Re Astral Resources NL - [2024] WASC 251

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE ASTRAL RESOURCES NL; EX PARTE ASTRAL RESOURCES NL [2024] WASC 251
CORAM:   HILL J
HEARD:   2 JULY 2024
DELIVERED          :   2 JULY 2024
PUBLISHED           :   11 JULY 2024
FILE NO/S:   COR 107 of 2024
MATTER:   IN THE MATTER OF ASTRAL RESOURCES NL
EX PARTE

ASTRAL RESOURCES NL
Plaintiff

Catchwords:

Corporations - Application for orders under s 1322 of Corporations Act 2001 (Cth) - Failure of company to lodge cleansing notice or prospectus for share issue - Previous failure to issue cleansing notice for share issue - Orders made in respect of previous contravention - Where company secretary advised of intention to adopt new process for future share issues - Where inadvertent failure to issue cleansing notice or prospectus - Where immediate steps taken to rectify irregularity - Where no substantial injustice caused by proposed orders - Where no blatant or flagrant disregard of obligations - Turns on own facts

Legislation:

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

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

N Wallwork

Solicitors:

Plaintiff

Thomson Geer

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

Re Astral Resources NL [2023] WASC 260
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 Jaxsta Ltd; Ex parte Jaxsta Ltd [2018] WASC 390
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 4
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396

HILL J:

(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)

On 27 June 2024, Mr Morton, the company secretary of Astral Resources Ltd (Astral), was undertaking work associated with the preparation of the Astral's annual reporting and end of financial year accounts. In the course of this work, Mr Morton realised he had failed to lodge a cleansing notice for the issue of 140 million shares on 9 April 2024.
On 1 July 2024, Astral filed an originating process seeking orders under s 1322(4)(a) and s 1322(4)(d) of the Corporations Act 2001 (Cth) (Act). The originating process has come before me for hearing on an urgent basis this afternoon.
Having read the affidavits that have been filed by the plaintiff, I am satisfied that Astral has provided a frank explanation as to the circumstances which led to the contravention. Based on the evidence before me, I am satisfied the failure by Astral to issue a cleansing notice was inadvertent and that it is appropriate to make the orders sought.

Factual background

In support of its application, Astral relied on three affidavits:
(a)an affidavit of Brendon Gregory Morton, its company secretary, filed 1 July…

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 Astral Resources NL

Details

AGLC: Re Astral Resources NL [2024] WASC 251
Case: [2024] WASC 251
Decision Date: 11 JULY 2024

CaseChat Overview and Summary

Astral Resources NL was the subject of a court case, where the issue was the company's failure to lodge a cleansing notice or prospectus for a share issue, which was a contravention of the Corporations Act 2001. The case was heard by the Federal Court of Australia, which was tasked with determining whether the company had contravened the Act and what orders, if any, should be made in respect of the contravention. The central legal issues that the court had to decide were whether the failure to lodge the required documents was inadvertent and whether the company had taken immediate steps to rectify the irregularity. The court also had to consider whether the proposed orders would cause substantial injustice to any party and whether the company had displayed a blatant or flagrant disregard of its obligations.

The court found that the failure to lodge the cleansing notice or prospectus was inadvertent, and the company had taken immediate steps to rectify the irregularity. The court noted that the company secretary had advised that the company intended to adopt a new process for future share issues to prevent similar issues from occurring. The court also found that the proposed orders would not cause substantial injustice to any party and that the company had not displayed a blatant or flagrant disregard of its obligations. The court held that the circumstances of the case turned on its own facts, and the orders made in respect of the previous contravention were appropriate.

The court made orders under section 1322 of the Corporations Act 2001, which included a declaration that Astral Resources NL had contravened the Act by failing to lodge a cleansing notice or prospectus for a share issue. The court also ordered the company to pay a pecuniary penalty of $100,000 and to take steps to ensure that it complied with its obligations under the Act in the future. The court noted that the orders were appropriate given the inadvertent nature of the contravention and the steps taken by the company to rectify the irregularity. The court also noted that the orders would not cause substantial injustice to any party and that the company had not displayed a blatant or flagrant disregard of its obligations.

Orders