huntleys view of legal case

To quote from the latest report

"Judgment in the case involving UWA, founder and former Chairman Bruce Gray and SRX is yet to be delivered despite the hearing finishing in July 2007. This suggests an unusual degree of complexity. We do not think this increases the risk of an unfavourable outcome for SRX, although we continue to warn that that there could be an impact on SRX such as the requirement to pay a small sales royalty to UWA. In simple terms the case is to determine whether Bruce Gray developed the SIR-Sphere technology while working at UWA and if so whether UWA has a claim to it and the nature of any such claim.


At its listing in 2000 Gray assigned the technology to SRX in return for a 36% stake. UWA raised no objection for a number of years but then in 2004 issued proceedings against Gray, SRX, and the Cancer Research Institute, claiming beneficial ownership of a number of inventions allegedly developed by Dr Gray in the course of his employment at UWA, and owned by SRX. "Laches defence" prevents a plaintiff from pursuing a claim after an unreasonable length of time and may be relevant in this case. In our opinion there is a small chance the technology assets will revert to the University, which would probably then license it back to SRX. The company would then likely be in a position to recover Gray's shareholding.


We emphasise we are not legal experts and may have significantly misjudged the risk to SRX constituted by the action. We are encouraged by savvy fund manager Hunter Hall's periodically and considerably increasing its holding - now at 26% - during the case.


The case has been a significant drain on management time and has cost SRX over $4m in legal fees. Victory would probably see recovery of a large proportion of this cost."