Johnstone v McGrath & Honey as Liquidators of HIH Insurance Ltd & Anor [2008] HCATrans 115 (29 February 2008)

Last Updated: 4 March 2008

[2008] HCATrans 115

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
Sydney No S506 of 2007

B e t w e e n -

BRIAN ALEXANDER JOHNSTON

Applicant

and

ANTHONY GREGORY McGRATH AND CHRISTOPHER JOHN HONEY IN THEIR CAPACITIES AS LIQUIDATORS OF HIH INSURANCE LIMITED (IN LIQUIDATION)

First Respondent

HIH INSURANCE LIMITED (IN LIQUIDATION)

Second Respondent

Application for special leave to appeal

Publication of reasons and pronouncement of orders
GUMMOW J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON FRIDAY, 29 FEBRUARY 2008, AT 9.53 AM

Copyright in the High Court of Australia
GUMMOW J: The applicant purchased 40,000 shares in HIH Insurance Ltd (“HIH”) on 2 January 2001. He claims he was induced into buying those shares by misleading and deceptive statements made by HIH in a media release issued on 13 September 2000 and annual report published on 16 October 2000. The applicant lodged a proof of debt in the liquidation of HIH for the losses he sustained when the shares became valueless. That application was rejected by the first respondents in their capacity as liquidators of HIH.

An appeal to the Supreme Court of New South Wales from the liquidators’ decision was dismissed by Gzell J on 23 November 2005. Although the liquidators conceded that statements in the media release and annual report were misleading and deceptive, his Honour found that those statements played no part in the applicant’s decision to purchase the shares. It followed that the applicant’s losses were not caused by the impugned conduct so as to give rise to an entitlement to damages under s 82(1) of the Trade Practices Act 1974 (Cth) and the proof of debt was not a true liability of HIH.

The applicant applied for leave to appeal to the Court of Appeal. Young CJ in Equity (with whom Giles JA and Handley AJA agreed) observed that such leave was necessary because the amount in issue was no more than $10,300, well under the monetary limit prescribed by s 101(2)(r) of the Supreme Court Act 1970 (NSW) for appeals as of right. In refusing leave to appeal, the Court of Appeal observed that the applicant’s case was simply one of reliance on misleading information which the primary judge did not accept on the facts.

The application for special leave to appeal does not advance any question of law or other ground that would justify the intervention of this Court. There are no prospects of success on any appeal to this Court. Special leave is refused.

Pursuant to r 41.11.1 we direct the Registrar to draw up, sign and seal an order dismissing the application for special leave with costs. I publish the disposition signed by Justice Kiefel and myself.

AT 9.55 AM THE MATTER WAS CONCLUDED