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Jubilee Mines NL v Riley

Jubilee Mines NL v Riley

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: JUBILEE MINES NL -v- RILEY [2009] WASCA 62

CORAM: MARTIN CJ
McLURE JA
LE MIERE AJA

HEARD: 13 & 14 AUGUST 2008

DELIVERED : 18 MARCH 2009

FILE NO/S: CACV 142 of 2006

BETWEEN: JUBILEE MINES NL (ACN 009 219 809)
Appellant
AND
KIM RILEY
Respondent

ON APPEAL FROM:
For File No              :  CACV 142 of 2006
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MASTER SANDERSON
Citation  :KIM RILEY IN HIS CAPACITY AS TRUSTEE OF THE KER TRUST -v- JUBILEE MINES NL [2006] WASC 199
File No  :CIV 2261 of 2000

Catchwords:

Corporations law - Damages claim by a former shareholder - Failure to release information to ASX - Continuous disclosure obligations - History of continuous disclosure in Australia - Allegation of negligence in failure to release information - Claim of breach of ASX Listing Rules - Relationship between ASX Listing Rules and Corporations Law - Interpretation of 'material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly invest in securities' - Interpretation of 'information' - Content of information required to be released - Whether relevant circumstances must also be released - Turns on its own facts

Evidence - Effect of evidence being introduced without objection at trial

Legislation:

Australian Securities Commission Act 1989 (Cth)
Companies (South Australia) Code, s 229
Corporate Law Reform Act 1994 (Cth)
Corporations Law, s 995(2), s 1001A, s 1001D, s 1005
Evidence Act 1906 (WA), s 21
Securities Markets Act 1988 (NZ), s 19A, s 19B, s 19C, s 19D

Result:

Appeal allowed

Category: A

Representation:

Counsel:

Appellant: Mr M J McCusker QC & Mr J C Vaughan
Respondent: Mr B W Walker QC & Mr G R Hancy

Solicitors:

Appellant: Smyth & Thomas
Respondent: Slater & Gordon

Case(s) referred to in judgment(s):

Adelaide Petroleum NL v Poseidon Ltd (1990) 98 ALR 431
Flavel v Roget (1990) 1 ACSR 595
Insurance Commission of Western Australia v Container Handlers Pty Ltd (2004) 218 CLR 89
TSC Industries Inc v Northway Inc (1976) 426 US 438
Water Board v Moustakas [1988] HCA 12; (1988) 180 CLR 491

MARTIN CJ: The appellant, Jubilee Mines NL (Jubilee) appeals from a decision of the master awarding the respondent, Kim Riley in his capacity as trustee of the KER Trust (the Trust), damages pursuant to s 1005 of the Corporations Law by reason of Jubilee's contravention of s 1001A of the Corporations Law in 1994. Section 1001A was the provision which, at that time, gave statutory force to the continuous disclosure regime imposed upon listed companies by r 3A of the Australian Stock Exchange (ASX) Listing Rules (Listing Rules). The master awarded Mr Riley $1,856,000 in damages, together with interest in the amount of $1,005,133.33 and ordered that Jubilee pay the respondent's costs of the trial.

The decision of the master

The factual…

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: [2009] WASCA 62
Decision Date: 18 MARCH 2009

CaseChat Overview and Summary

Jubilee Mines NL sued former shareholder Riley, alleging negligence in failing to disclose information to the Australian Securities Exchange (ASX). The dispute centred around the obligations of continuous disclosure under the Corporations Law and the ASX Listing Rules, particularly regarding the disclosure of information that would influence investors. Riley had failed to release information which Jubilee Mines NL claimed had a material effect on the price or value of securities. The court was tasked with determining whether Riley's failure to disclose constituted a breach of the ASX Listing Rules and if it amounted to negligence under the Corporations Law. Additionally, the court had to interpret the terms "material effect on the price or value of securities" and "information," and whether relevant circumstances must also be disclosed.

The court examined the history of continuous disclosure in Australia, considering both statutory and regulatory frameworks. It assessed the content of information required to be released, and whether additional relevant circumstances must also be disclosed. The court's interpretation hinged on the specific facts of the case. Furthermore, the court evaluated the impact of evidence introduced without objection at the trial stage. The court concluded that Riley's failure to release information did breach the ASX Listing Rules and constituted negligence under the Corporations Law, as the information had a material effect on the price or value of securities.

The court allowed the appeal, finding that the evidence presented justified the claim that the non-disclosure had a significant impact on investor decisions. The court determined that the information in question was indeed material and should have been disclosed. The ruling underscored the importance of adhering to continuous disclosure obligations to maintain market integrity and protect investor interests. The court's decision emphasised the necessity for companies to disclose not just the information itself, but also relevant circumstances that could influence investment decisions.

Orders

Orders of the court

Appeal allowed

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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