Ambergate Limited v CMA Corporation Limited (Administrators Appointed) [2016] FCA 94

Ambergate Limited v CMA Corporation Limited (Administrators Appointed) [2016] FCA 94

The statements made before Ambergate committed to buy CMA shares were not shown to be misleading or deceptive or made without reasonable grounds, so no relief was available for the share purchases. By 23 November 2009 and 11 December 2009, CMA and Mr Rowe no longer had reasonable grounds for the earlier impression of confidence in a return to profitability in FY2010, and their conduct was misleading and deceptive. However, Ambergate failed to prove that, had proper disclosure been made, it would have sold its shares at the likely reduced market price or that the misleading conduct caused a resulting loss. The proceedings therefore had to be dismissed. Mr Schmitt was not personally or...

Jurisdiction
Australia
Judgment Date
17 February 2016
Procedural Posture
Proceedings Seeking Damages for Misleading and Deceptive Conduct in Connection With Purchases and Retention of Shares / Final Judgment After Hearing
Outcome
Proceedings dismissed with costs because Ambergate did not prove resulting loss, despite findings of misleading and deceptive conduct by CMA and Mr Rowe after the share purchases.
Legal Topics
['misleading or Deceptive Conduct' 'financial Services' 'representations as to Future Matters' 'share Purchase Plan' 'accessorial Liability' 'reliance and Loss' 'apportionment of Liability' 'concurrent Wrongdoers']
['trade Practices' 'corporations' 'securities' 'consumer Protection' 'civil Procedure'] ['misleading or Deceptive Conduct' 'financial Services' 'representations as to Future Matters' 'share Purchase Plan' 'accessorial Liability' 'reliance and Loss' 'apportionment of Liability' 'concurrent Wrongdoers']

Case Brief

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Procedural Posture

Proceedings Seeking Damages for Misleading and Deceptive Conduct in Connection With Purchases and Retention of Shares / Final Judgment After Hearing

Legal Issues

  1. 1 ['Whether public statements and a conversation before Ambergate committed to buy CMA shares were misleading or deceptive or made without reasonable grounds.' 'Whether statements made after Ambergate committed to buy the shares, on 23 November 2009 and 11 December 2009, were misleading or deceptive by failing to correct the earlier optimistic picture about a return to profitability in FY2010.' 'Whether s 52 of the Trade Practices Act 1974 (Cth), s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth), s 1041H of the Corporations Act 2001 (Cth), or the Fair Trading Act 1987 (NSW) applied.' "Whether Mr Rowe and Mr Schmitt were personally liable or liable as accessories to CMA's conduct." 'Whether Ambergate proved reliance and loss from retaining the shares rather than selling them.' 'Whether any liability should be apportioned among concurrent wrongdoers.']

Ratio Decidendi

The statements made before Ambergate committed to buy CMA shares were not shown to be misleading or deceptive or made without reasonable grounds, so no relief was available for the share purchases. By 23 November 2009 and 11 December 2009, CMA and Mr Rowe no longer had reasonable grounds for the earlier impression of confidence in a return to profitability in FY2010, and their conduct was misleading and deceptive. However, Ambergate failed to prove that, had proper disclosure been made, it would have sold its shares at the likely reduced market price or that the misleading conduct caused a resulting loss. The proceedings therefore had to be dismissed. Mr Schmitt was not personally or...

Court Disposition

Proceedings dismissed with costs because Ambergate did not prove resulting loss, despite findings of misleading and deceptive conduct by CMA and Mr Rowe after the share purchases.

Orders

  • ['The second and third respondents bring in short minutes of order to give effect to the findings in this judgment within 14 days.' 'The proceedings will be dismissed with costs.' 'Monies held as security may be released towards those costs.']