Re Macro Metals Ltd
[2025] WASC 316
•8 AUGUST 2025
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE MACRO METALS LTD; EX PARTE MACRO METALS LTD [2025] WASC 316
CORAM: HILL J
HEARD: 17 JULY 2025
DELIVERED : 17 JULY 2025
PUBLISHED : 8 AUGUST 2025
FILE NO/S: COR 107 of 2025
MATTER: IN THE MATTER OF MACRO METALS LTD
EX PARTE
MACRO METALS LTD
Plaintiff
Catchwords:
Corporations - Application for extensions of time to lodge cleansing notices - Application for declaratory relief to validate trading in securities issued without a valid cleansing notice - Multiple instance of securities being issued without a valid cleansing notice - Where no blatant or flagrant disregard of obligations - Where no substantial injustice if orders made - Turns on own facts
Legislation:
Corporations Act 2001 (Cth) s 708A, s 1322
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | B Willesee |
Solicitors:
| Plaintiff | : | Hamilton Locke |
Cases referred to in decision:
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)
By originating process dated 11 July 2025, the plaintiff, Macro Metals Limited (Company), seeks declaratory relief pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth) (Act) to validate the quotation, offers for sale, and sale of shares, which were issued after four separate conversions of options between 27 March and 22 April 2025. An amended originating process was filed today to slightly amend the relief sought and to add an additional order seeking relief under s 1322(4)(a) of the Act to extend the timeframe within which a cleansing notice may be lodged with pursuant to s 708A(5) of the Act.
In support of its application, the Company read five affidavits, being:
(a)two affidavits of Melissa Jane Caddo, a lawyer employed by the Company's solicitors, filed 14 and 16 July 2025;
(b)an affidavit of Lisa Wynne, the secretary and chief financial officer of the Company, filed 16 July 2025; and
(c)two affidavits of Simon James Rushton, the managing director of the Company, filed 16 and 17 July 2025.
I have also had the benefit of detailed written submissions from the Company, as well as oral submissions from counsel who appeared before me this morning.
Notice of the application has been given to the Australian Securities and Investments Commission (ASIC) and the Australian Securities Exchange (ASX).[1] ASIC neither supports nor opposes the application and gave notice that it did not oppose the application.
[1] Affidavit of Melissa Jane Catto filed 16 July 2025.
Factual background
The Company is a mineral exploration, development and mining services company which owns a portfolio of iron ore and manganese assets. It was incorporated in 1980 and since 1987 has been publicly listed on the ASX.[2]
[2] Affidavit of Melissa Jane Catto filed 14 July 2025 [5] - [7], 'MJC-1'.
As at 11 July 2025, the Company had approximately 3.978 billion shares on issue with a market capitalisation of approximately $31.82 million.[3]
[3] Affidavit of Melissa Jane Catto filed 14 July 2025 [9].
The Company's application concerns four separate share issues, being:
(a)the issue of 55,039 ordinary fully paid shares to Ronald Peter Vallee on 27 March 2025;
(b)the issue of 20,000,000 ordinary fully paid shares to African Resource Consulting Pty Ltd (ARC) on 27 March 2025;
(c)the issue of 15,000,000 ordinary fully paid shares to John Campbell Smyth on 22 April 2025; and
(d)the issue of 5,000,000 ordinary fully paid shares to ARC on 22 April 2025
(together, the Share Issues).
Each of the Share Issues occurred after a notice of exercise of options was given to the Company by the relevant optionholder.
At the time the shares were issued to these optionholders and the applications for quotations of these shares were lodged with the ASX, Ms Wynne mistakenly believed that the options had been issued pursuant to the Company's employee incentive plan (EIP). This mistaken belief had been formed from her review of the Company's records, which led her to believe that the only options the Company had issued were issued pursuant to its EIP. As a result, on receipt of the notices of exercise of these options, Ms Wynne did not investigate the matter further.[4]
[4] Affidavit of Lisa Wynne filed 16 July 2025 [19], [22], [35], [39] - [40].
On 9 July 2025, the Company terminated Ms Wynne's position as company secretary and chief financial officer on unrelated grounds. On that same date, Mr Rushton was informed by a prospective company secretary during an interview that in respect of the Share Issues, the Company may have contravened its obligations under s 708A(5)(e) of the Act to lodge cleansing notices within five days of the issue of the shares.[5]
[5] Affidavit of Simon James Rushton filed 16 July 2025 [31].
Mr Rushton immediately informed Ms Wynne by email of the possible contravention by the Company and asked her to urgently investigate the matter.[6]
[6] Affidavit of Lisa Wynne filed 16 July 2025 [70], 'LW-13'.
Mr Rushton then took steps to address the possible contravention by seeking legal advice and engaging solicitors, making an announcement that the Company would be entering a trading halt, and notifying both the ASX and ASIC of the contravention.[7]
[7] Affidavit of Simon James Rushton filed 16 July 2025 [48]; Affidavit of Lisa Wynne filed 16 July 2025 [73].
On 11 July 2025, the Company went into a trading halt. Subsequently, its shares have been suspended from trading pending the determination of this application.
On 11 July 2025, the Company's solicitors wrote to this court foreshadowing the application that was filed on 14 July 2025.
Ms Wynne's evidence is that the failure to lodge the cleansing notices was a result of her assumption that all options the Company had on issue had been issued under its EIP. In addition, at the time that she lodged the applications for quotations of shares that are the subject of the Share Issues, Ms Wynne was new to her role and still becoming familiar with the Company's operations.[8]
[8] Affidavit of Lisa Wynne filed 16 July 2025 [65], [67].
Ms Wynne says that at the time of each of the Share Issues, there was nothing that would have prevented the Company from lodging a cleansing notice.[9]
[9] Affidavit of Lisa Wynne filed 16 July 2025 [69].
Ms Wynne reviewed the share registry to see whether any of the shares the subject of the Share Issues have been traded. Her evidence is that only ARC has traded any of the shares that were issued to it on 27 March 2025 and 22 April 2025. She has also reviewed the prices at which the Company's shares have traded since the Share Issues. Her evidence is that the share price has not materially altered over this time.[10]
[10] Affidavit of Lisa Wynne filed 16 July 2025 [77] - [83], 'LW-15', 'LW-16'.
In addition to the Share Issues that are the subject of this application, the Company has drawn to my attention a further share issue that took place on 7 February 2025, which also was not followed by the lodgement of a cleansing notice. This share issue is not a subject of this application because its shares are the subject of a 12-month escrow arrangement.[11]
[11] Affidavit of Lisa Wynne filed 16 July 2025 [72].
Legal principles
Pursuant to pt 6D.2 of the Act, disclosure obligations are imposed on companies in relation to the issue and sale of securities. These obligations can be satisfied by the company lodging either a cleansing notice or a prospectus. If disclosure has not been made by the issuer and the securities are on-sold within a period of 12 months, the party to whom the securities are issued may be obliged to make disclosure.
The Company seeks a declaration under s 1322(4)(a) that any quotation offer for sale or sale of shares in respect of each of the Share Issues is not invalid by any contravention of s 708A(5)(e) and s 707(3) of the Act, as well as an extension of the time to lodge the relevant cleansing notices.
In considering an application under s 1322(4) the essential principles are well known and can be summarised as follows:[12]
(a)The prescriptive requirements of the wording in s 1322(4) and the pre‑conditions in s 1322(6) of the Act must be satisfied.[13]
(b)Even where this is the case, the court retains a discretion under s 1322(4) of the Act as to whether it will make the orders sought.
(c)The broad power that has been granted to the court under s 1322 of the Act reflects the legislative policy that the law should not inflict unnecessary liability or inconvenience, or invalidate transactions because of non-compliance with its requirements 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.[14]
(d)Limitations to these broad powers should not be readily implied.[15] This is because s 1322 is remedial in character and should be applied broadly.
[12] Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174 [20].
[13] Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396 [43], [53], [64].
[14] Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418 [29].
[15] Weinstock v Beck [43], [55] - [56], [60], [64].
Should an extension of time be granted for the filing of the cleansing notices?
In considering whether to grant an extension of time under s 1322(4)(d) of the Act, the court undertakes a two-stage process. First, the court considers whether it is appropriate to make an order extending the relevant period under the Act having regard to the circumstances of the case and the general objects of the Act. Second, the court then considers whether any substantial prejudice has been or is likely to be caused by the making of the proposed order.
The court must exercise its power in a manner which is consistent with the general objects and purpose of the relevant statutory provision and must not undermine the reason for the requirement of the Act.
The extension of the relevant period may be extended under s 1322(4)(d) of the Act even if it has expired, as is the case in respect of each of the Share Issues.
For the following reasons, I am satisfied that, in the circumstances of this case, it is appropriate to grant the extension of time sought within which to lodge the cleansing notices until 4.00 pm tomorrow 18 July 2025.
First, on the evidence before me, I accept and find that the failure to lodge the cleansing notices was honest and inadvertent.
Second, in the absence of an extension, there are adverse consequences for the Company and its shareholders. Unless orders are made by the court, the Company's shares will continue to be suspended from trading, which will deny shareholders the opportunity to trade their shares.
Third, shareholders who have purchased shares on market since the end of March 2025 may have purchased some of the shares from the Share Issues. Given that any such purchases will have occurred without disclosure, this potentially means the transactions are void or voidable, which will create title issues for these parties.
Fourth, each of the recipients of the Share Issues have been notified of the error.
Fifth, in facilitating the transaction as originally contemplated, the making of these orders is, in my view, consistent with the conduct of commerce generally. As the courts have made clear, s 1322(4)(d) of the Act should be exercised in a manner which does not unnecessarily stifle corporate and financial activity on technical grounds.
Sixth, the plaintiff has brought this application without delay. In this case, the issue was identified just over a week ago and since then, the plaintiff has taken significant steps to determine the relief required, has sought legal advice, commenced the proceedings, and sought an urgent hearing of its application.
Seventh, the additional orders sought by the plaintiff provide for notice to be given to all persons affected and the ability for them to raise any issues with the court.
Finally, no party or either regulator appeared at the hearing today to oppose the orders that are sought by the Company.
Are the conditions in s 1322(6) satisfied?
In this case, counsel for the Company submits that the preconditions in both s 1322(6)(a)(ii) and (iii) are satisfied. I accept this submission.
In relation to the precondition in s 1322(6)(a)(ii) of the Act, in determining whether someone has acted honestly, the court will consider the absence of any evidence of dishonesty as well as what actions have been taken to remedy the error once they have become aware of the error. On the evidence before me, I accept and find that the failure by Ms Wynne to lodge cleansing notices in relation to each of the Share Issues was honest and inadvertent. At the date of each of the Share Issues, Ms Wynne mistakenly believed that cleansing notices were not required as the shares were being issued under an employee incentive scheme which does not require such a notice.
I also accept that in the circumstances of this case, it would be just and equitable to make the orders sought.
In considering whether there would be any substantial injustice if the orders sought are made, I have considered the classes of persons who may be impacted by the making of these orders. For the following reasons, I do not consider that any substantial injustice would be caused by the making of the orders, and, in fact, consider the reverse to be the case.
First, in my view, there would be prejudice to the recipients of the Share Issues if the orders sought are not made, as any future sales of these shares may be void or voidable. Alternatively, these recipients may simply just be prevented from dealing with their assets for a 12‑month period.
Second, there will be prejudice to the Company in having questions over its shares and the possibility it may be required to stay involved in the matter.
Third, in relation to the Company's shareholders more broadly, the Company's failure to comply with the relevant provisions of the Act has caused it to enter into a trading halt. If orders are not made by the court, these shareholders will not have the benefit of an active market for their shares.
Should the court exercise its discretion to grant the relief sought?
In exercising the court's discretion to grant relief, a relevant factor is the promptness with which the plaintiff has sought to remedy the irregularity once it was identified. As I have already indicated, immediate remedial steps were taken by the Company once the failure to comply with the relevant provisions of the Act was drawn to Mr Rushton's attention.[16]
[16] Affidavit of Simon James Rushton filed 16 July 2025 [48].
I accept and find that there is no evidence of any substantial misconduct, serious wrongdoing or flagrant disregard of the Act or the Company's constitution that would warrant the exercise of the discretion to refuse the relief that is sought.
There is nothing in the evidence before me that suggests any minority interest might be oppressed or that any other interest could be affected by the orders that are sought by the Company. I am satisfied that shareholders, together with the ASX and ASIC, have been notified of the issue that has arisen and have been given notice of the application. No shareholder or either regulator has sought to be heard or to intervene at the hearing today.
Finally, in relation to public policy considerations, it is my view that no public policy will be undermined by granting the relief sought by the Company.
Should the declarations sought by the Company be made?
The Company has sought two declarations under s 1322(4)(a) of the Act. First, in relation to all Share Issues, a declaration that the cleansing notice to be filed by 4.00 pm tomorrow be deemed to take effect as if it had been given to the ASX within five business days of the issue of their shares. Second, that any offer for sale or sale of securities by ARC will not be invalid by reason of the failure to issue a cleansing notice and the consequent failure of the seller to comply with s 707(3) of the Act.
In respect of the first declaration, the question as to whether the court should make such a deeming order was discussed by Colvin J in Re Spectur Limited.[17] In that case, his Honour noted that:
Spectur also sought orders to the effect that when cleansing notices are issued in accordance with the orders extending time that the notices be deemed to take effect as if they had been given within the period of five business days specified in s 708A(6)(a). The effect of such an order would be to go further than extend the period after the time for compliance had passed (which is a possibility that is expressly contemplated by s 1322(4)(d)). It would give the cleansing notice retrospective operation.
The Court has power to make orders that are consequential upon or ancillary to an order extending the period for doing an act, matter or thing under the Corporations Act. There may be circumstances in which a period may be extended to a date which has already passed by the time of the application so as to bring an act that has occurred outside a period specified by the Corporations Act within the specified period. In such a case, there may be an ancillary order to the effect that the act which had already occurred was to take effect as if performed when time had been extended. However, the proposed order would go further and give a future act retrospective effect. In particular, it would seek to authorise the service of cleansing notices with retrospective effect. It is an order which would make the extension of the period of time unnecessary. As indicated in the course of submissions in support of the application I am not presently persuaded that such an order would be within the scope of s 1322(4)(d) or the power to make consequential or ancillary orders. In those circumstances, counsel for Spectur did not press for the making of those additional orders.
[17] Re Spectur Limited [2019] FCA 867 [11] - [12].
In that case, at the time of the hearing there was no evidence that there had been any trading in the shares, nor had a cleansing notice been lodged. As discussed with counsel for the Company during today's hearing, I accept that in such a case there is no utility in making any orders for a declaration of validity, nor a deeming order. Counsel for the Company accepted this was the case and did not press for the making of the first declaration.
In respect of the second declaration, I am satisfied that on the evidence before me, there has been some trading in the shares.
In respect of second declaration, this proposed order:
(a)is framed in a declaratory form;
(b)identifies the act, matter or thing, namely the offers and sales of securities; and
(c)identifies the contraventions or possible contraventions that are sought to be validated by the orders, namely:
a.the Company's failure to give notices under s 708A(5)(e) to exempt the sellers from the obligation of disclosure; and
b.any consequent failure by the sellers of securities to comply with s 707(3).
For the reasons that I have already given in respect of the extension of time, it is my view that it is appropriate to make an order in terms of order 3 of the originating process.
Conclusion and Orders
For these reasons, it is my view it is appropriate to grant the relief in terms broadly in terms of the originating process, with the amendment proposed by counsel for the Company.
It is usual in cases such as this to provide an opportunity for shareholders and any persons with a sufficient interest in the matter to raise a complaint or concern about the orders. The usual period is that there be liberty to apply within 28 days, which is the timeframe sought by the Company.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
8 AUGUST 2025
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