Section 39
Civil liability for misstatement in prospectus or product disclosure statement
A person who subscribes for or purchases any interest and suffers loss or damage as a result of any statement or information contained in a prospectus or product disclosure statement that is false or misleading or any statement or information contained in a
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prospectus from which there is a material omission may recover the amount of loss or damage from the following persons:
(a)
the management company and each director of the management company at the time of the issue of the prospectus, for any loss or damage;
(b)
the person who consented or caused himself to be named and is named in the prospectus as a director or as having agreed to become a director, either immediately or after an interval of time, for any loss or damage;
(c)
a promoter, for any loss or damage in respect of the prospectus or the relevant part of the prospectus for which he is involved in the preparation;
(d)
a person named in the prospectus with his consent as having made a statement that is included in the prospectus or on which a statement made in the prospectus is based, for any loss or damage caused by the inclusion of the statement in the prospectus; or
(e)
a person who authorized or caused the issue of a prospectus in contravention of section 40, for any loss or damage caused by such contravention.
(2)
No person shall be liable under subsection (1) if he proves that—
(a)
having consented to become a director of the management company, he withdrew his consent before the issue of the prospectus, and that the prospectus was issued without his authority or consent;
(b)
the prospectus was issued without his knowledge or consent and he gave reasonable public notice after he becomes aware of its issue;
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(c)
after the issue of the prospectus and before allotment or sale of the interest, he withdrew his consent after he becomes aware of any false or misleading statement in the prospectus and gave reasonable public notice of the withdrawal together with his reasons; or
(d)
in relation to every false or misleading statement—
(i)
he had reasonable ground to believe that the statement was true up to the time of the allotment or sale of the interests;
(ii)
purporting to be a statement, or based on a statement, or contained in what purports to be a copy of or extract from a report of valuation, of an expert, and that he has reasonable ground to believe that the person making the statement is an expert and competent to make a true statement up to the time of the issue of the prospectus and that person has given the consent required under section 33 to the issue of the prospectus and has not withdrawn that consent before delivery of a copy of the prospectus for registration or before any allotment or sale pursuant to the prospectus;
and
(iii)
purporting to be a statement made by an official or contained in what purports to be a copy of or extract from a public official document, the statement was a true and fair representation of the statement or copy of or extract from the document.
(3)
Subsection (2) shall not apply in the case of a person liable, by reason of his having given a consent required of him under section 33, as a person who has authorized or caused the issue of the prospectus in respect of a false and misleading statement purporting to have been made by him.
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(4)
A person who apart from this subsection would under subsection (1) be liable, by reason of his having given a consent required by him under section 33 as a person who has authorized the issue of a prospectus in respect of a false or misleading statement purporting to be made by him shall not be liable if he proves that—
(a)
he had withdrawn his consent in writing before a copy of the prospectus was lodged with the Registrar;
(b)
after a copy of the prospectus was lodged with the
Registrar and before allotment or sale of the interests, he withdrew his consent in writing after he becomes aware of the false or misleading statement and gave reasonable public notice of the withdrawal together with the reason;
or
(c)
he was competent to make the statement and that he had reasonable ground to believe that the statement is true up to the time of the allotment or sale of the interests.
(5)
Where—
(a)
the prospectus contains the name of a person as a director of the management company, or a person who has agreed to become a director but has not given his consent to become a director, or has withdrawn his consent before the issue of the prospectus, and has not authorized or consented to the issue of the prospectus; or
(b)
the consent of a person is required under section 33 to the issue of the prospectus and he either has not given the consent or has withdrawn the consent before the issue of the prospectus, the directors of the management company except those without whose knowledge or consent the prospectus is issued, and any other person who authorized or caused the issue in respect of the prospectus shall be liable to indemnify the person so named or whose
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consent is required against all damages, costs and expenses to which he may be made liable by reason of his name having been inserted in the prospectus or of the inclusion in the prospectus of a statement purporting to be made by him, or in defending himself against any action or legal proceeding brought against him in respect of the prospectus.
(6)
This section shall be applicable to product disclosure statement issued by a management company and any references to
“prospectus” shall be construed as references to “product disclosure statement”.