Re Memphasys Limited

The case of Re Memphasys Limited involved the Australian Securities Investment Commission (ASIC) and the company Memphasys Limited, primarily centred around the failure to issue a valid notice in accordance with ASIC Class Order 09/425. The dispute was brought before the Federal Court of Australia. ASIC sought declarations and other remedies against Memphasys Limited, asserting that the company had failed to issue the requisite cleansing notice as stipulated under section 708A(5)(e) of the Corporations Act 2001 (Cth). This failure occurred multiple times concerning shares issued under a share purchase plan, leading to a series of regulatory concerns.

The court was tasked with determining whether Memphasys Limited's failures to issue the cleansing notices constituted breaches of the Corporations Act 2001 (Cth). It also had to consider whether the company's actions warranted the granting of curative orders under section 1322 of the Corporations Act 2001 (Cth). Furthermore, ASIC sought declarations under sections 1322(4)(a) and 254E of the Corporations Act 2001 (Cth) to clarify the legal status of the shares issued by Memphasys Limited. The court needed to assess whether the declarations sought by ASIC were appropriate and whether ancillary relief should be granted to rectify the situation.

In its decision, the Federal Court held that Memphasys Limited had indeed failed to issue the required cleansing notices, which constituted breaches of the Corporations Act 2001 (Cth). The court found that these failures warranted the granting of curative orders under section 1322 of the Act. The court also made the declarations sought by ASIC, clarifying the legal status of the shares issued by the company. In addition, the court granted ancillary relief to address the situation comprehensively. This included ordering Memphasys Limited to take necessary actions to ensure compliance with the regulatory requirements going forward.