Re Dubber Corporation Ltd - [2024] WASC 384

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE DUBBER CORPORATION LTD; EX PARTE DUBBER CORPORATION LTD [2024] WASC 384
CORAM:   HILL J
HEARD:   10 OCTOBER 2024
DELIVERED          :   10 OCTOBER 2024
PUBLISHED           :   21 OCTOBER 2024
FILE NO/S:   COR 152 of 2024
MATTER:   IN THE MATTER OF DUBBER CORPORATION LTD (ACN 089 145 424)
EX PARTE

DUBBER CORPORATION LTD (ACN 089 145 424)
Plaintiff

Catchwords:

Corporations - Application for orders under s 1322 of Corporations Act 2001 (Cth) - Resignation of auditor - Failure of company to have shareholder nominate auditor prior to annual general meeting - Failure of company to resolve to appoint auditor at annual general meeting - Where no substantial injustice likely to be caused in making orders - Where no blatant or flagrant disregard of obligations - Turns on own facts

Legislation:

Corporations Act2001 (Cth) s 301, s 302, s 314, s 327B, s 327C, s 328A, s 328B, s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

S J Penrose

Solicitors:

Plaintiff

Thomson Geer - Perth

Cases referred to in decision:

Re Bellevue Gold Ltd [2021] WASC 80
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
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.)

On 8 October 2024, the plaintiff, Dubber Corporation Ltd (Company), filed an originating process seeking orders under s 1322(4) of the Corporations Act2001 (Cth) (Act) relating to contraventions in the appointment process of its auditor and, as a consequence, its compliance with the auditing, financial reporting and lodgment obligations that arise under the Act.
These contraventions occurred as a result of a failure to have a shareholder nominate Ernst & Young (EY) as auditor or have EY's appointment as its auditor from 29 November 2023 approved at its 2023 annual general meeting (AGM).

Factual background

In support of the application, the plaintiff read six affidavits: an affidavit of Steven Papadopoulos, a solicitor engaged by the plaintiff to provide it with legal services; three affidavits of Sophie Ellen Durrant, a law graduate employed by Thomson Geer, the plaintiff's external solicitors; a confidential affidavit of Peter Edward Pawlowitsch, a director of the plaintiff, and an affidavit of David James Franks, the current company secretary of the plaintiff.
The plaintiff is a software and telecommunications company, whose securities are listed on the Australian Securities Exchange (ASX). As at 8 October 2024, the Company had a market capitalisation of approximately $26.9 million.[1]
[1] Affidavit of David James Franks filed 9 October 2024 [5].
Until November 2022, the Company's auditors were BDO Audit (WA) Pty Ltd (BDO). In November 2022, BDO informed the Company of its resignation as auditor. Their…

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 Dubber Corporation Ltd

Details

AGLC: Re Dubber Corporation Ltd [2024] WASC 384
Case: [2024] WASC 384
Decision Date: 21 OCTOBER 2024

CaseChat Overview and Summary

The applicant, Dubber Corporation Ltd, sought orders under section 1322 of the Corporations Act 2001 (Cth) following the resignation of its auditor. The company failed to have a shareholder nominate an auditor before the annual general meeting and did not resolve to appoint an auditor at the meeting. The primary issue before the court was whether the company's failure to appoint a new auditor constituted a blatant or flagrant disregard of its statutory obligations, and whether making the sought orders would result in substantial injustice.

The court considered the statutory provisions and relevant case law concerning the appointment of auditors and the consequences of non-compliance. It concluded that the company's actions did not amount to a blatant or flagrant disregard of its obligations, as there were no indications of wilful or egregious conduct. The court also determined that making the orders would not cause substantial injustice to the company or its members, as the applicant had taken steps to rectify the situation by nominating a new auditor and preparing to hold a meeting to resolve the appointment. The court emphasised that each case turns on its own facts and that the circumstances of this case did not warrant the imposition of stringent penalties.

The court made the orders sought by the applicant, allowing the company to proceed with the appointment of a new auditor and to take necessary steps to comply with its statutory obligations. The court's decision reflected a balanced approach, taking into account the statutory framework, the specific circumstances of the case, and the potential consequences of its orders. The final orders were made in favour of the applicant, providing it with the necessary relief to address the issue of the auditor's resignation and to ensure compliance with the relevant statutory provisions.

Orders