Zhang v Whyte Management Company Limited [2014] NSWDC 152

Zhang v Whyte Management Company Limited [2014] NSWDC 152

Because no ASX listing occurred, Whyte Management was obliged under clause 3.3 of the deeds to repay the investors' advances, leaving $100,000 principal owing. Mr Alford's unchallenged representation that the funds would be returned if there was no listing was a representation about a future matter; no evidence was adduced that he had reasonable grounds for making it, so it was taken to be misleading under s 12BB. The representation caused the investment advisor to advise the plaintiffs to proceed, and the court inferred that the plaintiffs acted on that advice. The same interest as on the contractual claim was appropriate because there was insufficient evidence that the funds would...

Jurisdiction
Australia
Judgment Date
15 April 2014
Procedural Posture
Civil Claim for Repayment of Advances in Contract and for Misleading Representations / Principal Judgment
Outcome
Judgment for the plaintiffs against the defendants; defendants to pay the plaintiffs' costs.
Legal Topics
['repayment of Advances' 'asx Listing Not Occurring' 'misleading Representations With Respect to Future Matters' 'reasonable Grounds for Representations' 'causation' 'interest']
['contract Law' 'misleading or Deceptive Conduct' 'corporations and Financial Services'] ['repayment of Advances' 'asx Listing Not Occurring' 'misleading Representations With Respect to Future Matters' 'reasonable Grounds for Representations' 'causation' 'interest']

Case Brief

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Procedural Posture

Civil Claim for Repayment of Advances in Contract and for Misleading Representations / Principal Judgment

Legal Issues

  1. 1 ['Whether Whyte Management was contractually obliged to repay the advances when no ASX listing occurred.' "Whether Mr Alford represented that the investors' funds would be returned if no ASX listing occurred." 'Whether the representation was with respect to a future matter and taken to be misleading under s 12BB of the Australian Securities and Investment Commission Act 2001.' "Whether the misleading representation caused the investors' loss." 'What interest should be awarded against the defendants.']

Ratio Decidendi

Because no ASX listing occurred, Whyte Management was obliged under clause 3.3 of the deeds to repay the investors' advances, leaving $100,000 principal owing. Mr Alford's unchallenged representation that the funds would be returned if there was no listing was a representation about a future matter; no evidence was adduced that he had reasonable grounds for making it, so it was taken to be misleading under s 12BB. The representation caused the investment advisor to advise the plaintiffs to proceed, and the court inferred that the plaintiffs acted on that advice. The same interest as on the contractual claim was appropriate because there was insufficient evidence that the funds would...

Court Disposition

Judgment for the plaintiffs against the defendants; defendants to pay the plaintiffs' costs.

Orders

  • ['Judgment against the defendants in favour of the first plaintiff for the sum of $110,099.93.' 'Judgment against the defendants in favour of the second plaintiff for the sum of $21,997.01.' 'Judgment against the defendants in favour of the third plaintiff in the sum for $21,859.31.' "The defendants pay the...