Re Jaxsta Ltd; Ex parte Jaxsta Ltd - [2018] WASC 390

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE JAXSTA LTD; EX PARTE JAXSTA LTD [2018] WASC 390
CORAM:   VAUGHAN J
HEARD:   7 DECEMBER 2018
DELIVERED          :   7 DECEMBER 2018
PUBLISHED           :   13 DECEMBER 2018
FILE NO/S:   COR 222 of 2018
MATTER:   JAXSTA LTD

EX PARTE
JAXSTA LTD
Plaintiff

Catchwords:

Corporations law - Securities - Application for extension of three month period in the Corporations Act 2001 (Cth) s 723(3)(b) in which securities must be admitted for quotation after the date of the disclosure document - Order under the Corporations Act 2001 (Cth) s 1322(4)(d) extending the period for admission to quotation

Legislation:

Corporations Act 2001 (Cth), s 723, s 1322(4)(d)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff	:	A J Papamatheos
Amicus Curiae	:	O Rayner

Solicitors:

Plaintiff	:	Steinepreis Paganin
Amicus Curiae	:	Australian Securities and Investments Commission

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

Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488
Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157
Re Austsino Resources Group Ltd [2018] FCA 883
Re Biron Capital Ltd [2005] FCA 1228; (2005) 54 ACSR 548
Re Compaction Systems Pty Ltd [1976] 2 NSWLR 477
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Geopacific Resources NL [2007] FCA 43; (2007) 25 ACLC 226
Re Golden Gate Petroleum Ltd [2004] FCA 1119; (2004) 50 ACSR 659
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re Laserbond Ltd [2007] FCA 2056; (2007) 25 ACLC 1,658
Re NuSep Ltd [2007] FCA 613; (2007) 62 ACSR 301
Re Solco Ltd [2015] FCA 635; (2015) 106 ACSR 591
Re Taruga Gold Ltd [2005] FCA 892
Re Tony Barlow Australia Ltd [2005] FCA 363; (2005) 53 ACSR 1
Re Wave Capital Ltd [2003] FCA 969; (2003) 21 ACLC 1,995

VAUGHAN J:

Overview

Ordinarily, where a disclosure document for an offer of securities states or implies that securities are to be quoted on a financial market, s 723(3)(b) of the Corporations Act 2001 (Cth) requires that the securities be admitted for quotation within three months after the date of the disclosure document.
Where that requirement is not satisfied there are two consequences. First, an issue or transfer of shares pursuant to an application under the disclosure document is void.[1] Second, the offeror must return money received from the applicant as soon as practicable.[2]
[1] Corporations Act 2001 (Cth) s 723(3)(c).
[2] Corporations Act 2001 (Cth) s 723(3)(d).
The plaintiff, Jaxsta Ltd (Jaxsta), lodged a prospectus with the Australian Securities and Investments Commission (ASIC) on 7 September 2018. The prospectus contemplated that the shares to be issued would be listed for quotation by ASX Ltd (ASX) in accordance with the ASX Listing Rules. On 16 November 2018, having received some $5.269 million, Jaxsta issued 26,345,000 shares to various share applicants. At that time, based on correspondence received from the ASX, Jaxsta expected that the shares as issued would be admitted for quotation by 7 December 2018.
An issue emerged on 30 November 2018 as to one of the reinstatement conditions imposed by the ASX. On 6 December 2018 the ASX withdrew the correspondence on which Jaxsta had relied for its belief that quotation would be effected by 7 December 2018. It was then apparent that Jaxsta would not be able to effect quotation of the shares as issued by the s 723(3)(b) cut‑off date of 7 December 2018.
On 7 December 2018 Jaxsta filed an urgent application seeking an order under s 1322(4)(d) of the Corporations Act 2001 (Cth) to extend the time to obtain quotation under s 723. The application was heard that afternoon. Jaxsta had served the papers on the ASX and the ASIC. The ASIC sought and was granted leave to appear as amicus curiae. The ASX did not appear at the hearing, having earlier informed Jaxsta that it was not in a position to support or oppose the application.
Jaxsta's application sought an extension of the time to obtain quotation to 21 December 2018.
I made orders under s 1322(4)(d) granting the extension of time in relation to the period prescribed by s 723(3)(b). However, I did so subject to two matters. First, I accepted Jaxsta's undertaking that it would not apply the $5.269 million as raised from the share applicants. Second, I imposed a condition that Jaxsta inform the share applicants of their entitlement to apply to modify or vary the orders such that: (1) the extension does not apply to them; and (2) as a result, the issue of their shares would be void and Jaxsta would be obliged to reimburse their application money.
I said that I would provide reasons for my orders in due course. These are those reasons.

Background facts

The application was supported by four affidavits. Two were sworn by a director of Jaxsta, Jorge Nigaglioni. The other two affidavits were sworn by one of Jaxsta's solicitors, Benjamin Purser. At the hearing counsel for Jaxsta also tendered an announcement to the ASX as made by Jaxsta.
Those materials establish the following matters.
Jaxsta was admitted to the official list of the ASX in 2010. At that time it conducted a business focussed on maritime safety locative devices and used the name 'Mobilarm Ltd'. In 2016 and 2017 Jaxsta acquired an interest in a music technology company, Jaxsta Holdings Pty Ltd (Jaxsta Holdings). Mr Nigaglioni described Jaxsta Holdings as having developed an online platform to hold official music metadata to develop a repository of official music-related information.
Since October 2017 Jaxsta has sought:
·to acquire all the shares in Jaxsta Holdings; and
·to change the focus of Jaxsta from marine safety solutions to operating the business of Jaxsta Holdings.
As part of that process, Jaxsta entered into an agreement to dispose of a subsidiary which conducts the maritime safety business. Jaxsta also entered into an acquisition agreement to acquire the outstanding issued capital in Jaxsta Holdings, ie the shares in Jaxsta Holdings it did not already own. Various shareholder approvals were sought and obtained in relation to the acquisition. Also, as contemplated by the acquisition agreement, Jaxsta undertook a public capital raising for a minimum of $5 million and a maximum of $7 million. To that end a prospectus was lodged with the ASIC on 7 September 2018 and a supplementary prospectus was lodged on 28 September 2018.
On 13 September 2018 Jaxsta lodged a Listing Application Form 1A with the ASX that sought re-admission to the ASX's official list following a change in the nature and scale of the company's activities.
The closing date for the share offer was later extended from 31 October 2018 to 7 November 2018.
On 31 October 2018 the ASX issued a conditional reinstatement letter setting out certain requirements that Jaxsta had to satisfy in order to be reinstated. A revised conditional reinstatement letter was then issued on 13 November 2018.
The share offer closed on 7 November 2018. Applications were received for 26,345,000 shares at $0.20 per share. Accordingly, Jaxsta received $5.269 million. That money remains intact in a separate bank account maintained by Jaxsta.
Settlement of the acquisition of the Jaxsta Holdings shares occurred on 16 November 2018. This timing was necessitated by the imminent expiry of the shareholder approvals as had been earlier obtained. At that time, because it was contemplated by the acquisition agreement terms, Jaxsta issued the 26,345,000 shares as had been applied for. Mr Nigaglioni deposes that at that time the board of Jaxsta was confident that all listing conditions would be met. There was reason for that confidence. The ASX had issued the conditional reinstatement letter. Also, at about that time, Jaxsta's solicitors had informed it that Jaxsta had a sufficient spread of shareholders to meet the ASX's requirements for reinstatement. It was said that the outstanding requirements for reinstatement were relatively procedural in nature.
On 30 November 2018 the ASX informed Jaxsta's solicitors that it had concerns as to the audited accounts of Jaxsta Holdings.
Specifically, the ASX was concerned as to the validity of the declaration of independence as had been signed by the auditor of Jaxsta Holdings' financial statements. Disclosure of those audited financial statements had been one of the ASX's conditions to reinstatement. Importantly, the issue did not concern Jaxsta's audited financial statements. Rather, the issue arose as to the declaration of independence by the auditor of Jaxsta Holdings.
It is unnecessary to detail the basis for the ASX's concern as to the declaration of independence. It suffices to state that, despite ongoing discussions with the ASX, Jaxsta's solicitors have not been able to satisfy the ASX of the independence of the auditor. On 4 December 2018 the ASX referred the matter to the ASIC. On 5 December 2018 there was a teleconference involving representatives of Jaxsta, its solicitors, the ASX and the ASIC. The ASIC representative informed the other parties that - unsurprisingly given the limited time it had been involved - the ASIC had not yet considered the independence issue in detail and had not formed a definitive view on the matter.
As the ASIC's investigation is ongoing, it is appropriate that I do not make any further comments as to the question of the auditor's independence.
On 6 December 2018 the ASX sent Jaxsta a letter that stated:
ASX raised its concerns regarding the auditor independence with ASIC. ASIC have indicated that their preliminary view, based on the information provided to ASIC by ASX, is that the relationships identified by ASX may give rise to a perceived lack of independence. The issue of independence therefore remains live.
In light of this, ASX is not able to be satisfied that [Jaxsta] has met the conditions for reinstatement …
In addition, so long as the auditor independence concern is in issue, ASX is not able to satisfy itself that the requirements under listing rule 1.3.5 to provided [sic] two years audited accounts for Jaxsta Holdings Pty Ltd has been met. As you are aware the 2016 and 2017 audited accounts for Jaxsta Holdings Pty Ltd were also provided to [Jaxsta] shareholders when they approved the acquisition of Jaxsta Holdings Pty Ltd.
Consequently ASX withdraws the conditional reinstatement letter of 13 November 2018.
The ASX went on to state that it would reconsider Jaxsta's application for reinstatement once the auditor independence issues were addressed to the ASX's satisfaction.
The ASX letter of 6 December 2018 also stated:
Without limiting ASX's absolute discretion, should it transpire that the auditor is not independent, [Jaxsta] will need to provide new audited accounts for Jaxsta Holdings Pty Ltd. ASX considers that this audit [sic] be undertaken by a "big 4" audit firm. In the event there are material differences to the audited accounts, ASX considers [Jaxsta] shareholders will be required approve [sic] the acquisitions based on the new audited accounts.
Thereafter, Jaxsta proceeded to make arrangements for its urgent application to extend the three month quotation period in s 723(3)(b). As mentioned, the application was filed on 7 December 2018.
Jaxsta, by Mr Nigaglioni, informed the court that given the late emergence of the independence issue it had not had adequate opportunity to consider, investigate and respond to the ASX's concerns. Jaxsta foreshadowed seeking to obtain an opinion from senior counsel to persuade the ASX that there was in fact no independence issue. Alternatively, Mr Nigaglioni informed the court that Jaxsta would seek to have Jaxsta Holdings' accounts re-audited. An appropriate accounting firm has been engaged for this purpose. Either means of resolving the independence issue to the ASX's satisfaction would enable Jaxsta to proceed with its reinstatement to the official list of the ASX and to bring about the quotation of the shares as issued.
In the circumstances Jaxsta sought an extension of the period in s 723(3)(b) of the Corporations Act 2001 (Cth) from 7 December 2018 to 21 December 2018.
In correspondence dated 7 December 2018 the ASIC informed Jaxsta:
ASIC has no objection to the proposed extension of the period set out in s 723(3)(b) for admission to quotation on the ASX of the securities issued under the Prospectus until 21 December 2018.
…
ASIC has concerns about further extensions if the Company and the ASX are unable to resolve these issues, and quotation of the securities under the Prospectus are not quoted, by 21 December 2018.
ASIC considers that, to mitigate any prejudice applicants under the Prospectus may incur as a result of not having marketable securities by the time they could reasonably have expected to have received marketable securities, any further extensions should be conditional on the Company offering withdrawal rights to affected persons.
On being served with the papers in Jaxsta's application, the ASX wrote to Jaxsta. The ASX stated:
[W]hile ASX will use its best endeavours to reconsider the Company's reinstatement to the official list of ASX, ASX is concerned that the short time frame for extension is unrealistic. ASX has withdrawn the conditional reinstatement letter issued to the Company on 13 November 2018. Prior to reconsidering the application for reinstatement ASX will need to be satisfied that the auditor independence concerns are addressed to ASX's satisfaction.
… ASX will need to be satisfied that there has been no contravention of Chapter 2M of the Corporations Act and no contravention of any applicable code of professional conduct in relation to the audit. ASX anticipates that this will require ASIC to investigate the concerns raised by ASX. This is however a matter for ASIC to determine.
Subject to the above occurring, ASX will reconsider an application for reinstatement. This will require an assessment of the suitability for listing based on the outcome of any investigation including submissions made by the Company. The Company will also be required to demonstrate compliance with Chapters 1 and 2 of the Listing Rules prior to ASX issuing a conditional reinstatement letter. ASX notes that its conditional reinstatement letter of 13 November 2018 was issued on the basis that the Company had demonstrated its compliance, aside from the subsequent concerns regarding auditor independence.
The Company will need to satisfy the conditions set out in ASX's conditional reinstatement letter (if issued).
ASX is concerned that it is unrealistic to submit that this will occur over the proposed ten day extension period.
At the hearing, having read the ASX's further letter of 7 December 2018, counsel for the ASIC informed the court that the ASIC had reservations as to the utility of the extension as sought. Nevertheless, the ASIC continued not to oppose the extension as sought. The ASIC made it clear, however, that its non-opposition was on the basis that the share applicants' position was adequately protected during the extension period.

Legal framework

Section 723 is within Chapter 6D of the Corporations Act 2001 (Cth) which deals with fundraising. More specifically, it is part of those provisions concerned with disclosure to investors about securities and the procedure for offering securities. Relevantly, certain offers must be made in, or be accompanied by, a disclosure document (s 721). Application money must be held on trust (s 722). Section 723 then deals with issuing or transferring securities under a disclosure document.
Section 723(3) provides:
(3)If a disclosure document for an offer of securities states or implies that the securities are to be quoted on a financial market (whether in Australia or elsewhere) and:
(a)an application for the admission of the securities to quotation is not made within 7 days after the date of the disclosure document; or
(b)the securities are not admitted to quotation within 3 months after the date of the disclosure document;
then:
(c)an issue or transfer of securities in response to an application made under the disclosure document is void; and
(d)the person offering the securities must return the money received by the person from the applicants as soon as practicable.
Certain choices are available if, among other things, the quotation condition is not met.[3] In some cases certain timing issues on quotation may be overcome by the issue of a 'refresh document'. However, the device of a refresh document is unavailable where securities have been issued under the disclosure document.[4]
[3] Corporations Act 2001 (Cth) s 724 (as modified by ASIC Corporations (Minimum Subscription and Quotation Conditions) Instrument 2016/70 (Cth)).
[4] Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174 [12], [22], [24D].
In Re Solco Ltd[5] McKerracher J summarised the legislative scheme for fundraising for companies and curative orders. That decision has been quoted with approval on a number of subsequent occasions.[6] It is unnecessary to again restate the legislative scheme as outlined by his Honour. I accept that, subject to the alterations subsequently effected by the ASIC Corporations (Minimum Subscriptions and Quotation Conditions) Instrument 2016/70 (Cth), McKerracher J has accurately summarised the applicable legislative scheme.
[5] Re Solco Ltd [2015] FCA 635; (2015) 106 ACSR 591 [15] - [20].
[6] See eg Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22 [15] ‑ [16]; Re Helios Energy Ltd [18]; Re Austsino Resources Group Ltd [2018] FCA 883 [12].
Two matters mentioned by McKerracher J were of importance to the case before me:
•Section 723 sets out the consequences if time limits are not observed for admission to quotation. By s 723(3) the issue of securities is void and the offeror must return the application money.[7]
•The statutory purpose of s 723 is that investors who expect the issued securities to be admitted to quotation on a financial market should receive such securities within the prescribed timeframe so that they are able to take advantage of the quotation.[8]
[7] Re Solco Ltd [20].
[8] Re Solco Ltd [20].
Section 1322(4)(d) of the Corporations Act 2001 (Cth) may be used to extend the time period for obtaining admission to quotation under s 723(3)(b). It provides:
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 conditionally or subject to such conditions as the Court imposes:
…
(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.
However, by s 1322(6) the court must not make an order under s 1322(4)(d) unless it is satisfied that 'no substantial injustice' has been or is likely to be caused to any person. The word 'injustice' requires the court to consider real, and not merely insubstantial or theoretical, prejudice. A degree of prejudice to a person or persons may be outweighed if the overwhelming weight of justice is in favour of the making of the order.[9]
[9] Re Compaction Systems Pty Ltd [1976] 2 NSWLR 477, 493; Elderslie Finance Corporation Ltdv Australian Securities Commission (1993) 11 ACSR 157, 160.
There are numerous cases in which courts have made orders to extend the time for admission of quotation and to validate and confirm issued shares where there has been a contravention of s 723(3).[10] Those cases, unlike the case before me, concerned applications made after the expiration of the three months and thus also involved a s 1322(4)(a) validation order or a similar such order under s 254. Extension orders have also been made on application to extend the period under s 723(3) where a validation order is not yet required.[11]
[10] See eg Re Wave Capital Ltd [2003] FCA 969; (2003) 21 ACLC 1,995; Re Golden Gate Petroleum Ltd [2004] FCA 1119; (2004) 50 ACSR 659; Re Tony Barlow Australia Ltd [2005] FCA 363; (2005) 53 ACSR 1; Re Biron Capital Ltd [2005] FCA 1228; (2005) 54 ACSR 548; Re Laserbond Ltd [2007] FCA 2056; (2007) 25 ACLC 1,658; Re Taruga Gold Ltd [2005] FCA 892; Re Solco Ltd; Re G8 Communications Ltd; Re Helios Energy Ltd.
[11] Re Geopacific Resources NL [2007] FCA 43; (2007) 25 ACLC 226 [16] ‑ [17]; Re NuSep Ltd [2007] FCA 613; (2007) 62 ACSR 301 [28] ‑ [29]; Re Austsino Resources Group Ltd.

Accordingly, there was no doubt that the extension order sought by Jaxsta was within the power provided by s 1322(4)(d).
Counsel referred me to a number of authorities which addressed the essential principles on such an application under s 1322(4). I acknowledge that many of those principles are mentioned in the cases referred to at footnotes 10 and 11. However, those principles are of more relevance to a case invoking the power under s 1322(4)(a). As to s 1322(4)(d), I derived more guidance from the two-stage process embraced by Barker J in Blaze Asset Pty Ltd v Target Energy Ltd.[12]
[12] Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488.
There Barker J stated:
[T]he exercise of the power under s 1322(4) [referring to s 1322(4)(d)] involves in effect a two stage process. First, the Court needs to determine whether, having regard to the circumstances of the case and the general objects of the [Corporations Act 2001 (Cth)] it is appropriate to make an order extending a relevant period, or abridging a relevant period. Secondly, if those circumstances are made out, then the Court must address the question whether any substantial prejudice has been or is likely to be caused to any person by the making of such an order.[13]
[13] Blaze Asset Pty Ltd v Target Energy Ltd [31].
Also, the power under s 1322(4)(d) must be exercised having regard to the general objects and purposes of the relevant statutory provision within the Corporations Act 2001 (Cth) - here the statutory purpose evinced by s 723(3). The court's order must not undermine the reasons for the requirements of the Act. The power must be exercised having regard to the interests of all parties affected and the public interest in ensuring compliance with the Act.[14]
[14] Re Wave Capital Ltd [29].

Disposition

Jaxsta is an 'interested person' for the purpose of s 1322(4)(d). Without an extension the shares Jaxsta has issued will be void and it must return the application money as received. Also, consistent with the many authorities in which s 1322(4)(d) orders have been made in prior cases, it is clear that the time limit for obtaining quotation under s 723(3)(b) is one which may be extended under s 1322(4)(d). It is a period for the doing of an act under the Corporations Act 2001 (Cth) and in relation to Jaxsta.
In the circumstances as recounted I was persuaded that it was appropriate to extend the quotation period by the 14 days as sought in Jaxsta's application. There were eight reasons for this conclusion.
First, the extension sought was for a relatively short period of time. An extension of two weeks does not, in the circumstances of the present case, impair or unduly adversely affect fulfilment of the statutory purpose of s 723(3).
Second, the issue of independence on the part of the auditor of Jaxsta Holdings' financial statements that has recently emerged was unexpected. It also emerged at a time when remediative measures could not reasonably be effected before the expiration of the three month period. The power under s 1322(4) is remedial. It reflects a broad legislative policy that the law should not inflect unnecessary inconvenience because of non‑compliance where such non-compliance is the product of honest error or inadvertence and where the court can avoid its effects without prejudice to third parties or the public interest.[15] The issue that has arisen may be capable of resolution within the extended period that has been sought. In any case, for reasons I will come to, it is appropriate that Jaxsta be given an opportunity to resolve the issue and that necessitates an extension of the quotation period.
[15] Re Wave Capital Ltd [29].
Third, allied to the earlier factor, the independence issue that has arisen is not a problem of Jaxsta's making. Rather, it involves a possible contravention on the part of the auditor of Jaxsta Holdings (who, it should be noted, was not appointed or engaged by Jaxsta). Accordingly, there is no disentitling conduct on the part of Jaxsta. This is not a case where there has been inadvertence or error on the part of the applicant.
Fourth, in the absence of an extension there would be serious and potentially irreversible consequences for Jaxsta. Jaxsta would have to return the $5.269 million. Jaxsta also remains exposed to some $450,000 in corporate and legal expenses. Jaxsta's ability to participate in a replacement capital raising is questioned by Mr Nigaglioni. Mr Nigaglioni deposes to the effect that if an extension is not permitted there would be genuine uncertainty as to whether Jaxsta could continue to operate as a going concern. At the least, if Jaxsta was required to restart the capital raising process there would be considerable delay and additional cost. This would operate to the disadvantage of Jaxsta and its existing shareholders. It would also operate to the disadvantage of those share applicants who wished to retain their investment.
Fifth, in granting additional time and thereby potentially facilitating the transaction as originally contemplated, the making of the orders sought was consistent with facilitating the conduct of commerce generally.[16] The power under s 1322(4)(d) ought to be exercised so as to not unreasonably stifle corporate and financial activity on technical grounds.[17] Section 1322(4) may be employed to maintain market confidence that technical difficulties will not unnecessarily prevent or unduly hinder the raising of capital by the issue of securities to be admitted for quotation.[18]
[16] Re Solco Ltd [33].
[17] Blaze Asset Pty Ltd v Target Energy Ltd [33].
[18] Re Solco Ltd [33].
Sixth, Jaxsta has acted promptly in bringing this application. There has been no delay.
Seventh, neither the ASIC nor the ASX opposed the application.
Finally, for reasons I will address when dealing with the issue of substantial injustice, I was satisfied that the interests of the share applicants could be adequately protected.
There is an issue as to the utility of the extension as was sought. If I were satisfied that the issue as identified by the ASX could not be overcome then the s 1322(4)(d) order as sought would be pointless. The order would not then have been made. Jaxsta acknowledges its proposed efforts may prove futile. But there is also a sufficient chance that the difficulty may be overcome. It may be, as the ASX suggests, that the timeframe suggested is unrealistic. However, the ASX has not categorically ruled out the possibility that matters may be addressed in the time Jaxsta has proposed.
I am, in any case, prepared to consider an application for a further extension beyond 21 December 2018. Accordingly, there is utility in providing for the short extension as sought to determine what steps might be taken to bring about reinstatement and the likely timeframe in which reinstatement could occur. That information would assist Jaxsta in making an application for a further extension. Whether such an extension will be granted will, however, depend on the progress made during the current period of extension and the likelihood of quotation being achieved within a reasonable period.
It was also necessary that I be satisfied that no substantial injustice had been or was likely to be caused to any person.
Plainly no substantial injustice had yet been caused. The three month period had not expired at the time of the hearing. Thus the question was whether any substantial injustice was likely to be caused to any person - the various share applicants - by the proposed order under s 1322(4)(d).
Since the order only provided for an extension of 14 days the likelihood of substantial injustice had to be assessed by reference to that time period. The reason for that is simple. Without the extension period the shares as issued would become void on 8 December 2015. Jaxsta would have to repay the $5.269 million to the share applicants. The extension order results in a deferral of those consequences unless quotation occurs in the meantime. Whether the proposed order would cause substantial injustice thus falls to be assessed by the 14 day delay in those consequences.
Jaxsta was prepared to proffer an undertaking to ensure that the $5.269 million remained intact. Accordingly, the delay in repayment did not expose the share applicants to a dissipation risk.
A delay in repayment of the share application money was likely to be viewed differently by different share applicants. Some applicants - perhaps many - would be prepared to await the 14 days in the hope that reinstatement was completed and the shares as issued were quoted for trading. That might be all the more so knowing of Jaxsta's undertaking to the court and the endeavours that were being pursued to bring about reinstatement and quotation. But others might have wished to bring the matter to a close and recoup their application money at once.
In my opinion, any prejudice to those share applicants who fell within the second category was appropriately accommodated by reserving to them liberty to apply to revoke or vary the extension order.
It would be possible, under that reservation, for an individual share applicant to apply to modify the extension order insofar as it applied to the applicant and the shares as issued to the applicant. The modified orders could 'carve out' the applicant so that the extension did not apply to the applicant. As a result, shares issued to that share applicant would become void and Jaxsta would be obliged to return to that applicant the money received for those shares.
In practical effect the reservation of liberty to apply thereby affords individual share applicants a method to effect withdrawal from their application. I appreciate that this is not a withdrawal right such as is contemplated by the 'refresh document' process under the ASIC Corporations (Minimum Subscriptions and Quotation Conditions) Instrument 2016/70 (Cth). The matter is subject to order of the court rather than mere election on the part of the share applicant. But, given the limited extension of 14 days, I was satisfied that this mechanism - coupled with Jaxsta's undertaking - was sufficient to preclude any substantial injustice.
I did, however, require that Jaxsta inform the share applicants of the orders, and in particular the order granting liberty to apply. Jaxsta was to inform the individual share applicants of the steps they could take to bring about a reimbursement of their share application money. An order under s 1322(4)(d) may be made subject to condition.[19] Such a condition was appropriate so that the share applicants were properly informed of their entitlement to seek 'withdrawal'.
[19] Corporations Act 2001 (Cth) s 1322(4).

Conclusions and orders

For these reasons I made orders as follows:
1.The court notes and accepts the plaintiff's undertaking, as proffered in the affidavit of Jorge Rafael Nigaglioni sworn 7 December 2018, that the plaintiff will not without further order of the court use any of the $5,269,000 offer proceeds as currently held in a separate bank account maintained by the plaintiff during the period of any extension of the quotation period granted by the court pursuant to the application.
2. Pursuant to section 1322(4)(d) of the Corporations Act 2001 (Cth) (Corporations Act) the period set out in section 723(3)(b) of the Corporations Act for the admission to quotation by the Australian Securities Exchange (ASX) of securities of the plaintiff pursuant to the Prospectus lodged on 7 September 2018 and Supplementary Prospectus lodged on 28 September 2018 (Prospectus), is extended to 21 December 2018 (inclusive).
3.The plaintiff forthwith:
(a)lodge a copy of these orders with the Australian Securities and Investments Commission (ASIC);
(b) make an announcement to the ASX disclosing the terms of these orders which announcement is to contain information for the shareholders who subscribed for shares under the Prospectus in terms substantially in the Form of "Annexure A" to these orders; and
(c) dispatch by Monday 10 December 2018 at 5:00pm, to each shareholder who subscribed for shares under the Prospectus, the substance of the announcement to the ASX, by ordinary post or email (as applicable).
4. The plaintiff and all other interested parties, including the ASIC, have liberty to apply to revoke or vary par 2 of these orders upon first giving 24 hours' prior written notice.
5. The plaintiff have liberty to apply on 72 hours' prior notice for a further extension of the quotation period.
6. The application is otherwise adjourned for further hearing before the Hon Justice Vaughan on Friday, 21 December 2018 at 9.00 am.

ANNEXURE A
INCLUSION WITHIN PROPOSED ANNOUNCEMENT AND ADVICE TO SHAREHOLDERS WHO SUBSCRIBED FOR SHARES UNDER THE PROSPECTUS
Today, the Supreme Court of Western Australia (Court) issued orders to extend the end date of the period for admission to quotation by the ASX until Friday 21 December 2018 (Order).
A copy of the Order is attached.
As part of the Order, the Court has also requested that all persons who subscribed for shares under the Prospectus be notified of their entitlement to apply to the Supreme Court of Western Australia to modify or vary the orders made.
A new shareholder under the Prospectus may apply to the Court to modify or vary the orders such that:
·the extension of the quotation period does not apply to them; and
·as a result, the shares they were issued become void and the Company would be obliged to return the money received from the person for the shares that become void.

The application will be before the Court again on Friday, 21 December 2018 at 9.00 am.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
CC
RESEARCH ASSOCIATE TO THE HONOURABLE JUSTICE VAUGHAN
13 DECEMBER 2018