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HSF fends off Vic Supreme Court challenge
Herbert Smith Freehills has triumphed in the Victorian Supreme Court this week, following a lengthy battle against its former client United Petroleum and national law firm Gilbert + Tobin.
Emma Musgrave
Victorian Supreme Court judge the Honourable Justice James Elliott has dismissed claims made by United Petroleum against Herbert Smith Freehills relating to United’s attempted initial public offering in late 2016.
In the case United Petroleum Australia Pty Ltd v Herbert Smith Freehills, the court heard from several law firms. HSF was represented by Clyde & Co, United was represented by Gilbert + Tobin, and former non-executive chairperson of United Holdings Martin Hudson was represented by Wotton + Kearney.
The court heard United co-founders Avi Silver and Eddie Hirsch accuse HSF of being responsible for the company’s failed float plans in October 2016, during the time HSF partner Michael Ziegelaar was acting as its legal adviser.
Court documents show HSF sued United in early 2017 for fees it claimed were outstanding for its counsel. United then counterclaimed, alleging that the company was entitled to a disappointment discount, according to court documents.
United alleged that the IPO process ceased on 23 October 2016, because HSF “failed to perform its obligations and breached its duties, including by assisting the non-executive directors to bring the process to a halt”.
However the judgement ruled in favour of HSF, citing that United did not perform in accordance with the agreed timetable, and information essential to the completion and verification of the financials had not been provided to HSF.
"It is incontrovertible that [United co-founder Avi] Silver and United failed to produce the financials in accordance with the agreed timetable, and that was the principal, if not sole, reason why the process was behind schedule in this regard," Justice Elliot said in handing down his decision.
“It is also incontrovertible that, in October 2016, Silver was told of, and appreciated, the need to meet the deadlines if the public offering was to proceed in 2016."
The judgment upheld that, in relation to the failed claims by United, HSF “acted appropriately and in accordance with its duties at all material times”.
“United’s case against Herbert Smith Freehills was unsuccessful on all counts,” HSF regional managing partner (Australia) Andrew Pike said.
“The judgment is a complete vindication of the firm and, in particular, of our respected partner and joint head of Australian equity capital markets, Michael Ziegelaar.”
Mr Pike added that the case “demonstrated the importance of the need for professional advisers to provide principled advice and to exercise solid judgment and expertise in challenging circumstances”.
Commenting further, Mr Ziegelaar said: “I am very pleased with the outcome”.
“Our firm’s handling of this complex and difficult matter was subject to intense scrutiny and the Supreme Court’s decision shows that we acted with professional integrity and complied with our duties at all times.
“I would like to thank my colleagues, clients, friends and family for their support during this case,” he concluded.
Lawyers Weekly approached Gilbert + Tobin for comment however the firm did not provide an official statement.
United Petroleum were also contacted however failed to provide comment by deadline.
Emma Musgrave
Emma Musgrave (née Ryan) is the managing editor, professional services at Momentum Media.
Emma has worked for Momentum Media since 2015, including five years spent as the editor of the company's legal brand - Lawyers Weekly. Throughout her time at Momentum, she has been responsible for breaking some of the biggest stories in corporate Australia. In addition, she has produced exclusive multimedia and event content related to the company's respective brands and audiences.
Prior to joining Momentum Media, Emma worked in breakfast radio, delivering news to the Central West region of NSW, before taking on a radio journalist role at Southern Cross Austereo, based in Townsville, North Queensland.
She holds a Bachelor of Communications (Journalism) degree from Charles Sturt University.
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