Re Metalicity Ltd - [2021] WASC 256

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE METALICITY LTD; EX PARTE METALICITY LTD [2021] WASC 256
CORAM:   HILL J
HEARD:   3 JUNE 2021
DELIVERED          :   3 JUNE 2021
PUBLISHED           :   27 JULY 2021
FILE NO/S:   COR 93 of 2021
MATTER:   IN THE MATTER OF METALICITY LTD

EX PARTE
METALICITY LTD
Plaintiff

Catchwords:

Corporations – Application for orders under s 1322(4)(a) of Corporations Act 2001 (Cth) – Failure of company to have ASIC consent to the resignation of auditor prior to annual general meeting – Resolution to appoint new auditor passed at annual general meeting – Where no blatant or flagrant disregard of obligations – Appropriate form of orders

Legislation:

Corporations Act 2001 (Cth) s 327A, s 327B, s 329, s 1322(4)(a)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

C C Spencer

Solicitors:

Plaintiff

Tottle Partners

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

Re Bellevue Gold Ltd [2021] WASC 80
Re Caeneus Minerals Ltd [2018] FCA 560
Re Classic Minerals Ltd [2018] FCA 2039
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re ICandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396

HILL J:

On 28 May 2021, the plaintiff, Metalicity Limited (Metalicity), filed an originating process seeking orders under s 1322(4)(a) of the Corporations Act 2001 (Cth) (Act) relating to a contravention of s 329(5) of the Act. The contravention occurred as a result of the failure to obtain the consent of the Australian Securities and Investments Commission (ASIC) to the resignation of Stantons International Audit and Consulting Pty Ltd (Stantons) as auditor of Metalicity until May 2021, and the subsequent failure of Metalicity to determine that consent had not been given prior to the appointment of a new auditor at its annual general meeting held on 26 November 2020.
In light of the urgency with which the application was brought, I made orders at the conclusion of the hearing on 3 June 2021, subject to minor amendment, granting the relief sought, and said that I would subsequently publish reasons for my decision. These are the reasons for my decision.

Factual background

Metalicity is an Australian public company whose securities are listed on the Australian Securities Exchange (ASX). Metalicity is a mineral exploration and development company.[1]
[1] First affidavit of Justin Charles Barton filed 28 May 2021 [6].
As at 28 May 2021, Metalicity had 1,730,735,820 shares on issue and a market capitalisation of approximately $23.3million.[2]
[2] First affidavit of Justin Charles Barton filed 28 May 2021 [7].
On 7 February 2012, Stantons was appointed as Metalicity's auditor in place of Grant Thornton NSW.[3]
[3] First affidavit of Justin Charles Barton filed 28 May 2021 [8] – [9], 'JB2'.
In October 2020, the directors of Metalicity resolved to appoint Pitcher Partners BA&A Pty Ltd (Pitcher Partners) as auditor in place of Stantons. This decision was…

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.

Continue reading Re Metalicity Ltd

Details

AGLC: Re Metalicity Ltd [2021] WASC 256
Case: [2021] WASC 256
Decision Date

CaseChat Overview and Summary

Metalicity Limited applied to the Supreme Court of Western Australia for orders under s 1322(4)(a) of the Corporations Act 2001 (Cth) to validate the resignation of Stantons International Audit and Consulting Pty Ltd as its auditor and the appointment of Pitcher Partners BA&A Pty Ltd as its replacement auditor. This was due to the failure to obtain the consent of the Australian Securities and Investments Commission (ASIC) to Stantons' resignation prior to the annual general meeting held on 26 November 2020. The court had to decide whether it should grant the relief sought under s 1322(4)(a) of the Act, considering the prescriptive requirements of s 1322(4) and the preconditions in s 1322(6) of the Act.

The court found that the plaintiff had acted honestly and there was no blatant or flagrant disregard of their obligations. The failure to obtain ASIC's consent arose from inadvertence, and the plaintiff acted promptly in seeking legal advice and commencing these proceedings upon discovering the issue. The court also found that it would be just and equitable to grant the relief sought and that no substantial injustice would be caused to any person if the orders were made. The court granted the relief sought, validating the resignation of Stantons and the appointment of Pitcher Partners as auditor, effective as of 26 November 2020.

Orders