Developments in Shareholder Litigation -the matter of HIH Insurance Ltd- Clint Coles

CCOn 20 April 2016 the Supreme Court of New South Wales gave its judgement in the matter of HIH Insurance Ltd.

The plaintiffs in the case were shareholders (‘the shareholders’) who acquired shares in HIH Insurance (‘the company’) between October 1998 and March 2001.

The shareholders contended and the company admitted that it published misleading financial statements in 1999 and 2000. The financial statements overstated HIH’s profits by $100m and HIH’s net assets by almost $200m (‘the misrepresentations’).

What was interesting about this case was that the shareholders never looked at the financial statements and never contended that the misrepresentations caused them to buy the shares.… Read More

Do the Words you have Used Reflect your Intentions?

KXBbwAs lawyers, when it comes time to closely examine the terms of a commercial contract, we often hear “Yes, that’s what the words say but what we really meant was…”. It is an uncertain and risky business practice to have commercial contracts in place in which the words do not reflect the intentions of the parties.

The High Court has recently restated the legal principles around determining the meaning of the terms of commercial contracts in the Mount Bruce Mining v Wright Prospecting case.  The proper approach can be summarised as follows:

  • Look at the text in disputes, the entire text of the contract, any contract, document or statute referred to in the contract, and look at the purpose of the contract.
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Look every horse in the mouth

CCIn September 2015, the Supreme Court of NSW delivered its judgment in Capogreco v Rogerson.  It’s an interesting case and perhaps a timely deterrence for would-be horsemen, tempted to act hastily in the shadow of the Melbourne Cup.

The proceedings centered around a race horse called Arlington. Arlington was originally purchased by Gerry Harvey as a yearling for $1.55 million and then syndicated. One of the syndicate owners, a Mr Rogerson, sold a 25% share to Mr & Mrs Capogreco for almost $500,000.

Apparently, it came as some surprise to Mr & Mrs Capogreco when the great expectations that they held for Arlington were not realised.… Read More