 353

Beazley JA The facts of this matter can be stated shortly. The respondent was a participant with others in a horse breeding venture known as the Bernborough 1987 Breeding Venture, details of which were set out in a thoroughbred investors' agreement which each participant signed, and in a brochure for the venture. The respondent's particular agreement was signed on his behalf pursuant to a power of attorney.

The entry into the venture involved the acquisition of a number of contractual rights. In particular, each participant entered into an agreement to purchase from Bernborough 15 weanlings in common with other participants and to be in agreement to lease from the first appellant a proprietary interest as tenant in common in a herd of mares for a term of four years. Finance was made available by the first appellant to prospective participants.

The present respondent entered into an interest-only agreement. The amount held was equal to the total purchase price of the weanlings with lease and rent payable for the first year and other wages and proceeds prepaid so as to absorb a tax deduction as at 30 June 1987.

In the proceedings the first appellant as plaintiff sought to recover from the respondent and other participants the balance of the moneys lent to the beginning of the venture together with shares of rent and a sum payable under the lease. The respondent defendant in the proceedings alleged that he had been induced to enter into the venture by a misrepresentation made by an employee or officer of NZL in circumstances where the trial judge found that NZI was the agent of the first appellant.