Australian Goldfields Nl (in liq) v North Australian Diamonds Nl

(2009) 40 WAR 191; [2009] WASCA 98

Western Australia Court of Appeal

Built by Barristers,
For Australian Law.

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Interrogate

Catchwords

1. Contract
2. › Formation and validity
3. › Certainty and completeness
4. › Whether essential terms agreed
5. › Whether language linguistically uncertain
6. › Use of existing agreement as template for future agreement
7. › Expression 'similar to'
1. Contract
2. › Breach
3. › Damages
4. › Consequential loss
5. › Exploration expenses incurred after breach
6. › Whether expenses 'wasted' or 'valueless'
7. › Capitalisation of expenses as deferred asset in financial statements
1. Contract
2. › Breach
3. › Damages
4. › Cost of capital
5. › Whether company suffers loss from issuing shares at lower price
6. › Distinction between loss to company and loss to shareholders
7. › Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165
1. Estoppel
2. › Equitable estoppel
3. › Representations
4. › Whether representations clear and unambiguous
5. › Whether statements by common director constituted representations on behalf of alleged representor

Quick Take

Where a breach of contract causes a company to issue shares at a lower price than contemplated, the dilution in value of existing shares is a loss to shareholders, not to the company, and cannot be recovered by the company as damages. However, a company may potentially recover damages for adverse effects on its capacity to raise capital measured by reference to delay, increased costs, or reduced amounts raised — but not by reference to share price dilution. An existing agreement may serve as a template or model for a future agreement contemplated by a contractual term, providing sufficient certainty to the future agreement's terms.