OzEcom v Hudson Investment Group

CITATION:	OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719
HEARING DATE(S):	23, 26, 27, 30 April 2007 and 1, 2 May 2007
JUDGMENT DATE :	3 August 2007
JURISDICTION:	Equity Division Commercial List
JUDGMENT OF:	McDougall J at [1]
DECISION:	See paras [365] to [368] of judgment
CATCHWORDS:	CORPORATIONS - Capital raising - Underwriting agreement - First defendant agreed to underwrite IPO of shares in first plaintiff – Second plaintiff agreed to act as manager and lead broker – Public offering failed – Achievement of spread necessary for plaintiff to be listed on ASX - Whether first defendant breached obligations in relation to spread and to underwrite the issue – ‘Best endeavours’ obligation - Whether first defendant used ‘best endeavours’ to procure spread required by ASX – Delegation of performance to second defendant - whether delegator liable if delegate fails to use best endeavours – agreed extensions of time in accordance with underwriting agreement – Whether further extensions made either formally or on ad hoc basis. - CONTRACT - Whether agreement to extend closing date can be inferred from conduct – Offer and acceptance – Whether ‘best endeavours’ used to do all that could reasonably be done to achieve the contractual object. - ESTOPPEL – By representation – Whether evidence of reliance – Whether any detriment suffered if reliance on any representations - Whether unconscionable for first defendant not to comply with underwriting obligations where agreements allegedly made to extend – Whether plaintiff refrained from enforcing its rights due to alleged representation of extension. - NEGLIGENCE – Duties of care in negligence – Whether second defendant owed to plaintiff duties of care relating to its activities as sponsoring broker – Assumption of responsibility. - DAMAGES – Claim against first defendant for pure economic loss - Whether failure of IPO amounted to a loss to the company of the capital sum not raised – Whether wasted expenditure recoverable – Whether expenditure made or liability incurred on the faith of first defendant’s using its ‘best endeavours’ to achieve spread
LEGISLATION CITED:	Evidence Act 1995
CASES CITED:	Adelaide Petroleum NL and Others v Poseidon Ltd and Others (1990) 98 ALR 431. Astley And Others v Austrust Limited (1999) 197 CLR 1 Australian Broadcasting Commission v Australasian Performing Right Association Limited (1973) 129 CLR 99 Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 Commonwealth v Verwayen (1990) 170 CLR 394 Commonwealth of Australia v Crothall Hospital Services (Aust) Ltd (1981) 36 ALR 567 Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd (1988) 14 NSWLR 523 Esanda Finance Corporation Limited v Peat Marwick Hungerfords (1997) 188 CLR 241 Farah Constructions Pty Ltd v Say-Dee Pty Ltd [2007] HCA 22 Hadley v Baxendale (1854) 9 Ex 341; 156 ER 145 Hexiver Pty Ltd v Lederer [2006] NSWSC 1129 Hospital Products Limited v United States Surgical Corporation (1985) 156 CLR 41 Ingot Capital Investments & Ors v Macquarie Equity Capital Markets & Ors [No 6] [2007] NSWSC…