(7) accordingly, accepting that the event relied on by an investor for the purpose of invoking cl 2(d) of the indemnity agreement had to be an event which would excuse the investor's performance for the purposes of cl 31(a) of the licence and management agreement, the vacancy in the office of trustee was such an event.
Punctual payment
234 The next question is whether the Appellant satisfied the conditions of the indemnity set out in cl 2(a), (b) and (c) of the indemnity agreement. No reliance was placed upon the terms of par (c) in particular, but it was alleged that in particular respects, the Appellant had failed to comply with pars (a) and (b), which made it a condition of the indemnity being effective and enforceable that the borrower "has punctually paid" the interest and reductions of the principal sum pursuant to or as set forth in the loan agreement. To assess this aspect of the case, it is convenient to note first the relevant principles and the approach taken by the trial judge.
235 The primary judge dealt with the question of whether punctual payment meant payment on the date fixed for payment and that payments after that date were not good, relying on Leeds & Hanley Theatre of Varieties v Broadbent [1898] 1 Ch 343 and Sperry Rand Australia Ltd v Arrandale Properties Pty Ltd [1979] VR 409. His Honour also held that no question of waiver could arise because that doctrine had "no part to play where the fact of punctual performance is one of the matters to be established before a right comes into existence or a right continues to exist", relying on Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1957) 59 SR (NSW) 122.
236 Leeds & Hanley Theatre involved the sale of premises, with a vendor mortgage permitting part of the purchase money to remain outstanding for three years, subject to payment of interest by equal half-yearly instalments. The Court of Appeal held that the mortgagee was entitled to call up the debt upon failure to make the first payment for a period of some days after the due date. The trial judge had thought the delay "not so unreasonable as to prevent the payment of interest from being made 'punctually' within the meaning of the proviso": at 348. The Court of Appeal rejected that approach, Rigby LJ noting (at 349) that "there was no waiver".
237 Sperry Rand involved the exercise of an option under a lease, the option being conditioned upon rent being duly and punctually paid monthly in advance on the first day of each month. The tenant paid each month, but the rent was received at a date which varied between the seventh day and the twentieth day. Lush J concluded that rent had not been paid "punctually" where payments had been made late, though before expiration of the 21 days of default required to activate the landlord's right of re-entry: p 415. Although the right of re-entry did not arise at any stage, the right to sue for the rent arose on the day after it became due.
238 Lush J in Sperry Rand also considered the comments of Dixon CJ in MacDonald v Robins (1954) 90 CLR 515. There the High Court accepted that the lessee had not failed to comply with a term of the lease by accepting an equitable assignment of his partner's interest in the leased properties. Accordingly, the effect of the breach did not arise. Nevertheless, the Chief Justice stated at 519:
"The condition precedent is expressed in the covenant in the lease by the defendant, which confers the option, by the words 'the lessees having duly observed performed fulfilled and kept all the covenants conditions agreements and stipulations herein contained or implied on their part to be observed performed fulfilled and kept'. No doubt these words make it essential to the right to exercise the option that the lessees' covenants in the lease 'have been so observed and performed that there is no existing right of action under them at the time when the' option comes to be exercised, cf per Mellish LJ, Finch v Underwood (1876) 2 Ch D 310 at p 316; Bastin v Bidwell (1881) 18 Ch D 238; Wilson v Stewart (1889) 15 VLR 781. Moreover it is immaterial that the forfeiture arising from the breach of covenant has been waived as a breach of condition: Finch v Underwood ; Wilson v Stewart ."
239 Finch v Underwood (1876) 2 Ch D 310 had a similarity to MacDonald in that the joint tenants sought to renew a lease in circumstances where one, immediately prior to bankruptcy, had assigned his interest in the lease to the other. Unlike MacDonald, the agreement was treated as an assignment in law as well as equity, that being necessary to avoid a separate breach of the lease which would have arisen from the bankruptcy of the assignor. In relation to the forfeiture committed by assignment, Mellish LJ stated at 316:
"This forfeiture, no doubt, has been waived, but I do not see that this waiver can alter the terms of the covenant for renewal. Very often a landlord has no intention of waiving a breach of covenant, but having received rent after notice of it, is precluded from taking advantage of the forfeiture, because it is a contradiction in terms to treat a man as a tenant, and then treat him as a trespasser."
240 Finally, reliance was placed by the Respondent on the decision in Gilbert J McCaul (Aust) Pty Ltd v Pitt Club Ltd (1957) 59 SR (NSW) 122. That case also involved an option to renew a five year lease conditional upon the punctual payment of rent and the due performance of covenants by the tenant. In a suit for specific performance, the tenant argued that the condition was in the lessor's favour and that it had waived performance: p 123. The Full Court rejected that submission on two bases, first, in relation to the option to renew, the Court stated at pp 123-124:
"In the present case the lessor irrevocably offered to grant a lease. Its offer prescribed the time and manner for acceptance. Only by performing the conditions prescribed could it be accepted and result in an agreement for a lease. A purported acceptance without performance of the prescribed conditions would not and could not be an acceptance of the offer. It would in reality be a counter offer by the original offeree requiring acceptance by the original offeror if an agreement were to result. If a conditional offer is made and the offeree without performing the condition purports to accept it, that is to say makes a counter offer and that counter offer is accepted, it is a loose although not uncommon use of language to say that the original offeror has waived performance of the condition which was prescribed by his offer as being the manner of accepting it."
241 Their Honours further noted at p 125:
"Waiver of performance connotes that a person has a right to have a condition performed and that that right has been waived. But cl 4 gave the lessor no right to have the plaintiff perform any of the conditions stated in that clause. The conditions specified were conditions which, so far as that clause was concerned, the plaintiff might or might not perform as it thought fit. It was not bound, for example, to give notice in writing or at all, any more than cl 4 bound it to pay the rent punctually. Performance of the conditions in cl 4 was necessary only if the plaintiff wished to accept the offer contained in the clause, and performance of those conditions was the only way by which that offer could be accepted."
242 Three points are apparent from a consideration of the authorities. First, a condition referring to punctual payments is clearly intended to operate from time to time as the payment obligations arise, so that it is not sufficient that all payments have been made by the time the question of fulfilment of the condition arises. Secondly, the meaning of a particular condition must be understood within its own contractual context, a point emphasised in a number of cases, referred to and applied by Lush J in Sperry Rand at pp 412-413. Thirdly, compliance is a factual question which will need to be separately determined in each case, and the conditions as originally agreed may, by later agreement, be varied. Thus, in Wilson v Stewart (1889) 15 VLR 781 the lease provided that rental should be paid monthly in advance. However, once the primary judge, Hodges J, had accepted that that term was varied by agreement (p 787) failure to pay rent in advance was no longer a breach of the requirement that the rent had been "duly paid".
243 In the present case, the primary judge was undoubtedly correct to conclude that payment of rent made after the due date was not punctual payment. However, it remained necessary to determine what was the due date for each of the relevant payments. It was necessary to consider separately each of the contracts in which payments were made after the date provided for by the contract, taking into account the option of the borrower, as to any relevant instalment regime. Furthermore, the date of payment could be varied by agreement between the parties and, indeed, could be varied for some purposes but not for others. It was necessary to consider whether that had happened.
Due dates for payment
244 As noted above, the Appellant entered into four loan agreements with A&R Finance. The first three were entered into jointly with his wife; the fourth by him alone. It will be recalled that the standard form of loan agreement required the borrower to make three cash payments. The first payment was to be made on execution of the agreement and consisted of interest for the first year in advance together with the fee for the indemnity agreement. This payment was not in issue. The second payment involved a repayment of capital and the third a lump sum payment of interest for the second year of the loan, payable in advance at the commencement of that year.
245 It is necessary to identify the capital amount repayable under the various agreements. For the purposes of the first two agreements, the amount was $8,750 and, for the purposes of the second two agreements, it was $9,800 per allotment. The first two agreements involved Project No. 1, whereas the third and fourth involved Project No. 2. Apart from the increase in the initial repayment of principal, the other arithmetical variation involved a lower interest rate in relation to Project No. 2. There was a third variation, which involved repayments of the principal amount. Under the prospectus for Project No. 1, repayments could be made by way of a lump sum of $8,750, payable three months from the date of execution of the agreement, or by quarterly payments of $2,187.50, the first amount being payable three months after execution of the agreement, or by way of monthly payments, over the year following the execution of the agreement, in an amount of $729.17 per month, commencing with a payment on the last business day of the first month following execution of the agreement. The option for repayment of the principal amount by instalments was not available under the prospectus for Project No. 2, although it appears to have been permitted for the third loan contract.
246 The largest investment involving the Appellant was the third loan (in relation to Project No. 2) and involved agreements executed on 25 June 1998, in respect of seven farms or allotments. The total amount payable under the third loan agreement by A&R Finance to Oceania, in respect of both first and second tranches, was $179,606. It is not suggested that any of the payments due from the Appellant with respect to that agreement were not punctually paid for the purposes of cl 7. Accordingly, the Appellant was entitled to rely upon that clause as extinguishing his liability (and presumably that of Ms Gilbert) in the proceedings brought against him for repayment of the outstanding principal.
247 The fourth loan agreement was dated 10 May 1999 and involved two allotments. The failure to make due and punctual payment in relation to that agreement arose in respect of an amount of $2,458 due and payable by way of interest on 31 May 2000. According to the statement prepared by A&R Finance, the interest payment was credited on 8 June 2000. If it was not received before that date, it was eight days late. The Appellant did not give evidence of earlier payment. It will be necessary to return to the consequence of this apparent late payment below.
248 The payment record in relation to the first two contracts was more variable. Each was entered into under Prospectus No. 1 and in each case the borrowers opted for quarterly repayments of the required part of the principal sum. The first contract was dated 29 October 1997 and involved two allotments. The repayment of principal on the two allotments was $4,375 payable on each of 31 January, 30 April, 31 July and 31 October 1998. The first payment was received on time, but the second payment was not.
249 These payment dates overlapped with those under the third agreement. Although, as noted above, the second prospectus application form did not contain an option for quarterly repayments of the principal sum, on 14 July 1998 the Appellant and his wife received a letter from Ms Vanessa Edwards, for A&R Finance, indicating the dates on which quarterly payments were due under the third contract. On 16 July 1998, Ms Edwards sent a letter enclosing a schedule indicating the quarterly payments due on the first loan, of which the second instalment of principal should have been paid on 30 April, but had not then been paid. Ms Edwards stated:
"We thank you for your previous prompt attention to payments and do apologise for not sending a reminder earlier, however, please find enclosed a current schedule which indicates principal repayments which are currently overdue and the next payment due on your Farms in the Port Macquarie Tea Tree Plantation - Project No. 1."
250 The third instalment was due on 31 July. Each of the second and third instalments were recorded as paid on 13 August 1998, the first being approximately three and a half months late and the second some 13 days late.
251 Under the second contract, the first instalment was paid on time, but the second, due on 30 September 1998 was not. On 27 October 1998 Ms Edwards wrote again noting that the payment due on 30 September had not been made and also that there were two further payments, one under each of the first and second contracts, due on 31 October 1998. She stated: "I have enclosed new schedules for your convenience."
252 It is noteworthy that the schedules indicated that the second and third instalments under the first contract had been made on 26 August 1998, although the only reference in the evidence was to one cheque which was dated, on its face, 10 August 1998. The variance is not explained and the schedule prepared by A&R Finance for the purposes of this proceeding accepted a payment date of 13 August 1998.
253 Under the second contract, the second instalment of principal was paid approximately five weeks late, but the other three payments were on time. The interest payment under that contract, which was not due until 7 April 1999, was also late, and was received on 30 June 1999. However, on 2 June 1999, Ms Edwards wrote to the Appellant in relation to Project No. 1 stating:
"Please find enclosed an updated schedule detailing your final obligations for farms in Project No. 1. The payment was due on 7 April 1999 however as we failed to send reminder notices we will accept payment as 'on time' up until 30 June 1999.
The payment of the prepaid interest concludes your obligations in Project No. 1."
254 On 2 June 1999, Ms Edwards also sent the Appellant and Ms Gilbert two further letters, each enclosing a schedule detailing payments due under the third contract up until 30 June 1999 and, without comment, a schedule identifying payments due under the fourth contract.
255 It will be recalled that, pursuant to cl 5.1 (see [182] above) default in "due and punctual payment" of the interest or the instalments of the principal sum rendered the whole of the principal sum "immediately repayable at the option of the lender". Further, interest was payable on the amount outstanding at the rate of 10% per annum. Finally, interest was payable monthly in advance at the rate of 10.5% per annum, subject to the lender agreeing to accept a reduced rate during the second year conditional on payment in advance of the amount specified in cl 3.3(a)(i). Given these contractual entitlements, it would appear that the letter of 2 June 1999 with respect to Project No. 1 was an express variation of the borrowers' obligations under the first and second loan agreements. It could be construed as a waiver of any entitlement to further interest in relation to the first and second agreements, despite the 10 days lateness in payment of interest under the first contract and the need to extend the interest payment for two and a half months under the second contract. Further, all the principal repayments having been made prior to 2 June 1999, under the first and second contracts, the letter would also appear to be a waiver of any outstanding obligation in relation to repayment of the principal sums. On the other hand, it may be said that the lender merely forewent its demand for further interest; that did not show that payments had been punctually made or made "on time". That is an issue to which it will be necessary to return.
256 Mr Gardiner gave evidence of telephone conversations with Ms Edwards in which other and more particular statements were made, which were relied upon to constitute waivers of default in respect of those payments. The content of these conversations was challenged by A&R Finance and the primary judge did not accept the Appellant's version. The case for the Appellant, in relation to the payments under the first and second contracts relating to Project No. 1, must rely upon acceptance by A&R Finance that he was, by 2 June 1999, not in default under those loan agreements.
257 The real question is whether such acceptance of the payments as sufficient satisfaction of the financial obligations between it and the borrowers also satisfied the requirements for punctual payment under cl 2(d) of the indemnity agreement. There are three reasons why that conclusion may follow. The first is that A&R Finance was itself a party to the indemnity agreement and, to the extent that it waived default by a borrower under the loan agreement, it may be taken to have waived any reliance on such default by the borrower for the purposes of the indemnity agreement. Secondly, that approach is confirmed by the fact that the effect of default under the indemnity agreement is incorporated into the loan agreement, by virtue of cl 7, so that absence of default (subject to satisfaction of the other conditions) would mean that the borrower had no further liability under the loan agreement. If the lender were intending to accept the borrower's tender of payments as sufficient compliance with obligations under the loan agreement, otherwise than for the purposes of cl 7 and the operation of the indemnity agreement, that distinction should have been made clear. Nor can the indemnifier, Oceania, suggest otherwise, because it will have no obligation to make any payment to A&R Finance in respect of a borrower who has no obligation under the loan agreement.
258 The third reason is founded on the language of cl 2 of the indemnity agreement. As its terms indicate, the indemnity becomes effective and enforceable when three conditions have been met. Two are, as it were conditions precedent, namely the punctual payment of the interest and reductions of the principal sum, as discussed above. Until those amounts have been paid, the indemnity would not operate. In addition, the borrower must have ceased to carry on business for a particular reason. Further, and contemporaneously with the engagement of the indemnity, the borrower must not otherwise be in default under the loan agreement.
259 The interlocking agreements should, so far as possible, be read together, so that cl 5 of the loan agreement operated consistently with cl 2 of the indemnity agreement. Clause 5.1, set out at [182] above, is the obverse of cl 2 of the indemnity agreement. Thus, in relation to the condition in cl 2 that the borrower has "punctually paid" the interest and the reductions of capital, cl 5.1(a) permits recovery at the option of the lender if the borrower "defaults in the due and punctual payment" of interest or capital.
260 In other words, the obligation to repay the outstanding balance of the principal is conditioned on the lender opting to require repayment for default. It is doubtful whether, in the light of the conduct of the lender set out above in 1999, it would have been open to the lender in January 2002 to rely upon delay in payment to invoke cl 5.1(a). In any event, it did not purport to do so. Rather, it purported to rely upon the cessation of business as a result of the vacancy in the office of trustee and the operation of cl 46.4 of the project deed: Summons, paragraphs A.(4), B.(1)-(3), C.(11)-(19).
261 To the extent that the Appellant relied upon a verbal variation of his obligations, pursuant to telephone conversations with Ms Edwards, his Honour rejected that evidence. However, the letter of 2 June 1999, with its express reference to A&R Finance accepting a payment "as on time" up until 30 June 1999, should be understood as an extension of the time for due and punctual payment of that amount.
262 The statement that that payment "concludes your obligation in Project No. 1" is ambiguous. It may simply mean that all amounts had, by that date, been received, as opposed to an agreement that they should be treated as having been received "on time".
263 The statement is properly understood to mean that the lender would not exercise any right under cl 5.1(a) or (b) to call up the outstanding amount under the loan, for failure to make due and punctual payments. True it is that the lender could indicate such an intention without agreeing to vary the requirements of the contract, so as to treat the payments as having been made duly and punctually. On the other hand, the more limited reading of the letter would imply an intention on the part of the lender, unexpressed in the letter, that the late payments would leave the borrower at risk of a requirement to pay all outstanding moneys, together with interest calculated at the rate of 10.5% per annum even if there were a cessation of the business some 14 years later due to a matter beyond the control of the borrower. In other words, the lender would be treating the late payments as not conferring the right to call up the moneys under cl 5.1(a) and (b), but reserving the right to call them up at any time, pursuant to cl 5.1(c), on the basis that the indemnity agreement could not apply. That reading would, in my view, be entirely inconsistent with the apparent intention of the letter of 2 June 1999, which was to provide reassurance to the borrowers that they were not to be treated as in default.
264 That conclusion should apply to both the first and second loans, each of which was encompassed within the reference to obligations "in Project No. 1".
265 As already noted, the third contract, being the largest entered into by the Appellant, did not give rise to any issue with respect to due and punctual payment. The question does arise, however, in relation to the fourth contract where payment of interest was made, according to the materials before the Court, seven days late.
266 In relation to this payment, made in early June 2000, the Appellant does not seek to deny that it was late, nor does he claim any particular variation of the contractual date which was agreed to by A&R Finance. In his affidavit of 22 October 2004 (par 122) the Appellant stated that he sent the cheque in question "on or about 31 May 2000". He said he was unable to locate a copy of the cheque butt in respect of the cheque or a receipt for payment. He accepted that the cheque was presented on 9 June 2000.
267 This evidence does not support the view that the cheque was sent more than a day prior to 31 May. The history of payments indicates that where cheques were sent to A&R Finance receipts dated two working days after the date of the cheque, were routinely provided. The inference should therefore be drawn that the payment was not received on time. There was no evidence of a variation of the date for payment. Accordingly, cl 7 did not operate to avoid the liability for repayment of the amount outstanding under the fourth loan contract.
Conclusions
268 Taking into account the findings at [233] in relation to the satisfaction of cl 2(d)(i) of the indemnity agreement, and the findings at [263]-[265] that all payments under loan contracts 1, 2 and 3 were punctually made for the purposes of cl 2(a) and (b) of the indemnity agreements, the Appellant owed no obligation to pay any amount to A&R Finance under those agreements, by operation of cl 7 of the loan agreement. The judgment in favour of A&R Finance in respect of those agreements should be set aside.
D. BREACH OF FIDUCIARY DUTY
269 In addition to the construction issues, the Appellant argued there was a "second group of issues" which disentitled A&R Finance from recovering the amounts due under the loan agreement. It was said that A&R Finance was estopped from enforcing the loan agreements in circumstances where Oceania had acted in breach of its fiduciary duty to the investors, to act in their best interests.
270 As the trial judge noted, no assistance was obtained by seeking to impose a general law fiduciary duty, arising from the relationship between Oceania and the investors. That was because under the project deed, there was an express undertaking by Oceania to "perform its functions and exercise its powers under this deed in the best interests of all Farmers and not in the interests of itself or the Trustee if those interests are not the same as those of the Farmers generally": cl 33.17(a). That covenant was intended for the benefit of the investors jointly and severally: cl 33. (Similar covenants were made by the trustee: see cls 34 (chapeau) and 34.11.) The Appellant, in written submissions, sought to quibble with his Honour's refusal to invoke the general law fiduciary duty, but identified no benefits which would flow from reliance on that source of obligation, rather than on the contract. In any event, for the reasons noted below, nothing turns on that point.
271 The Appellant's substantive argument turned on two factual allegations. The first was that Oceania in effect conspired with GCC and Mr Claude Cassegrain to terminate the projects in circumstances which would result in the investors remaining liable under their loan agreements, without the benefit of the indemnity. This would result in a substantial recovery by A&R Finance and, through its loan arrangements with A&R Finance, by Oceania. A&R Finance was, it was contended, party to this scheme and was liable to equitable relief to prevent it taking steps to enforce repayment obligations under the loan agreements.
272 It will be seen that this contention also depends, in a significant respect, on the operation of the indemnity agreement discussed above. To the extent that the construction arguments adopted above result in the alleged scheme failing in its purpose, no relief is necessary. To the extent that those investors who could no longer rely on the indemnity because of their own failures in relation to punctual payment might be caught by the scheme, such a result would have been largely incidental to the breach of duty.
273 The second way in which a breach was alleged, was the payment away by Oceania of substantial sums in favour of GCC and Endwise (to which it was not legally indebted) and to A&R Finance, to provide the funds for further investors. To the extent that these actions involve dereliction of duty, they too fail to cause immediate loss to the investors who continued to enjoy the protection of their indemnity agreements. On the other hand, they may have adversely affected the interests of those investors who did not enjoy an indemnity, either because they had not entered into an indemnity agreement, or because they had not maintained punctual payments, because they would become liable to repayment of outstanding loan amounts. The Appellant fell within this class, in relation to his fourth loan agreement.
274 There remains a causal link to be established in order to demonstrate that a relevant loss followed from the breach of duty (assuming for present purposes that there was such a breach). The direct cause of termination of the projects was the appointment by the trustee of an administrator, which triggered the entitlement of Oceania to call for its resignation. Having taken that step, Oceania then sought a replacement trustee, but was unable to make an appointment within the 60 days provided for that to happen, under the project deed.
275 In relation to the first step, the evidence did not establish that the appointment by the trustee of an administrator to its business was in any way related to the shortage of funds with respect to the projects.
276 The second step in the chain of causation was the request by Oceania that the trustee retire pursuant to cl 37.1(a) of the project deed. It was not shown that Oceania made that request acting otherwise than in the best interests of the investors. Indeed, as the evidence set out above at [168] suggests, the preferred course being taken by Oceania was to obtain the trustee's consent to termination of the projects. As noted, ARG was either not willing or unable to give that consent, but that is insufficient evidence to establish that the request to retire was not a proper request.
277 The third step in the chain of causation was the failure to appoint a new trustee. Oceania took appropriate steps to advertise for a replacement trustee, and two parties appear to have expressed interest. Why that interest was not pursued, is simply not known. It may be that agents of Oceania took steps which discouraged a replacement coming forward, on the basis of its own impecuniosity. However, an equally available inference is that the prospective replacement trustees formed the same view as those in control of Oceania as to the long-term viability of the projects.
278 In my view, the evidence relied on by the Appellant does not establish that the projects were terminated as a result of any conduct engaged in by Oceania in breach of its obligation to act in the best interests of the investors. Accordingly, other issues relating to this basis of defence and cross-claim need not be addressed.
E. REPRESENTATIONS BY MR LLOYD
279 The Appellant accepted that the core representation given by Mr Lloyd and relied upon was in relation to the operation of the indemnity so identified by the trial judge at [83]. He also accepted that this issue would only arise if he failed on the contractual claim, because it would be that result which would render the representation false. That concession was made because the representation relevantly addressed the circumstances in which the indemnity would be available generally in relation to the project, and not by reference to individual obligations, such as punctual payment. As, on my view, the Appellant succeeds on the contractual construction points, the Lloyd representations need not be addressed.
F. PROSPECTUS CLAIMS
280 The investments in project 1 were, as noted above, "prescribed interests" for the purposes of the Corporations Law. Changes were made to the Corporations Law by the Managed Investments Act 1998 (Cth), which commenced on 1 July 1998. Both projects 1 and 2 were the subject of prospectuses lodged prior to that date and the relevant obligations of the trustee and the manager have been treated as subject to the pre-July 1998 law: see Corporations Law, s 1454(1), inserted by the Managed Investments Act.
281 Section 995 of the Corporations Law made it an offence for a person in, or in connection with, any prospectus issued in relation to securities to engage in conduct that is misleading or deceptive or is likely to mislead or deceive: s 995(2). Further, s 996 relevantly provided:
"996 Misstatement in, or omission from, lodged prospectus
(1) A person must not authorise or cause the issue of a prospectus in relation to securities of a corporation if:
(a) the prospectus has been, or is required to be, lodged under Part 7.12; and
(b) either:
(i) a material statement in the prospectus is false or misleading; or
(ii) there is a material omission from the prospectus."
282 Investments may be made on the basis of information contained in a prospectus over a period of time. During that period, the corporation may become aware of information of which it was not aware at the time the prospectus was lodged or become aware that there have been changes in circumstances since the prospectus was lodged. These eventualities were dealt with under the Corporations Law in the following provisions:
" 1023B Correction of false or misleading statements etc. in prospectus by a supplementary or replacement prospectus
(1) This section applies if a prospectus relating to securities of a corporation has been lodged and the corporation becomes aware, during the application period in relation to the prospectus, that the prospectus is deficient because:
(a) it contains a material statement that is false or misleading; or
(b) there is a material omission from the prospectus. [Note omitted]