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Re Insurance Australia Group Ltd

Re Insurance Australia Group Ltd

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FEDERAL COURT OF AUSTRALIA
In the matter of Insurance Australia Group Ltd [2003] FCA 581
CORPORATIONS – application under s 1322(4)(d) of the Corporations Act 2001 (Cth) (“the Act”) by issuer of securities for extension of the period of seven days from date of prospectus allowed by ss 723(3)(a) and 724(1)(b)(i) of the Act for making of application for listing of securities for official quotation – seven-day period expired on 27 May 2003 – oversight discovered by solicitors on 4 June 2003 – application for extension of time heard on 6 June 2003 – extension granted to next business day, 10 June 2003 – construction of s 1322(4)(d) of the Act
Corporations Act 2001 (Cth) ss 723(3)(a), 724(1)(b)(i), 1322(4)(d)
Re Australian Koyo Ltd (1984) 8 ACLR 928 cited
Brown v DML Resources Pty Ltd (in liq) (No 6) (2002) 166 FLR 393 cited
Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157 cited
David Grant & Co Pty Ltd (receiver appointed) v Westpac Banking Corporation (1995) 184 CLR 265 distinguished
Super John Pty Ltd v Futuris Rural Pty Ltd (1999) 32 ACSR 398 cited
Pinnacle VRB Ltd v Reliable Power Inc (2001) 39 ACSR 8 cited
Premier Pacific Pharmaceutical Industries Ltd v Australian Stock Exchange Ltd (1995) 129 ALR 661 discussed
IN THE MATTER OF INSURANCE AUSTRALIA GROUP LIMITED
(ACN 090 739 923)
N 3032 OF 2003
LINDGREN J
6 JUNE 2003
SYDNEY

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 3032 OF 2003

IN THE MATTER OF INSURANCE AUSTRALIA GROUP LIMITED
(ACN 090 739 923)

INSURANCE AUSTRALIA GROUP LIMITED
(ACN 090 739 923)
PLAINTIFF

JUDGE:

LINDGREN J

DATE OF ORDER:

6 JUNE 2003

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:
1.For the purposes of s 723(3)(a) and s 724(1)(b)(i) of the Corporations Act 2001 (Cth), the time within which the plaintiff may make an application for the admission of Reset Preference shares issued pursuant to a prospectus dated 20 May 2003 to quotation on Australian Stock Exchange Limited be extended to 10 June 2003.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA

NEW SOUTH WALES DISTRICT REGISTRY

N 3032 OF 2003

IN THE MATTER OF INSURANCE AUSTRALIA GROUP LIMITED
(ACN 090 739 923)

INSURANCE AUSTRALIA GROUP LIMITED
(ACN 090 739 923)
PLAINTIFF

JUDGE:

LINDGREN J

DATE:

6 JUNE 2003

PLACE:

SYDNEY

REASONS FOR JUDGMENT
INTRODUCTION

Where a prospectus states or implies that the securities to which it relates are to be quoted on a financial market, application for the admission of the securities to quotation must be made within a specified time after the date of the prospectus. In the present case, due to inadvertence, the time limit was not observed. The plaintiff (“IAG”) has applied, ex parte, under s 1322(4)(d) of the Corporations Act 2001 (Cth) (“the Act”) for an order extending the period. At about 5.00 pm on Friday 6 June 2003 I made the order…

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: [2003] FCA 581
Decision Date: 6 JUNE 2003

CaseChat Overview and Summary

In the case of Re Insurance Australia Group Ltd, the applicant sought an extension of time to apply for the quotation of certain preference shares on the Australian Stock Exchange (ASX). The primary legal issues that the court needed to address were whether the applicant was eligible for relief under Section 1322 of the Corporations Act 2001 (Cth), and if the extension of time would cause substantial injustice to any party. Specifically, the court had to determine whether the applicant's failure to apply for quotation within the stipulated timeframe was an irregularity that warranted an extension under the Act.

The court found that the applicant had indeed missed the deadline for applying for quotation, which was a result of an administrative oversight. However, the court also noted that the applicant had acted promptly upon discovering the error and that granting the extension would not cause any substantial injustice to any party, including the ASX. Furthermore, the court considered the broader context of the market and the interests of potential investors who might be adversely affected by the delay. Given these factors, the court exercised its discretion in favour of making the order sought by the applicant.

Consequently, the court granted the order, extending the time for the applicant to apply for the quotation of the Reset Preference Shares to 10 June 2003. This decision was based on the understanding that the extension would not result in any substantial injustice and that it was in the best interest of all parties involved, including the potential investors.

Orders

Orders of the court

1. For the purposes of s 723(3)(a) and s 724(1)(b)(i) of the Corporations Act 2001 (Cth), the time within which the plaintiff may make an application for the admission of Reset Preference shares issued pursuant to a prospectus dated 20 May 2003 to quotation on Australian Stock Exchange Limited be extended to 10 June 2003.

Note:

Background

Background to the litigation

Section 1322 of the Act deals with “irregularities”. Subsection 1322(4) provides, relevantly, as follows:“Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:(a) ...;(b) ...;(c) ...;(d)an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding;and may make such consequential or ancillary orders as the Court thinks fit.”Subsection 1322(6) of the Act provides that the Court must not make an order under s 1322 unless, relevantly, “no substantial injustice has been or is likely to be caused to any person”.FACTS IAG issued a prospectus dated 20 May 2003 (“the Prospectus”) in respect of 2,000,000 Reset Preference Shares at a face value of $100 each to raise up to $200 million. IAG had previously issued such shares. I will call the Reset Preference Shares, the subject of the Prospectus, “RPS2”. The prospectus was lodged with the Australian Securities and Investments Commission (“ASIC”) also on 20 May 2003. The Prospectus stated that it would be made generally available from its date until the closing date for applications, which was said to be 19 June 2003. The Prospectus said that the opening date for receipt of applications was 28 May 2003. That date was one day after the statutory seven-day period for the making of application to ASX for official quotation. The Prospectus stated in various places that the RPS2 were intended to be quoted on the ASX, subject to the application for quotation being successful. On pages 7 and 15 of the Prospectus it was stated that the application for official quotation would be made to ASX within seven days after the date of the Prospectus. At page 7 it was added that if quotation was not granted, the RPS2 would not be issued and application money would be refunded without interest. The Prospectus stated that it was expected that trading of the RPS2 on the ASX would commence on a deferred settlement basis on 23 June 2003 following announcement of allocations, and that trading would continue on that basis until 27 June 2003 when trading would be on a normal settlement basis. On 20 May 2003 IAG made an announcement to ASX advising that it had lodged the Prospectus with ASIC. The announcement set out an indicative timetable for the offer, which included the RPS2 commencing trading on the ASX on the deferred settlement basis on 23 June 2003 and on a normal settlement basis on 27 June 2003. The indicative timetable had been agreed in discussions between IAG and ASX. On 21 May 2003 ASX released an announcement to the market setting out key details of the offer by IAG. That announcement by ASX also set out the indicative timetable.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

LINDGREN J

I have no hesitation in exercising the Court’s discretion in favour of making the order.CONCLUSION There will be an order in the terms sought in the originating process.

Ratio Decidendi

Legal Principle Established

Established by: LINDGREN J

Full text does not contain this section.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	N 3032 OF 2003

INSURANCE AUSTRALIA GROUP LIMITED (ACN 090 739 923) PLAINTIFF
JUDGE:	LINDGREN J
DATE OF ORDER:	6 JUNE 2003
WHERE MADE:	SYDNEY