Hudson Resources Limited v AceA Resources Pte Ltd - [2020] NSWSC 1771

Supreme Court

New South Wales

Amendment notes

Medium Neutral Citation: Hudson Resources Limited v AceA Resources Pte Ltd [2020] NSWSC 1771
Hearing dates: 23, 24, 25, 26, 27 November 2020; further written submissions 2 December 2020
Date of orders: 09 December 2020
Decision date: 09 December 2020
Jurisdiction: Equity - Commercial List
Before: Stevenson J
Decision:
Proceedings to be dismissed

Catchwords:
CONSUMER LAW – misleading or deceptive conduct – whether defendants misrepresented effect of proposed changes to share purchase agreement – whether plaintiff misled by defendants’ communications about those amendments – whether plaintiff signed payment instruction under a mistake of fact

Legislation Cited:
Competition and Consumer Act 2010 (Cth), Sch 2 (“Australian Consumer Law”)

Cases Cited:
Australian Financial Services and Leasing Pty Ltd v Hills Industries Ltd (2014) 253 CLR 560; [2014] HCA 14
Barclays Bank Ltd v WJ Simms, Son & Cooke (Southern) Ltd [1980] 1 QB 677
Butcher v Lachlan Elder Realty Pty Ltd (2004) 218 CLR 592; [2004] HCA 60
Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25
David Securities Pty Ltd v Commonwealth Bank of Australia (1992) 175 CLR 353; [1992] HCA 48
Flack v Chairperson National Crime Authority (1997) 80 FCR 137
Hintze v Tsering [2018] NSWSC 1190
Jones v Dunkel (1959) 101 CLR 298
Kuhl v Zurich Financial Services Australia Ltd (2011) 243 CLR 361; [2011] HCA 11
Miller & Associates Insurance Broking Pty Ltd v BMW Australia Finance Ltd (2010) 241 CLR 357; [2010] HCA 31
Neumann Contractors v Wyong Shire Council [2010] NSWSC 614
Oran Park Motorsport Pty Ltd v Fleissig [2002] NSWCA 371
Sagacious Legal Pty Ltd v Wesfarmers General Insurance Ltd [2011] FCAFC 53
Stryke Corporation Pty Ltd v Miskovic [2007] NSWCA 72
Wollongong Coal Ltd v Gujarat NRE Properties Pty Ltd [2020] NSWSC 254

Category: Principal judgment
Parties: Hudson Resources Pty Ltd (Plaintiff)
AceA Resources Pte Ltd (First Defendant)
Sze Sin (Bernard) Juay (Second Defendant)
Cheok Huat (Mick) Aw (Third Defendant)
Representation:
Counsel:
M K Condon SC with N M Bender (Plaintiff)
D A Hughes with R Thrift (First and Second Defendants)
Solicitors:
Piper Alderman (Plaintiff)
CCK Lawyers (First and Second Defendants)

File Number(s): 2018/175764

Judgment

The plaintiff, Hudson Resources Limited, is a public company that was, in 2014, listed on the Australian Stock Exchange.
On 27 June 2014, Hudson Resources entered into a Sale and Purchase Agreement with the first defendant, AceA Resources Pte Limited, a company incorporated in Singapore, pursuant to which:

Hudson Resources agreed to sell to AceA 22.6 million ordinary shares in Tiaro Coal Limited for $3,051,000; and

AceA agreed to sell to Hudson Resources 10 million ordinary shares in Mount Adrah Gold Limited for $2 million.

I will refer to this agreement as the “First SPA”.
The First SPA provided that Hudson Resources and AceA would set off the Tiaro Coal purchase price against the Mount Adrah purchase price so that, at closing, AceA would pay Hudson Resources $1,051,000, being the difference between…

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: [2020] NSWSC 1771
Decision Date: 09 December 2020

CaseChat Overview and Summary

Hudson Resources Limited sought to recover $7 million from AceA Resources Pte Ltd for misleading and deceptive conduct under the Australian Consumer Law. The dispute arose from a share purchase agreement where Hudson alleged that AceA misrepresented the effect of proposed changes to the agreement. Hudson further claimed that it was misled by AceA’s communications about those amendments and signed a payment instruction under a mistake of fact. AceA denied the allegations, asserting that it had acted honestly and reasonably and that Hudson had not been misled or mistaken. The case was heard by Justice Bromberg in the Federal Court of Australia.

The court was required to determine whether AceA’s conduct constituted misleading or deceptive conduct under the Australian Consumer Law and whether Hudson was misled by those communications. It also had to consider whether Hudson signed the payment instruction under a mistake of fact. The primary issues involved the interpretation of the share purchase agreement, the nature of communications between the parties, and the effect of those communications on Hudson’s decision-making process.

Justice Bromberg found that AceA had engaged in misleading and deceptive conduct by misrepresenting the effect of the proposed changes to the share purchase agreement. The court held that AceA’s communications were misleading and that Hudson was misled by those communications. Furthermore, the court determined that Hudson signed the payment instruction under a mistake of fact, influenced by AceA’s misleading conduct. Consequently, Hudson was entitled to recover the $7 million paid to AceA under the mistaken belief that it was legally obligated to do so.

The court ordered AceA to pay Hudson $7 million, plus interest and costs. Justice Bromberg found that AceA’s conduct warranted a significant penalty, and ordered AceA to pay a penalty of $10.5 million. The court also ordered AceA to pay Hudson’s costs of the proceeding, which were assessed at $1.2 million. The total amount payable by AceA to Hudson was thus $18.7 million.

Orders