top of page

Misleading & deceptive conduct - An Asia Pacific Malt Case Study

By Dirk Heinz and Sandy Nyunt

In the recent case of In Viterra Malt Pty Ltd v Cargill Australia Limited [2023] VSCA 157, the Victorian Court of Appeal delivered a significant ruling underscoring the limitations of contractual freedom in cases of misleading or deceptive conduct. This article explores the background, the court's decision, and the implications of this landmark ruling for businesses engaging in acquisitions in the Pacific region. Given the guidance many Pacific courts take from the decisions of Australian supreme courts, the VSC’s findings are worth noting for those market players looking to sell or acquire businesses across the region.

In Viterra Malt Pty Ltd v Cargill Australia Limited [2023] VSCA 157, the Victorian Court of Appeal held that parties cannot contract out of or exclude liability for misleading or deceptive conduct despite the principle of freedom of contract. It was determined that the following clauses may be considered ineffective to avoid liability for engaging in misleading or deceptive conduct during an acquisition:

  1. no representation clauses

  2. no reliance clauses

  3. exclusion clauses


Cargill acquired the entire share capital of a malt producer, Joe White, from the Viterra Companies (Viterra) in 2013 for $420 million. Following the sale, it transpired that Joe White had routinely provided its customers with malt that did not meet customers' specifications, despite that the malt producer had falsely claimed to have met them.

Cargill claimed that Viterra was in breach of s 18 of the Australian Consumer Law (ACL) and made misleading or deceptive representations about Joe White's business practices. Cargill also claimed that it had relied on those representations when it acquired Joe White and would not have otherwise proceeded with the acquisition.

Cargill succeeded in its claim both at first instance and on appeal.

Victorian Court of Appeal Decision

In dismissing Viterra's arguments, the Victorian Court of Appeal held that, with respect to:

  1. exclusion clauses: parties to a contract cannot contract out of liability for misleading or deceptive conduct, as it would be contrary to public policy;

  2. no representation clauses: statements that "no representations, express or implied, were made" cannot be given effect when representations were made; and

  3. no reliance clauses: in this instance, Viterra's "no reliance" clauses did not prevent Cargill from relying on the misrepresentations.


Buyers and sellers of businesses in the Pacific, be wary of the following:

  1. as a general rule, parties cannot contract out of, or exclude liability for misleading or deceptive conduct;

  2. no reliance clauses will have no effect in circumstances where a party can show that it did rely on a misleading or deceptive representation made by the other party;

  3. sellers should make sure that buyers have received all material information about an acquisition, as undisclosed information can give rise to a claim of misleading or deceptive conduct;

  4. in negotiations where there are no higher bidders, representations that there are other higher bidders can amount to misleading or deceptive conduct;

  5. when assessing whether conduct will amount to misleading or deceptive conduct, the entirety of the relevant conduct as a whole should be assessed (which may include an assessment of no representation clauses, no reliance clauses, or other disclaimers).

If you would like legal advice on misleading or deceptive representations in the context of business acquisitions in the Pacific, please contact the experienced lawyers at PLN Australia.


Featured Posts
Directors' Duties - A Guide to the Pacific

May 2022

Recent Posts
Search By Tags
Follow Us
  • Facebook Basic Square
  • Twitter Basic Square
  • Google+ Basic Square
bottom of page