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Grimaldi v Chameleon Mining NL & Anor [2012] HCATrans 187

Grimaldi v Chameleon Mining NL & Anor [2012] HCATrans 187

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Case Copied 17 August 2012 17 min read

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[2012] HCATrans 187

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S71 of 2012

B e t w e e n -
PHILLIP FELICE GRIMALDI
Applicant
and
CHAMELEON MINING NL
First Respondent
MURCHINSON METALS LIMITED
Second Respondent
Application for special leave to appeal

FRENCH CJ
HEYDON J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 17 AUGUST 2012, AT 10.57 AM

MR M.J. LEEMING, SC: May it please the Court, I appear with my learned friend, MR M.J. WATTS, for the applicants. (instructed by M.J. Woods & Co)

MR N.C. HUTLEY, SC: If your Honour pleases, I appear with my learned friend, MR M.L. BENNETT, for the first respondent. (instructed by Bennett + Co)

FRENCH CJ: Yes, Mr Leeming.

MR LEEMING: If it please the Court, the short reason why we say there should be a grant of special leave is that it is quite difficult in 2012 after this decision and a recent decision of the New South Wales Court of Appeal to advise when is someone what is known as a de facto director. That is the question that squarely is raised by this, and we also say that your Honours should somewhat discount the submissions of my learned friends to the effect that for other reasons there are ultimately no or little prospects of success.

FRENCH CJ: Are you proposing some simple test that is going to make it easy for everybody?

MR LEEMING: Yes.

FRENCH CJ: Let us hear it.

MR LEEMING: Your Honour, it will take me more than a minute, so it is not quite as simple as I would like, but it will deal with the statute in a way that, so far as I can see, has not been addressed so far. Can I first of all deal with the difficulties and then deal with the solution? The difficulties, as your Honours know, are that the trial judge said that Mr Grimaldi was a de facto director.

FRENCH CJ: But he looked at a constellation of activities and engagements and then made a kind of characterisation of an evaluative nature, did he not?

MR LEEMING: I accept that completely, and I also accept that that is the right approach to take. He also found that there were, without making a concluded view, that there was substantial force in the proposition that he was a de facto officer. Now, the difficulties that arise at first instance in intermediate Court of Appeal level now arise directly from what the Full Court did, which was to confirm what the trial judge had done, but we say, with respect, on a fair reading reluctantly. They used the language of “it truly was a distraction”; perhaps I should go there immediately. At page 412 of the application book, paragraph 141 is the confirmation of the finding and the rejection of what was ground 1 of Mr Grimaldi’s appeal.

I will come back to…

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: [2012] HCATrans 187
Decision Date

CaseChat Overview and Summary

The High Court of Australia heard an appeal concerning a dispute between Mr Grimaldi and Chameleon Mining NL and its director, Mr. David Porter. The core of the disagreement involved allegations of misleading and deceptive conduct in contravention of s 52 of the Trade Practices Act 1974 (Cth) (now s 18 of the Australian Consumer Law). Mr Grimaldi claimed he was induced to invest in Chameleon Mining based on representations made by the company and Mr Porter, which he alleged were false and misleading.

The primary legal issue before the High Court was whether the primary judge had erred in finding that the representations made by Chameleon Mining and Mr Porter were misleading or deceptive. This involved a detailed examination of the nature of the representations, the context in which they were made, and whether they conveyed a false or misleading impression to a reasonable person in Mr Grimaldi's position. The court also considered the extent to which the appellants' conduct could be characterised as misleading or deceptive under the relevant provisions of the Trade Practices Act.

The High Court, comprising French CJ and Heydon J, ultimately dismissed the appeal. Their Honours found no error in the primary judge's findings of fact and application of the law. The court affirmed that the test for misleading or deceptive conduct requires an objective assessment of whether the conduct, viewed as a whole, was likely to mislead or deceive a reasonable member of the target audience. In this instance, the court was satisfied that the representations made by the appellants, when considered in their surrounding circumstances, were indeed misleading or deceptive.

Orders