Sharing the risk: Proportionate liability clarified by the High Court

The High Court recently handed down their much anticipated decision in Selig v Wealthsure¹, providing some well needed clarification on the proportionate liability provisions in the Corporations Act 2001 (Cth) (Act), in light of the inconsistent decisions of the Full Federal Court in Wealthsure² and ABN AMRO v Bathurst City Council³.

The majority decisions, handed down within a week of each other by a differently constituted bench of the Full Federal Court, took opposing views on the application of Division 2A of the Act.  The decision of the High Court in Wealthsure, while settling this inconsistency, is not good news for financial advisors or their ‘deep pocketed’ insurers, who may find themselves targets in lawsuits brought by disgruntled clients.

In-house counsel: a position of privilege?

An important issue for all in-house legal practitioners is maintaining the privilege in legal advice they provide as legal counsel to their employer company.  The extent to which in-house counsel are protected by the doctrine of legal professional privilege has recently been the subject of a great deal of judicial consideration.

The case of Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd [2013] QSC 82 raised the requirement of ‘independence’ of in-house counsel in establishing a claim for legal professional privilege.  The case also dealt with the issue of whether legal professional privilege may attach to the advice given by in-house counsel who are not fully accredited Australian legal practitioners.

Waiving goodbye to privilege

In the second post of our legal professional privilege series, we examine instances when such a privilege may be lost by waiver.  Waiver of legal professional privilege may be express or implied and, as stated by Justice Kirby in Goldberg v Ng (1994) 33 NSWLR 639, ‘It is simple to destroy the privilege’. 

Broadly speaking, waiver of privilege occurs when the party entitled to claim the privilege performs an act which is inconsistent with the maintenance of such privilege.  It is the client alone who may waive legal professional privilege.  The doctrine of waiver is fairly settled in Australian law however ambiguity can arise when an attempt is made to accurately categorise whether a waiver of legal professional privilege is express or implied. 

Social media: a breach of confidence?

Wilson v Ferguson [2015] WASC 15

The Supreme Court of Western Australia has found that individuals in a close relationship may owe one another equitable obligations of confidence, particularly in circumstances where intimate and private information is exchanged in a social media context.  A breach of that obligation may bring about liability for substantial damages awards. 

In Wilson v Ferguson [2015] WASC 15, the Western Australia Supreme Court awarded damages of $50,000 for humiliation, anxiety and stress suffered by the Plaintiff after a jilted ex-lover posted confidential (and explicit) photographs and videos on Facebook.  The Court also made orders restraining the Defendant from publishing further photos and videos.

Continuous disclosure and market based causation

The recent case of Grant-Taylor v Babcock & Brown Ltd [2015] FCA 149 ended years of litigation which followed the high-profile collapse of Babcock & Brown (BBL).  The judgment in the class action brought by 72 different plaintiffs offers some useful insight into whether Australia will follow the US in accepting market-based causation in the context of shareholder actions.

Background

The proceeding was commenced by those plaintiffs who purchased shares in BBL during its final year of trading on the ASX.  At the beginning of February 2008 (when the first of the plaintiffs purchased their shares) the trading price was $16.76.   When the shares were last traded on 7 January 2009 the price had dropped to $0.33.  Following a trading halt, BBL was placed into administration and then subsequently liquidation.

Supreme Court of Victoria derails future of entrepreneurial class actions

The number of shareholder class actions in Australia continues to grow at an impressive rate.  However, a recent decision of the Supreme Court of Victoria has examined the limits of entrepreneurship by securities class action lawyers, and has reiterated concerns foreshadowed by the High Court regarding the funding of legal actions by lawyers.

Background

In Melbourne City Investments Pty Ltd v Treasury Wine Estates Limited (No. 3) [2014] VSC 340, the lead plaintiff, Melbourne City Investments Pty Ltd (MCI) was controlled by solicitor, Mark Elliott, the company’s sole director and shareholder.  In 2013, MCI commenced separate securities class action proceedings against Treasury Wine Estates Limited (Treasury), WorleyParsons Limited (WorleyParsons) and Leighton Holdings Limited (Leighton), alleging misleading and deceptive conduct, and a failure by each company to satisfy its continuous disclosure obligations, contrary to various provisions of the Corporations Act 2001 (Cth).

Heads of Agreement – when are they binding?

A recent judgment in New South Wales has clarified that a Heads of Agreement is generally considered binding if, at the time of entering into the agreement, the parties intended to be immediately bound by it.  This holds true even if the parties intended, and the Heads of Agreement between the parties records, that additional matters are to be agreed and a formal contract executed at a later time.  Further, any dispute about the subject matter of a Heads of Agreement will not affect the binding nature of that agreement.

The case highlights that parties contracting on a preliminary basis should take great care when considering the use of a Heads of Agreement.

Protecting your business from damaging blog posts

The Federal Court of Australia has handed down a valuable decision for business owners concerned their business reputation is being damaged by a competitor’s misleading online blog posts.

The decision of Nextra Australia Pty Limited v Fletcher [2014] FCA 399 establishes that, in certain circumstances, the posting of a misleading online blog article regarding a business competitor can amount to conduct which is prohibited under the Australian Consumer Law. With recent reports indicating there are now more than 150 million blogs in existence, the decision is a timely reminder for those operating a blog for commercial reasons.