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Re Austpac Resources NL

Re Austpac Resources NL

Case [2010] NSWSC 1438 10 December 2010

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CITATION: Austpac Resources N.L. [2010] NSWSC 1438

HEARING DATE(S): 08/12/10, 09/12/10

JUDGMENT DATE :
10 December 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Validating orders made.

CATCHWORDS: CORPORATIONS - offers of securities requiring disclosure - securities issued without disclosure - disclosure obligation in respect of subsequent offers for sale - securities quoted on ASX - issuer fails to lodge notice with ASX within five business days - notice later lodged - persons offering for sale exposed to liability for non-disclosure - evidence shows that lateness of notice did not cause any material matter to be withheld from the market - validating orders warranted

LEGISLATION CITED: Companies Act 1936, s 141
Corporations Act 2001 (Cth), Part 6D.2, ss 674, 706, 707(1), 707(2), 707 (3), 707(4)(b), 707(5), 708(11), 708A, 1322

CATEGORY: Principal judgment

CASES CITED: Re A J Lucas Group Ltd [2008] FCA 999,
Re Chalice Gold Mines Ltd [2009] FCA 1236
Re Chameleon Mining NL [2009] NSWSC 660
Re Charter Hall Ltd [2007] FCA 1316
Re Diversified United Investment Ltd [2008] FCA 720 `

PARTIES: Austpac Resources N.L. - Plaintiff

FILE NUMBER(S): SC 2010/408312

COUNSEL: Mr J S Tobin - Plaintiff

SOLICITORS: Gadens Lawyers - Plaintiff

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

FRIDAY, 10 DECEMBER 2010

2010/408312 AUSTPAC RESOURCES NL

JUDGMENT

1 On 8 December 2010, I made orders as follows and indicated that I would give reasons later, as I now do:

“1. In respect of the 14,876,429 fully paid shares in Austpac Resources N.L. which were issued on 30 September 2010 ( Relevant Securities ), the period of five business days referred to in s 708A(6)(a) of the Corporations Act 2001 (Cth) be extended to the second business day after the day on which these orders are entered.

2. A notice under s 708A(5)(e) of the Corporations Act 2001 (Cth) given to the Australian Securities Exchange Ltd in respect of the Relevant Securities within the period provided for in Order 1 above be deemed to take effect as if it had been given to the Australian Securities Exchange Ltd on 1 October 2010.

3. A sealed copy of these orders be served as soon as practicable on the Australian Securities Exchange Ltd and the Australian Securities and Investments Commission.

4. A copy of these orders is to be placed on the website of the plaintiff as soon as practicable and remain there for at least 28 days.

5. Any interested party have liberty to apply within 28 days of the entry of these orders to revoke or vary the orders.”

2 Orders 1 and 2 were made under s 1322 of the Corporations Act 2001 (Cth).

3 The orders were made on an ex parte application made by Austpac Resources NL (“Austpac”). The need from them arose from delay by Austpac in lodging a notice concerning a placement of 14,876,429 shares made by it. The placement was by way of allotment and issue in circumstances not…

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 Austpac Resources NL

Details

AGLC: Re Austpac Resources NL [2010] NSWSC 1438
Case: [2010] NSWSC 1438
Decision Date: 10 December 2010

CaseChat Overview and Summary

In the case, Austpac Resources NL sought validation orders to regularise its failure to comply with certain disclosure requirements. The securities of Austpac Resources NL were quoted on the Australian Securities Exchange (ASX). The company issued securities without the necessary disclosure, and subsequently failed to lodge a notice with the ASX within the stipulated five business days when offering the securities for sale. The court had to determine whether the late notice lodged by Austpac Resources NL warranted the granting of validating orders to regularise its non-compliance.

The primary legal issue was whether the lateness of the notice to the ASX caused any material matter to be withheld from the market, thereby affecting the market's perception of the securities. The court examined the evidence provided by Austpac Resources NL and considered the impact of the late notice on the market. The company argued that the late notice did not result in any material matter being withheld from the market. The court found that the evidence supported this contention, as the market had already been exposed to the information through other means, and the lateness of the notice did not prejudice any party.

The court held that the validating orders were warranted in this instance. It was determined that the late notice did not cause any material matter to be withheld from the market, and therefore, the market had not been prejudiced by the non-compliance. The court concluded that the lateness of the notice did not have a significant impact on the market, and the securities continued to be quoted on the ASX. The court granted the validating orders to regularise the non-compliance and allow the securities to remain quoted on the ASX.

Orders