Rod Investments (Vic) Pty Ltd v Abeyratne (No 2)
[2009] VSC 278
•7 July 2009
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
No. 2011 of 2005
| ROD INVESTMENTS (VIC) PTY LTD | Plaintiff |
| v | |
| WILLIAM ABEYRATNE (AS TRUSTEE IN BANKRUPTCY OF ADAM CLARK) & ORS | Defendants |
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JUDGE: | HANSEN J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 22 May 2009 | |
DATE OF JUDGMENT: | 7 July 2009 | |
CASE MAY BE CITED AS: | Rod Investments (Vic) Pty Ltd v Abeyratne & Ors (No 2) | |
MEDIUM NEUTRAL CITATION: | [2009] VSC 278 | |
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PRACTICE AND PROCEDURE – Group proceeding – Trial of preliminary questions – Proportionate liability – Whether claims apportionable within the meaning of Corporations Act2001 (Cth), Division 2A of Part 7.10; Australian Securities and Investments Commission Act 2001 (Cth), Subdivision GA of Division 2 of Part 2; Trade Practices Act 1974 (Cth), Part VIA; Wrongs Act 1958 (Vic), Part IVAA.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Dr K P Hanscombe SC with Mr L W L Armstrong | Maurice Blackburn Pty Limited |
| No appearance by or on behalf of the First, Second Fifth, Sixth, Eighth, Ninth and Tenth Defendants, or the Third Party | ||
| For the Third and Seventh Defendants | Mr A T Broadfoot | Minter Ellison |
| The Fourth Defendant appeared in person |
HIS HONOUR:
Introduction
This is the trial of preliminary questions that concern, in essence, whether any and if so which of the plaintiff’s claims in the proceeding are apportionable claims within the meaning of the following proportionate liability provisions: Division 2A of Part 7.10 of the Corporations Act2001 (Cth) (“the Corporations Act”), Subdivision GA of Division 2 in Part 2 of the Australian Securities and Investments Commission Act 2001 (Cth) (“the ASIC Act”), Part VIA of the Trade Practices Act 1974 (Cth) (“the TPA”), and Part IVAA of the Wrongs Act 1958 (Vic) (“the Wrongs Act”).
The proceeding is a group proceeding[1] brought by the plaintiff on its own behalf and on behalf of “group members”, relevantly defined as all persons (other than the defendants, their relatives and related parties) who acquired an interest in shares in a company called Media World Communications Limited (“MWC”) during the period between 26 October 2000 and 1 September 2004, and who suffered loss and damage resulting from the conduct of the defendants. In essence, the plaintiff alleges that each defendant engaged in conduct that was misleading or deceptive in breach of various statutory provisions, and further that the eighth and tenth defendants (“the Tolly Parties”) were negligent.
[1]Part 4A, Supreme Court Act 1986.
On 27 March 2009 I ordered, pursuant to r 47.04, that twelve preliminary questions be tried before the trial of the proceeding. At the trial of the preliminary questions, the plaintiff and the third and seventh defendants were represented by counsel who addressed submissions. The fourth defendant appeared in person but did not address submissions. No other party attended the hearing.
The preliminary questions (stated in Annexure A to the order of 27 March and set out at [23] below) are to be answered assuming the matters alleged in particular paragraphs of the plaintiff’s fourth amended statement of claim (“the 4SOC”). It is therefore convenient, before setting out the questions, to summarise briefly the content of the relevant paragraphs of the pleadings. All paragraph references in the following section are to the 4SOC unless otherwise stated.
The plaintiff’s claims
The claims against all defendants except the Tolly Parties
Para 12 alleges that in about October 2000, the Clark parties[2], Graeme Clark[3] and Velik[4] commenced to make a series of representations concerning a digital technology known as Adams Platform Technology (“APT”). In essence they stated that APT was a new and revolutionary technology with immense potential applications. These representations, defined as “the APT representations”, were made in various presentations to the plaintiff and other potential investors. Question 1 concerns these representations.
[2]Adam Clark and two related companies, originally being the first, sixth and ninth defendants respectively. Following Adam Clark’s bankruptcy, his trustee in bankruptcy was substituted as the first defendant.
[3]The fifth defendant.
[4]The fourth defendant.
Prior to 26 October 2000, the APT representations were also made to Tatoulis[5] and Ramsden[6] (who were directors of MWC), and Terrain Capital Limited[7] (“Terrain”), which was an investment services company engaged to investigate investment opportunities for MWC[8]. Between 26 October 2000 and 22 September 2004, Tatoulis, Ramsden, Terrain and Media World Broadcasting Pty Ltd (“MWB”) made similar representations to the plaintiff and other potential investors, in connection with fundraising for MWB, which was a company proposed to be involved in the commercial development of APT. These representations are defined as “the MWB representations”[9]. The Clark parties, Graeme Clark and Velik were involved in making the MWB representations[10]. Question 2 concerns these representations.
[5]The second defendant.
[6]The third defendant.
[7]The seventh defendant.
[8]Para 23.
[9]Para 26.
[10]Para 32.
The APT and/or MWB representations were also made to MWC[11]. From early 2001 MWC commenced to make representations to similar effect to the plaintiff and other potential investors. Each of the defendants other than the Tolly Parties was involved in making these latter representations, which are defined as “the first MWC representations”, “the second MWC representations” and “the third MWC representations” respectively[12]. Question 3 concerns these representations.
[11]Para 38.
[12]Paras 41 to 43.
Further, from late 2000 onwards, the defendants other than the Tolly Parties engaged in a course of conduct promoting investment in corporate vehicles for the commercial development of APT. By that course of conduct, those defendants made a series of implied representations (“the Promoters’ Implied Representations”)[13]. Question 4 concerns these representations.
[13]Para 57.
Also, from late 2000 up to 22 September 2004, the Clark Parties made a series of representations by silence[14], constituted, in essence, by those parties remaining silent about the fact that APT was not, contrary to the various representations being made about it, new technology but rather was a compilation of existing software applications, and did not have the performance capabilities claimed for it. Question 5 concerns these representations.
[14]Paras 21, 35, 54 and 64.
It is to be noted that although there are differences between the representations referred to above and dealt with by questions 1 to 5, the differences are immaterial for present purposes. The substance of the pleading is that, whether expressly, impliedly, by silence or otherwise, the defendants (other than the Tolly Parties) made a series of representations, each to the effect that APT had particular capabilities, performance characteristics, and potential applications. Further, the plaintiff alleges that APT did not have these particular capabilities, performance characteristics, and potential applications, hence each of the representations referred to above was misleading or deceptive, in contravention of various statutory prohibitions including the former Corporations Law 2001 (Cth) (“the Corporations Law”)[15], the Corporations Act as in effect until 11 March 2002[16], the Corporations Act as in effect from 11 March 2002[17], the ASIC Act[18] and the Fair Trading Act 1999 (Vic) (“the FTA”)[19].
[15]Section 995.
[16]Section 995.
[17]Section 1041H(1).
[18]Section 12DA(1).
[19]Sections 9 and 11.
Para 71 alleges that the substance of the APT, MWB and MWC representations was communicated to the plaintiff (and its predecessor trustees) in writing and orally. As to the written communication of the representations, the particulars list a series of documents (from a range of dates between August 2001 and October 2003) said to have been read by the plaintiff’s director on or about the date of each document. As to the oral communication of the representations, the particulars refer to a lunch in December 2002, a presentation in March 2004, and numerous conversations between the plaintiff’s director and his stockbroker, the dates of which are not stated.
Paras 72 and 73 allege that in reliance upon some or all of the representations (including the Promoters’ Implied Representations and the representations by silence), the plaintiff (and its predecessor trustees) acquired shares in MWC at particular times during the period of the plaintiff’s claim (“the period”)[20], retained the shares throughout the remainder of the period, and refrained from selling the shares in off-market transactions or otherwise[21].
[20]The plaintiff’s claim period is 26 October 2000 to 1 September 2004, however the latest share purchase and allotment date pleaded is October 2003.
[21]Paras 72 and 73.
Paras 74 and 75 allege that by reason of the matters in paras 71 to 73 inclusive, some or all of the representations were a cause of the plaintiff (and its predecessor trustees) and group members acquiring shares in MWC during the period.
Para 76 alleges, further and in the alternative, that some or all of the representations were a cause of the MWC share price being higher than it otherwise would have been. Particulars to this plea allege that the representations had the effect of artificially inflating the share price (creating a “false market”), and that if potential purchasers of the shares had known of the matters in para 14 of the 4SOC (which in substance alleges that APT was not a miraculous new technology and could not perform as represented), the price the shares would have had was nil or negligible at all relevant times (the “true value”).
Para 77 alleges that by reason of the matters in paras 74 and 75, further or alternatively para 76, the plaintiff and each group member has suffered loss and damage, particularised as “acquisition loss”, being the difference between the consideration given for the shares and the true value of the shares at the time of the acquisition. The plaintiff’s acquisition loss is $569,231.53. It is stated that particulars of the group members’ losses will be provided following the trial of common questions or otherwise as the Court may direct.
Para 78 alleges that further and in the alternative, by reason of paras 19, 33, 52, 63, 70 (which in essence allege that the defendants were involved in contraventions of the relevant statutory provisions) and para 77, the plaintiff and the group members may recover the amount of their loss from the defendants (excluding the Tolly parties). I interpolate that para 77 itself does not specifically allege that the plaintiff and group members may recover the amount of their loss and damage from the defendants by reason of the defendants’ conduct in contravention of particular statutory prohibitions on misleading or deceptive conduct, nevertheless it is clear that the plea of loss in para 77 is premised on the breaches (by the defendants other than the Tolly Parties) of relevant provisions[22] pleaded at paras 17, 22, 31, 36, 50, 55, 61 and 68, and the entitlement to recover the loss caused by breach of these provisions is picked up by the plea in para 78.
[22]Section 995 of the Corporations Law and the pre-11 March 2002 Corporations Act, s 1041H of the post-11 March 2002 Corporations Act, s 12DA of the ASIC Act, and ss 9 and 11 of the FTA.
Finally, it is to be noted that the 4SOC alleges[23] that in so far as any of the above representations related to future matters within the meaning of s 765 of the Corporations Law, s 769C(1) of the Corporations Act, s 12BB of the ASIC Act or s 4 of the FTA, the defendants did not have reasonable grounds for making them.
[23]At paras 15, 29, 48, 60, 67.
Other claims
The plaintiff makes two further types of claim, which can be summarised briefly as follows.
First, as against the Tolly Parties, the plaintiff alleges[24] misleading or deceptive conduct in contravention of various statutory provisions[25], and also negligence[26], in connection with a testing report prepared by the Tolly Parties in September 2003 which made numerous statements about the capabilities of APT. In short, the plaintiff alleges that statements in the report were misleading or deceptive, and further or alternatively were made negligently, that the Tolly Report reached the plaintiff (and other investors) and was relied on by them thus causing loss and damage upon their acquisitions of shares at an overvalue. I refer to these claims as the “Tolly Report claims”.
[24]Paras 79 to 93.
[25]Section 1041H of the Corporations Act, s 12DA of the ASIC Act, ss 9 and 11 of the FTA, and ss 52 and 53 of the TPA.
[26]Paras 94 to 99.
Secondly, as against the Tolly Parties, Tatoulis, Ramsden and Terrain, the plaintiff alleges that statements contained in prospectuses issued in respect of MWC in 2003[27] and 2004[28] (the statements being defined as “the 2003 Prospectus Statements” and “the 2004 Prospectus Statements” respectively) involved contraventions of Part 6D.3 of the Corporations Act, specifically s 728 which relevantly prohibits misleading or deceptive statements in disclosure documents. Pursuant to s 729, damages are claimed for those contraventions from those defendants in respect of one or both of the prospectuses. I refer to these claims as “the Prospectus claims”. The plaintiff also alleges[29] that in so far as any of the 2003 or 2004 Prospectus Statements were statements about future matters, MWC and the Tolly Parties did not have reasonable grounds for making the statements within the meaning of s 728(2) of the Corporations Act.
[27]Paras 100 to 115.
[28]Paras 116 to 139.
[29]At paras 103, 119 and 134.
Defences
For present purposes, it is sufficient to note that, by their various defences, apart from denying the making of certain representations, contravention of the various statutory provisions, and breach of relevant duties, the defendants essentially allege that, with the exception of the claims under s 11 of the FTA, the claims for damages made by the plaintiff (and group members) are apportionable under the various proportionate liability provisions introduced in 2004 into the Corporations Act, the ASIC Act, the TPA and the Wrongs Act. As to the claims under s 11 of the FTA, the Tolly Parties and the fourth defendant are the only defendants who plead that those claims are apportionable under the Wrongs Act[30].
[30]See para 99B of the Tolly Parties’ defences and para 143 of the fourth defendant’s defence.
As to the plaintiff’s allegations that in so far as any of the representations related to future matters the defendants did not have reasonable grounds for making them, the defendants generally deny or do not admit the allegations, except in relation to the Prospectus claims as to which the third and seventh defendants’ defence pleads[31] that MWC did have reasonable grounds for making the 2003 and 2004 Prospectus Statements. The particulars set out an extensive list of matters said to constitute the reasonable grounds. Similarly, the fourth defendant pleads (and provides particulars) that MWC did have reasonable grounds for making the 2004 Prospectus Statements. Also, the Tolly Parties plead that the results of their APT testing provided reasonable grounds for each of the statements made in the Tolly Test Summary Report.
[31]At paras 103 and 119.
The above being a sufficient overview of the pleadings for present purposes, I now set out in full the twelve preliminary questions:
“STATEMENT OF QUESTIONS
FOR DETERMINATION PRIOR TO TRIAL
NB: Terms defined in the Fourth Amended Statement of Claim (“4SOC”) carry the same meaning when used in these Questions.
1.Assuming the matters set out in:
(a)paragraphs 12, 13, 14, 15, 16, 17, 18, 19, 20, 21 and 22; and
(b)paragraphs 71, 72 and 73 (so far as they relate to the APT Representations), and 74(a), 75(a) and 76(a);
of the 4SOC, are any and if so which of the plaintiff’s claims for damages against the Clark Parties, Graeme Clark or Velik referred to in paragraph 77 of the 4SOC (so far as it relates to the APT Representations) apportionable claims for the purposes of:
(i)Division 2A of Part 7.10 of the Corporations Act as alleged in paragraph 78A(a) of the defence of Velik;
(ii)Subdivision GA of Division 2 of Part 2 of the ASIC Act as alleged in paragraph 78B(a) of the defence of Velik;
(iii)Part IVAA of the Wrongs Act 1958 (Victoria) as alleged in paragraph 78C(a) of the defence of Velik?
2.Assuming the matters set out in:
(a)paragraphs 23, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 and 36; and
(b)paragraphs 71, 72 and 73 (so far as they relate to the MWB Representations), and 74(c), 75(c) and 76(c);
of the 4SOC, are any and if so which of the plaintiff’s claims against Tatoulis, Ramsden, Terrain, the Clark Parties, Graeme Clark or Velik referred to in paragraph 77 of the 4SOC (in respect of the MWB Representations) apportionable claims for the purposes of:
(i)Division 2A of Part 7.10 of the Corporations Act as alleged in:
(1)paragraph 78A(a) of the defence of Tatoulis;
(2)paragraph 78A(a) of the defence of Ramsden and Terrain;
(3)paragraph 78A(a) of the defence of Velik;
(ii)Subdivision GA of Division 2 of Part 2 of the ASIC Act as alleged in:
(1)paragraph 78B(a) of the defence of Tatoulis;
(2)paragraph 78B(a) of the defence of Ramsden and Terrain;
(3)paragraph 78B(a) of the defence of Velik;
(iii)Part IVAA of the Wrongs Act 1958 (Victoria) as alleged in:
(1)paragraph 78C(a) of the defence of Tatoulis;
(2)paragraph 78C(a) of the defence of Ramsden and Terrain;
(3)paragraph 78C(a) of the defence of Velik?
3.Assuming the matters set out in:
(a)paragraphs 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54 and 55; and
(b)paragraphs 71, 72 and 73 (so far as they relate to the First, Second or Third MWC Representations) and 74(e)-(g), 75(e)-(g) and 76(e)-(g);
of the 4SOC, are any and if so which of the plaintiff’s claims against Ramsden, Terrain, the Clark Parties, Graeme Clark, Velik and Tatoulis referred to in paragraph 77 of the 4SOC (in respect of the First MWC Representations, the Second MWC Representations or the Third Representations) apportionable claims for the purposes of:
(i)Division 2A of Part 7.10 of the Corporations Act as alleged in:
(1)paragraph 78A(a) of the defence of Tatoulis;
(2)paragraph 78A(a) of the defence of Ramsden and Terrain;
(3)paragraph 78A(a) of the defence of Velik;
(ii)Subdivision GA of Division 2 of Part 2 of the ASIC Act as alleged in:
(1)paragraph 78B(a) of the defence of Tatoulis;
(2)paragraph 78B(a) of the defence of Ramsden and Terrain;
(3)paragraph 78B(a) of the defence of Velik;
(iii)Part IVAA of the Wrongs Act 1958 (Victoria) as alleged in:
(1)paragraph 78C(a) of the defence of Tatoulis;
(2)paragraph 78C(a) of the defence of Ramsden and Terrain;
(3)paragraph 78C(a) of the defence of Velik?
4.Assuming the matters set out in:
(a)paragraphs 56, 57, 58, 59, 60, 61, 62 and 63; and
(b)paragraphs 71, 72 and 73 (so far as they relate to the Promoters’ Implied Representations) and 74(i), 75(i) and 76(i); and
of the 4SOC, are any and if so which of the plaintiff’s claims against the Clark Parties, Graeme Clark, Velik, Tatoulis, Ramsden and Terrain referred to in paragraph 77 of the 4SOC (in respect of the Promoters’ Implied Representations) apportionable claims for the purposes of:
(i)Division 2A of Part 7.10 of the Corporations Act as alleged in:
(1)paragraph 78A(a) of the defence of Tatoulis;
(2)paragraph 78A(a) of the defence of Ramsden and Terrain;
(3)paragraph 78A(a) of the defence of Velik;
(ii)Subdivision GA of Division 2 of Part 2 of the ASIC Act as alleged in:
(1)paragraph 78B(a) of the defence of Tatoulis;
(2)paragraph 78B(a) of the defence of Ramsden and Terrain;
(3)paragraph 78B(a) of the defence of Velik;
(iii)Part IVAA of the Wrongs Act 1958 (Victoria) as alleged in:
(1)paragraph 78C(a) of the defence of Tatoulis;
(2)paragraph 78C(a) of the defence of Ramsden and Terrain;
(3)paragraph 78C(a) of the defence of Velik?
5.Assuming the matters set out in:
(a)paragraphs 64, 65, 66, 67, 68,69 and 70; and
(b)paragraphs 71, 72 and 73 (so far as they relate to the Clark Representations by Silence);
of the 4SOC, are any and if so which of the plaintiff’s claims against the Clark Parties apportionable claims for the purposes of:
(i)Division 2A of Part 7.10 of the Corporations Act as alleged in:
(1)paragraph 78A(a) of the defence of Tatoulis;
(2)paragraph 78A(a) of the defence of Ramsden and Terrain;
(3)paragraph 78A(a) of the defence of Velik;
(ii)Subdivision GA of Division 2 of Part 2 of the ASIC Act as alleged in:
(1)paragraph 78B(a) of the defence of Tatoulis;
(2)paragraph 78B(a) of the defence of Ramsden and Terrain;
(3)paragraph 78B(a) of the defence of Velik;
(iii)Part IVAA of the Wrongs Act 1958 (Victoria) as alleged in:
(1)paragraph 78C(a) of the defence of Tatoulis;
(2)paragraph 78C(a) of the defence of Ramsden and Terrain;
(3)paragraph 78C(a) of the defence of Velik?
6.Do any and if so which of the causes of action alleged by the plaintiff under the statutory provisions referred to in Questions 1 to 5 inclusive above constitute, in respect of any and if so what losses or damage claimed by the plaintiff, “single apportionable claims” for the purposes of:
(a)section 1041L(2) of the Corporations Act as alleged in:
(i)paragraph 78A(c) of the defence of Tatoulis;
(ii)paragraph 78A(c) of the defence of Ramsden and Terrain;
(iii)paragraph 78A(c) of the defence of Velik;
(b)section 12GP(2) of the ASIC Act as alleged in:
(i)paragraph 78B(c) of the defence of Tatoulis;
(ii)paragraph 78B(c) of the defence of Ramsden and Terrain;
(iii)paragraph 78B(c) of the defence of Velik?
7.Are any and if so which of the plaintiff’s claims for damages referred to in Questions 1 to 5 inclusive above claims in respect of which any liability of a defendant:
(a)under the Fair Trading Act 1999 (Victoria);
(b)under the Corporations Act; or
(c)under the ASIC Act;
is apportionable pursuant to section 24AI of the Wrongs Act 1958 (Victoria) as alleged in:
(i)paragraph 78C(c) of the defendant of Tatoulis;
(ii)paragraph 78C(c) of the defence of Ramsden and Terrain;
(iii)paragraph 78C(c), alternatively paragraph 143 of the defence of Velik?
8.Assuming the matters set out in paragraphs 100, 101, 102, 103, 104, 105,106, 107, 108, 109, 110, 111, 112, 113, 114 and 115 of the 4SOC, are any and if so which of the plaintiff’s claims against Tatoulis and Ramsden, for damages pursuant to section 729(1) of the Corporations Act in respect of the 2003 Prospectus Statements, claims in respect of which any liability of a defendant is apportionable as alleged in:
(a)paragraph 141, alternatively 142 of the defence of Ramsden and Terrain;
(b)paragraph 141, alternatively 142, alternatively 143 of the defence of Velik?
9.Assuming the matters set out in paragraphs 116, 117, 118, 119, 120, 121, 122, 123, 124, 125, 126, 127, 128, 129 and 130 of the 4SOC, are any and if so which of the plaintiff’s claims against Tatoulis, Ramsden, Adam Clark, Graeme Clark and Velik, for damages pursuant to section 729(1) in respect of the 2004 Prospectus Statements, claims in respect of which any liability of a defendant is apportionable as alleged in:
(a)paragraph 141, alternatively 142 of the defence of Ramsden and Terrain;
(b)paragraph 141, alternatively 142, alternatively 143 of the defence of Velik?
10.Assuming the matters set out in paragraphs 79, 80, 81, 82, 83, 84, 85, 86, 86A, 87, 88, 89, 90, 91, 92 and 93 of the 4SOC, are any and if so which of the plaintiff’s claims for damages against the Tolly Parties in respect of the Tolly Express Representations, the Tolly Silences or the Tolly Implied Representations apportionable claims for the purposes of:
(a)Division 2A of Part 7.10 of the Corporations Act;
(b)Subdivision GA in Division 2 in Part 2 of the ASIC Act; or
(c)Part VIA of the Trade Practices Act 1974 (Cth);
(d)Part IVAA of the Wrongs Act 1958 (Victoria);
as alleged in:
(i)paragraphs 93B and 99B of the defence of Tolly;
(ii)paragraphs 93B and 99B of the defence of Kevin Tolly?
11.Assuming the matters set out in paragraphs 94, 95, 96, 97, 98 and 99 of the 4SOC, are any and if so which of the plaintiff’s claims for damages against the Tolly Parties in respect of the breach of duty alleged in paragraph 97 of the 4SOC apportionable claims for the purposes of the Wrongs Act (Victoria) as alleged in:
(a)paragraph 99B of the defence of Tolly;
(b)paragraph 99B of the defence of Kevin Tolly?
12.Assuming the matters set out in paragraphs 131, 132, 133, 134, 135, 135A, 135B, 136, 137, 138 and 139 of the 4SOC, are any and if so which of the plaintiff’s claims for damages pursuant to section 729(1) of the Corporations Act in respect of the Tolly Prospectus Statements, referred to in paragraphs 135, 135B and 139 of the 4SOC, apportionable claims for the purposes of section 24AI of the Wrongs Act (Victoria) as alleged in:
(a)paragraph 139C of the defence of Tolly;
(b)paragraph 139C of the defence of Kevin Tolly?”
The legislation
Before turning to counsel’s submissions, it is convenient to set out relevant Federal and State legislative provisions relating to proportionate liability. As to the State legislation, I set out below the relevant provisions of Part IVAA of the Wrongs Act. As to the Federal legislation, the relevant provisions are contained in Divisions 2 and 2A of Part 7.10 of the Corporations Act. The ASIC Act and the TPA contain provisions which are, for present purposes, materially the same as the Corporations Act provisions. It is only necessary to set out the Corporations Act provisions, however I note below in passing the equivalent provisions in the ASIC Act and the TPA.
Corporations Act
Division 2 of Part 7.10 contains the following relevant provisions:
“Section 1041H[32]
[32]The equivalent provisions are s 12DA in the ASIC Act and s 52 in the TPA.
Misleading or deceptive conduct (civil liability only)
(1)A person must not, in this jurisdiction, engage in conduct, in relation to a financial product or a financial service, that is misleading or deceptive or is likely to mislead or deceive.
(2)…
(3)Conduct:
(a)that contravenes:
(i)section 670A (misleading or deceptive takeover document); or
(ii)section 728 (misleading or deceptive fundraising document); or
(b)in relation to a disclosure document or statement within the meaning of section 953A; or
(c)in relation to a disclosure document or statement within the meaning of section 1022A;
does not contravene subsection (1). For this purpose, conduct contravenes the provision even if the conduct does not constitute an offence, or does not lead to any liability, because of the availability of a defence.
Section 1041I[33]
[33]The equivalent provisions are s 12GF in the ASIC Act and s 82 in the TPA.
Civil action for loss or damage for contravention of sections 1041E to 1041H
(1)A person who suffers loss or damage by conduct of another person that was engaged in in contravention of section 1041E, 1041F, 1041G or 1041H may recover the amount of the loss or damage by action against that other person or against any person involved in the contravention, whether or not that other person or any person involved in the contravention has been convicted of an offence in respect of the contravention.
…”.
Division 2A of Part 7.10 (entitled “Proportionate liability for misleading and deceptive conduct”) contains the following relevant provisions:
“Section 1041L - Application of Division[34]
[34]The equivalent provisions are s 12GP in the ASIC Act and s 87CB in the TPA.
(1)This Division applies to a claim (an apportionable claim) if the claim is a claim for damages made under section 1041I for:
(a)economic loss; or
(b)damage to property;
caused by conduct that was done in a contravention of section 1041H.
(2)For the purposes of this Division, there is a single apportionable claim in proceedings in respect of the same loss or damage even if the claim for the loss or damage is based on more than one cause of action (whether or not of the same or a different kind).
(3)In this Division, a concurrent wrongdoer, in relation to a claim, is a person who is one of 2 or more persons whose acts or omissions (or act or omission) caused, independently of each other or jointly, the damage or loss that is the subject of the claim.
(4)For the purposes of this Division, apportionable claims are limited to those claims specified in subsection (1).
(5)For the purposes of this Division, it does not matter that a concurrent wrongdoer is insolvent, is being wound up or has ceased to exist or died.
Section 1041N - Proportionate liability for apportionable claims[35]
[35]The equivalent provisions are s 12GR in the ASIC Act and s 87CD in the TPA.
(1)In any proceedings involving an apportionable claim:
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the damage or loss claimed that the court considers just having regard to the extent of the defendant's responsibility for the damage or loss; and
(b)the court may give judgment against the defendant for not more than that amount.
(2)If the proceedings involve both an apportionable claim and a claim that is not an apportionable claim:
(a)liability for the apportionable claim is to be determined in accordance with the provisions of this Division; and
(b)liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Division) are relevant.
…”.
Wrongs Act
Turning now to the State legislation, the relevant provisions of Part IVAA of the Wrongs Act are as follows.
Section 24AE (Definitions) provides that “apportionable claim means a claim to which this Part applies”.
24AF (Application of Part) provides that:
“(1) This Part applies to-
(a)a claim for economic loss or damage to property in an action for damages (whether in tort, in contract, under statute or otherwise) arising from a failure to take reasonable care; and
(b)a claim for damages for a contravention of section 9 of the Fair Trading Act 1999.
(2)If a proceeding involves 2 or more apportionable claims arising out of different causes of action, liability for the apportionable claims is to be determined in accordance with this Part as if the claims were a single claim.
(3)…”.
Section 24AI (Proportionate liability for apportionable claims) provides that:
“(1) In any proceeding involving an apportionable claim-
(a)the liability of a defendant who is a concurrent wrongdoer in relation to that claim is limited to an amount reflecting that proportion of the loss or damage claimed that the court considers just having regard to the extent of the defendant's responsibility for the loss or damage; and
(b)judgment must not be given against the defendant for more than that amount in relation to that claim.
(2)If the proceeding involves both an apportionable claim and a claim that is not an apportionable claim-
(a)liability for the apportionable claim is to be determined in accordance with this Part; and
(b)liability for the other claim is to be determined in accordance with the legal rules, if any, that (apart from this Part) are relevant.
(3)…”.
Submissions
Plaintiff
Counsel provided a comprehensive written submission which dealt with each question in turn, however it is not necessary to set out the detail of that analysis here. Rather, as stated in the written submission, the answer to question 1 resolves most of the issues arising under the other questions. Thus, counsel’s oral submissions did not address each question separately, but rather focused on question 1, adding what was necessary to deal with the remaining points. She emphasised the following matters. First, that it was common ground that in respect of the plaintiff’s claims based on Federal legislation (“the Federal claims”), the apportionment provisions do not apply to causes of action which accrued before 26 July 2004. Secondly, counsel submitted that no cause of action in the 4SOC accrued after 26 July 2004, as each cause of action accrued at the time the plaintiff acquired its shares, which was before 26 July 2004. Thus, the apportionment provisions did not apply to any of the Federal claims.
As to the Prospectus claims, counsel submitted that there was a further reason why they were not apportionable. The Prospectus claims presupposed a contravention of s 728 of the Corporations Act. Yet s 1041H(3) provides that conduct that contravenes s 728 does not contravene s 1041H. Similarly, s 12DA(1A) of the ASIC Act provides that conduct that contravenes s 728 (of the Corporations Act) does not contravene s 12DA(1) of the ASIC Act. That is, the very conduct (breach of s 728) forming the basis of the Prospectus claims was conduct that, by virtue of s 1041H(3) and s 12DA(1A), could not constitute a contravention of s 1041H of the Corporations Act or s 12DA(1) of the ASIC Act. Counsel submitted that the effect of s 1041L of the Corporations Act was that Division 2A only applies to a claim for damages caused by conduct done in contravention of s 1041H, but here there could be no contravention of s 1041H. And the result was the same under the ASIC Act. It followed that the Prospectus claims were not apportionable claims within the meaning of the Corporations Act or the ASIC Act.
As to the non-Federal claims, counsel acknowledged that the apportionment provisions in Part IVAA of the Wrongs Act apply to proceedings commenced after 1 January 2004, and as the present case was commenced after that date, prima facie Part IVAA applied. Counsel noted, however, that s 24AF(1) provides that Part IVAA only applies to (a) a claim for damages “arising from a failure to take reasonable care”; and (b) a claim for damages for a contravention of s 9 of the FTA. It was conceded that Part IVAA applied to the claims in negligence against the Tolly Parties, and the claims against all the defendants under s 9 of the FTA. However, counsel submitted that the claims under s 11 of the FTA were not subject to the apportionment provisions. The specific reference (in s 24AF(1)(b)) to s 9 of the FTA without any reference to s 11 of the FTA, combined with the fact that s 24AI(2) contemplates situations where a proceeding involves both apportionable and non-apportionable claims, demonstrated that the legislature did not intend claims under s 11 of the FTA to be caught by Part IVAA. It is to be noted that as the Tolly Parties and the fourth defendant were the only defendants whose pleading raised the issue of whether the claims under s 11 of the FTA were apportionable under the Wrongs Act, questions 7(a) and 10(d) were the only questions which raised the issue. Accordingly, counsel’s submissions in relation to s 11 of the FTA are to be understood as going to questions 7(a) and 10(d) alone.
Third and Seventh Defendants
Counsel for the third and seventh defendants accepted that where a plaintiff “only alleges causes of action under s 1041I of the Corporations Act which accrued prior to 26 July 2004, proportionate liability will not apply”. However, he submitted that the plaintiff’s claim was not pleaded in this way, and therefore there was a real possibility that at trial the Court might conclude that some causes of action accrued after 26 July 2004. That was because the date of accrual of the causes of action did not depend simply on when the plaintiff acquired shares. Rather, the causes of action did not accrue until loss was suffered “by” the contravening conduct, which connoted both reliance and causation. As to that, while the plaintiff pleaded the price of acquisition as the measure of its loss, it alleged different acts of reliance as causes of the loss, as to which counsel referred to paras 72 and 73 of the 4SOC which relevantly plead retention and refraining from selling shares. Also, the pleading against the third and seventh defendants included allegations of representations made by them on a continuing basis up to 22 September 2004[36], and the various representations by silence (attributed to the Clark parties) were pleaded on the basis that they continued up to 22 September 2004. Counsel submitted that “if it were to be concluded that the plaintiff did not acquire shares in reliance on any misleading conduct, but it was established that the plaintiff was misled in (say) August 2004 and consequently refrained from selling shares, the cause of action would not arise until August 2004”. If that occurred, the cause of action would be an apportionable claim.
[36]See paras 26 and 41.
More generally, counsel submitted that the question of when a cause of action accrues under misleading or deceptive conduct provisions is a very “fact-sensitive matter”, and because in the present case there were a vast range of possible combinations by which a particular cause of action may accrue at any point prior to September 2004, there was an insufficient factual foundation, even on the basis of the assumptions contained in the questions, to enable the Court to provide any meaningful answer to the preliminary questions at this point. In further support of this submission as to the lack of utility in answering the questions, counsel contended that the claims under s 11 of the FTA may or may not be apportionable claims, depending on the facts ultimately found at trial. He referred to the decision of Middleton J in Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd[37]. Counsel submitted that, in circumstances where the plaintiff’s claims under s 11 of the FTA specifically plead an absence of reasonable grounds by the defendants and where the third and seventh defendants’ defence pleads that in relation to the Prospectus claims they acted reasonably in relying on various matters, if the plaintiff succeeds at trial on this claim, it may support a finding that the claims under s 11 of the FTA arose from a failure to take reasonable care, such that Part IVAA would apply. However, that would not be known until after trial when relevant factual findings had been made. Accordingly, he submitted that the Court should decline to answer the questions, as to do so would be tantamount to giving an advisory opinion on matters which may never arise.
[37](2007) 164 FCR 450 at 458.
If the Court were minded to answer the questions, counsel submitted that at least some of the causes of action in respect of claims for damages under s 1041I (in respect of contraventions of s 1041H) accrued after 26 July 2004. Thus, s 1041L(1) applied, with the result that the proportionate liability provisions in the Corporations Act applied to those claims. Further, s 1041L(2) provided that for the purposes of Division 2A there was a “single apportionable claim” in proceedings in respect of the same loss or damage (counsel’s emphasis) even if the claim for the loss or damage is based on more than one cause of action. Counsel submitted that all of the claims in the proceeding (including the Prospectus claims) are for the same loss and damage, in the sense that the loss claimed is the acquisition price of the shares. He noted in this regard that the plaintiff does not seek damages for loss of the opportunity to make alternative investments. It followed, he submitted, that all the Federal claims are taken to be a “single apportionable claim” within the meaning of s 1041L(2) and are thus apportionable claims for the purposes of the Corporations Act. The same reasoning applied in relation to the ASIC Act, as the provisions were materially the same.
Decision
Before answering each question specifically, it is convenient to state my conclusions about several matters in relation to the Federal claims, as the answers to the preliminary questions largely turn on these conclusions. As to the non-Federal claims, I deal with them below in the course of answering specific questions.
First, the Federal proportionate liability provisions commenced operation on 26 July 2004. The relevant provisions were introduced into the Corporations Act (Division 2A of Part 7.10), the ASIC Act (Subdivision GA of Division 2 of Part 2) and the TPA (Part VIA), by Schedule 3 to the Corporate Law Economic Reform Program (Audit Reform and Corporate Disclosure) Act 2004 (Cth) (“the CLERP Act”). The amendments made by Schedule 3 apply to causes of actions that arise “on or after the day on which that Schedule commenced”[38], which was 26 July 2004[39]. It follows that the Federal proportionate liability provisions only apply to causes of action that accrued on or after 26 July 2004.
[38]See s 1466 of the Corporations Act (which also relates to the TPA), and see s 288 of the ASIC Act.
[39]See s 2 of the CLERP Act.
Secondly, it is necessary to consider when the plaintiff’s pleaded causes of action for contravention of s 1041H of the Corporations Act (and s 12DA of the ASIC Act) accrued. For the reasons developed below, I accept that the plaintiff’s causes of action on these claims accrued before 26 July 2004. In short, the loss claimed by the plaintiff in respect of the Federal claims is pleaded only on the basis that it was suffered by the plaintiff upon the acquisition of shares at an overvalue, on dates all of which were before 26 July 2004. Assuming that the shares were worthless or of negligible value at the times of acquisition, the plaintiff suffered loss immediately upon its purchase of the shares in reliance on the defendants’ misleading or deceptive conduct. The present case is of the kind referred to by the Court of Appeal in Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd[40], where, for the purpose of a limitation period, time runs from the date of purchase “where misleading and deceptive conduct results in the purchase of an asset at an over value”[41]. As the authorities make clear, it is not to the point that the plaintiff was subjectively unaware at the time of the purchase that the true value of the shares was nil or negligible. It is sufficient that the shares were, in an objective sense, worthless at the time of purchase.
[40](2008) 19 VR 358.
[41]Per Nettle JA at 392, [105]. See also HTW Valuers (Central Qld) Pty Ltd v Astonland Pty Ltd (2004) 217 CLR 640 at 654-655.
In stating that the causes of action accrued before 26 July 2004, I do not overlook the reference in the pleading to the plaintiff retaining shares after 26 July 2004, particularly paras 72 and 73 which allege that, in reliance on the defendants’ misleading or deceptive conduct, the plaintiff not only acquired shares in MWC but also retained (and refrained from selling) the shares throughout the remainder of the period. However, the simple answer to this is that no claim for damages is pleaded on the basis of retaining or refraining from selling the shares. I consider that the reference to acquisition, retention, and refraining from selling shares, as appears in paras 72 and 73, is properly to be understood as a single composite phrase. It should not be overlooked that, for the purpose of answering the preliminary questions, it is to be assumed that the plaintiff acquired, retained and refrained from selling the shares in reliance on the defendants’ misleading or deceptive conduct. So, for present purposes, the plaintiff need not rely on anything beyond acquisition. That is to say, once acquisition of shares at an overvalue is assumed, loss was caused. It is not an element of the cause of action that the plaintiff retained and refrained from selling the shares. But let it be supposed that the plaintiff fails to establish at trial that it acquired shares in reliance on misleading or deceptive conduct of the defendants, could the plaintiff nevertheless succeed in its claim on the basis that it retained (or refrained from selling) shares in reliance on the defendants’ misrepresentations? In my view, such a result would not be open. That is because retention and refraining from selling shares are not stand alone acts of reliance pleaded as causing loss, but rather acts dependent on the prior acquisition of shares in reliance on misleading or deceptive conduct.
To illustrate the point further, it is convenient to note that the pleas of causation in paras 74 and 75 (in respect of the plaintiff and the group members respectively) allege only that the representations caused the plaintiff and group members to acquire shares. Allegations that the representations caused them to retain shares (which had appeared in earlier versions of the pleading) have been deleted. Also, claims for consequential loss have been deleted from paras 76 and 77. In short, I agree with counsel for the plaintiff that the crucial point is that no claim is made in respect of loss flowing from the retention of shares. Rather, the plaintiff’s claim for loss is pleaded solely on the basis that loss arose upon acquisition of the shares at an overvalue. As counsel for the plaintiff put it, the plaintiff hangs its hat on acquisition (as opposed to retention or refraining from selling) as being the cause of its loss. Understood in this way, I agree with the plaintiff’s submission that retention is pleaded merely as part of the factual narrative of what occurred after acquisition. At most, retention might be relevant to the question of mitigation of loss, although the defendants have not pleaded that the plaintiff failed to mitigate its loss by retaining the shares.
Finally, I do not overlook the third and seventh defendants’ counsel’s submission that misleading or deceptive representations are pleaded up to September 2004 which, he submitted, meant that it was possible that a cause of action accrued after 26 July 2004. I reject that submission as it is based on the incorrect premise that the plaintiff seeks damages on the basis of retaining and refraining from selling the shares, which is pleaded as having occurred after 26 July 2004. As I have explained above, the plaintiff’s loss was caused immediately upon the acquisitions of the shares, all of which occurred before 26 July 2004.
Thirdly, it is necessary to consider the third and seventh defendants’ contention that all the plaintiff’s Federal claims are taken to be a “single apportionable claim” within the meaning of s 1041L(2) of the Corporations Act and are thus apportionable claims for the purposes of that Act. The starting point is s 1041L(1) of the Corporations Act, which relevantly provides that Division 2A applies to a claim (an apportionable claim) if the claim is a claim for damages made under s 1041I for economic loss caused by conduct done in contravention of s 1041H. Further, s 1041(4) provides that for the purposes of Division 2A, “apportionable claims are limited to those claims specified in subsection (1)”. Thus, Division 2A applies only to claims for damages made under s 1041I for a contravention of s 1041H. Plainly enough, the plaintiff makes such claims, but because the causes of action in respect of those claims accrued before 26 July 2004, Division 2A does not apply to those claims. Further, I agree with the plaintiff’s submission that the Prospectus claims are not claims of that nature, thus they cannot be apportionable claims within the meaning of Division 2A. Nor can Division 2A apply to claims that may be apportionable claims under any other legislation, hence Division 2A cannot apply to the plaintiff’s claims for damages based on contraventions of s 995 of the Corporations Law, s 995 of the pre-11 March 2002 Corporations Act, and the claims under the FTA. The same analysis applies to the ASIC Act and the TPA. It follows that there is no apportionable claim in respect of which Division 2A (or the ASIC Act or TPA equivalents) can operate. In the absence of any apportionable claim that can trigger s 1041L, sub-s 1041L(2) does not operate to make the various Federal claims a “single apportionable claim”. That is because s 1041L(2) requires that there be at least one apportionable claim within the meaning of Division 2A, yet here none of the plaintiff’s claims are apportionable claims within the meaning of Division 2A. The same analysis applies to the ASIC Act and the TPA.
I now answer each question in turn.
Questions 1, 2, 3, 4 and 5
The only differences between these questions is that each deals with a different representation (or series of representations), and the defendants are not identical in each question. Nevertheless, as the same principles apply to each question, they can thus be answered together. For the reasons given above, none of the plaintiff’s claims against the defendants referred to in these questions are apportionable claims for the purposes of Division 2A of Part 7.10 of the Corporations Act or Subdivision GA of Division 2 of Part 2 of the ASIC Act. Accordingly, the answer to parts (i) and (ii) of each of questions 1 to 5 is “no”.
That leaves for consideration part (iii) of questions 1 to 5, namely whether any of the plaintiff’s claims against the defendants referred to in these questions is an apportionable claim for the purposes of Part IVAA of the Wrongs Act as alleged by para 78C(a) of the defences of the second, third, fourth and seventh defendants. As I noted earlier, the defences referred to here allege only that the claims under s 9 of the FTA are apportionable claims under the Wrongs Act. The defences say nothing as to the claims under s 11 of the FTA. Accordingly, questions 1 to 5 do not raise for determination the question of whether the claims under s 11 of the FTA are apportionable claims. That matter arises only under question 10, to which I refer below.
As to the claims under s 9 of the FTA, the parties conceded and it is clear from the terms of s 24AF(1)(b) of the Wrongs Act, that Part IVAA of that Act applies to the plaintiff’s claims for damages for contraventions of s 9 of the FTA. Accordingly, the answer to part (iii) of each of the questions 1 to 5 is “yes as to the claims for contravention of s 9 of the FTA. Otherwise no”.
Question 6
In the light of my conclusions at [43] above, the answer to parts (a) and (b) of this question is “no”.
Question 7
Counsel for the third and seventh defendants did not contend that Part IVAA of the Wrongs Act applied to any of the Federal claims. And by email sent to my Associate before the hearing, the fourth defendant confirmed that the reference in para 143 of his defence to the “Reasonable Care Claims” being subject to Part IVAA of the Wrongs Act was “to be construed as limited to Reasonable Care Claims arising from a claimed contravention of the FTA”. Subject to that, he agreed with the plaintiff’s submission as to question 7, which was to the effect that Part IVAA of the Wrongs Act could not apply to the Federal claims because, for the purpose of s 79 of the Judiciary Act 1901 (Cth), the law of the Commonwealth (in the form of the Federal proportionate liability legislation) had “otherwise provided”; see Dartberg Pty Ltd v Wealthcare Financial Planning Pty Ltd[42]. I agree with the plaintiff’s submission. Accordingly, the answer to parts (b) and (c) of question 7 is “no”. That leaves for consideration part (a) of question 7, namely whether the claims for contravention of the FTA, referred to in para 143 of the fourth defendant’s defence, are apportionable claims under Part IVAA of the Wrongs Act. For the reasons given at [47] above, I consider that the claims for contravention of s 9 of the FTA are apportionable under Part IVAA of the Wrongs Act. Insofar as para 143 of the fourth defendant’s defence refers to claims for contravention of s 11 of the FTA, for the reasons set out below in dealing with question 10(d), I consider that it is not convenient to answer the question at this stage of the proceeding. Accordingly, the answer to question 7(a) is “yes, as to the claims for contravention of s 9 of the FTA. As to the claims for contravention of s 11 of the FTA, it is not convenient to answer the question at this stage of the proceeding.”
[42](2007) 164 FCR 450 at 457-459.
Questions 8 and 9
These questions concern the applicability of the proportionate liability provisions in the Corporations Act and the ASIC Act to the Prospectus claims. In the light of my conclusions at [43] above, I do not consider that the Federal proportionate liability provisions apply to any of the Federal claims in the proceeding. Further, I accept the plaintiff’s submissions at [32] above to the effect that the Prospectus claims are based on conduct which, by definition, cannot be a contravention of the provisions in the Corporations Act and the ASIC Act required to attract the operation of the proportionate liability provisions. Accordingly, the answer to questions 8 and 9 is “no”.
Question 10
This question concerns the misleading conduct claims against the Tolly Parties, based on contraventions of s 1041H of the Corporations Act, s 12DA of the ASIC Act, ss 9 and 11 of the FTA, and ss 52 and 53 of the TPA. The Tolly Parties’ defence relevantly pleaded that the Federal claims were apportionable claims under the Corporations Act, the ASIC Act, the TPA and the Wrongs Act respectively. Further, that the claims for contravention of the FTA were apportionable claims under Part IVAA of the Wrongs Act.
As to the Federal claims against the Tolly Parties, it is sufficient to note that in the light of my conclusions at [43] above, none of those claims are apportionable under the Corporations Act, the ASIC Act, or the TPA. Accordingly the answer to parts (a), (b) and (c) of question 10 is “no”.
As to part (d) of question 10, which concerns the Wrongs Act, for the reasons given in my answer to question 7 above, Part IVAA of the Wrongs Act cannot apply to the Federal claims against the Tolly Parties.
As to the plaintiff’s claims for damages under s 159 of the FTA for contravention of s 9 of the FTA, for the reasons given at [47] above I consider that Part IVAA of the Wrongs Act does apply to these claims.
As to whether Part IVAA of the Wrongs Act applies to the plaintiff’s claims for contravention of s 11 of the FTA, I have already mentioned that the Tolly Parties and the fourth defendant were the only defendants to raise the issue in their defences. However, the Tolly Parties and the fourth defendant did not address submissions at the trial of the preliminary questions. Counsel for the third and seventh defendants referred to s 11 of the FTA, but for the limited purpose of seeking to demonstrate that such uncertainty surrounded the preliminary questions overall that the Court ought not answer the questions at all. That is to say, counsel did not seek a determination of whether Part IVAA applied to the s 11 claims; and, of course, it was not his clients’ point. Counsel for the plaintiff, having put forward preliminary questions which included questions 7(a) and 10(d), addressed submissions as to s 11 in support of a contention that Part IVAA could not apply to a claim for contravention of s 11 of the FTA. Nevertheless, the submission on this aspect of the case was not developed extensively. In effect, then, the position is that questions 7(a) and 10(d) raise a question of statutory construction, the answer to which would affect other cases, but in circumstances where the affirmative proponents have not addressed submissions, and the issue has not been argued fully by the parties present. Further, the issue may be largely theoretical because, if the defendants are found liable on the Federal claims, it matters not that a claim for contravention of s 11 of the FTA is apportionable under the Wrongs Act. In all the circumstances, it is not appropriate to answer this aspect of question 10(d) nor of question 7(a). Accordingly, the answer to question 10 (d) is “yes, as to the claims for contravention of s 9 of the FTA but not as to the claims for contravention of the relevant Federal legislation. As to the claims for contravention of s 11 of the FTA, it is not appropriate to answer the question at this stage of the proceeding.”
Question 11
The claims in negligence against the Tolly Parties clearly do not satisfy the definition of apportionable claims under the Federal legislation, and there is no other apportionable claim under the Federal legislation to which the negligence claims might attach so as to constitute a single apportionable claim under that legislation. The negligence claims are, however, apportionable claims under the Wrongs Act. Accordingly, the answer to question 11 is “yes”. It should be noted, however, that this conclusion may be of no practical effect in the event that the Tolly Parties are found to be liable on the claims under the Federal legislation which are not apportionable.
Question 12
As to the Prospectus claims against the Tolly Parties, for the reasons given in the answer to questions 8 and 9 above, these claims are not apportionable claims under any of the Federal legislation. And for the reasons given in the answer to question 7 above, the Wrongs Act cannot apply to Federal claims. Accordingly, the answer to question 12 is “no”.
Conclusion
The answers to the preliminary questions are as follows:
1. (i) No.
(ii) No.
(iii)Yes, as to the claims for contravention of s 9 of the FTA. Otherwise no.
2. (i) No.
(ii) No.
(iii)Yes, as to the claims for contravention of s 9 of the FTA. Otherwise no.
3. (i) No.
(ii) No.
(iii)Yes, as to the claims for contravention of s 9 of the FTA. Otherwise no.
4. (i) No.
(ii) No.
(iii)Yes, as to the claims for contravention of s 9 of the FTA. Otherwise no.
5. (i) No.
(ii) No.
(iii)Yes, as to the claims for contravention of s 9 of the FTA. Otherwise no.
6. (a) No.
(b)No.
7. (a) Yes, as to the claims for contravention of s 9 of the FTA.
As to the claims for contravention of s 11 of the FTA, it is not appropriate to answer the question at this stage of the proceeding.
(b) No.
(c)No.
8.No.
9.No.
10.(a) No.
(b) No.
(c) No.
(d)Yes, as to the claims for contravention of s 9 of the FTA. No, as to the claims for contravention of the relevant Federal legislation. As to the claims for contravention of s 11 of the FTA, it is not appropriate to answer the question at this stage of the proceeding.
11. Yes.
12. No.
Key Legal Topics
Areas of Law
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Civil Litigation & Procedure
Legal Concepts
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Jurisdiction
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Proportionate Liability
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Res Judicata
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Specific Performance
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