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casetreasury

Henjo Investments Pty Ltd v Collins Marrickville Pty Ltd (1988) 79 ALR 83

Facts: Collins, P, bought a lease to a restaurant off Henjo, D. The restaurant was operating illegally (it seated more people than its licence allowed; 128 vs 84 seats). P was led to believe (via a signed card and by observation of the premises) that the illegal capacity was licensed (i.e. the words “seats 128” were immediately under the word “licensed” on the instruction card). P hired a lawyer to check the licence, but he did not do so. The contract had both an entire agreement clause and a disclaimer of all prior representations.


Issue: Had D engaged in misleading or deceptive “conduct” pursuant to Australian Consumer Law (ACL) by failing to disclose the limitation on seating capacity contained in the licence?


Held: The ACL on misrepresentation is broad; “conduct” includes acts, omissions and silences.


Issue: Had HI engaged in misleading or deceptive conduct by failing to disclose the limitation on seating contained in the liquor licence?


Held: Half-truths (the provision of partial information) may result in deception. At common law, silence can give rise to an actionable misrepresentation where there is a duty upon the representor to reveal a matter if it exists, and where the other party is therefore entitled to infer that matter does not exist from the silence of the representer. Where disclosure is necessary, it is not a defence that the representee should have made its own inquiries to find out the truth.


Issue: What is the effect of the exclusion clause?


Held: Exclusion clauses are not effective in a case of fraudulent misrepresentation.

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