Queensland Judgments
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Venerdi P/L v Anthony Moreton Group Funds Management Ltd & Ors

Unreported Citation:

[2013] QSC 219


In this matter Jackson J was asked to determine whether a contract containing an “exclusory and disclaimer” clause (“the reliance exclusion clause”) could be relied upon by a defendant in an action for misleading or deceptive conduct brought pursuant to s 12DA of the Australian Securities Investment Commission Act 2001 (Cth) (“ASIC Act”).  The defendant sought to rely upon the existence of the exclusion / disclaimer clause in a standard form contract as the foundation of a counterclaim for:

(1)  misleading and deceptive conduct by the plaintiff – the defendant’s loss or damage being their liability to the plaintiff on the plaintiff’s claim; or

(2) breach of contract – the defendant seeking damages “measured by the [plaintiff’s] claim”.

The defendants alleged that, if the plaintiffs were to make out their claim for misleading and deceptive conduct then, it would follow that, the agreement in the contract to terms of the reliance exclusion disclaimer was false.  The plaintiff’s conduct, so it was said, would also have been misleading and deceptive as the defendants would not have entered into the contract had they known this and, as a consequence, the defendants counterclaimed for damages equivalent to their liability to the plaintiff.

While there is a significant body of case-law concerning the reliance on exclusion clauses as a defence to a claim to a s 52 TPA claim; his Honour was faced with a paucity of precedent which considered the specific issue of whether or not it could be relied on offensively? [29]. After undertaking a thorough examination of the available, relevant case-law, (see [36]–[38], [41]–[44]), his Honour concluded that, despite the absence of any “overt illegality,” – there being no express prohibition of reliance on exclusion clauses to found an action in the ASIC Act – the present claim was invalid for “public policy illegality,” as to give effect to the clause would operate to “cut down” the statutory norm protected. [45].

His Honour then considered whether the defendants’ liability to the plaintiff for loss or damage suffered as a consequence of their violation of s 12DA of ASIC Act, could be “‘loss or damage’ that the defendant suffered ‘by’ the plaintiff’s misleading or deceptive conduct in contravention of s 12DA (or s [18])?” [48]. To answer this question the Court looked to the construction of the relevant provisions of the ASIC Act, deciding that the interpretation which would “best achieve the purpose” of the Act was that the defendants’ liability could not be defined as “loss or damage”. [51]. His Honour articulated a number of reasons for this conclusion, specifically that this interpretation would require the acceptance that what is, in reality, a contingent liability is equivalent to “loss or damage” as it is generally understood [52]; and that the defendants’ interpretation would otherwise interfere with the operation and purpose of the ASIC Act, [53]–[54], see further [56]–[61]. 

In the result Jackson J struck out the defendants’ counterclaim.

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