Leadenhall Australia Ltd v Peptech Ltd

[2001] NSWCA 272

Reported Decision: (2001) 39 ACSR 265
(2001) 19 ACLC 1662
[2001] ACL Rep 100 NSW 9

New South Wales

Court of Appeal

CITATION:	Leadenhall Australia Ltd & Ors v Peptech Ltd [2001] NSWCA 272 revised - 24/09/2001
FILE NUMBER(S):	CA 40995/99
HEARING DATE(S):	1 August 2001
JUDGMENT DATE:	24 September 2001
PARTIES :	Leadenhall Australia Limited & Ors - Appellants Peptech Ltd - Respondent
JUDGMENT OF:	Meagher JA at 1; Handley JA at 18; Giles JA at 19

LOWER COURT JURISDICTION :	Supreme Court - Equity Division
LOWER COURT FILE NUMBER(S) :	ED (Comm List) 50080/99
LOWER COURT JUDICIAL OFFICER :	Hunter J

COUNSEL:	D J Hammerschlag SC & V Kerr - Appellants S D Robb QC & C Moore - Respondent
SOLICITORS:	Barker Gosling - Appellants Clayton Utz - Respondent
CATCHWORDS:	Misleading and deceptive statements - where company failed to disclose existence of restricted shares - where appellants acquired shares and options in respondent in reliance on those statements - quantum of damages - appeal dismissed. D.
LEGISLATION CITED:	Corporations Law Trade Practices Act 1974 Fair Trading Act 1987 (NSW)
CASES CITED:	Apollo Shower Screens Pty Ltd v Building or Construction Industry Long Service Payments Corporation (1985) 1 NSWLR 561; Daniels v Anderson (1995) 37 NSWLR 438; Gates v City Mutual Life Assurance Society Ltd (1986) 160 CLR 1; Marks v GIO (1998) 196 CLR 494; Potts v Miller (1940) 64 CLR 282; Sellers v Adelaide Petroleum NL (1994) 179 CLR 332.
DECISION:	Appeal dismissed with costs.

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40995/99
ED (Com List) 50080/99

MEAGHER JA

HANDLEY JA

GILES JA

Monday, 24 September 2001

LEADENHALL AUSTRALIA LTD & ORS v PEPTECH LTD


FACTS

The appellants claimed damages for misleading and deceptive statements made by the respondent in two of its public documents. They alleged breaches of the Corporations Law, the Trade Practices Act 1974 and the Fair Trading Act (NSW). The statements were false and misleading in that they omitted to mention the existence of an amount of restricted shares which would not be available for trading until about 6 September 1997.

On 31 July 1997, in reliance on the misleading documents, the first appellant entered an allotment agreement with the respondent whereby the first appellant acquired a fixed number of shares as well as options to acquire further shares in the respondent. On 25 September 1997, the second appellant acquired from the first appellant a number of shares, the third appellant acquired a number of options.

The appellant’s case at trial and on appeal was that if they had known of the existence of the restricted shares before 31 July 1997 they would have terminated negotiations, or if they had found out shortly after that they would have rescinded the transaction. The trial Judge found that Mr L, who controlled the appellant companies, would not have abandoned negotiations but that an allotment agreement, possibly of a modified form, would have been negotiated;…