Contractual Claims and Consumer Law Missteps. Brisby v Poole Exposes Pitfalls in Business Sale Disputes

M & E Brisby Pty Ltd v D Poole Services Pty Ltd & Anor [2025] NSWDC 44

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Key Takeaways

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1. The case illustrates the critical importance of accurately pleading the correct statutory provisions, especially when alleging breaches of the Australian Consumer Law against individuals.​

 

2. His Honour Weber SC DCJ found that the plaintiff’s failure to plead the Australian Consumer Law (NSW) rendered the claim against the Second Defendant, being a natural person, legally unsustainable.

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3. The contractual obligations of both the vendor and purchaser must be clearly understood and documented prior to the sale of a business.

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4. Courts are reluctant to accept vague or speculative claims, particularly where documentary evidence supports one party's version of events.

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Factual Background

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The plaintiff, M & E Brisby Pty Ltd, operated by Mathew and Emma Brisby, agreed to purchase the business known as "Sports Online" from D Poole Services Pty Ltd (First Defendant), a company controlled by David Poole (Second Defendant). The transaction followed a period of negotiation and the provision of a Confidential Business Profile (CBP) by the Defendants, which set out certain background details of the business, including the nature of its supplier relationships.

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Key to the plaintiff’s complaints was the business’s reliance on a major international supplier, Exclusive Memorabilia Dealers (EMD). The plaintiff alleged that the defendants made misleading statements and failed to disclose relevant facts concerning this relationship prior to and after the execution of the written contract dated 6 July 2022.

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The plaintiff also argued that the CBP was incorporated into the final agreement and relied on its contents to establish both contractual warranties and representations under the Australian Consumer Law.

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Alleged Breach of Contract

 

The contract claim was grounded in several alleged breaches, including:

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1. Failure to introduce the plaintiffs to suppliers and customers under Clause 26 and Special Condition 15.

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2. Failure to provide proper training;

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3. Failure to notify the plaintiffs of a material email from EMD prior to completion;

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4.  Conduct derogating from goodwill (Clause 17.3);

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5. Failure to provide information under Special Condition 5; and

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6. Failure to transfer certain business assets, namely an eBay account.

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Introduction to Suppliers and Training

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The plaintiff argued that these clauses imposed an obligation to introduce them to suppliers and provide extensive training. The Court found that Clause 26 was limited to the post-completion period and only required introduction to suppliers during that phase, not before. Evidence showed the Brisbys received both pre- and post-completion training, with specific instruction on customer systems and backend website operations.

Dr Poole's unchallenged affidavit, coupled with the Brisbys' own concessions in cross-examination, supported the conclusion that adequate training was given and that any obligation to introduce suppliers had been satisfied to the extent required by the contract.

 

Failure to Notify About Supplier Issues

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The plaintiff asserted that an email from EMD dated 18 July 2022 triggered obligations under these clauses, which required disclosure of any disputes. The Court rejected this argument, noting there was no evidence of a "dispute" existing at the time of the contract. The email did not amount to a formal dispute and following subsequent communications, the supplier agreed to continue supplying goods via Dr Poole.

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Conduct Derogating from Goodwill

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A further claim alleged Dr Poole undermined goodwill by contacting a third party, Mr Tino Hemmingsen, to act as a backup supplier. The Court accepted Dr Poole’s evidence that this was a contingency plan to assist the Brisbys and was not an attempt to divert business or harm goodwill.

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Failure to Produce Information

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This clause required the vendor to provide reasonable documentation verifying information in the agreement. Emails between Mrs Brisby and Dr Poole evidenced transparent discussions about supplier arrangements. Dr Poole offered two options for continuing supply, including acting as an ordering intermediary, and the Brisbys accepted one of those options. The Court concluded that the information was provided as required.

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eBay Account

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The only remaining asset-related issue concerned an eBay account. However, unchallenged evidence showed the account was personal to Dr Poole and had not been used for business purposes post-sale. Moreover, the plaintiffs had waived any claim to this account, and no damages were claimed.

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Conclusion on Contractual Claims

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Weber SC DCJ concluded that the plaintiffs failed to establish any breach of contract. The defendants had complied with all relevant obligations, and where post-contractual complications arose, they were dealt with appropriately and transparently.

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Australian Consumer Law Claims

The plaintiff also alleged five contraventions of section 18 of the Australian Consumer Law (Cth), relating to misleading or deceptive conduct. Notably, only the Second Defendant (David Poole) was named in this claim.
 

Failure to Plead Australian Consumer Law (NSW)

This Australian Consumer Law claim proved to be fundamentally flawed due to the plaintiff's failure to properly plead the applicable statutory basis.

Section 131(1) of the Competition and Consumer Act 2010 (Cth) confines the application of the Commonwealth Australian Consumer Law to corporations. Since Dr Poole is a natural person, the Australian Consumer Law (Cth) could not apply to him as a primary contravener.

For claims against individuals, the correct statutory pathway is through the Australian Consumer Law (NSW), which applies the Australian Consumer Law (Cth) as state law under section 28 of the Fair Trading Act 1987 (NSW) (FTA). This extension is governed by section 32 of the FTA, which brings individuals within the scope of liability.

Despite this well-established legal framework, the plaintiff explicitly pleaded the Australian Consumer Law (Cth) and failed to invoke the Australian Consumer Law (NSW). As Weber SC DCJ observed, this error was fatal:

"The Australian Consumer Law, as a law of the Commonwealth, does not relevantly apply to the Second Defendant as an individual... This jurisdictional point is fatal to the Plaintiff’s Australian Consumer Law case."
 

Analysis of Alleged Misrepresentations

Even if the jurisdictional defect had not been fatal, the Court found the misrepresentation claims lacked substance, namely:

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1. First and Second Representations: Assertions that supply from EMD would continue and that there were no ongoing issues were found to be true at the time made. Dr Poole had in fact disclosed the conclusion of the exclusive supply arrangement and ongoing uncertainty, which the plaintiffs understood.

 

2. Third Representation: Not pressed in submissions.
 

3. Fourth Representation: Statements about the ability to order without minimum spend from EMD were also accurate and made in good faith.

 

4. Fifth Representation: Post-contractual comments about future supply arrangements were part of a broader discussion in which the Brisbys were given viable options. They ultimately accepted one, confirming there was no deception.
 

Weber SC DCJ emphasised that none of the statements led the plaintiffs into error or created a misleading impression. The judgment referenced established authorities such as Wormald v Maradaca, ACCC v TPG Internet, and Xu v Lindsay Bennelong to affirm the high threshold for proving misleading conduct, particularly in commercial contexts involving sophisticated parties.

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Legal Insights

Curiously, the plaintiff did not plead a contravention of section 4 of the Australian Consumer Law, which deals specifically with misleading representations as to future matters. Section 4 imposes a legal presumption that a person who makes a representation about a future matter, without reasonable grounds, is taken to have engaged in misleading or deceptive conduct. In such circumstances, the burden of proof shifts to the defendant to demonstrate that they had reasonable grounds for making the representation.

Had the plaintiff relied on section 4, it could have provided an alternative statutory pathway to prove misleading conduct without needing to establish falsity at the time of the statement. The obligation would have been on the defendants to prove that their statements regarding ongoing supply from the major supplier were supported by reasonable grounds.

This omission in the pleadings represents a significant strategic oversight. In many business transaction disputes, especially those involving statements about future supplier relationships, sales projections, or ongoing business viability, section 4 can be a powerful tool in a plaintiff's legal arsenal. As it stands, the plaintiff's failure to invoke this provision may well have undermined their chances of success under the Australian Consumer Law.

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This decision offers a timely reminder about the technical and substantive requirements when pleading claims under the Australian Consumer Law. Where individuals are named as defendants in the context of misleading and deceptive conduct, plaintiff(s) must ensure that the Australian Consumer Law (NSW) is correctly pleaded as the source of jurisdiction and liability. The distinction between the Australian Consumer Law (Cth) and the Australian Consumer Law as applied in NSW determines the Court’s jurisdiction to impose liability on natural persons.

Further, this case illustrates how the failure to allege facts with sufficient specificity and legal foundation can render even plausible grievances legally unsustainable. The Court showed little tolerance for speculative claims unsupported by contract terms or accurate representations of statutory obligations.

 

How to Protect Yourself When Purchasing a Business

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When purchasing a business, particularly one involving complex operations or supplier relationships, it is crucial to conduct careful due diligence to avoid future disputes. Below is a practical checklist to help buyers protect their interests:

1. Have a lawyer review all legal documents, including the contract for sale and any ancillary agreements. Ensure the final contract reflects all essential terms discussed.

2. Obtain an independent valuation to verify that the asking price is supported by the financial performance of the business.

3. Confirm whether key supplier relationships are governed by formal, assignable contracts. If they are not, assess the risk of supply chain disruption.

4. Ensure any representations made by the vendor (including in business profiles or promotional material) are accurate and supported by documentary evidence.

5. Examine profit and loss statements, tax returns, inventory lists, supplier invoices, and customer data.

 

6. Clarify what training and support, if any, will be provided by the vendor after settlement and ensure this is reflected in the contract.

7. Keep written records of email correspondence and discussions that may form the basis of representations or negotiations.

8. Ensure all warranties, undertakings or commitments are formally recorded in the contract for sale.

 

9. Identify and ensure proper legal transfer of essential business assets such as websites, social media accounts, trading names, client databases, and intellectual property.

 

Following these steps can significantly reduce your legal and financial exposure.

 

How Arida Lawyers Can Help

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At Arida Lawyers, we provide strategic, clear advice in both business disputes and consumer protection matters.

 

Whether you are a business navigating a contractual disagreement or an individual pursuing remedies under the Australian Consumer Law, our team has the legal and commercial insight to guide you.

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We have an in-depth understanding of the jurisdictional frameworks that apply to both Commonwealth and state-based legislation and can help ensure your case is correctly framed and well-pleaded from the outset.

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If you have a consumer law or contract issue and want clarity about your legal options, we invite you to book a free 10-minute telephone consultation with our team today.​

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This article provides general information relevant to our expert services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.

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