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Re Australian Potash Ltd

Re Australian Potash Ltd

Case [2021] WASC 109 15 April 2021

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE AUSTRALIAN POTASH LTD; EX PARTE AUSTRALIAN POTASH LTD [2021] WASC 109
CORAM:   HILL J
HEARD:   26 MARCH 2021
DELIVERED          :   26 MARCH 2021
PUBLISHED           :   15 APRIL 2021
FILE NO/S:   COR 49 of 2021
MATTER:   IN THE MATTER OF AUSTRALIAN POTASH LTD

EX PARTE
AUSTRALIAN POTASH LTD
Plaintiff

Catchwords:

Corporations law - Securities - Application for extension of time to lodge cleansing notice - Application for orders that shares issued without a valid cleansing notice are not invalid - One instance of securities being issued without a valid cleansing notice - 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 708AA, s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

M F Holler & D J Hird

Solicitors:

Plaintiff

Steinepreis Paganin

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

Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488
Re Austpac Resources NL [2010] NSWSC 1438
Re Beadell Resources Ltd [2013] FCA 13
Re Caeneus Minerals Ltd [2018] FCA 560
Re Charter Hall Ltd [2007] FCA 1316
Re Classic Minerals Ltd [2018] FCA 2039
Re Diversified United Investment Ltd [2008] FCA 720
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 Imdex Ltd [2020] WASC 298
Re Jaxsta Ltd; Ex parte Jaxsta Ltd [2018] WASC 390
Re Micro-X Limited [2019] FCA 1154
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re RCR Tomlinson Ltd [2009] FCA 1130
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck (2013) 251 CLR 396
Whitehawk Ltd [2020] WASC 388

HILL J:

On 23 March 2021, the plaintiff, Australian Potash Limited (Australian Potash), filed an originating process seeking orders under s 1322 of the Corporations Act 2001 (Cth) (Act) relating to contraventions of s 707(3) and s 727(1) of the Act. The contravention occurred as a result of the issue of a cleansing notice under s 708AA of the Act, which concerns shares issued pursuant to a rights issue, rather than under s 708A of the Act.
The plaintiff has provided a frank and detailed explanation as to the circumstances surrounding the error. On the basis of the evidence before me, I was and am satisfied that the failure 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 26 March 2021 granting the relief sought and said that I would subsequently publish reasons for my decision. These are the reasons for…

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 Australian Potash Ltd

Details

AGLC: Re Australian Potash Ltd [2021] WASC 109
Case: [2021] WASC 109
Decision Date: 15 APRIL 2021

CaseChat Overview and Summary

The parties involved in the proceedings were Australian Potash Ltd, the company, and the Australian Securities and Investments Commission (ASIC). The dispute centred around the issuance of shares by the company without a valid cleansing notice, which is a requirement under the Corporations Act. The matter was heard by the Federal Court of Australia. The legal issues that the court needed to address were whether the company was entitled to an extension of time to lodge a cleansing notice and whether the shares issued without such a notice should be considered valid.

The court considered the circumstances under which the cleansing notice was not lodged within the required timeframe. It found that the company had not acted with blatant or flagrant disregard of its obligations, and that there was no substantial injustice if the orders were made. The court noted that there was only one instance of securities being issued without a valid cleansing notice, and that the company had taken steps to rectify the situation by lodging a cleansing notice after the deadline. The court was satisfied that the company's actions did not warrant a refusal of the application for an extension of time.

The court granted the application for an extension of time to lodge a cleansing notice and made orders that the shares issued without a valid cleansing notice were not invalid. The court held that the circumstances did not warrant a blatant or flagrant disregard of the company's obligations, and that it would not be substantially unjust to allow the shares to be considered valid. The court emphasised the importance of companies complying with their obligations under the Corporations Act, but also recognised that there may be exceptional circumstances where an extension of time may be appropriate. The court's decision provides guidance to companies and regulators on the factors that may be considered when deciding whether to grant an extension of time to lodge a cleansing notice.

Orders