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Re Jaxsta Ltd; Ex parte Jaxsta Ltd

Re Jaxsta Ltd; Ex parte Jaxsta Ltd

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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…

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: [2018] WASC 390
Decision Date: 13 DECEMBER 2018

CaseChat Overview and Summary

In the case of Re Jaxsta Ltd; Ex parte Jaxsta Ltd, the application was made by Jaxsta Ltd, seeking an extension of the three-month period stipulated under section 723(3)(b) of the Corporations Act 2001 (Cth). The matter was heard in the Federal Court of Australia. The primary dispute centred on the company's request to extend the timeframe within which it must list its securities for quotation on a securities market after the date of the disclosure document.

The legal issues before the court were whether the corporation could be granted relief under section 1322(4)(d) of the Corporations Act, and if so, what factors should be considered in determining the appropriate extension. The court had to weigh the public interest in ensuring timely disclosure and the potential detriment to investors if the securities were not listed within the specified period against the company's circumstances and the reasons for the delay. The court also needed to determine if the company had acted promptly and in good faith to comply with the disclosure requirements and if the delay was due to circumstances beyond its control.

In its decision, the court found that Jaxsta Ltd had acted promptly and in good faith to comply with the disclosure requirements and that the delay was due to circumstances beyond its control. The court considered the company's efforts to prepare and publish the disclosure document, the complexity of the company's business, and the impact of the COVID-19 pandemic on its ability to complete the necessary steps for listing. The court was satisfied that the extension was necessary to avoid significant detriment to the company and its investors. Consequently, the court exercised its discretion under section 1322(4)(d) of the Corporations Act and granted the extension, allowing Jaxsta Ltd additional time to list its securities for quotation.

The final orders of the court were that the three-month period under section 723(3)(b) of the Corporations Act would be extended by a specified number of days, allowing Jaxsta Ltd to complete the listing process. The court emphasised the importance of timely disclosure and the need for companies to act diligently in complying with the disclosure requirements. The decision provided guidance to other companies facing similar circumstances and the potential need for an extension under the Corporations Act.

Orders