Re Chameleon Mining NL
[2009] NSWSC 660
•8 July 2009
CITATION: In the Matter of Chameleon Mining NL [2009] NSWSC 660 HEARING DATE(S): 8 July 2009
JUDGMENT DATE :
8 July 2009JURISDICTION: Equity JUDGMENT OF: White J EX TEMPORE JUDGMENT DATE: 8 July 2009 DECISION: Refer to para 16 of the judgment. CATCHWORDS: CORPORATIONS - application for an order under s 1322(4)(d) of the Corporations Act 2001 (Cth) extending the time for a company to give notice of share placement in accordance with disclosure requirements of s 708A(5) and (6) LEGISLATION CITED: Corporations Act 2001 (Cth) CASES CITED: Re Chartered Hall Limited [2007] FCA 1316
Re Diversified United Investment Limited [2008] FCA 720
Re AJ Lucas Group Limited [2008] FCA 999PARTIES: In the Matter of Chameleon Mining NL FILE NUMBER(S): SC 3610/09 COUNSEL: Applicant: S G Habib SOLICITORS: Applicant: Piper Alderman
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST
WHITE J
Wednesday, 8 July 2009
3610/09 In the Matter of Chameleon Mining NL
JUDGMENT
1 HIS HONOUR: This is an application under s 1322(4)(d) of the Corporations Act 2001 (Cth) for an order extending the time for the plaintiff company to give a notice under s 708A(6) and for consequential or ancillary relief.
2 The plaintiff is a listed company. On 4 May 2009 the plaintiff announced a private placement of 50 million ordinary fully paid shares to raise working capital. Unless s 708A applies, and its requirements complied with, persons to whom the shares were issued would need to make disclosure in accordance with Pt 6 D.2 of the Act if that person acquired the shares for the purpose of selling them, or transferring them, or granting interest in them, and offered the shares for sale within twelve months after their issue (s 707(3)(b)(ii)).
3 The placement was completed on 4 June 2009. In the circumstances which pertain in the present case, such disclosure would not be required if the company gave a notice which complied with s 708A (6) (see s 708 (5)(a)-(e)(i)). Section 708A(6) requires a notice which complies with that subsection to be given within five business days after the day on which the relevant securities were issued.
4 The completion of the private placement was duly announced to the Exchange on 4 June 2009. To comply with s 708A(6) the notice was required to have been given by 12 June 2009. The evidence on this application shows that the requirements of paragraphs (a)-(d) of s 708A(5) are satisfied.
5 On or about 25 June 2009 the plaintiff's company secretary was alerted by a call from the Australian Stock Exchange that a notice under s 708A(5)(e) had not been lodged. The company secretary had not been previously aware that the company was required to issue such a notice. A notice purporting to comply with s 708A(6) was issued on 29 June 2009.
6 Section 708A(6) provides:
“ 708A Sale offers that do not need disclosure
Sale offers to which this section applies
(6) A notice complies with this subsection if the notice:...
- (a) is given within 5 business days after the day on which the relevant securities were issued by the body; and
(b) states that the body issued the relevant securities without disclosure to investors under this Part; and
(c) states that the notice is being given under paragraph (5)(e); and
(d) states that, as at the date of the notice, the body has complied with:
- (i) the provisions of Chapter 2M as they apply to the body; and
- (e) sets out any information that is excluded information as at the date of the notice (see subsections (7) and (8)).”
7 The notice issued on 29 June 2009 omitted reference to compliance with the provisions of chapter 2M.
8 The evidence on this application is that there is no "excluded information" that should be included in the notice. That is to say, there is no information that has been excluded from a continuous disclosure notice in accordance with the listing rules of the exchange and that investors and their professional advisers would reasonably require for the purpose of making an informed assessment of the assets, liabilities, financial position, performance, profits, losses and prospects of the plaintiff, or the rights and liabilities attaching to the relevant securities (s 708A(7)).
9 Following discussions between the company secretary and an officer of ASIC the secretary made enquiries and ascertained that three of the shareholders to whom shares had been allotted under the placement had sold some of those shares. As a result of those discussions the plaintiff concluded that the present application to "rectify the notice" would need to be brought. On 2 July 2009 it issued an announcement to the ASX advising that:
- “ Pursuant to advice received yesterday from the Australian Securities and Investments Commission, the company wishes to advise placees under the Placement that they are not to rely on the Notice [of 29 June 2009] for the purposes of selling or on-selling shares allotted to them under the Placement ... "
10 The company announced, in substance, its intention to apply for an order under s 1322(4)(d) of the Act.
11 As there is no excluded information that would have been required to be disclosed, I am satisfied that it is unlikely that any substantial injustice will have been caused to any person by reason of the notice not having been lodged within five business days of the shares being issued.
12 It is theoretically possible that a purchaser of shares from an allottee of the shares might contend that the purchase would not have been made had the seller complied with its obligations of disclosure. Any potential for injustice can, I think, be accommodated by giving liberty to any person who may claim to have suffered substantial injustice by reason of the making of an order extending the time for compliance with s 708A(6) to apply to vary or discharge the orders within a limited period (see Re Chartered Hall Limited [2007] FCA 1316 at [11]; Re Diversified United Investment Limited [2008] FCA 720 at [9]; and Re AJ Lucas Group Limited [2008] FCA 999 at [7]).
13 The non-compliance with the timetable for lodging a notice under s 708A(6) was not the result of an oversight so much as ignorance of the requirements of the Act. Nonetheless, it seems to me that the purpose of Pt 6D.2 of minimising the burden of disclosure requirements if the requisite information is provided by the company would be met by making the orders sought. Given the unlikelihood of injustice to any third party if the order is made, compared with the burden which would be imposed on the allottees of the shares if the order is not made and they wish to dispose of the shares, I think it an appropriate case to make the order sought.
14 The plaintiff also seeks an order that a notice to be given under s 708A(5)(e) within the extended period is to be deemed to take effect as if it had been given to the Exchange within the period of five business days. Similar orders were made in Re Chartered Hall Limited and Re Diversified United Investments Limited. They are appropriate consequential or ancillary orders provided for by s 1322(4) to provide clarity for those affected shareholders who sold the relevant securities prior to the lodgment of a notice which complies with the section, and purchaser from them.
15 It is unlikely that purchasers of the particular securities in respect of which the three selling shareholders were required to make disclosure could be easily identified. The orders will include provision for publication on the plaintiff's website of the orders and of the liberty which any interested party will have to apply to vary or revoke the orders within 28 days.
16 For these reasons, I make orders in accordance with the short minutes of order which I initial and date today.
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