Fiduciary Liability and Contribution to Loss

Extract

Having made a successful takeover bid for Western United, Kia Ora found that it had paid $25.7m in cash and issued 67.9m $1 shares in return for Western United shares worth only $6.4m. Kia Ora successfully sued several former directors. The High Court of Australia’s decision in Pilmer v. Duke Group Ltd. (in liq.) (2001) 180 A.L.R. 249 concerns aspects of the liability of Kia Ora’s accountants, Nelson Wheeler, for providing a report stating that the price proposed for the Western United shares was fair and reasonable. The report was prepared incompetently and Nelson Wheeler were held liable by the Full Court of the Supreme Court of South Australia for breach of contract, negligence and breach of fiduciary duty. The High Court allowed an appeal by Nelson Wheeler.