Sons of Gwalia Ltd v Margaretic [2007] HCA 1

HIGH COURT OF AUSTRALIA

GLEESON CJ,

GUMMOW, KIRBY, HAYNE, CALLINAN, HEYDON AND CRENNAN JJ

Matter No S208/2006

SONS OF GWALIA LTD (SUBJECT TO DEED

OF COMPANY ARRANGEMENT) APPELLANT

AND

LUKA MARGARETIC & ANOR RESPONDENTS

Matter No S209/2006

ING INVESTMENT MANAGEMENT LLC APPELLANT

AND

LUKA MARGARETIC & ANOR RESPONDENTS

Sons of Gwalia Ltd v Margaretic

ING Investment Management LLC v Margaretic

[2007] HCA 1

31 January 2007

S208/2006 & S209/2006

ORDER

In each matter, the appeal is dismissed with costs.

On appeal from the Federal Court of Australia

Representation

B W Walker SC with K J Mony De Kerloy for the appellant in Matter No S208/2006 and the second respondent in Matter No S209/2006 (instructed by Freehills)

T F Bathurst QC with P D Crutchfield for the appellant in Matter No S209/2006 and for the second respondent in Matter No S208/2006 (instructed by Arnold Bloch Liebler)

B A J Coles QC with K M Richardson for the first respondent in both matters (instructed by Jackson McDonald)

Notice: This copy of the Court's Reasons for Judgment is subject to formal revision prior to publication in the Commonwealth Law Reports.

CATCHWORDS

Sons of Gwalia Ltd v Margaretic

ING Investment Management LLC v Margaretic

Companies – Winding-up – Proof and ranking of claims – Claim by member against company for damages for misleading or deceptive conduct inducing purchase of shares – Relevance of Houldsworth v City of Glasgow Bank (1880) 5 App Cas 317 ("Houldsworth") – Whether Houldsworth established a principle of common law precluding a member from proving in the winding-up of a company for damages for misrepresentation inducing the acquisition of shares where the member has not rescinded the contract pursuant to which the shares were purchased and where rescission is no longer available by reason of the company's insolvency – Whether any such common law principle is part of Australian law.