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Re Astral Resources Nl

Re Astral Resources Nl

Case [2023] WASC 260 14 July 2023

Corporate Compliance

Dishonest Assistance

Company Secretary Duties

Remedial Orders

Cleansing Prospectus

Substantial Injustice

Corporate Law & Governance

Type to search within this case.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE ASTRAL RESOURCES NL; EX PARTE ASTRAL RESOURCES NL [2023] WASC 260
CORAM:   LUNDBERG J
HEARD:   11 JULY 2023
DELIVERED          :   14 JULY 2023
FILE NO/S:   COR 112 of 2023
MATTER:   IN THE MATTER OF ASTRAL RESOURCES NL
EX PARTE

ASTRAL RESOURCES NL
Plaintiff

Catchwords:

Corporations Law - Securities - Single failure to issue a cleansing notice in accordance with s 708A(5) and s 708A(6) of the Corporations Act 2001 (Cth) - Inadvertence on the part of the company secretary - Application for relief pursuant to s 1322(4) of the Corporations Act 2001 (Cth) to validate share issue through a cleansing prospectus - Orders to validate trading in securities - Plaintiff acted honestly - Whether substantial injustice caused - Application granted

Legislation:

Corporations Act 2001 (Cth), s 707(3), s 708A(1), s 708A(5), s 708A(6), s 708A(11), s 1322(4) and s 1322(6)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

Mr N J Wallwork

Solicitors:

Plaintiff

Thomson Geer - Perth

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

Metalicity Ltd [2020] WASC 387
Re Azure Minerals Limited [2013] FCA 63
Re Charter Hall Limited [2007] FCA 1316
Re European Lithium Limited [2017] FCA 894
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Golden Gate Petroleum [2010] FCA 40
Re Great Boulder Resources Ltd; Ex parte Great Boulder Resources Ltd [2023] WASC 258
Re ICandy Interactive Limited [2018] FCA 533
Re Memphasys Limited; Ex parte Memhasys Limited [2022] WASC 269
Re Murray River Organics Ltd [2019] FCA 931
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd (No 2) [2018] WASC 357
Sprint Energy Limited; in the matter of Sprint Energy Limited [2012] FCA 1354

Table of Contents

A. Overview

B. The Application

Notice to ASIC

C. Disposition - Preliminary matters

D. Disposition - Order 1 (deeming order)

Preliminary

Act, matter or thing

Section 1322(6)(a)

Section 1322(6)(c) - no substantial injustice

E. Disposition - Order 2 (offers and sales of shares not invalid)

Preliminary

Act, matter or thing

Section 1322(6)(a)

Section 1322(6)(c) - no substantial injustice

F. Residual discretion

G. Orders

ATTACHMENT A

LUNDBERG J:

A. Overview

These reasons relate to an urgent application filed by the plaintiff company on 10 July 2023 (Application),[1] which was heard on the afternoon the following day. The application sought orders under s 1322(4) of the Corporations Act 2001 (Cth) (Act)[2] arising from a failure by the plaintiff to comply with its disclosure obligations in respect of an issue of shares.
[1] Originating process dated 10 July 2023.
[2] Unless otherwise indicated, all references to statutory provisions are to provisions of the Corporations Act 2001 (Cth).
The specific failure which was the catalyst for the Application was a failure by the plaintiff to issue a cleansing notice pursuant to s 708A(5) at the time the share issue took place on 8 May 2023 (Share Issue),…

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 [2023] WASC 260
Case: [2023] WASC 260
Decision Date

CaseChat Overview and Summary

The plaintiff, Astral Resources NL, brought an urgent application before the Supreme Court of Western Australia, seeking relief under s 1322(4) of the Corporations Act 2001 (Cth) for a failure to issue a cleansing notice in accordance with s 708A(5) and s 708A(6) during a share issue on 8 May 2023. The company secretary, Brendon Gregory Morton, admitted to inadvertently forgetting to issue the required notice, leading to the irregularity being identified two months later. Upon discovery, the plaintiff swiftly took corrective actions, including seeking a trading halt, lodging a cleansing prospectus, and notifying ASIC. The plaintiff sought a deeming order to validate the share issue and declarations that any subsequent sales of the shares were not invalid. The court was required to decide whether the relief was appropriate under s 1322(4), considering factors such as the act or matter being in relation to an 'act, matter or thing', one of the criteria in s 1322(6)(a) being satisfied, and no substantial injustice being caused.

The court found that the plaintiff had standing to seek relief and that the requirements of s 1322(4)(a) and s 1322(6)(a) were satisfied. The court accepted that the failure was inadvertent and that the plaintiff acted promptly to remedy the situation. The court was also satisfied that no substantial injustice had been or was likely to be caused to any person. The court considered that making the orders was in the interests of the shareholders and would ensure the free trading of shares without infringing statutory requirements. The court exercised its residual discretion and granted the relief sought by the plaintiff. The orders included a deeming order to validate the share issue and declarations that any subsequent sales of the shares were not invalid. The court also made an ancillary order permitting any interested party who might suffer substantial injustice to apply to vary or dissolve the s 1322(4) order.

Orders