Pursuit Minerals Limited, in the matter of Pursuit Minerals Limited

In the matter of Pursuit Minerals Limited, the plaintiff applied to the court for relief under section 1322(4) of the Corporations Act 2001 (Cth), seeking to validate the on-sale of shares by the vendor shareholders without the required disclosure. The dispute arose from the issuance of 16,100,045 shares by the plaintiff in June 2018, and the subsequent failure to issue a valid cleansing notice under section 708A of the Corporations Act. The plaintiff sought to avoid invalidating the sales of these shares and to relieve the sellers from any civil liability arising from the failure to comply with certain disclosure obligations under the Act.

The court was required to determine whether the failure to issue a valid cleansing notice and the resulting non-compliance with disclosure obligations by the vendor shareholders could be validated under section 1322(4) of the Act. The court also had to consider whether the omission by the company was inadvertent and whether the five day rule, a requirement under section 708A(5)(e) of the Act, could be satisfied. The key issue was whether the five day rule, which requires that the company's shares must not have been suspended from quotation for more than five days in the 12 months preceding the date of issue, could be met despite the fact that the shares had been suspended for more than five days prior to the relisting.

The court found that the omission by the company was inadvertent and that the five day rule could not be satisfied because the relevant period included the period prior to the relisting of the shares on the Australian Securities Exchange (ASX). Despite this, the court granted the plaintiff's application under section 1322(4) of the Corporations Act, declaring that any offer for sale or sale of the shares during the relevant period was not invalid due to the failure to issue a valid cleansing notice and the consequent failure to comply with certain disclosure obligations. The court also relieved the sellers from any civil liability arising out of the contravention of sections 707(3) and 727(1) of the Act.

The court ordered that any offer for sale or sale of the quoted securities during the specified period was not invalid due to the failure to issue a valid cleansing notice and the sellers' consequent failure to comply with certain disclosure obligations. The sellers were relieved from any civil liability arising out of the contravention of sections 707(3) and 727(1) of the Corporations Act. The plaintiff was directed to publish an announcement on the ASX including a copy of the orders, and to request the ASX for the class of securities 'PUR' to be reinstated. Any person who claimed to have suffered substantial injustice by the making of any or all of these orders had liberty to apply to vary or to discharge them within 28 days from the date of reinstatement by the ASX of the class of securities 'PUR' and the publication of these orders on the ASX website. There were no orders as to costs.