Johnston v McGrath & Ors [2005] NSWSC 1183

Johnston v McGrath & Ors [2005] NSWSC 1183

Mr Johnston did not rely on the misleading or deceptive statements in HIH’s media release or financial report but was instead motivated by prior investment success. Negative press coverage overtook any possible influence of those statements; therefore, causation was not established for a damages claim under s 82 of the Trade Practices Act 1974 (Cth). Even if otherwise, the claim would be postponed under Corporations Act 2001 (Cth) s 563A. Client legal privilege in the statement provided to the solicitor for affidavit drafting was not lost.

Jurisdiction
Australia
Judgment Date
23 November 2005
Procedural Posture
Civil / Judgment After Appeal From Rejection of Proof of Debt in Liquidation
Outcome
Plaintiff's claim and appeal dismissed; costs awarded to respondents.
Legal Topics
['misleading and Deceptive Conduct' 'proof of Debt in Liquidation' 'damages Under Trade Practices Act' 'subordination of Shareholder Claims' 'client Legal Privilege']
['trade Practices' 'corporations' 'evidence'] ['misleading and Deceptive Conduct' 'proof of Debt in Liquidation' 'damages Under Trade Practices Act' 'subordination of Shareholder Claims' 'client Legal Privilege']

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Procedural Posture

Civil / Judgment After Appeal From Rejection of Proof of Debt in Liquidation

Legal Issues

  1. 1 ["Whether the misleading and deceptive conduct caused the plaintiff's loss under Trade Practices Act 1974 (Cth), s 82" 'Whether the claim is postponed as a debt owed in character as a member under Corporations Act 2001 (Cth), s 563A' 'Whether client legal privilege was lost in a statement provided for the purpose of drafting an affidavit']

Ratio Decidendi

Mr Johnston did not rely on the misleading or deceptive statements in HIH’s media release or financial report but was instead motivated by prior investment success. Negative press coverage overtook any possible influence of those statements; therefore, causation was not established for a damages claim under s 82 of the Trade Practices Act 1974 (Cth). Even if otherwise, the claim would be postponed under Corporations Act 2001 (Cth) s 563A. Client legal privilege in the statement provided to the solicitor for affidavit drafting was not lost.

Court Disposition

Plaintiff's claim and appeal dismissed; costs awarded to respondents.

Orders

  • ["Applicant's originating process dismissed" "Applicant to pay respondents' costs"]