314. Liability on prospectus
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(1) Subject to this section, each of the following designated persons is, for any loss or damage sustained by other persons who, on the faith of a prospectus, subscribe for, or purchase any shares or debentures, liable for any loss or damage sustained by those other persons by reason of any untrue statement in the prospectus, or by reason of the wilful non-disclosure in the prospectus of any matter of which the designated person had knowledge and that he or she knew to be material, namely—
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(a) a person who is a director of the company at the time of the issue of the prospectus;
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(b) a person who authorised or caused himself or herself 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;
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(c) an incorporator of the company; or
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(d) a person who authorised or caused the issue of the prospectus.
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(2) Despite subsection (1), where the consent of an expert is required to the issue of a prospectus and he or she has given that consent, he or she is not, by reason only of the consent, liable as a person who has authorised or caused the issue of the prospectus, except in respect of an untrue statement purporting to be made by him or her as an expert; and the inclusion in the prospectus of a name of a person as a trustee for debenture holders, auditor, banker, attorney-at-law, transfer agent or stockbroker may not, for that reason alone, be taken as an authorisation by him or her of the issue of the prospectus.
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(3) A person is not liable under subsection (1) who—
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(a) having consented to become a director of the company, withdrew his or her consent before the issue of the prospectus and the prospectus was issued without his or her authority or consent;
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(b) when the prospectus was issued without his or her knowledge or consent, gave reasonable public notice of that fact after he or she became aware of its issue;
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(c) after the issue of the prospectus and before allotment or sale under it, became aware of an untrue statement in it and withdrew his or her consent, and gave reasonable public notice of the withdrawal of his or her consent and the reasons for it; or
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(d) as regards every untrue statement not purporting to be made on the authority of an expert or of a public official document or statement, had reasonable ground to believe and did, up to the time of the allotment or sale of the shares or debentures, believe that the statement was true.
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(4) A person is not liable under subsection (1), if—
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(a) as regards every untrue statement purporting to be a statement made by an expert or to be based on a statement made by an expert, it fairly represented the statement, or was a correct and fair copy of, or extract from, the report or valuation and that person had reasonable ground to believe and did, up to the time of the issue of the prospectus, believe that the expert making the statement was competent to make it, and had given his or her consent as required under section 313 to the issue of the prospectus and had not withdrawn that consent before delivery of a copy of the prospectus for registration, nor had the expert, to that person's knowledge, withdrawn that consent before allotment or sale under the prospectus; or
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(b) as regards every untrue statement purporting to be a statement made by an official person or contained in what purports to be a copy of, or extract from, a public official document, it was a correct and fair representation of the statement or copy of, or extract from the document.
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(5) Subsections (3) and (4) do not apply in the case of a person liable, by reason of his or her having given a consent required of him or her by section 313, as a person who has authorised or caused the issue of the prospectus in respect of an untrue statement purporting to have been made by him or her as an expert.
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(6) A person who, apart from this subsection, would be liable under subsection (1), by reason of his or her having given a consent required of him or her by section 313 as a person who has authorised or caused the issue of a prospectus in respect of an untrue statement purporting to be made by him or her as an expert, is not liable, if—
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(a) having given his or her consent under that section to the issue of the prospectus, he or she withdrew his or her consent in writing before a copy of the prospectus was lodged with the Registrar;
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(b) after a copy of the prospectus was lodged with the Registrar and before allotment or sale under the prospectus, he or she, on becoming aware of the untrue statement, withdrew his or her consent in writing and gave reasonable public notice of the withdrawal and of the reasons for the withdrawal; or
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(c) he or she was competent to make the statement and had reasonable ground to believe, and did, up to the time of the allotment or sale of the shares or debentures, believe that the statement was true.
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(7) When—
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(a) a prospectus contains the name of a person as a director of the company, or as having agreed to become a director, and he or she has not consented to become a director, or has withdrawn his or her consent before the issue of the prospectus and has not authorised or consented to its issue; or
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(b) the consent of a person is required under section 313 to the issue of a prospectus and he or she either has not given the consent or has withdrawn it before the issue of the prospectus,
any person who authorised or caused the issue of the prospectus and the directors of the company, other than those directors without whose knowledge or consent the prospectus was issued, are liable to indemnify the person so named, or whose consent was so required, against all damages, costs and expenses to which he or she might be liable by reason of his or her name having been inserted in the prospectus, or of the inclusion of a statement purporting to be made by him or her as an expert, or in defending himself or herself against any action or legal proceedings brought against him or her in respect thereof.
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