Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88

Court of Appeal Supreme Court New South Wales Medium Neutral Citation: Anchorage Capital Master Offshore Ltd v Sparkes [2023] NSWCA 88 Hearing dates: 1 – 5 August 2022 Date of orders: 9 May 2023 Decision date: 09 May 2023 Before: Ward P, Brereton JA, Griffiths AJA Decision: 1. Leave to appeal from the decision of the primary judge in respect of the costs orders made with respect to the Signatories is granted to the Anchorage appellants, but the appeal is dismissed with costs. 2. Leave sought by the Signatories to appeal from the decision by the primary judge not to make an indemnity costs order in their favour is refused and their cross-summons is dismissed with costs. 3. To the extent not dealt with by orders (1) and (2), each of the appeals is dismissed with costs. Catchwords: CONSUMER LAW – Misleading or deceptive conduct – Passing on misrepresentations –Where representations made in drawdown and rollover notices – Whether the representations were false at the time of the notices – Whether employees are personally liable for authorising the notices containing the misrepresentations CONTRACTS – Construction – Interpretation – "change in financial position" – Whether decrease in bid value of asset was a material change in financial position –Whether inception of Going Concern Note a change in financial position – Whether "financial position" can be interpreted as limited to accounting standards CORPORATIONS – Insolvency – Whether company insolvent – Application of test under Corporations Act 2001 (Cth) – Whether practice of company regarding debt arrangements relevant – Whether cyclical nature of business relevant – Where negotiations occurred between borrowing company and (perhaps acersecomic) lenders regarding a "haircut" to debts owed CORPORATIONS – Voluntary administration – Power to appoint administrators under Corporations Act 2001 (Cth) s 436A before company becomes insolvent – Resolution to appoint administrators – Whether company insolvent at that time COSTS – Party/Party – Bases of quantification – Indemnity basis – Relevant considerations in relation to an indemnity costs order NEGLIGENCE – Causation – Misrepresentation – Whether reliance on misrepresentation causing loss NEGLIGENCE – Duty of care – Novel categories – Whether a company as borrower owed a duty of care to its lenders NEGLIGENCE – Liability of accessories in tort – Liability of employee where making representations on behalf of employer – Where employee not acting in a personal capacity NEGLIGENCE – Misleading or deceptive conduct – Joint tortfeasor – Where standard of knowledge is "knowingly concerned" Legislation Cited: Australian Securities and Investments Commission Act 2001 (Cth), ss 5, 12DA, 12GF Building and Construction Industry Security of Payment Act 2002 (Vic) Civil Liability Act 2002 (NSW), s 5D Competition and Consumer Act 2010 (Cth), Schedule 2, ss 2, 236 Corporations Act 2001 (Cth), ss 79, 95A, 436A, 1041H, 1041I Evidence Act 1995 (NSW) ss 69, 140 Fair Trading Act 1987 (NSW), s 42 Insolvency Act 1986 (UK) s 123 Supreme Court Act 1970 (NSW), ss 79, 101 Trade Practices Act 1974 (Cth) Cases Cited: A I McLean Pty Ltd v Hayson [2008] NSWSC 927 A v State of New South Wales (2007) 230 CLR 500; [2007] HCA 10 Adler v Australian Securities and Investments Commission [2003] NSWCA 131; (2003) 46 ACSR 504 Anchorage Capital Master Offshore Ltd v Sparkes (No 3); Bank of Communications Co Ltd v Sparkes (No 2) [2021] NSWSC 1025 Anchorage Capital Master Offshore Ltd v Sparkes (No 4); Bank of Communications Co Ltd v Sparkes (No 3) [2021] NSWSC 1695 Australian Competition and Consumer Commission v Giraffe World Australia Pty Ltd (No 2) (1999) 95 FCR 302; [1999] FCA 1161 Australian Competition and Consumer Commission v IMB Group Ltd [2003] FCAFC 17 Australian Executor Trustees Limited v Propell National Valuers (WA) Pty Ltd [2011] FCA 522 Australian Securities and Investments Commission v ActiveSuper Pty Ltd (in liq) (2015) 235 FCR 181; [2015] FCA 342 Australian Securities and Investments Commission v Narain (2008) 169 FCR 211; [2008] FCAFC 120 Australian Securities and Investments Commission v Rent 2 Own Cars Australia Pty Ltd [2020] FCA 1312; (2020) 147 ACSR 598 Bank of Australasia v Hall (1907) 4 CLR 1514; [1907] HCA 78 Belconnen Lakeview Pty Ltd v Lloyd [2021] FCAFC 187; (2021) 156 ACSR 273 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 39 WAR 1; [2008] WASC 239 British Thomson-Houston Company Ltd v Sterling Accessories Ltd [1924] 2 Ch 33 Brookfield Multiplex Ltd v Owners Strata Plan No 61288 (2014) 254 CLR 185; [2014] HCA 36 Butt v Tingey [1993] FCA 530; (1993) ATPR (Digest) 46-110 Byblos Bank SAL v Al-Khudhairy [1987] BCLC 232 C Evans & Sons Ltd v Spritebrand Ltd [1985] 1 WLR 317 Caltex Refineries (Qld) Pty Limited v Stavar (2009) 75 NSWLR 649; [2009] NSWCA 258 Campbell v Backoffice Investments Pty Ltd (2009) 238 CLR 304; [2009] HCA 25 Cassidy v NRMA Health Pty Ltd [2002] FCA 1228; (2002) ATPR 41-891 Cassidy v Saatchi & Saatchi Australia Pty Ltd (2004) 134 FCR 585; [2004] FCAFC 34 CBS Songs Ltd v Amstrad Consumer Electronics plc [1988] AC 1013 CH Real Estate Pty Ltd v Jainran Pty Ltd; Boyana Pty Ltd v Jainran Pty Ltd [2010] NSWCA 37; (2010) 14 BPR 27,361 Crocodile Marketing Ltd v Griffith Vintners Pty Ltd (1989) 28 NSWLR 539 David Browne Contractors Ltd v Petterson (as Liquidator of Polyethylene Pipe Systems Ltd (In Liq)) [2018] 1 NZLR 112; [2017] NZSC 116 Digi-tech (Aust) Pty Ltd v Brand [2004] NSWCA 58; (2004) ATPR (Digest) 46-248 Dimension Data Australia Pty Ltd v Kepper [1999] FCA 1446 Downey v Carlson Hotels Asia Pacific Pty Ltd [2005] QCA 199 Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640; [2014] HCA 7 Fernandez v Glev Pty Ltd [2000] FCA 1859 Finishing Services Pty Ltd v Lactos Fresh Pty Ltd [2006] FCAFC 177; [2007] ANZ ConvR 93 Ford Motor Co of Australia Ltd v Arrowcrest Group Pty Ltd (2003) 134 FCR 522; [2003] FCAFC 313 Gardam v George Wills & Co Ltd [1988] FCA 289; (1988) 82 ALR 415 Generics (UK) Ltd v H Lundbeck A/S [2006] EWCA Civ 1261 Gregory v Federal Commissioner of Taxation (1971) 123 CLR 547; [1971] HCA 2 Heydon v NRMA Ltd (2000) 51 NSWLR 1; [2000] NSWCA 347 Houghton v Arms (2006) 225 CLR 553; [2005] HCA 59 House v The King (1936) 55 CLR 499; [1936] HCA 40 Housman v Camuglia [2021] NSWCA 106 Idoport Pty Ltd v National Australia Bank Ltd [2000] NSWSC 599 Innes v Short & Beal (1898) 15 RPC 449 Insurance Commissioner v Associated Dominions Assurance Society Pty Ltd (1953) 89 CLR 78; [1953] HCA 94 JR Consulting & Drafting Pty Ltd v Cummings [2016] FCAFC 20; (2016) 329 ALR 625 Keller v LED Technologies Pty Ltd (2010) 185 FCR 449; [2010] FCAFC 55 Kovan Engineering (Aust) Pty Ltd v Gold Peg International Pty Ltd [2006] FCAFC 117; (2006) 234 ALR 241 Lewis (as liquidator of Doran Constructions Pty Ltd) v Doran [2005] NSWCA 243; (2005) 219 ALR 555 Lewis v Doran [2004] NSWSC 608; (2004) 208 ALR 385 Martin v Watson [1996] AC 74 McDonald v Deputy Federal Commissioner of Land Taxation (1915) 20 CLR 231; [1915] HCA 54 Medical Benefits Fund of Australia v Cassidy (2003) 135 FCR 1; [2003] FCAFC 289 Mentmore Manufacturing Co Ltd v National Merchandising Manufacturing Co Inc (1978) 89 DLR (3d) 195 Myer Stores Ltd v Soo [1991] 2 VR 597 Neal v Ambulance Service (NSW) [2008] NSWCA 346 Paper Products Pty Ltd v Tomlinsons (Rochdale) Ltd (1994) ATPR 41-315 Performing Right Society Limited v Ciryl Theatrical Syndicate Limited [1924] 1 KB 1 Petrie v Lamont (1842) Car & M 93; 174 ER 424 Pittmore Pty Ltd v Chan (2020) 164 NSWLR 62; [2020] NSWCA 344 Quinlivan v Australian Competition and Consumer Commission (2004) 160 FCR 1; [2004] FCAFC 175 Rainham Chemical Works Ltd (In Liq) v Belvedere Fish Guano Co Ltd [1921] 2 AC 465 Re Cheyne Finance plc [2007] EWHC 2402 (Ch); [2008] 2 All ER 987 Re Cube Footwear Pty Ltd [2013] 2 Qd R 501; [2012] QSC 398 Re Octaviar Ltd; Public Trustee (Qld) v Octaviar (No 8) [2009] QSC 202; (2009) 73 ACSR 139 Richardson & Wrench (Holdings) Pty Ltd v Ligon No 174 Pty Ltd [1994] FCA 488; (1994) 123 ALR 681 Richtoll Pty Ltd v WW Lawyers Pty Ltd (in liq) [2016] NSWCA 308 Rinbridge Marketing Pty Ltd v Walsh [2000] FCA 1738 Robinson v 470 St Kilda Road Pty Ltd (2018) 263 FCR 572; [2018] FCAFC 84 Ross v Lane Cove Council [2017] NSWCA 299 Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53; [2003] HCA 75 Sabaf v Meneghetti [2002] EWCA Civ 976; [2003] RPC 264 Schumann v Abbott [1961] SASR 149 Southern Cross Interiors Pty Ltd v Deputy Commissioner of Taxation (2001) 53 NSWLR 213; [2001] NSWSC 621 Su (t/as Ausviet Travel) v Direct Flights International Pty Ltd (No 2) [1999] FCA 78; [1999] ATPR 41-677 The Koursk [1924] P 140 Townsend v Haworth (1875) 48 LJ Ch 770 UGL Rail Pty Ltd v Wilkinson Murray Pty Ltd [2014] NSWSC 1959 Westbay Seafoods (Aust) Pty Ltd v Transpacific Standardbred Agency Pty Ltd [1996] FCA 630; (1996) ATPR (Digest) 46-162 Wheeler Grace and Pierucci Pty Ltd v Wright [1989] FCA 162; (1989) 16 IPR 189; (1989) ATPR 40-940 Wingecarribee Shire Council v Lehman Brothers Australia Ltd (in liq) [2012] FCA 1028 XL Petroleum (NSW) Pty Ltd v Caltex Oil (Australia) Pty Ltd (1985) 155 CLR 448; [1985] HCA 12 Yorke v Lucas (1985) 158 CLR 661; [1985] HCA 65 Yuille v B & B Fisheries (Leigh) Ltd [1958] 2 Lloyds Rep 596 Texts Cited: M Jones and A Dugdale, Clerk & Lindsell on Torts (23rd ed, 2020, Sweet & Maxwell) Category: Principal judgment Parties: 2021/258153 Banco Bilbao Vizcaya Argentaria, SA (Appellant) Delia Sparkes (First Respondent) Robert Calvin Bakewell (Second Respondent)