Re Force Commodities Ltd

In the case of Force Commodities Ltd, the plaintiff, an Australian company, sought urgent orders under sections 1322(4) and 254E of the Corporations Act 2001 (Cth). The relief was sought to validate the trading in the plaintiff's shares and to relieve sellers of shares from civil liability. The application was made ex parte and on an urgent basis due to non-compliance with ASIC Class Order 09/425 and the failure to issue a valid cleansing notice. The primary legal issues involved determining whether the orders should be made under sections 1322 and 254E of the Corporations Act and whether the just and equitable ground was satisfied.

The Court found that Force Commodities was an interested party under section 1322(4) of the Act and that secondary trading had occurred, resulting in a breach of section 707(3) of the Act. The Court was satisfied that the requirements under section 1322(6) were met, including the just and equitable ground. The Court also accepted that the company secretaries made honest mistakes regarding the need for a cleansing notice and the requirements for a valid notice. The Court concluded that orders under section 1322(4)(c) relieving shareholders from civil liability should be made, as it was probable that any person who was issued with shares or purchased and on-sold such securities did so in the bona fide belief that the shares were tradable without having to make disclosure under section 707(3) of the Act.

The Court allowed the application, validating the issue of the shares and confirming that any offer for sale or sale of the shares during the specified period is not invalid due to the failure to issue a valid cleansing notice or comply with certain sections of the Act. The Court also relieved sellers of shares, except for present and past directors and officers, from any civil liability arising out of any contravention of sections 707(3) and 727(1) of the Act. The Court further ordered that a sealed copy of these orders be served on ASIC and that a copy of these orders be sent to the last known email address of each person to whom the shares were issued. The plaintiff was also directed to request the ASX to reinstate the class of securities '4CE' and to publish an announcement on the ASX markets announcement platform. No order as to costs was made.