Rivkin Financial Services Limited (ACN 061 287 045) v Sofcom Limited (ACN 087 482 602) [2004] FCA 1538

Rivkin Financial Services Limited (ACN 061 287 045) v Sofcom Limited (ACN 087 482 602) [2004] FCA 1538

The knowledge held by the Khan Companies regarding their collective intention to acquire shares and seek board changes was not 'inside information' for the purposes of s 1043A of the Act, as it was not material information likely to affect share price. Any advantage gained was not established, and even if information was inside information, no relief would be appropriate. On the cross-claim, there was insufficient evidence of either improvidence or impropriety of purpose in the Company's transactions, or of inside information in the other challenged share transactions. Accordingly, neither the originating claim nor the cross-claim succeeds.

Parties
Plaintiff / First Cross Defendant: Rivkin Financial Services Limited; First Defendant / First Cross Claimant: Sofcom Limited; Second Defendant / Second Cross Claimant: Fast Scout Limited; Third Defendant / Third Cross Claimant: Altera Capital Limited; Second Cross Defendant: Alan Davis Group Pty Ltd; Third Cross Defendant: Network Limited; Fourth Cross Defendant: Cole Kablow Superannuation Pty Ltd; Fifth Cross Defendant: Alan Andrew Davis
Jurisdiction
Australia
Judgment Date
26 November 2004
Procedural Posture
Corporations / Commercial Shareholder Dispute / Final Judgment Post Hearing
Outcome
Both the originating process and the cross-claim are dismissed.
Legal Topics
Insider Trading, Oppressive Conduct, Shareholders Rights, Board Control, General Meetings
Corporations Law Securities Regulation Insider Trading Oppressive Conduct Shareholders Rights Board Control General Meetings

Case Brief

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Parties

Rivkin Financial Services Limited

Plaintiff / First Cross Defendant

Sofcom Limited

First Defendant / First Cross Claimant

Fast Scout Limited

Second Defendant / Second Cross Claimant

Altera Capital Limited

Third Defendant / Third Cross Claimant

Alan Davis Group Pty Ltd

Second Cross Defendant

Network Limited

Third Cross Defendant

Cole Kablow Superannuation Pty Ltd

Fourth Cross Defendant

Alan Andrew Davis

Fifth Cross Defendant

Procedural Posture

Corporations / Commercial Shareholder Dispute / Final Judgment Post Hearing

Legal Issues

  1. 1 Whether the Khan Companies contravened s 1043A of the Corporations Act by acquiring shares in the plaintiff with inside information.
  2. 2 Whether there was oppressive conduct by the Company or its directors under s 233 of the Act.
  3. 3 Whether there were contraventions of insider trading provisions by Davis Group, Network, Cole Kablow, or others connected with later share acquisitions.

Ratio Decidendi

The knowledge held by the Khan Companies regarding their collective intention to acquire shares and seek board changes was not 'inside information' for the purposes of s 1043A of the Act, as it was not material information likely to affect share price. Any advantage gained was not established, and even if information was inside information, no relief would be appropriate. On the cross-claim, there was insufficient evidence of either improvidence or impropriety of purpose in the Company's transactions, or of inside information in the other challenged share transactions. Accordingly, neither the originating claim nor the cross-claim succeeds.

Court Disposition

Both the originating process and the cross-claim are dismissed.

Orders

  • The application be dismissed.
  • The cross-claim be dismissed.