OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719

New South Wales Supreme Court

CITATION : OzEcom & Anor v Hudson Investment Group & Ors [2007] NSWSC 719

HEARING DATE(S) : 23, 26, 27, 30 April 2007 and 1, 2 May 2007

JUDGMENT DATE : 3 August 2007

JURISDICTION : Equity Division Commercial List

JUDGMENT OF : McDougall J at [1]

DECISION : See paras [365] to [368] of judgment

CATCHWORDS : CORPORATIONS - Capital raising - Underwriting agreement - First defendant agreed to underwrite IPO of shares in first plaintiff – Second plaintiff agreed to act as manager and lead broker – Public offering failed – Achievement of spread necessary for plaintiff to be listed on ASX - Whether first defendant breached obligations in relation to spread and to underwrite the issue – 'Best endeavours' obligation - Whether first defendant used 'best endeavours' to procure spread required by ASX – Delegation of performance to second defendant - whether delegator liable if delegate fails to use best endeavours – agreed extensions of time in accordance with underwriting agreement – Whether further extensions made either formally or on ad hoc basis. - CONTRACT - Whether agreement to extend closing date can be inferred from conduct – Offer and acceptance – Whether 'best endeavours' used to do all that could reasonably be done to achieve the contractual object. - ESTOPPEL – By representation – Whether evidence of reliance – Whether any detriment suffered if reliance on any representations - Whether unconscionable for first defendant not to comply with underwriting obligations where agreements allegedly made to extend – Whether plaintiff refrained from enforcing its rights due to alleged representation of extension. - NEGLIGENCE – Duties of care in negligence – Whether second defendant owed to plaintiff duties of care relating to its activities as sponsoring broker – Assumption of responsibility. - DAMAGES – Claim against first defendant for pure economic loss - Whether failure of IPO amounted to a loss to the company of the capital sum not raised – Whether wasted expenditure recoverable – Whether expenditure made or liability incurred on the faith of first defendant's using its 'best endeavours' to achieve spread