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Adelaide Petroleum NL v Poseidon Ltd

Adelaide Petroleum NL v Poseidon Ltd

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Case Copied 4 October 1990 84 min read

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JUDGMENT NO. .57.6.../.&..2

C A T C H W O R D S

TRADE PRACTICES - misleading or deceptive conduct - pre-contractual representations - acquisition by one company of controlling shares in another - representation by acquirer as to intention to assume control and management and to appolnt specific directors to the Board - acquirer's executive negotiating beyond authority - agreement concluded other than as authorised by acquirer's Board - lntentlon by acquirer's executive to secure effective option wlth no substantive commitment by acquirer - accessorial liability of executive - damages - loss of opportunity to vendors to enter alternative transaction - significant contingencies attaching to alternative - assessment of loss.
DAI-mGES - loss of chance - assessment of loss.
CONTRACT - terms - express and implied - bases of implication - antecedent negotiations - whether repudiation - measure of damages
- loss of chance.

Trade Practices Act 1974 s.52, s.82, sub-ss.84(1) and ( 2 ) , s.86A

Pavlch v Bobra Nominees Pty Ltd (Fed. Court; 4/8/88; unrcp. French -
J.)
David Securities Pty Ltd v Commonwealth Bank of Australia (1990)
93 ALR 2-11
Hospital Products Ltd v United States Surgical Corporation (1984)
156 CLR 41
BP Refinery (Westernport) Pty Ltd v Shire of Iiastings (1977) 52
ALJR 20.
Secured Income Real Estate (Australia) Ltd v St. 1-lartins
Investments Pty Ltd (1979) 144 CLR 596
Prenn v Simmonds L19711 1 WLR 1381

-fa Construction Pty Ltd v State Rail Authority of NSW (1982)
49 CLR 337
Mackay v Dick (1881) 6 App. Cas. 251

Butt v ~ c E l d (1896) 7 QLJ 68

Peter Turnbull and Co. Pty Ltd v Mundus Trading Co. (Australasia)
Pty Ltd (1954) 90 CLR 235
Mahoney v Lindsay (1980) 55 ALJR 118

ADELAIDE PETROLEUM NL AND OTHER V POSEIDON LIMITED AND OTHERS
POSEIDON LIMITED AND OTHERS v ADELAIDE PETROLEUM NL AND OTHERS
NO. WAG 115 of 1980

FRENCH J .

PERTH
4 OCTOBER 19 90

IN THE FEDERAL COURT )

OF AUSTRALIA 1

WESTERN AUSTRALIA 1
DISTRICT REGISTRY 1
GENERAL DIVISION

) NO. WAG 115 of 1988

B E T W E E N : ADELAIDE PETROLEUM NL AND OTHERS
Applicants
and
POSEIDON LIMITED AND OTHERS
Respondents

POSEIDON LII.IITED AND OTHERS
Cross-Claimants

and
ADELAIDE PETROLEUM NL AND OTHERS
Cross-Respondents

MINUTE OF ORDER

JUDGE I-IAKING ORDER: FRENCH J.
DATE OF ORDER: 4 OCTOBER 1990
WHERE MADE: PERTH
THE COURT ORDERS THAT:
1. There be judgment against the first and sixth

respondents as follows: (1) In favour of the first applicant in the sum of $88,992.
(2) In favour of the second applicant in the sum of
$146,835.

(3) In favour of the third applicant in the sum of
$48,037.

(4) In favour of the fourth applicant in the sum of
$48,037.

(5) In favour of the fifth to twelfth applicants inclusive in the sum of $880,292.
The application is dismissed as against the second to fifth respondents.
The cross-claim is dismissed.
There will be liberty to the parties to file written
submissions wlthin fourteen…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [1990] FCA 576
Decision Date: 4 Oct 1990

CaseChat Overview and Summary

In the Federal Court of Australia, the case of Adelaide Petroleum NL and Others v Poseidon Ltd and Others was heard by French J. The applicants, a group of directors and shareholders of Adelaide Petroleum NL (ADP), sued Poseidon Ltd and its executive, Mark Philip Sellars, for misleading or deceptive conduct under the Trade Practices Act 1974, as well as for damages for breach of contract. The applicants alleged that the defendants' representations induced them to enter into an agreement with Poseidon instead of pursuing a transaction with Pagini Resources, resulting in financial loss. The court found that Sellars, acting within the scope of his authority, engaged in misleading or deceptive conduct by making representations regarding Poseidon's intention to manage ADP and appoint specific directors. The court awarded damages to the applicants based on the loss of opportunity to enter into the Pagini transaction, discounted for various contingencies. The court also found an implied term in the agreement between the parties to cooperate and not frustrate the performance of the agreement, which was repudiated by Poseidon. However, as damages for breach of contract would have been offset by the damages awarded under the Trade Practices Act, the court dismissed the contract claim. Interest was awarded on the damages from 1 August 1989 to the date of judgment.

Orders