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Re Imdex Ltd

Re Imdex Ltd

Case [2020] WASC 298 18 August 2020

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   EX PARTE IMDEX LTD [2020] WASC 298
CORAM:   HILL J
HEARD:   12 AUGUST 2020
DELIVERED          :   18 AUGUST 2020
FILE NO/S:   COR 107 of 2020

EX PARTE
IMDEX LTD
Plaintiff

Catchwords:

Corporations – Application for orders extending the period for issuing cleansing notices under s 708A of the Corporations Act 2001 (Cth) - Shares issued without cleansing notice – Where trading of shares prior to issue of cleansing notice - Where no blatant or flagrant disregard of obligations – Where no substantial injustice if orders made - Consideration of appropriate form of orders

Legislation:

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

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

A J Papamatheos

Solicitors:

Plaintiff

HopgoodGanim Lawyers (Perth)

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

Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488
Re Austpac Resources NL [2010] NSWSC 1438
Re Beadell Resources Ltd [2013] FCA 13
Re Caeneus Minerals Ltd [2018] FCA 560
Re Charter Hall Ltd [2007] FCA 1316
Re Classic Minerals Ltd [2018] FCA 2039
Re Diversified United Investment Ltd [2008] FCA 720
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; Ex parte Jaxsta Ltd [2018] WASC 390
Re Micro-X Limited [2019] FCA 1154
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re RCR Tomlinson Ltd [2009] FCA 1130
Re Spectur Limited [2019] FCA 867; (2019) 136 ACSR 542
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck (2013) 251 CLR 396

HILL J:

Introduction

On 10 August 2020, the plaintiff, Imdex Ltd (Imdex), filed an originating process seeking orders under s 1322(4)(a) and s 1322(4)(d) of the Corporations Act 2001 (Cth) (Act) to extend the timeframe under which a cleansing notice may be given under s 708A of the Act, to deem such notice to be effective from 22 July 2020 and to validate any offers or sales of shares between 22 July 2020 and the date of any orders of the court.
The contravention of pt 6D.2 of the Act concerns shares being issued on 22 July 2020 to Alexandra and Paul Douglas Gamson (Gamsons) and Atrico Pty Ltd (Atrico).[1] No cleansing notice, pursuant to s 708A of the Act, was lodged at the time of the issues of these shares.[2]
[1] Affidavit of Paul Anthony Evans filed 10 August 2020 [23], [25] - [30], 'PAE-12'.
[2] Affidavit of Paul Anthony Evans filed 10 August 2020 [32].
The company has provided a frank and detailed explanation as to the circumstances surrounding the share issue on 22 July 2020. I was and am satisfied that the failure was caused by…

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 Imdex Ltd

Details

AGLC: Re Imdex Ltd [2020] WASC 298
Case: [2020] WASC 298
Decision Date: 18 AUGUST 2020

CaseChat Overview and Summary

The applicant, Imdex Limited, sought orders under section 708A of the Corporations Act 2001 (Cth) to extend the period for issuing cleansing notices. The case involved shares that were issued without the requisite cleansing notice, and trading of these shares occurred before the issuance of the notice. The primary concern was whether the company's actions warranted a finding of blatant or flagrant disregard of its statutory obligations and whether granting the extension would cause substantial injustice. The Federal Court was tasked with deciding these issues.

The court considered whether Imdex Limited's failure to issue cleansing notices before trading the shares constituted a blatant or flagrant disregard of its statutory obligations. It found that there was no evidence of such disregard, as the company had acted in good faith and taken steps to comply with the Act. The court also evaluated whether granting the extension would result in substantial injustice, concluding that it would not. The court examined the principles of equity and justice, weighing the public interest in enforcing compliance against the potential harm to the company and its shareholders.

In light of the findings, the court determined that it was appropriate to extend the period for issuing the cleansing notices. The court recognised that while compliance with the statutory obligations is crucial, the circumstances of this case did not warrant a penalty that would cause substantial injustice. The court's decision was based on a balanced consideration of the statutory objectives and the equities of the case. The final orders reflected the court's determination to provide relief to the applicant while upholding the principles of the Act.

Orders