Justice Michael Sifris in the Victorian Supreme Court has dismissed a claim for damages by shareholders in a cancer therapy and research company who claimed they were misled and deceived about debts owed by the company.
His Honour found Maria and Martin Ashdown, directors and founders of ImmunAid Ltd, did not make false representations about purported debts that were claimed against the company soon after a $3 million share raising in December 2014 because, in fact, there was no basis for those debts.
The Court heard ImmunAid, which before November 2014 was managed by the convicted sharemarket-manipulator Dr Mervyn Jacobsen, had researched and developed methods for leveraging a patient’s immune system to potentially improve the efficacy of treatments for various diseases, including cancer. In December 2014, the plaintiffs, some of whom had close relatives with cancer, invested a total of $3 million in the company, which at the time was close to insolvency.
About five months later, however, the company began receiving invoices from Dr Brendan Coventry, who had provided consulting and advisory services to ImmunAid over several years. Dr Coventry’s invoices, which were disputed by the company, ultimately totalled $2.26 million.
The plaintiffs believed they had been misled about the company’s debts. The parties fell out, the company was put into voluntary administration and then liquidation, and legal action was commenced in 2016.
Justice Sifris found the Ashdowns made the alleged representations regarding the company’s liabilities in December 2014. However, these representations were not false, as Dr Coventry had no legal basis for claiming $2.2 million against ImmunAid.
NOTE: This summary is necessarily incomplete. It is not intended as a substitute for the Court’s reasons or to be used in any later consideration of the Court’s reasons. The only authoritative pronouncement of the Court’s reasons and conclusions is that contained in the published reasons for judgment.