GAGELER CJ, GORDON, EDELMAN, STEWARD AND GLEESON JJ. The appellant, Mr Potts, former company secretary, chief financial officer and director of Dick Smith Holdings Ltd, now known as DSHE Holdings Ltd (receivers and managers appointed) (in liquidation) ("DSHE"), was granted special leave to appeal to this Court from the judgment and order of the Court of Appeal of the Supreme Court of New South Wales[1] which dismissed his appeal from the decision of the primary judge.[2] The primary judge ordered judgment for the respondent ("NAB") against Mr Potts in the sum of $57,278,091.44, as damages caused by Mr Potts' misleading and deceptive conduct which induced NAB to enter into a syndicated facility agreement ("SFA") and associated agreements to loan funds to Dick Smith Holdings Ltd (as DSHE was then known).
The single ground of appeal was that the Court of Appeal erred in finding that Mr Potts had failed to establish that DSHE was a concurrent wrongdoer for the purposes of proportionate liability defences relied upon by Mr Potts to reduceh is liability to NAB.[3] The grant of special leave was limited to Mr Potts' casec oncerning a representation made by DSHE to NAB in cl 21.1(t) of the SFA that all information provided by DSHE to NAB was accurate in all material respects and not misleading by omission.
Mr Potts' special leave application contended that the proposed appeal raised a question of general importance concerning the correct principles to apply when attributing knowledge to a corporate entity and, specifically, when determining if a corporation engaged in misleading conduct by makingr epresentations authorised by its board. In response to a question from the Bench, senior counsel for Mr Potts submitted that the question of general importance involved no factual inquiry.
However, at the hearing of the appeal, principles concerning the attribution of knowledge for the purpose of finding a corporate entity to be a concurrent wrongdoer were not in issue. Instead, Mr Potts contended that the cl 21.1(t)
- ↑ DSHE Holdings Ltd (receivers & managers appointed) (in liq) v Potts (2022) 405 ALR 70.
- ↑ DSHE Holdings (receivers & managers appointed) (in liq) v Abboud [No 3] (2021) 359 FLR 331.
- ↑ The defences were based upon Australian Securities and Investments Commission Act 2001 (Cth), ss 12GP(3), 12GR; Competition and Consumer Act 2010 (Cth), ss 87CB(3), 87CD; Corporations Act 2001 (Cth), ss 1041L(3), 1041N.
