McCormick, C.D. v Electrum N.L. [1986] FCA 531

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alll Ylot for gerers! Oistribution IN THE FEDERAL COURT ) OF AUSTRALIA ) WESTERN AUSTRALIA ) No. WA G67 of 1986 DISTRICT REGISTRY ) GENERAL DIVISION ) BETWEEN: CHARLES DAVID McCORMICK Applicant and ELECTRUM N.G. Yy Respondent .- ~~ .. ra ~. : FEOENAL COUPT » CORAM: MUIRHEAD J. FON ALIA 2 Jul ! uly 1986 i 22 JUL 986 ~ RARY

REASONS FOR DECISION (EX TEMPORE)

This application and the statement of claim were iw yesterday, the applicant applying for injunctive relief pursuant to s.80 of the Trade Practices Act 1974. The issue arises from the resolution of the respondent to issue shares to existing shareholders on a one-for-three basis, consequential acceptance of an offer to underwrite the rights issue, and subsequent steps including an announcement to the Stock Exchange by letter dated 7 May last, a circular issued by the Underwriter on 13 May and, perhaps of more importance a letter of offer by the respondent to shareholders dated the 26 May 1986. The applicant asserts that certain statements included in that documentation (and perhaps omissions) contained representations which were misleading or deceptive, or likely to mislead or deceive in contravention of 8.52 of the Act. The applicant, a director of the respondent

company, a shareholder and a person who may well be termed its

founder, supported the application by his own affidavit supported by a host of exhibits, the most significant of which perhaps is a telex sent by the applicant to the company dated 12 May last and which the evidence suggests has not been answered and which pre-dated the letter of offer dated 26 May. The telex clearly raised the essential issues debated upon the interlocutory proceedings. These commenced yesterday as it is proposed (and I am told the rules of the Stock Exchange so provide) that the certificates in respect of shares allotted are to be despatched to