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Re Helios Energy Ltd

Re Helios Energy Ltd

Case [2021] WASC 183 11 June 2021

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE HELIOS ENERGY LTD; EX PARTE HELIOS ENERGY LTD [2021] WASC 183
CORAM:   HILL J
HEARD:   22 MARCH 2021
DELIVERED          :   22 MARCH 2021
PUBLISHED           :   11 JUNE 2021
FILE NO/S:   COR 48 of 2021
MATTER:   Helios Energy Ltd

EX PARTE
HELIOS ENERGY LTD
Plaintiff

Catchwords:

Corporations law - Securities - Application for extension of time to lodge cleansing notice - Application for declaratory relief to validate trading in shares issued without a valid cleansing notice or prospectus - Six instances of securities being issued without a valid cleansing notice - Where no blatant or flagrant disregard of obligations - Whether no substantial injustice if orders made - Application granted

Legislation:

Corporations Act 2001 (Cth), s 707, s 708A, s 721, s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

N Wallwork & K M McNally

Solicitors:

Plaintiff

McNally & Co

Case(s) referred to in decision(s):

Re Caeneus Minerals Ltd [2018] FCA 560
Re Classic Minerals Ltd [2018] FCA 2039
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re ICandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Jaxsta Ltd [2018] WASC 390
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck (2013) 251 CLR 396

HILL J:

On 19 March 2021, the plaintiff, Helios Energy Ltd (Helios Energy), filed an originating process seeking orders under s 1322 of the Corporations Act 2001 (Cth) (Act) relating to contraventions of s 707(3) and s 727(1) of the Act. The contraventions occurred as a result of six separate instances of shares being issued between 13 February 2019 and 4 March 2021 without a valid cleansing notice or cleansing prospectus.
Despite the number of instances where shares were issued without a valid cleansing notice or cleansing prospectus, the plaintiff has provided a frank and detailed explanation as to the circumstances surrounding each of the share issues. On the basis of the evidence before me, I was and am satisfied that the failure was caused by inadvertence rather than any deliberate disregard of the plaintiff's obligations.
In light of the urgency with which the application was brought, I made orders at the conclusion of the hearing on 22 March 2021 granting the relief sought and said that I would subsequently publish reasons for my decision. These are the reasons for my decision.

Part 6D.2 Corporations Act

Part 6D.2 of the Act imposes disclosure obligations in relation to the issue and sale of shares. In certain circumstances, these obligations can be satisfied by lodging what is commonly referred to as a cleansing notice or a prospectus.[1] If disclosure has not been made by the issuer and the shares are on-sold within…

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 Helios Energy Ltd

Details

AGLC: Re Helios Energy Ltd [2021] WASC 183
Case: [2021] WASC 183
Decision Date: 11 JUNE 2021

CaseChat Overview and Summary

Helios Energy Limited, a company seeking to list on the Australian Securities Exchange, applied to the Federal Court for an extension of time to lodge a cleansing notice and for declaratory relief to validate trading in shares issued without a valid cleansing notice or prospectus. The company argued that six instances of securities being issued without a valid cleansing notice did not constitute a blatant or flagrant disregard of its obligations under the Corporations Act 2001. Helios Energy submitted that there would be no substantial injustice if the orders were made.

The legal issues before the court were whether the application for an extension of time to lodge the cleansing notice should be granted and whether the application for declaratory relief should be made to validate the trading in shares issued without a valid cleansing notice or prospectus. The court had to consider whether the company's failure to lodge a cleansing notice or prospectus within the required timeframe constituted a blatant or flagrant disregard of its obligations under the Corporations Act. Additionally, the court needed to determine whether making the orders sought by Helios Energy would result in substantial injustice.

The court found that there was no blatant or flagrant disregard of obligations by Helios Energy. The company had taken steps to comply with its obligations under the Corporations Act and had not acted in a manner that demonstrated a lack of concern for its legal obligations. The court was satisfied that making the orders sought by Helios Energy would not result in substantial injustice. Consequently, the court granted the application for an extension of time to lodge the cleansing notice and made the declaratory relief sought by the company.

The court ordered that the time for lodging a cleansing notice be extended by a reasonable period. Furthermore, the court declared that the trading in shares issued without a valid cleansing notice or prospectus was valid and enforceable, provided that the cleansing notice was subsequently lodged within the extended timeframe. The orders ensured that Helios Energy could proceed with its listing on the Australian Securities Exchange while addressing its compliance obligations.

Orders