The High Court, by a 6-1 majority, in Sons of Gwalia Ltd v Margaretic; ING Investment Management LLC v Margaretic [2007] HCA 1 has dismissed the appeals from the decision of the Full Court of the Federal Court of Australia in Sons of Gwalia Limited (Subject to Deed of Company Arrangement) v Margaretic [2006] FCAFC 17 which affirmed that an on-market purchaser (as opposed to a subscribing shareholder) of shares can in a winding up prove for damages against the company for the misrepresentation which induced the purchase and so have claims in damages or for compensation for contraventions of s 52 of the Trade Practices Act 1974 (Cth), s 1041H of the Corporations Act 2001 (Cth) or s 12DA of the Australian Securities and Investments Commission Act 2001 (Cth).

The High Court held that the right of a shareholder to prove for damages against the company for the misrepresentation was not governed by
s 563A of the Act which postpones all members’ rights on a winding up until all creditors have been paid.