Re Arizona Lithium Ltd - [2021] WASC 446

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE ARIZONA LITHIUM LTD; EX PARTE ARIZONA LITHIUM LTD [2021] WASC 446
CORAM:   HILL J
HEARD:   23 NOVEMBER 2021
DELIVERED          :   23 NOVEMBER 2021
PUBLISHED           :   10 DECEMBER 2021
FILE NO/S:   COR 201 of 2021
MATTER:   IN THE MATTER OF ARIZONA LITHIUM LTD

EX PARTE
ARIZONA LITHIUM LTD
Plaintiff

Catchwords:

Corporations law - Securities - Application for declaratory relief to validate trading in securities issued without a valid cleansing prospectus - Two instances of securities being issued without a valid cleansing prospectus - Where no blatant or flagrant disregard of obligations - Where no substantial injustice if orders made - Application granted

Legislation:

Corporations Act 2001 (Cth), s 707, s 708A, s 727, s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

M Holler & D Hird

Solicitors:

Plaintiff

Steinepreis Paganin

Case(s) referred to in decision(s):

Re Bellevue Gold Ltd [2021] WASC 80
Re Caeneus Minerals Ltd [2018] FCA 560
Re Classic Minerals Ltd [2018] FCA 2039
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re ICandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396

HILL J:

On 18 November 2021, the plaintiff, Arizona Lithium Ltd (Arizona), filed an originating process seeking orders under s 1322(4)(a) of the Corporations Act 2001 (Cth) (Act) relating to contraventions of s 708A(11), s 707(3) and s 727(1) of the Act. The contraventions occurred as a result of sales of securities following two separate instances of securities being issued by the plaintiff on 10 November and 11 November 2021 without a valid cleansing prospectus pursuant to s 708A(5)(e) of the Act.
Arizona has provided a frank and detailed explanation as to the circumstances surrounding the issue of these securities. Based on the evidence before me, I was and am satisfied that the failure to issue a cleansing prospectus was caused by inadvertence rather than any deliberate disregard of the plaintiff's obligations.
In light of the urgency with which the application was brought, I made orders at the conclusion of the hearing on 23 November 2021 granting the relief sought and said that I would subsequently publish reasons for my decision. These are the reasons for my decision.

Part 6D.2 of the Corporations Act

Part 6D.2 of the Act imposes disclosure obligations in relation to the issue and sale of securities. In certain circumstances, these obligations can be satisfied by lodging what is commonly referred to as a cleansing notice or a prospectus.[1] If disclosure has not been made by the issuer and the securities are on-sold within 12 months, the party to whom the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Arizona Lithium Ltd

Details

AGLC: Re Arizona Lithium Ltd [2021] WASC 446
Case: [2021] WASC 446
Decision Date: 10 DECEMBER 2021

CaseChat Overview and Summary

In the Federal Court of Australia, the matter of Re Arizona Lithium Ltd was heard. The applicant, Arizona Lithium Ltd, sought declaratory relief to validate the trading in securities that were issued without a valid cleansing prospectus. This was because the company had issued securities on two occasions without ensuring that a valid cleansing prospectus was in place. The court was required to determine whether the applicant's actions constituted a blatant or flagrant disregard of its obligations under the Corporations Act and whether it would be substantially unjust to grant the relief sought by the applicant. The court considered the applicant's compliance with other statutory requirements and the lack of any prejudice to investors or the market. The court found that there was no blatant or flagrant disregard of obligations and that it would not be substantially unjust to grant the orders sought by the applicant. Therefore, the court granted the application for declaratory relief to validate the trading in the securities.
The court held that the applicant's failure to issue a valid cleansing prospectus did not amount to a blatant or flagrant disregard of its obligations under the Corporations Act. The court noted that the applicant had taken steps to comply with other statutory requirements and that there was no evidence of any prejudice to investors or the market. The court also found that it would not be substantially unjust to grant the orders sought by the applicant, as the interests of justice would be best served by validating the trading in the securities. The court further held that the relief sought by the applicant would not undermine the statutory scheme or the protections afforded to investors under the Corporations Act. The court concluded that the applicant's application for declaratory relief should be granted.

Orders