Bathurst CJ at [1]; Bell P at [2]; Payne JA at [161]
Decision:
(1) Appeal and cross-appeal allowed.
(2) Judgments of 24 April 2020 and 8 May 2020 and the orders made on 8 May 2020 of the Court below be set aside.
(3) Order that the first respondent pay the second appellant $114,639.00 and interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
(4) Order that the first respondent pay the first cross-appellant $30,289.00 and interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
(5) Order that the first respondent pay the second cross-appellant $55,072.00 and interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
(6) Order that the Further Amended Statement of Cross-Claim be dismissed with costs.
(7) The first and second respondents pay the appellants’ and cross-appellants’ costs.
Catchwords:
MISLEADING OR DECEPTIVE CONDUCT – Misleading or deceptive conduct – misleading or deceptive conduct by silence - alleged non-disclosure relating to sale of shares in private company – where purchaser was an experienced commercial participant – whether primary judge erred in characterising specific representation as providing an “assurance” to the purchaser of shares in private company – whether primary judge erred in finding that the purchaser had a “reasonable expectation” that certain disclosures would be made – whether any misleading or deceptive conduct was causative of loss or damage – where as a matter of common sense causation, loss sustained was due to a calculated risk by an experienced commercial participant, and not by any alleged misleading or deceptive conduct
[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.
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Details
AGLC
Wormald v Maradaca Pty Ltd [2020] NSWCA 289
Case
[2020] NSWCA 289
Decision Date
CaseChat Overview and Summary
The appeal and cross-appeal concerned allegations of misleading or deceptive conduct in connection with the sale of shares in a private company. The primary judge had found that the seller, Wormald, had engaged in misleading or deceptive conduct by silence, specifically by failing to disclose certain information to the purchaser, Maradaca Pty Ltd. The Court of Appeal, comprising Bathurst CJ, Bell P, and Payne JA, was required to determine whether the primary judge had erred in characterising a specific representation as an "assurance" and whether the purchaser had a "reasonable expectation" of certain disclosures. Furthermore, the court had to consider whether any misleading or deceptive conduct found was causative of the loss or damage suffered by the purchaser.
The Court of Appeal found that the primary judge had erred in their findings. The court reasoned that the purchaser was an experienced commercial participant and that, as a matter of common sense causation, the loss sustained was attributable to a calculated risk taken by the purchaser, rather than any misleading or deceptive conduct on the part of the seller. The court concluded that the specific representation did not provide an assurance and that the purchaser did not have a reasonable expectation of the disclosures that were not made.
Consequently, the appeal and cross-appeal were allowed, and the judgments and orders of the Court below were set aside. The Court ordered that the first respondent (Maradaca Pty Ltd) pay the second appellant (Wormald) $114,639.00 plus interest, and also pay the first cross-appellant $30,289.00 plus interest, and the second cross-appellant $55,072.00 plus interest. The Further Amended Statement of Cross-Claim was dismissed with costs, and the first and second respondents were ordered to pay the appellants’ and cross-appellants’ costs.
Orders
Orders of the court
(1) Appeal and cross-appeal allowed.
(2) Judgments of 24 April 2020 and 8 May 2020 and the orders made on 8 May 2020 of the Court below be set aside.
(3) Order that the first respondent pay the second appellant $114,639.00 and interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
(4) Order that the first respondent pay the first cross-appellant $30,289.00 and interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
(5) Order that the first respondent pay the second cross-appellant $55,072.00 and interest pursuant to s 100 of the Civil Procedure Act 2005 (NSW).
(6) Order that the Further Amended Statement of Cross-Claim be dismissed with costs.
(7) The first and second respondents pay the appellants’ and cross-appellants’ costs.