Prospectus liability for misleading statements cannot be avoided by non-compliance with filing requirements.

A document inviting the public to subscribe for shares is a prospectus if it falls within the statutory definition, and liability for misleading or untrue statements attaches to directors and persons authorising the issue. That liability under the compensation provision is not limited by separate filing or registration requirements, and a defendant cannot avoid responsibility by relying on non-compliance with those requirements. On that basis, the plaintiff succeeded on the prospectus claim, the defendant was held liable under the statute, and the trial decree was restored with costs.

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Issues: Whether Exhibit A was a prospectus within the meaning of the Companies Act and whether the defendant, as a director and authorised issuer, was liable to compensate the plaintiff under the statutory provision notwithstanding non-compliance with the filing requirements.

Analysis: Exhibit A invited the public to subscribe for shares and therefore fell within the statutory definition of a prospectus. The statutory liability attached to every director at the time of issue and to every person authorising the issue where subscription was obtained on the faith of misleading or untrue statements. The filing and registration requirements governing prospectuses did not control or limit that liability. A person could not escape liability under the compensation provision by relying on his own failure to comply with the separate registration requirement, and the document remained a prospectus for the purposes of the liability section even if it had not been filed in the manner contemplated by the registration provisions.

Conclusion: The plaintiff was entitled to succeed on the basis of the prospectus claim, and the defendant was liable under the statutory provision.

Final Conclusion: The appellate decree was set aside, the trial decree was restored, and the plaintiff obtained relief with costs throughout.

Ratio Decidendi: A document inviting subscription is a prospectus if it falls within the statutory definition, and liability for misleading statements in such prospectus cannot be avoided by non-compliance with the separate filing or registration requirements.

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