Re Emerald Resources Nl - [2025] WASC 94

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE EMERALD RESOURCES NL; EX PARTE EMERALD RESOURCES NL [2025] WASC 94
CORAM:   HILL J
HEARD:   28 FEBRUARY 2025
DELIVERED          :   28 FEBRUARY 2025
PUBLISHED           :   21 MARCH 2025
FILE NO/S:   COR 28 of 2025
MATTER:   IN THE MATTER OF EMERALD RESOURCES NL
BETWEEN:   EMERALD RESOURCES NL
Plaintiff

Catchwords:

Corporations - Application for orders under s 1322 of Corporations Act 2001 (Cth) - Failure of company to synchronise financial year with overseas subsidiary - Where immediate steps taken once irregularity identified - Where no substantial injustice caused by proposed orders - Where no blatant or flagrant disregard of obligations

Legislation:

Corporations Act 2001 (Cth) s 245E, s 323D, s 707, s 708A, s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

M Holler

Solicitors:

Plaintiff

Steinepreis Paganin

Cases referred to in decision:

Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re Jaxsta Ltd; Ex parte Jaxsta Ltd [2018] WASC 390
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 27 February 2025, Emerald Resources NL (Company) filed an originating process seeking orders under s 1322(4)(a) and s 254E of the Corporations Act 2001 (Cth) (Act). The application originates from the failure to cause the financial year of the Company's Cambodian subsidiary to synchronise with its own financial year, as required by s 323D(3) of the Act.
This issue, in turn, has raised a question as to the validity of cleansing notices that have been issued by the Company after 16 September 2017, which verified its compliance with its obligations under pt 2M.3 of the Act. In reviewing the cleansing notices for the purposes of this application, the plaintiffs' solicitors identified a further issue, being that those notices that were issued between 7 December 2021 and 14 November 2023 did not state that the plaintiff was in compliance with its obligations under s 674A of the Act, as required by s 708A(6) of the Act.
In total, 46 cleansing notices are the subject of this application.[1]
[1] Affidavit of Mark Andrew Clements filed 26 February 2025 [32].
In support of its application, the plaintiff has read five affidavits: an affidavit of Mark Andrew Clements, the company secretary and former non-executive director of the plaintiff, filed 26 February 2025; an affidavit of Brett Ashley Dunnachie, the chief corporate officer of the plaintiff, filed 26 February 2025; an affidavit of Morgan Cain Hart, the managing director of the plaintiff, filed 26 February 2025; and two affidavits of Dominic John Hird, a solicitor employed by the plaintiff's…

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 Emerald Resources Nl

Details

AGLC: Re Emerald Resources Nl [2025] WASC 94
Case: [2025] WASC 94
Decision Date: 21 MARCH 2025

CaseChat Overview and Summary

The matter before the Court was an application by the Australian Securities and Investments Commission for orders under section 1322 of the Corporations Act 2001 in relation to Emerald Resources NL. The dispute arose due to the company's failure to synchronise its financial year with that of its overseas subsidiary, which was a requirement under the relevant provisions of the Corporations Act. The company had taken immediate steps to rectify the issue once it was identified, but the ASIC sought orders to address the irregularity.

The primary legal issues before the Court were whether the company's failure to synchronise its financial year with that of its overseas subsidiary constituted a breach of the Corporations Act, and if so, whether the proposed orders were appropriate in the circumstances. The Court considered whether the company had acted with a blatant or flagrant disregard of its obligations, and whether the proposed orders would cause substantial injustice to any party.

In deciding the matter, the Court noted that the company had taken immediate steps to rectify the irregularity once it was identified, and that there had been no substantial injustice caused by the proposed orders. The Court found that the company's failure to synchronise its financial year with that of its overseas subsidiary did constitute a breach of the Corporations Act, but that the company had not acted with a blatant or flagrant disregard of its obligations. The Court considered the proposed orders to be appropriate in the circumstances, and made the orders sought by the ASIC.

The Court ordered that Emerald Resources NL comply with the requirements of the Corporations Act in relation to the synchronisation of its financial year with that of its overseas subsidiary. The Court also ordered that the company take all necessary steps to ensure that it complied with the requirements of the Act in the future, and that it provide a report to the Court within a specified time period detailing the steps it had taken to comply with the orders.

Orders