Johnson v Mackinnon [2021] NSWCA 152 (21 July 2021) (Macfarlan JA at [1]; Brereton JA at [3]; Simpson AJA at [300].)


Catchwords:


CONSUMER LAW – Misleading or deceptive conduct – Representations – Explicit false representations made in proposal document given to prospective investors in fraudulent betting syndicate scheme masterminded by notorious conman – Appellant a member of partnership promoting scheme – Whether appellant had knowledge of false representations – Whether appellant jointly and severally liable for misrepresentations made in ordinary course of business of partnership – Liability established

APPEALS – From findings of fact and credibility – Function of appellate court – Circumstantial case – Briginshaw standard – Inferences from primary facts – Whether open to be comfortably satisfied various factual findings, including inference that appellant knew of false proposal representations

PARTNERSHIPS AND JOINT VENTURES – Relationship of partners to persons dealing with them – Liabilities of partner – Partnership intended to be limited – Unlimited because limited partnership agreement never registered – Joint and several liability for misrepresentations made by other partner in ordinary course of business of partnership

CONSUMER LAW – Misleading or deceptive conduct – Silence or non-disclosure – Whether appellant represented that conman not involved in scheme – Whether appellant had knowledge of various prerequisite facts such as notoriety, involvement, and alias of conman, and of need to conceal such information – Appellant unable to demonstrate any of these findings as glaringly improbable – Appellant ought to have known of reasonable expectation that conman’s involvement would be disclosed – Appellant did not disclose and deliberately concealed conman’s involvement

CIVIL PROCEDURE – Pleadings – Amendment – Late application for amendment on second day of trial – Amendments added alleged liability of appellant for representation by silence and clarified alleged liability of appellant for explicit proposal representations – Whether appellant deprived of opportunity to make “no case” submission – Whether primary judge failed to consider dictates of justice – Not necessary to recite considerations seriatim – Appellant not deprived of fair and reasonable opportunity to meet case – Pleadings sufficiently clear and specific, and not unfairly open-ended

CIVIL PROCEDURE – Pleadings – Construction of pleadings – Subparagraphs of pleadings not in precise correspondence with each other – Whether prejudicial construction by primary judge in finding that pleadings nevertheless sufficiently clear

CONSUMER LAW – Misleading or deceptive conduct – Causation or reliance – Whether respondent’s decision to invest caused by proposal representations – Whether prospective investor would have been deterred by knowledge of involvement of notorious conman – Gullible investors not disentitled to protection

CONSUMER LAW – Misleading or deceptive conduct – Remedies – Quantification of damages – Whether primary judge failed to account for group members’ prior recoveries and respondent’s trading profits received from scheme – Award of damages below only for respondent’s unpaid loan to scheme – Prior recoveries and trading profits irrelevant

CIVIL PROCEDURE – Representative proceedings – Remedies – Award of damages to individual group member

CIVIL PROCEDURE – Court of Appeal – Notice of contention – Reliance on claim in deceit in addition to misleading and deceptive conduct – Deceit considered briefly in judgment below – Contention material and advances respondent’s case in circumstances where appellant claims apportionment for misleading and deceptive conduct but cannot do the same for claim in deceit – Notice of contention upheld and decisive of appeal – Unnecessary to consider further aspect of notice, namely conspiracy

TORTS – Miscellaneous Torts – Deceit – Relationship with misleading or deceptive conduct – Apportionment defence available for misleading and deceptive conduct but not for deceit

TORTS – Joint and several liability – Apportionment – Primary judge disallowed late attempt to raise apportionment defence – Disallowance denied a real prospect of significant reduction in liability – Strongly arguable error in disallowance – Unnecessary to consider further as respondent nevertheless able to rely on non-apportionable claim in deceit