Former real estate agent Stuart Pope fronted a test case for multiple investors seeking compensation for their failed investment in digital billboards promoter iSEE Digital. Profit projections in a pre-investment information memorandum proved wildly overstated. The claim failed. An extensive disclaimer excused liability for inaccuracies.
In 2017, Mr Pope and his spouse invested in a billboard purchase and leaseback deal put together by iSEE Digital (2012) Ltd. He had recently sold his Mike Pero real estate franchise.
On offer was the chance to buy a share in specific electronic billboards yet to be installed throughout New Zealand, this share in each billboard to be leased back to iSEE who would manage and sell advertising space.
The promised beauty of this system was that billboards were to be monitored centrally, with digital advertisements readily updated remotely.
It was later to come out in evidence in the High Court that revenue came to be impacted both by software glitches affecting remote operation of individual billboards and what turned out to be a limited number of customers placing advertisements.
Buy-in prices depended on size and location of proposed billboards.
Returns promised to investors included a return on the leaseback plus a share of net profits on advertising revenue earned on the billboard purchased.
Mr Pope invested in two Auckland billboards at a cost of $370,000. His all-up return was dismal: $3650.
Attempts to restructure the business in 2019, by merging with rival Lighthouse Digital, only saw their merged operations going into liquidation.
Through their family investment company, Freedom Digital Marketing Ltd, the Popes sued iSEE’s John Moore alleging negligence.
Freedom alleged profit projections contained in the investor information memorandum were negligently compiled.
Before investing, Mr Pope had questioned projections indicating a sixty per cent return on investment in year one; 180 per cent in year two.
He contacted Mr Moore who said that even if projected income in year one was reduced by 75 per cent, a return on investment of nearly fifteen per cent was possible.
Employed by iSEE as chief financial officer, Mr Moore himself invested in iSEE’s billboard purchase and leaseback scheme.
For investors, returns proved to be close to zero.
In the High Court, Justice Blanchard ruled that disclaimer wording featuring prominently at the front of the investors’ information memorandum made it clear there was no liability falling on iSEE or its staff and directors for any inaccuracy in financial information provided either in the memorandum or by subsequent enquiry.
This wording barred any claim for negligence.
Investors did not succeed with their argument that projections were so inaccurate that there was no reasonable basis for them.
iSEE’s business was a new one. It had a very limited track record.
Freedom Digital as an investor knew there was risk that the investment could be a total failure, Justice Blanchard said.
Freedom Digital Marketing Ltd v. Moore – High Court (11.12.25)
26.048