Re Corazon Mining Ltd - [2024] WASC 451

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE CORAZON MINING LTD; EX PARTE CORAZON MINING LTD [2024] WASC 451
CORAM:   HILL J
HEARD:   20 NOVEMBER 2024
DELIVERED          :   20 NOVEMBER 2024
PUBLISHED           :   29 NOVEMBER 2024
FILE NO/S:   COR 180 of 2024
MATTER:   IN THE MATTER OF CORAZON MINING LTD
EX PARTE

CORAZON MINING LTD
Plaintiff

Catchwords:

Corporations law - Securities - Application for declaratory relief to validate trading in shares issued without a valid cleansing notice - Two instances of defective cleansing notices being issued - Where no blatant or flagrant disregard of obligations - Where no substantial injustice if orders made - Turns on own facts

Legislation:

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

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

M F Holler

Solicitors:

Plaintiff

Steinepreis Paganin

Cases referred to in decision:

Re Caeneus Minerals Ltd [2018] FCA 560
Re Classic Minerals Ltd [2018] FCA 2039
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re Nanoveu Ltd; Ex Parte Nanoveu Ltd [2024] WASC 329
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
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.)

By originating process dated 18 November 2024, the plaintiff, Corazon Mining Ltd (Company), seeks orders under s 1322(4)(a) of the Corporations Act 2001 (Cth) (Act) arising out of a defect in two cleansing notices that were issued on 22 September 2021 and 25 June 2024 (Cleansing Notices). The defect was the failure to refer to s 674A of the Act, as required by s 708A(6)(d)(ii) of the Act. The plaintiff seeks declarations that, notwithstanding this defect, the Cleansing Notices were effective when given and that any offer for sale or sale of shares issued pursuant to the share issues the subject of the Cleansing Notices, during the period after their respective issues, are not invalid.
In support of the application, the plaintiff has read three affidavits: an affidavit of William Robert Orr, the company secretary of the plaintiff, filed 18 November 2024; and two affidavits of Anna Barningham Prior, a solicitor employed by Steinepreis Paganin, the solicitors for the plaintiff, both filed 19 November 2024.
The plaintiff is a listed Australian-based mining exploration company with projects in both Canada and Australia. As at 18 November 2024, the plaintiff had approximately 668 million shares on issue, more than 2,300 shareholders, and a market capitalisation of approximately $2.67 million.[1]
[1] Affidavit of William Robert Orr filed 18 November 2024 [12] - [13].
On 13 November 2024, during a due diligence that was being undertaken on a separate matter, Mr Orr identified the issue with the Cleansing Notices. He immediately spoke to solicitors from Steinepreis Paganin in relation to the issue and sought advice.
As a result of that advice:
(a)on 18 November…

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 Corazon Mining Ltd

Details

AGLC: Re Corazon Mining Ltd [2024] WASC 451
Case: [2024] WASC 451
Decision Date: 29 NOVEMBER 2024

CaseChat Overview and Summary

The case of Re Corazon Mining Ltd involved a dispute regarding the validity of shares issued by the company. The applicant sought a declaration from the court to validate trading in shares that were issued without a valid cleansing notice. The defendant, Corazon Mining Ltd, argued that the cleansing notices were defective. The case was heard in the Federal Court of Australia.

The central legal issues before the court were whether the defects in the cleansing notices were so severe as to render them invalid and, if so, whether the applicant could still seek declaratory relief to validate the trading in the shares. The court needed to consider the circumstances of the case, including the nature of the defects in the notices and whether there had been any flagrant disregard of obligations by the company.

The court found that while the cleansing notices were indeed defective, the defects were not so severe as to render the notices entirely invalid. The court held that there was no blatant or flagrant disregard of obligations by Corazon Mining Ltd. Furthermore, the court determined that there would be no substantial injustice if the orders sought by the applicant were made. Consequently, the court concluded that the applicant could seek declaratory relief to validate the trading in the shares. The court's decision hinged on the specific facts of the case, including the nature of the defects and the overall circumstances surrounding the issuance of the shares.

Orders