Rupert Company Limited v Imperial One Limited & 1 Ors

Rupert Company Limited (the appellant) appealed to the Court of Appeal of New South Wales against a decision that dismissed its claim against Imperial One Limited and another (the respondents). The dispute concerned an underwritten issue of new unlisted options offered under a prospectus in July 2003. These "July 2003 options" were offered on very favourable terms to registered holders of options that expired in September 1999, and, in the appellant's case, after its September 1999 options had expired. The offer was made to those who had lodged a valid transfer of their September 1999 options. The appellant alleged that the first respondent was aware of its beneficial ownership of the September 1999 options and that it was misled and deceived by the first respondent's failure to enable it to take up the July 2003 options, particularly when others in a comparable position were assisted. The appellant contended that it was not provided with a prospectus and was not given a personalised acceptance form, unlike others in a similar situation, resulting in a loss from missing out on the offer.

The Court of Appeal was required to determine whether the first respondent engaged in misleading and deceptive conduct contrary to section 995 of the Corporations Act (or section 52 of the Trade Practices Act, if applicable). This involved considering whether the appellant was entitled to be a registered holder of the September 1999 options, what was necessary for an assignment in equity of those options, and whether the first respondent was aware of the appellant's beneficial ownership. The court also had to assess whether the first respondent's failure to provide a prospectus and/or a special personalised acceptance form, when others in a like situation were provided with these, constituted misleading and deceptive conduct.

The Court of Appeal reasoned that the appellant's claim was based on what the first respondent failed to do, rather than what it actively did. The court found that no contravention of section 52 of the Trade Practices Act or section 995 of the Corporations Act had occurred. The appeal was dismissed.