Connective Services Pty Ltd & Anor v Slea Pty Ltd & Ors - [2019] HCATrans 98

[2019] HCATrans 098

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Melbourne No M203 of 2018

B e t w e e n -
CONNECTIVE SERVICES PTY LTD (ACN 107 366 496)
First Appellant
CONNECTIVE OSN PTY LTD (106 761 326)
Second Appellant
and
SLEA PTY LTD (ACN 106 752 434)
First Respondent
MINERVA FINANCIAL GROUP PTY LTD (ACN 124 171 759)
Second Respondent
MILLSAVE HOLDINGS PTY LTD (ACN 115 160 097)
Third Respondent
MARK SEAMUS HARON
Fourth Respondent

KIEFEL CJ
GAGELER J
KEANE J
GORDON J
EDELMAN J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 15 MAY 2019, AT 9.49 AM

____________________

MR D.F. JACKSON, QC: If the Court pleases, I appear with my learned friend, MR D.G. GUIDOLIN, for the appellants. (instructed by Quinn Emanuel Urquhart & Sullivan)

MR J.T. GLEESON, SC: May it please the Court, I appear with MS K.E. FOLEY and MR G.C. KOZMINSKY for the first and second respondents. (instructed by Arnold Bloch Leibler)

KIEFEL CJ: Yes, Mr Jackson.

MR JACKSON: Your Honour, as the Court will have seen, the appeals concern the operation of section 260A(1) of the Corporations Act 2001. Your Honours will have, I think, a copy of our outline of submissions on the matter. The case involves three questions. The first concerns the function to be performed by section 260A(1) in the light of other provisions of the Act. The second is the meaning to be attributed to the words used in section 260A. Your Honours, the first and second overlap, I accept. The third is the question of material prejudice. Your Honours, could I go then to those matters.

The first question raises the issue of two sections - section 260A, which your Honours will see in volume 1 of the materials, the joint book at page 101, whether that provision applies when the conduct – indeed, the only conduct – suggested as being in contravention of it, is the bringing of action by the company to require compliance with the terms of its constitution, the particular terms being pre‑emption clauses of a very common type; namely, requiring that a proposed transfer of shares by an existing shareholder must first be offered to other existing shareholders before the shares can be offered to other persons.

You will see the clause set out as clause 77 of each constitution. It can be seen in a document called “Appellants’ Further Materials” at page 22. Your Honours, I will be coming back to it in a little more detail in just a moment. But could we invite your Honours to note, in addition, the terms of clause 78.2, also on page 22, and clause 79, which you will see towards the end of page 22 also.

Your 260A does not sit alone or in a dominant position, in our submission, in the Corporations Act. Rather, the provisions of that Act refer, importantly for present purposes, to two things.…

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: [2019] HCATrans 98
Decision Date

CaseChat Overview and Summary

The High Court of Australia considered a dispute between Connective Services Pty Ltd and its related entities (the appellants) and Slea Pty Ltd and its related entities (the respondents). The core of the dispute concerned the appellants' alleged breaches of contract and misleading or deceptive conduct in relation to the provision of software and services to mortgage brokers, who were clients of the respondents. The respondents, who provided services to these mortgage brokers, claimed they suffered loss as a result of the appellants' actions.

The High Court was required to determine whether the appellants had breached their contractual obligations to the respondents, specifically concerning the provision of software and services. Furthermore, the Court had to assess whether the appellants had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in contravention of the Australian Consumer Law. A key issue was the proper interpretation of the contractual terms governing the relationship between the parties and the scope of the appellants' representations.

The Court's reasoning focused on the interpretation of the contracts and the nature of the representations made by the appellants. It was held that the appellants had not breached their contractual obligations as alleged by the respondents. Regarding the misleading or deceptive conduct claim, the Court found that the representations made by the appellants, when viewed in their proper context, did not amount to misleading or deceptive conduct under the Australian Consumer Law. The Court applied established principles of contractual interpretation and the legal tests for misleading or deceptive conduct, emphasizing the importance of the overall impression conveyed by the representations.

The High Court allowed the appeal, setting aside the orders of the Full Federal Court. The Court ordered that the respondents' application be dismissed.

Orders