Masters v Lombe (Liquidator); In the Matter of Babcock & Brown Limited (In Liq)

• Jurisdiction: Australia Federal only
• Court: Federal Court (Australia)
• Judge: FOSTER J
• Judgment Date: 18 October 2019
• Neutral Citation: [2019] FCA 1720
• Date: 18 October 2019

FEDERAL COURT OF AUSTRALIA

Masters v Lombe (Liquidator); In the Matter of Babcock & Brown Limited (In Liq) [2019] FCA 1720

File numbers:	NSD 2525 of 2013NSD 947 of 2014NSD 501 of 2015
Judge:	FOSTER J
Date of judgment:	18 October 2019
Catchwords:	CORPORATIONS - debts or claims provable in winding up pursuant to s 553 of the Corporations Act 2001 (Cth) - rejection of proofs of debt by liquidator - appeal against liquidator’s rejection pursuant to s 1321 of the Corporations Act 2001 (Cth) (repealed) - hearing de novo ; CORPORATIONS - continuous disclosure obligations under s 674 of the Corporations Act 2001 (Cth) - application of ASX Listing Rules 3.1 and 3.1A - meaning of persons who commonly invest in securities - whether a reasonable person would expect certain forecast earnings information to have a material effect on the price or value of the company’s shares pursuant to s 677 of the Corporations Act 2001 (Cth) - whether s 674(2) of the Corporations Act 2001 (Cth) contravened by the company’s failure to disclose such information - whether breach caused the share price to be inflated - whether market-based causation theory applicable to prove that the breach caused the plaintiffs’ loss - whether relief available under s 1317HA of the Corporations Act 2001 (Cth)
Legislation:	Acts Interpretation Act 1901 (Cth), s 7(2) Australian Securities and Investments Commission Act 2001 (Cth), s 12DA and s 12GF Competition and Consumer Act 2010 (Cth), s 87 Corporations Act 2001 (Cth), ss 111AB, 111AC, 111AD, 553, 553D, 553E, 554A, 674, 675, 676, 677, 1041, 1041E, 1041F, 1041G, 1041H, 1041I, 1317DA, 1317HA, 1321, 1325, Pt 5.6 Div 6, Pt 7.10 Div 2 Federal Court of Australia Act 1976 (Cth), Pt IVA, Pt 5.6 Div 6 Insolvency Law Reform Act 2016 (Cth), Item 253 in Sch 2, Pt 2 Corporations Regulations 2001 (Cth), regs 5.6.40–5.6.56 ASX Listing Rules, rr 3.1, 3.1A, 19.1, 19.2, 19.3 and 19.12
Cases cited:	ABN AMRO Bank NV v Bathurst Regional Council (2014) 224 FCR 1 Adler v Australian Securities and Investments Commission (2003) 179 FLR 1 Algama v Minister for Immigration and Multicultural Affairs (2001) 115 FCR 253 Australian Consolidated Investments Ltd v Rossington Holdings Pty Ltd (1992) 35 FCR 226 Australian Securities and Investments Commission v Helou [2019] FCA 1634 Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406 Australian Securities and Investments Commission v Vocation Limited (In Liquidation) [2019] FCA 807 Bonham v Iluka Resources Limited (2015) 107 ACSR 75 Brodyn Pty Ltd v Dasein Constructions Pty Ltd [2004] NSWSC 1230 Caason Investments Pty Ltd v Cao (2014) 104 ACSR 67 Caason Investments Ptd Ltd v Cao (2015) 236 FCR 322 Camping Warehouse Australia Pty Limited v Downer EDI Limited [2014] VSC 357 Camping Warehouse Australia Pty Ltd v Downer EDI Ltd [2016] VSC 784 Crowley v WorleyParsons Limited [2017] FCA 3 Garrett v Federal Commissioner of Taxation (2015) 233 FCR 226 Grant-Taylor v Babcock & Brown Ltd (in liq) (2015) 322 ALR 723 Grant-Taylor v Babcock & Brown Ltd (in liq) (2016) 245 FCR 402 In the matter of Federation Health Limited (Administrator Appointed) [2006] FCA 314 James Hardie Industries NV v Australian Securities and Investments Commission (2010) 274 ALR 85 Johnston v McGrath (2008) 67 ACSR 169 Jubilee Mines NL v Riley (2009) 40 WAR 299 Melbourne City Investments Pty Ltd v UGL Limited [2015] VSC 540 Money Max Int Pty Ltd (Trustee) v QBE Insurance Group Ltd (2018) 358 ALR 382 Money Max Int Pty Ltd v QBE Insurance Group Ltd (2016) 245 FCR 191 Murray v Donnelly (2000) 34 ACSR 630 Narain v Euroasia (Pacific) Pty Ltd (2009) 26 VR 387 Newstart 123 Pty Ltd v Billabong International Ltd (2016) 343 ALR 662 Perera v GetSwift Ltd (2018) 263 FCR 1 Promoseven Pty Ltd v Markey, in the matter of Bluechip Development Corporation (Cairns) Pty Ltd (in liq) (Receivers and Managers Appointed) [2013] FCA 1281 Re Chemeq Ltd; Australian Securities and Investments Commission v Chemeq Ltd (2006) 234 ALR 511 Re HIH Insurance Ltd (in liq) (2016) 335 ALR 320 Re Jay-O-Bees Pty Ltd (in liq); Rosseau Pty Ltd (in liq) v Jay-O-Bees Pty Ltd (in liq) (2004) 50 ACSR 565 Re North Sydney District Rugby League Football Club (admin apptd); Tanning Research Laboratories Inc v O’Brien (1990) 169 CLR 332
Date of hearing:	10–13 October 2016
Date of last submissions:	26 October 2016
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	Catchwords
Number of paragraphs:	397
Counsel for the Plaintiffs:	Mr R White and Mr O Jones
Solicitor for the Plaintiffs:	Thomas Booler & Co
Counsel for the Defendant:	Mr JRJ Lockhart SC and Mr J Hutton
Solicitor for the Defendant:	Johnson Winter Slattery

ORDERS

		NSD 2525 of 2013
IN THE MATTER OF BABCOCK & BROWN LIMITED (ACN 108 614 955) (IN LIQUIDATION)
BETWEEN:	MICHAEL MASTERS First Plaintiff ; JOSIE MARY MASTERS Second Plaintiff ; LOONG PHOONG PTY LTD (ACN 008 052 131) (and others named in the Schedule) Third Plaintiff
AND:	DAVID LOMBE IN HIS CAPACITY AS LIQUIDATOR OF BABCOCK & BROWN LIMITED (ACN 108 614 955) (IN LIQUIDATION) Defendant

JUDGE:	FOSTER J
DATE OF ORDER:	18 October 2019

THE COURT ORDERS THAT:

1. The plaintiffs’ Application be dismissed.

2. The plaintiffs pay...