(10 marks)

After working in the catering industry for many years, Matthew decided he wanted to run his ownrestaurant. He saw an advertisement in the local newspaper that "Little Italy" restaurant was forsale. "Little Italy" was described as a pizzeria with a capacity of 120 seats located on the mainstreet of Leichhardt, Sydney. Matthew obtained the financial statements from the business agentand arranged an inspection.

At the inspection of the restaurant, Matthew met the owner, Antonio, and the chef, Renaldo.Matthew told them that this was the first time he was buying a restaurant business. Antonioassured Matthew that the pizzeria was operating successfully. Antonio also told Matthew he hadnothing to worry about because Renaldo would be happy to stay on after the business was sold.

Matthew noticed that there were 120 chairs arranged at 30 separate tables both inside therestaurant and outside on the pavement area.Matthew signed an agreement to purchase the restaurant business from Antonio. The purchaseagreement included the following clause:

Clause 8: The purchaser acknowledges that he accepts the premises in their present condition and as a result of his own inspection of the premises. In entering this agreement, the purchaser acknowledges that he has not relied on any statements, representations, warranties or conditions made or given by or on behalf of the vendor in respect of the subject matter of this agreement, other than those expressly set out in this agreement.

Renaldo stayed on as head chef for one week and then resigned to set up his own restaurant in StPeters, Sydney. Within a month, Matthew discovered that for many years, the restaurant had beenoperating with a seating capacity that exceeded its entitlement under its council approval. The localcouncil limited the maximum seating capacity to 80 people to be seated at 20 tables inside therestaurant only. Antonio had applied for council approval to set up tables on the pavement but thisapproval had not been granted.

Matthew seeks your advice as to what action, if any, may be taken against Antonio under the lawof contract and under statute law in these circumstances.