A Guide to the Law of Securitisation in Australia - Clayton Utz

3.3.8 DisclaimersTheir use in an information memorandumAn information memorandum almost always contains a detaileddisclaimer of liability. This is usually found in the ImportantNotice section at the front of the information memorandum.Disclaimers vary in their language, but usually fall into one oftwo classes:• often, but not always, the information memorandum containsan express denial of liability in respect of representations orstatements contained in it.• usually investors will be directed to make and rely upon theirown inquiries in relation to the securities on offer.Disclaimers as a means of avoiding a contraventionIt is clear that a disclaimer cannot oust section 52 of the TPA(and presumably sections 1041H of the Corporations Act and12DA of the ASIC Act). Where a person engages in misleadingor deceptive conduct through a defective informationmemorandum, a disclaimer as in the first disclaimer above, willbe ineffective.Using disclaimers to eliminate relianceSections 1041I of the Corporations Act and 12GF of the ASIC Acteach require that a plaintiff establish a causal connectionbetween the misleading and deceptive conduct and the lossclaimed (“loss or damage by conduct of another person”).The second class of disclaimer referred to above seeks toeliminate the causal connection between the misleading ordeceptive conduct and the alleged damage, by advising intendinginvestors that they must not rely on the informationmemorandum.Although there are some authorities in support of the secondclass of disclaimer, a consistent and uniform judicial approachhas yet to emerge on this issue. It is likely that the courts wouldbe more prepared to uphold such a disclaimer where therecipient, as with a capital markets issue, is sophisticated.However, it is equally likely that a court’s approach will also beinfluenced by its assessment of how practical it would have beenfor an investor to rely on its own inquiries. If the court takes theview that an investor could not have reasonably implemented thedirection in the disclaimer, then it probably will not give effect toits terms.3.4 ConclusionThe Corporations Act and the ASIC Act (and other similarlegislation) impose substantial civil consequences on thoseresponsible for the preparation of a defective informationmemorandum. Securitisers need to be particularly mindful ofthese and to institute procedures for the preparation of aninformation memorandum in a systematic manner to ensure itscompleteness and accuracy. It is only by these means that therisks for securitisers from defective information memorandumswill be minimised.The next two sections of this publication deal with some of therevenue impacts on securitisation. These are stamp duty (section4) and tax (section 5).23