Edelsten v Ward

In *Edelsten v Ward and Ors*, the New South Wales Court of Appeal considered a dispute between the appellant, Edelsten, and the respondents, who were the directors of a company. The core of the disagreement concerned allegations of misleading and deceptive conduct in contravention of s 52 of the *Trade Practices Act 1974* (Cth) and related common law claims.

The primary legal issues before the Court of Appeal were whether the directors had engaged in conduct that was misleading or deceptive, or likely to mislead or deceive, in relation to representations made about the financial position and prospects of the company. The Court also had to determine the extent of the directors' liability for such conduct, particularly in circumstances where the representations were made in a prospectus and subsequent communications.

The Court of Appeal found that the directors had indeed engaged in misleading and deceptive conduct. It reasoned that the representations made, when viewed objectively, were likely to mislead a reasonable person in the position of an investor. The Court applied the principles established in cases concerning misleading representations, emphasizing that the test is objective and focuses on the effect of the conduct on the relevant audience. The directors were held liable for the losses suffered by the appellant as a consequence of their contraventions.