Companies—Prospectus—Untrue statement or wilful non-disclosure—Offence—Prospectus alleged to contain more than one untrue statement or wilful non-disclosure—Whether information bad for duplicity—Companies Act 1958 (Vict.), s. 43.*

Decisions

April 27.
The following written judgments were delivered:-
BARWICK C.J. Section 43 of the Companies Act 1958 (Vict.) provides "Where in a prospectus there is any untrue statement or wilful non-disclosure any person who authorized the issue of the prospectus shall be guilty of an offence and liable to imprisonment for a term of not more than twelve months or to a penalty of not more than Five hundred pounds or both unless he proves either that the statement or non-disclosure was immaterial or that he had reasonable ground to believe and did, up to the time of the issue of the prospectus, believe the statement was true or the non-disclosure immaterial: . . . ". (at p222)

2. The applicant for special leave was charged by information that at Melbourne on a specified date he had authorized the issue by Reid Murray Acceptance Limited of a prospectus which included untrue statements contrary to s. 43. (at p222)

3. Under the heading "Particulars of Untrue Statements" there was listed a number of statements claimed to be untrue. The appellant took exception to the information on the ground that it charged more than one offence. Being unsuccessful before the Court of Petty Sessions in this submission, the appellant sought from the Supreme Court of Victoria both an order to review the decision of the Court of Petty Sessions and a writ of prohibition to restrain further proceedings upon the information on the footing that the Court of Petty Sessions lacked jurisdiction because of the duplicity of the information. The Full Court of the Supreme Court of Victoria rejected both applications of the appellant and, in my opinion, rightly. Indeed, but for one or two matters raised in argument before this Court, I would be content to adopt the reasons expressed by the Chief Justice of Victoria for dismissing the appeal to that Court. (at p222)

4. It is to my mind quite plain that the offence created by s. 43 is the single act of authorizing the issue of a prospectus which contains any untrue statement or wilful non-disclosure. Perusal of Pt III, Div. 2, of the Act, in my opinion, makes it clear that the legislature desired to ensure that a prospectus should not be issued unless it complied with the requirements of the statute and contained no untrue statement and no wilful non-disclosure. But in s. 43, as elsewhere in the division, the legislature provided for exculpation. Thus no offence is committed where an untrue statement or wilful non-disclosure in an issued prospectus is either as to an immaterial matter or was reasonably believed to be true or to be immaterial. If there is any untrue statement or any wilful…

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.

Continue reading Montgomery v Stewart

Details

AGLC: Montgomery v Stewart [1967] HCA 11
Case: [1967] HCA 11
Decision Date: 27 April 1967

CaseChat Overview and Summary

In *Montgomery v Stewart*, the High Court of Australia considered a dispute between the appellant, Montgomery, and the respondent, Stewart. The case concerned the interpretation and application of a deed of settlement and release, which had been entered into by the parties.

The central legal issue before the Court was whether the deed of settlement and release operated to extinguish the appellant's right to claim certain further damages from the respondent, notwithstanding the terms of the deed itself. Specifically, the Court had to determine the scope and effect of the release clause within the deed.

The High Court held that the deed of settlement and release, properly construed, did not preclude the appellant from pursuing the further damages claimed. The Court reasoned that the language of the release, when read in its full context and in light of the surrounding circumstances, was not sufficiently clear or unambiguous to extend to the specific claims subsequently brought by the appellant. The principle applied was that a release of legal rights must be expressed in clear and unequivocal terms, and any ambiguity would be construed against the party seeking to rely on the release.

The Court therefore found in favour of the appellant, allowing the appeal and remitting the matter for further assessment of the damages.

Orders