Entertainment Publications of Australia Pty Ltd v Australian Securities and Investments Commission

Entertainment Publications of Australia Pty Ltd, the plaintiff, was involved in a legal dispute with the Australian Securities and Investments Commission, the defendant, concerning the company's compliance with financial reporting and lodging requirements under Part 2M.3 of the Corporations Act 2001. The case centred on the inadvertent failure of the plaintiff to comply with certain conditions of the ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, which provides relief from certain financial reporting obligations for wholly-owned companies that are parties to a deed of cross-guarantee. The plaintiff sought relief under section 1322 of the Corporations Act, which allows the court to grant relief from civil liability for inadvertent or minor non-compliance.

The primary legal issues before the court were whether the plaintiff's inadvertent failure to comply with the conditions of exemption warranted relief under section 1322 of the Corporations Act and, if so, the appropriate scope of such relief. The court needed to determine whether the relief was limited to the inadvertent failure to comply with the conditions of exemption or whether it could extend to other related compliance failures. Additionally, the court had to decide on the appropriate relief, including any extension of time for compliance and relief from civil liability.

The court found that the purpose of Instrument 2016/785 was to enable a closed group of companies to prepare and lodge financial statements on a consolidated basis where each company was a party to a deed of cross-guarantee. The court acknowledged that the plaintiff's failure to comply with certain conditions of the instrument was inadvertent and granted relief under section 1322 of the Corporations Act. The relief included an extension of time for the plaintiff to lodge certain notices and relief from civil liability for the inadvertent failures to comply with specific conditions of the instrument and related financial reporting obligations. The court considered the rationale for the instrument and the need to balance the interests of creditors and other stakeholders with the practicalities of financial reporting for wholly-owned companies within a group.

The court made orders extending the time for the plaintiff to lodge a Form 389 Opt-in Notice and a Form 399 Opt-out Notice, and relieving the plaintiff and its directors and officers from civil liability in respect of various compliance failures. The court also granted relief from compliance with certain financial reporting obligations for the 2017-2018 and 2018-2019 financial years. The relief was tailored to address the inadvertent nature of the non-compliance and to promote compliance with the intended purpose of the ASIC instrument.