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Re Metalicity Ltd

Re Metalicity Ltd

Case [2020] WASC 387 29 October 2020

Corporate Law & Governance

Securities Law

Cleansing Notices

Statutory Compliance

Corporate Law & Governance

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION:   METALICITY LTD [2020] WASC 387
CORAM:   HILL J
HEARD:   16 OCTOBER 2020
DELIVERED          :   16 OCTOBER 2020
PUBLISHED           :   29 OCTOBER 2020
FILE NO/S:   COR 123 of 2020

EX PARTE
METALICITY LTD
Plaintiff

Catchwords:

Corporations law - Securities - Application for orders extending the period for issuing cleansing notices or prospectus under s 708A of the Corporations Act 2001 (Cth) - 17 instances of securities being issued without valid cleansing notice - Where trading of securities prior to issue of cleansing notice or prospectus - Where no blatant or flagrant disregard of obligations - Where no substantial injustice if orders made - Consideration of appropriate form of orders - Appropriate costs order

Legislation:

Corporations Act 2001 (Cth), s 707, s 708A, s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

A J Papamatheos & C Spencer

Solicitors:

Plaintiff

Tottle Partners

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

Re Austpac Resources NL [2010] NSWSC 1438
Re Beadell Resources Ltd [2013] FCA 13
Re Caeneus Minerals Ltd [2018] FCA 560
Re Charter Hall Ltd [2007] FCA 1316
Re Classic Minerals Ltd [2018] FCA 2039
Re Diversified United Investment Ltd [2008] FCA 720
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re ICandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Imdex Ltd [2020] WASC 298
Re Jaxsta Ltd; Ex parte Jaxsta Ltd [2018] WASC 390
Re Micro-X Ltd [2019] FCA 1154
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re RCR Tomlinson Ltd [2009] FCA 1130
Re Sprint Energy Ltd [2012] FCA 1354
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck (2013) 251 CLR 396

HILL J:

Introduction

On 13 October 2020, the plaintiff, Metalicity Ltd (Metalicity), filed an originating process seeking orders under s 1322(4)(a) and s 1322(4)(d) of the Corporations Act 2001 (Cth) (Act) in relation to 17 separate share issues by the company.
Despite the large number of instances where shares were issued without a valid cleansing notice or cleansing prospectus, Metalicity has provided, where possible, a frank explanation as to the circumstances surrounding these issues. On the basis of the evidence before me, I was and am satisfied that in most cases, the failure was caused by inadvertence rather than any deliberate disregard of the plaintiff's obligations. In the remaining cases, I was and am satisfied that it is just and equitable to make the orders sought.
In light of the urgency with which the application was brought, I made orders at the conclusion of the hearing on 16 October 2020 granting the relief sought and said that I would subsequently publish reasons for decision. These are the reasons for my decision. In publishing my reasons, I have drawn on the helpful submissions…

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: METALICITY LTD [2020] WASC 387
Case: [2020] WASC 387
Decision Date: 29 OCTOBER 2020

CaseChat Overview and Summary

Metalicity Ltd applied to the Federal Court of Australia for orders extending the period for issuing cleansing notices or a prospectus under section 708A of the Corporations Act 2001. The applicant, Metalicity Ltd, identified seventeen instances where securities were issued without a valid cleansing notice or prospectus. Trading of the securities occurred prior to the issuance of the required notices or prospectus. The primary legal issue before the Court was whether the applicant's failure to issue cleansing notices or a prospectus within the statutory timeframe could be excused, given the circumstances of the case. The Court considered whether there was a blatant or flagrant disregard of the obligations under the Corporations Act and whether granting the relief would cause substantial injustice to any party.

The Court determined that while the applicant had indeed failed to issue the necessary notices or prospectus within the statutory timeframe, there was no blatant or flagrant disregard of their obligations. The Court also found that granting the relief would not result in any substantial injustice. The Court further considered the appropriate form of orders to be made, taking into account the specific circumstances of the case. The Court ordered that Metalicity Ltd must issue the required cleansing notices and prospectus within a specified timeframe. Additionally, the Court made an order as to costs, determining that Metalicity Ltd should bear the costs of the application.

Orders