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Re Great Boulder Resources Ltd; Ex parte Great Boulder Resources Ltd

Re Great Boulder Resources Ltd; Ex parte Great Boulder Resources Ltd

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Case Copied 13 July 2023 35 min read

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE GREAT BOULDER RESOURCES LTD; EX PARTE GREAT BOULDER RESOURCES LTD [2023] WASC 258
CORAM:   LUNDBERG J
HEARD:   11 JULY 2023
DELIVERED          :   13 JULY 2023
FILE NO/S:   COR 111 of 2023
MATTER:   IN THE MATTER OF GREAT BOULDER RESOURCES LTD

EX PARTE
GREAT BOULDER RESOURCES LTD
Plaintiff

Catchwords:

Corporations Law - Securities - Single failure to lodge a cleansing notice in accordance with s 708A(5) and s 708A(6) of the Corporations Act 2001 (Cth) - Incorrect reliance on the cleansing prospectus exemption in s 708A(11) of the Corporations Act 2011 (Cth) based on legal advice - Application for orders extending time pursuant to s 1322(4) of the Corporations Act 2001 (Cth) to lodge a cleansing notice - Application for declaratory relief to validate trading in securities issued without a cleansing notice - Orders sought to relieve sellers from civil liability - Plaintiff and sellers acted honestly - Whether substantial injustice caused - Application granted

Legislation:

Corporations Act 2001 (Cth), s 708A(1), s 708A(5), s 708A(6), s 708A(11), s 1322(4) and s 1322(6)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

Ms B S Giles

Solicitors:

Plaintiff

Blackwall Legal LLP

Cases referred to in decision:

An v Joo [2019] NSWSC 39
Caeneus Minerals Ltd; in the matter of Caeneus Minerals Ltd [2018] FCA 560
Canon Australia Pty Ltd, in the matter of Cannon Australia Pty Ltd [2023] FCA 281
Clancy Exploration Limited, in the matter of Clancy Exploration Limited [2018] FCA 569
DAC Finance (NSW/Qld) Pty Ltd and other companies [2020] NSWSC 182
Diona Pty Ltd, in the matter of Diona Pty Ltd [2022] FCA 1215
Elderslie Finance Corp Ltd v Australian Securities Commission [1993] WASC 465; (1993) 11 ACSR 157
Entertainment Publications of Australia Pty Ltd v ASIC [2022] FCA 960
Gangemi v Osborne [2009] VSCA 297
In the matter of Weebit Nano Limited [2023] NSWSC 43
Kimberley College Ltd v Davis, in the matter of Kimberley College Ltd [2018] FCA 1102
Re Argent Minerals Ltd; Ex parte Argent Minerals Ltd [2023]WASC 34
Re Azure Minerals Ltd [2013] FCA 63
Re Barrick Middle East Pty Limited [2023] WASC 122
Re Bellavista Resources Limited; Ex parte Bellavista Resources Limited [2023] WASC 40
Re Charter Hall Limited [2007] FCA 1316
Re Classic Minerals Ltd [2018] FCA 2039
Re Compaction Systems Pty Ltd & The Companies Act [1976] 2 NSWLR 477
Re Elemental Minerals Limited [2010] FCA 687
Re European Lithium Limited [2017] FCA 894
Re Golden Gate Petroleum Ltd [2010] FCA 40
Re ICandy Interactive Limited [2018] FCA 533
Re Jaxsta Ltd [2018] WASC 390
Re Murray River Organics Ltd [2019] FCA 1432; (2019) 138 ACSR 365
Re Sprintex Ltd [2022] WASC 188
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Re Wesfarmers Ltd; Ex parte Wesfarmers Ltd (No 2) [2018] WASC 357
Re Yandal Resources Ltd [2022] WASC 338
Silver Lake Resources Limited, in the matter of Silver Lake Resources Limited [2012]…

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.

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Details

Case: [2023] WASC 258
Decision Date

CaseChat Overview and Summary

The plaintiff company, Great Boulder Resources Ltd, applied to the Supreme Court of Western Australia for orders to remedy its failure to lodge a cleansing notice with the Australian Securities Exchange (ASX) within the required timeframe after issuing 18,000,000 shares. The court was required to determine whether to grant relief under s 1322(4) of the Corporations Act 2001 (Cth), which allows the court to make orders to avoid the effects of irregularities, extend time, and relieve from civil liability. The plaintiff's failure to issue a cleansing notice arose from an incorrect interpretation of the cleansing prospectus exemption in s 708A(11) of the Corporations Act, based on legal advice received.

The court considered whether the plaintiff had met the criteria for relief under s 1322(4) and s 1322(6). The plaintiff had to demonstrate that the failure was essentially procedural in nature, that the persons involved acted honestly, and that no substantial injustice had been or was likely to be caused to any person. The court found that the plaintiff had acted honestly and promptly to rectify the failure once it became apparent. Additionally, the court found that no substantial injustice had been caused to any person by the failure or was likely to be caused by the proposed orders.

The court granted the relief sought by the plaintiff, including an extension of time to lodge the cleansing notice, a declaration that any offer for or sale of the placement shares is not invalid, and relief from civil liability for sellers of the placement shares. The court made these orders subject to its residual discretion, which was not exercised in this case. The court also made an ancillary order permitting any interested person who may suffer substantial injustice to apply to vary or dissolve the orders within a set period.

Orders