IMF (Australia) Ltd v Sons of Gwalia Ltd (administrator appointed)

IMF (Australia) Ltd sought a declaration that it would not contravene s 177(1) of the Corporations Act 2001 by using information obtained from the Sons of Gwalia Ltd's register of members to contact current shareholders. IMF aimed to inform shareholders about its services to investigate a potential claim against the company and to invite shareholders to engage IMF to fund litigation if the claim was pursued. The court had to decide whether IMF's proposed use of the Share Register information was prohibited by s 177(1) of the Corporations Act and whether it was exempted by s 177(1A). The court concluded that the proposed use of the Share Register information was prohibited by s 177(1) and was not exempted by s 177(1A). This decision was based on the limitations on the use of information about shareholders obtained from the company’s Share Register. The exemption in s 177A(a) did not apply to IMF’s conduct, leading to the dismissal of their application. The court did not prevent IMF from publicly advertising its proposal to present and former shareholders of Sons of Gwalia, provided it did not use Register information in doing so. The company did not substantively participate in the argument, and the court decided there should be no order as to costs.