Uni Pub buyers sue sellers over alleged false and misleading statements
Buyers of the now-closed Uni Pub in Civic are suing the people who sold them the struggling business, alleging they made false, deceptive and misleading statements in the lead-up to the sale, court documents reveal.
Documents filed in the ACT Supreme Court allege, in particular, that the sellers falsely told the buyers they had been paying rent to the landlord, when in fact the business had a special rent-free arrangement in place.
The buyers, Jornad Pty Ltd, say they relied on the various representations when buying the business and signing a lease, and that had they known what they was told was false, they would not have gone through with it.
They allege they suffered loss because of the sellers, and are seeking damages and compensation.
Last month, a court heard allegations Jornad had incurred liabilities of more than $400,000 “because of the actions of the defendants”.
The sellers, Sapme Pty Ltd, have denied the allegations, and deny they made the representations.
The defence filed with the court says the buyers had to satisfy themselves of the truth or accuracy of provided information, and knew or should have known the state of the business by virtue of their own enquiries.
Jornad director Kevin John Barnes, is named in court documents as the second plaintiff, while Sapme director Stephen John Dawn and an alleged agent, Anne Dawn, are also named as defendants.
Jornad purchased the Uni Pub business around August 2016, but it closed about seven months later in March.
The new owners vacated the site, and launched the law suit against the sellers.
Their claim is based on Australian consumer law, and in the alternative, a claim under leasing laws.
The former Uni Pub site, on the corner of London Circuit and University Avenue in Civic is now occupied by another business, Balthazar, which is entirely unrelated to these proceedings.
Court documents detail a series of meetings between the then-owners of Uni Pub and the potential buyers, including at the Civic establishment, the Olive restaurant in Mawson and the Kingston pub.
It is alleged that during the meetings the sellers told the buyers among other matters that the business was financially supporting itself, the bills were up to date and it had paid its rent up to date.
The statement of claim filed last year alleges that by September 2016, the sellers had not paid rent for more than 13 months, and accrued a debt of unpaid rent to the landlord of $955,000.
However, the buyers have more recently alleged that the sellers had a special arrangement with the landlord to forgo rent since mid-2015.
The buyers allege the weren't told about the arrangement, and only found out about it in April this year.
They have filed an application to amend the statement of claim with the new information.
The case came before court last month, when the sellers requested a court order that the buyers provide security for costs for the case, and that the case be stayed until security is paid.
The sellers argued in part that it was clear the business had not been doing well when it was sold, and pointed to the purchase price of $1.
But Justice John Burns said he understood the buyers' claim to be that although they knew the business was performing poorly, it was performing significantly worse than they had been led to believe, to the extent it was not possible to be turned around.
The judge refused the sellers' application for security for costs.