Bert v Red 5 Limited - [2017] QCA 233

SUPREME COURT OF QUEENSLAND

CITATION:

Bert & Ors v Red 5 Limited & Anor [2017] QCA 233

PARTIES:

JEAN-CLAUDE BERT
(first appellant)
GABRIELLE BERT
(second appellant)
ISABELLE BERT
(third appellant)
CAROLINE BERT
(fourth appellant)
v
RED 5 LIMITED
ACN 068 647 610
(first respondent)
COLIN JACKSON
(second respondent)

FILE NO/S:

Appeal No 1139 of 2017
SC No 1467 of 2016

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal (Leave Granted)

ORIGINATING COURT:

Supreme Court at Brisbane – [2016] QSC 302 (Applegarth J)

DELIVERED ON:

13 October 2017

DELIVERED AT:

Brisbane

HEARING DATE:

19 July 2017

JUDGES:

Sofronoff P and Morrison JA and Atkinson J

ORDER:

Appeal dismissed.

CATCHWORDS:

CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the appellants were shareholders in the first respondent – where the respondent’s main asset was an open cut gold mine – where the Board of the company resolved to raise $15,000,000 for working capital and $10,000,000 for exploration – where the second respondent was the director of the first respondent – where the first appellant claimed that the second respondent told him that the capital was being raised for the purpose of exploration – where the first appellant claimed that the second respondent never told him that working capital was being raised – where the second respondent denied that he misled the first appellant as alleged – where the trial judge found the second respondent to be a more credible witness than the first appellant – whether the trial judge erred in accepting the second respondent’s evidence over the first appellant’s evidence

CORPORATIONS – FINANCIAL SERVICES AND MARKETS – DISCLOSURE – where the appellants claim that the first respondent failed to disclose the significant presence of groundwater in the mine – whether the first respondent breached its disclosure obligations under s 674 of the Corporations Act

CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the first respondent initially stated that the pit dewatering process was complete and later stated that it was not complete – where the first respondent was aware that water levels had increased – whether the statements regarding pit dewatering were misleading or deceptive

Corporations Act 2001 (Cth), s 674(1), s 674(2)

Bert v Red 5 Limited [2016] QSC 302, affirmed
Dearman v Dearman (1908) 7 CLR 549; [1908] HCA 84, cited
Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, cited
R v Noble [2002] 1 Qd R 432; [2000] QCA 523, cited

COUNSEL:

N H Ferrett for the appellants
D L K Atkinson for the respondents

SOLICITORS:

Broadley Rees Hogan for the appellants
Hopgood Ganim for the respondents

SOFRONOFF P: The appellants were shareholders in the first respondent, Red 5 Limited. The first appellant, Mr Jean-Claude Bert, had first bought shares in Red 5 in 2004 for himself and for his wife and children. They are…

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.

Continue reading Bert v Red 5 Limited

Details

AGLC: Bert v Red 5 Limited [2017] QCA 233
Case: [2017] QCA 233
Decision Date: 13 October 2017

CaseChat Overview and Summary

Bert and another appellant brought an appeal against Red 5 Limited and a director, seeking to challenge findings made by the trial judge in a case concerning alleged misleading and deceptive conduct and disclosure breaches in the context of a gold mining operation. The appellants, who were shareholders in Red 5, alleged that the company had misled them about the purpose of a capital raise and had failed to disclose the presence of significant groundwater in the mine. The appellants also argued that statements made by the company about the completion of a pit dewatering process were misleading or deceptive. The trial judge dismissed the appellants' claims, finding the evidence of the director to be more credible than that of the appellants.

The legal issues in the appeal centred on whether the trial judge erred in accepting the evidence of the director over that of the appellants, particularly in relation to the purpose of the capital raise and the disclosure of the groundwater. Additionally, the court needed to determine whether the statements about the pit dewatering process were misleading or deceptive. The appellants argued that the trial judge should have found that the company breached its disclosure obligations under section 674 of the Corporations Act and that the statements about pit dewatering were misleading or deceptive.

In dismissing the appeal, the court held that the trial judge was entitled to prefer the evidence of the director over that of the appellants. The court found that the trial judge's assessment of the credibility of the witnesses was open to him and had not been shown to be wrong. Regarding the disclosure of the groundwater, the court held that the trial judge was correct to find that there was no obligation on the company to disclose the presence of groundwater, as it was not a material fact that would affect the appellants' investment decision. As for the pit dewatering process, the court found that the company's statements were not misleading or deceptive, as they were made in good faith and there was no evidence that the company was aware that the statements were false at the time they were made.

The appeal was dismissed, and the orders of the trial judge were affirmed. The court held that the trial judge did not err in his assessment of the evidence and that the appellants' claims were not substantiated. The findings of the trial judge were upheld, and the company was not found to have engaged in misleading or deceptive conduct or breached its disclosure obligations.

Orders

Orders of the court

Appeal dismissed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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CITATION:	Bert & Ors v Red 5 Limited & Anor [2017] QCA 233
PARTIES:	JEAN-CLAUDE BERT (first appellant) GABRIELLE BERT (second appellant) ISABELLE BERT (third appellant) CAROLINE BERT (fourth appellant) v RED 5 LIMITED ACN 068 647 610 (first respondent) COLIN JACKSON (second respondent)
FILE NO/S:	Appeal No 1139 of 2017 SC No 1467 of 2016
DIVISION:	Court of Appeal
PROCEEDING:	General Civil Appeal (Leave Granted)
ORIGINATING COURT:	Supreme Court at Brisbane – [2016] QSC 302 (Applegarth J)
DELIVERED ON:	13 October 2017
DELIVERED AT:	Brisbane
HEARING DATE:	19 July 2017
JUDGES:	Sofronoff P and Morrison JA and Atkinson J
ORDER:	Appeal dismissed.
CATCHWORDS:	CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the appellants were shareholders in the first respondent – where the respondent’s main asset was an open cut gold mine – where the Board of the company resolved to raise $15,000,000 for working capital and $10,000,000 for exploration – where the second respondent was the director of the first respondent – where the first appellant claimed that the second respondent told him that the capital was being raised for the purpose of exploration – where the first appellant claimed that the second respondent never told him that working capital was being raised – where the second respondent denied that he misled the first appellant as alleged – where the trial judge found the second respondent to be a more credible witness than the first appellant – whether the trial judge erred in accepting the second respondent’s evidence over the first appellant’s evidence CORPORATIONS – FINANCIAL SERVICES AND MARKETS – DISCLOSURE – where the appellants claim that the first respondent failed to disclose the significant presence of groundwater in the mine – whether the first respondent breached its disclosure obligations under s 674 of the Corporations Act CORPORATIONS – FINANCIAL SERVICES AND MARKETS – MARKET MISCONDUCT AND OTHER PROHIBITED CONDUCT – MISLEADING, DECEPTIVE OR UNCONSCIONABLE CONDUCT – where the first respondent initially stated that the pit dewatering process was complete and later stated that it was not complete – where the first respondent was aware that water levels had increased – whether the statements regarding pit dewatering were misleading or deceptive Corporations Act 2001 (Cth), s 674(1), s 674(2) Bert v Red 5 Limited [2016] QSC 302, affirmed Dearman v Dearman (1908) 7 CLR 549; [1908] HCA 84, cited Fox v Percy (2003) 214 CLR 118; [2003] HCA 22, cited R v Noble [2002] 1 Qd R 432; [2000] QCA 523, cited
COUNSEL:	N H Ferrett for the appellants D L K Atkinson for the respondents
SOLICITORS:	Broadley Rees Hogan for the appellants Hopgood Ganim for the respondents