Gambaro v Mobycom Mobile Pty Ltd and Ors (No.2)

In *Gambaro v Mobycom Mobile Pty Ltd and Ors (No.2)*, the Supreme Court of Queensland considered a dispute between the plaintiff, Mr. Gambaro, and the defendants, Mobycom Mobile Pty Ltd and its directors. The proceedings concerned allegations of misleading and deceptive conduct and breaches of directors' duties in relation to a proposed joint venture and the subsequent sale of shares.

The central legal issues before the Court were whether the defendants had engaged in misleading or deceptive conduct in contravention of the *Trade Practices Act 1974* (Cth) (now the *Competition and Consumer Act 2010* (Cth)) and the *Corporations Act 2001* (Cth), and whether the directors had breached their fiduciary duties to the company. Specifically, the Court had to determine if representations made by the defendants regarding the viability of the joint venture and the value of the shares were false or misleading, and if the directors had acted in their own interests rather than in the best interests of the company.

Judge Jarrett found that the defendants had engaged in misleading and deceptive conduct by representing that the joint venture was viable and that the shares were worth a certain amount, when in fact they were not. The Court reasoned that these representations were material to Mr. Gambaro's decision to invest and purchase shares. Furthermore, the Court held that the directors had breached their fiduciary duties by failing to act in the best interests of the company and by prioritising their own interests over those of the company and its shareholders. The Court applied established principles of corporate law regarding directors' duties of care, skill, and diligence, and the prohibition against misleading and deceptive conduct.

The Court ordered that the defendants were liable for damages suffered by the plaintiff as a result of the misleading and deceptive conduct and the breaches of directors' duties.