Re Nanoveu Ltd - [2024] WASC 329

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE NANOVEU LTD; EX PARTE NANOVEU LTD [2024] WASC 329
CORAM:   STRK J
HEARD:   19 MARCH 2024
DELIVERED          :   19 MARCH 2024
PUBLISHED           :   9 SEPTEMBER 2024
FILE NO/S:   COR 37 of 2024
MATTER:   IN THE MATTER OF NANOVEU LTD

EX PARTE
NANOVEU LTD
Plaintiff

Catchwords:

Corporations law - Securities - Application for relief pursuant to s 1322(4)(d) of the Corporations Act 2001 (Cth) - Application for an order extending the period for issuing a cleansing notice or prospectus under s 708A of the Corporations Act 2001 (Cth) - Shares issued without a cleansing notice or prospectus - Where failure is inadvertent and there is no blatant or flagrant disregard of obligations - Where statutory precondition is met and there is no other discretionary reason to withhold relief

Corporations law - Financial reporting - Application for relief pursuant to s 1322(4)(d) of the Corporations Act 2001 (Cth) - Application for an order extending the period for lodging with the Australian Securities and Investments Commission half-year financial report, director's report and auditor's report under s 320(1) of the Corporations Act 2001 (Cth) - Lodgement delayed - Where no blatant or flagrant disregard of obligations - Where statutory preconditions are met and there is no other discretionary reason to withhold relief

Corporations law - Securities - Application for relief pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth) - Deeming orders - Offering of securities for sale without proper disclosure - Prescriptive requirements met - Where statutory precondition is met and there is no other discretionary reason to withhold relief

Legislation:

Corporations Act 2001 (Cth) s 1322
Rules of the Supreme Court 1971 (WA)

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

T C Webb

Solicitors:

Plaintiff

Steinepreis Paganin

Cases referred to in decision:

Ashley & Martin Pty Ltd [2022] WASC 20
Austpac Resources N.L., in the matter of Austpac Resources N.L. [2023] FCA 108; (2023) 167 ACSR 1
Bull v Australian Quarter Horse Association [2014] NSWSC 1665
Caeneus Minerals Ltd, in the matter of Caeneus Minerals Ltd [2018] FCA 560
Classic Minerals Limited, in the matter of Classic Minerals Limited [2018] FCA 2039
Ex Parte Imdex Ltd [2020] WASC 298
In the matter of Weebit Nano Limited [2023] NSWSC 43
Re Argent Minerals Ltd; Ex Parte Argent Minerals Ltd [2023] WASC 34
Re Bellavista Resources Limited; Ex Parte Bellavista Resources Limited [2023] WASC 40
Re BPM Minerals Ltd; Ex Parte BPM Minerals Ltd [2021] WASC 329
Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [2022] WASC 241
Re EHR Resources Ltd [2018] FCA 997
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17
Re Great Boulder Resources Ltd; Ex Parte Great Boulder Resources Ltd [2023] WASC 258
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re iCandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Insurance Australia Group Ltd [2003] FCA 581; (2003) 45 ACSR 702; (2003) FCR 581
Re Jaxsta Ltd; Ex Parte Jaxsta Ltd [2018] WASC 390
Re Matador Mining Ltd; Ex Parte Matador Mining Ltd [2021] WASC 132
Re Memphasys Limited; Ex Parte Memphasys Limited [2022] WASC 269
Re Metalicity Ltd [2020] WASC 387
Re Micro-X Limited, in the matter of Micro-X Limited [2019] FCA 1154
Re Pilbara Minerals Ltd; Ex Parte Pilbara Minerals Ltd [2021] WASC 330
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re Sprintex Ltd; Ex Parte Sprintex Ltd [2022] WASC 188
Re Whitehawk Ltd [2020] WASC 388
Re Yandal Resources Ltd; Ex Parte Yandal Resources Ltd [2022] WASC 338
Sandfire Resources Ltd [2024] WASC 261
Sprint Energy Limited, in the matter of Sprint Energy Limited [2012] FCA 1354
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396

STRK J:

Introduction

By this proceeding, Nanoveu Limited sought curative orders pursuant to s 1322 of the Corporations Act2001 (Cth), arising from the failure to lodge cleansing notices for three issues of fully paid ordinary shares in Nanoveu; and the late lodgement of the half year financial report, half year directors' report and auditor's report for Nanoveu for the half year ending 30 June 2023. The curative orders were sought in circumstances where upon discovering the omissions, Nanoveu had placed its shares into a trading halt and subsequently suspension.
Notice of the omissions and of the hearing of this application were given to shareholders of Nanoveu, to the Australian Securities and Investments Commission (ASIC), and to the Australian Securities Exchange (ASX). No interested party sought to be heard.
Upon considering the materials filed and hearing counsel for Nanoveu, I was satisfied that Nanoveu had provided a substantive and comprehensive explanation of the circumstances surrounding the omissions. Considering the comprehensive evidence read, I was satisfied that the omissions were caused by inadvertence and not a deliberate disregard for Nanoveu's obligations. While noting that there was some concern as to the timing of the application, I was satisfied that Nanoveu had alleviated the concern by giving a frank and detailed explanation as to the surrounding circumstances, and I was satisfied that the timing of the application was unlikely to have caused substantial prejudice or injustice to any persons.
In light of the urgency with which the application was brought, I made orders at the conclusion of the hearing granting the relief sought and stated I would publish reasons for my decision. These are my reasons.

The omissions and when they were detected

The application for curative orders was made in circumstances where Nanoveu failed to issue a valid notice pursuant to s 708A(5)(e) of the Corporations Act (also known as a cleansing notice) in the requisite period, or to issue a prospectus under s 708A(11) of the Corporations Act (also known as a cleansing prospectus), following the issue of shares on three separate occasions, namely:
(a)when 52,500,000 shares were issued in Nanoveu on 27 January 2023, and 6,000,000 shares were issued in Nanoveu on 30 January 2023 (together, the 'January shares'); and
(b)when 6,730,769 shares were issued in Nanoveu on 20 June 2023 (the 'June shares'),
(together, the 'share issues').
Nanoveu also failed to lodge its 30 June 2023 half year financial report and accompanying half year directors' report and auditor's report (together, the 'half year reports') with ASIC in accordance with s 320(1) of the Corporations Act - that is, within 75 days after the end of the half year.
As to the detection of the cleansing omissions, on 10 July 2023 Nanoveu's Chief Financial Officer and Company Secretary identified that a cleansing notice had not been issued with the issue of the June shares. A holding lock was then instituted in respect of the June shares and a due diligence process was initiated, in the course of which the omission relating to the January shares was identified. Nanoveu placed its shares into a trading halt on 19 July 2023, and subsequently a suspension on 21 July 2023.
It was not the case that Nanoveu failed to lodge the half year reports within time and then later discovered the omission. Rather, by reason of numerous identified errors and the time required to correct them so as to ensure that half year reports accurately reflected the financial position of Nanoveu, Nanoveu was unable to lodge the half year reports by the reporting deadline of 13 September 2023.

Declarations and orders sought by the application

Nanoveu sought and was granted leave to amend the originating process filed on its behalf on 11 March 2024 pursuant to O 21 r 5 of the Rules of the Supreme Court 1971 (WA). The amendments were to correct minor errors and to make plain the scope of the relief sought.[1]
[1] ts 3 (19 March 2024).
By the amended originating process filed on 13 March 2024, Nanoveu sought orders for relief arising from its failure to lodge cleansing notices for the three share issues and the late lodgement of the half year reports.
Among other ancillary, Nanoveu sought orders in the following terms:
1.Pursuant to section 1322(4)(d) of the Corporations Act, in respect of the ordinary fully paid shares in the Plaintiff identified in Column B in the Schedule to these orders, which were issued on the date identified in Column C in the Schedule to these orders, the period of five business days referred to in section 708A(6)(a) be extended to 7 March 2024.
2.Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that each notice under section 708A(5)(e) of the Corporations Act given to the Australian Stock Exchange Limited (ASX) on 7 March 2024 in respect of the ordinary fully paid shares in the Plaintiff identified in Column B in the Schedule to these orders which were issued on the date identified in Column C in the Schedule to these orders, be deemed to take effect as if it had been given to the ASX on the date of issue of these shares.
3.Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that any offer for sale or sale of the ordinary fully paid shares in the Plaintiff identified in Issues No. 1 and 2 in the Schedule to these orders which were issued on the date identified in Column C of the Schedule to these orders, during the period after their issue to the date of the Court's orders is not invalid by reason of:
(a)any failure of a notice under section 708A(5)(e) of the Corporations Act to exempt the sellers from the obligation of disclosure under the Corporations Act; and
(b)the sellers' consequent failure to comply with section 707(3) of the Corporations Act.
4.Pursuant to section 1322(4)(d) of the Corporations Act, in respect of the half‑year financial report, director's report and auditor's report of the Plaintiff for the half year ended 30 June 2023, the period by which each of those reports must be lodged with the Australian Securities and Investments Commission (ASIC) referred to in section 320(1) of the Corporations Act be extended to 4 December 2023.
…
The Schedule referred to in the originating process is reproduced below:

As was observed by counsel for Nanoveu, the form of orders sought regarding the cleansing errors was based on the orders made by this court in Re Argent Minerals Ltd; Ex Parte Argent Minerals Ltd [2023] WASC 34.[2] As to the half year reports, Nanoveu sought orders extending the time for lodgement of the reports until the date that they were actually lodged with ASIC - that is, an extension of 82 days from the lodgement date required under s 320(1) of the Corporations Act.
[2] See also Re Great Boulder Resources Ltd; Ex Parte Great Boulder Resources Ltd [2023] WASC 258, as noted in the ; outline of submissions par 83.
Further, I noted Nanoveu did not move for declarations or orders to relieve the directors or other officers of Nanoveu of any liability in connection with the relevant contraventions of the Corporations Act.[3]
[3] Outline of submissions par 9.

Evidence filed in support of the application

Four affidavits were filed and read in support of the application. Set out below is an overview of the evidence that was before the court. It is not intended to be a comprehensive description of all the evidence.

Affidavit of Naomi Haydari

The first was the affidavit of Naomi Haydari affirmed on 8 March 2024 to which Ms Haydari annexed 64 documents marked NH‑01 to NH‑64.
Ms Haydari is the Chief Financial Officer and Company Secretary of Nanoveu, having held those roles since 20 June 2023. Among other things, Ms Haydari described in her affidavit the business conducted by Nanoveu; estimated its market capitalisation; described the circumstances in which Ms Haydari came to assume the Company Secretary role of Nanoveu and the extent of handover that took place upon Ms Haydari assuming that role; described Ms Haydari's responsibilities as the Chief Financial Officer and Company Secretary of Nanoveu; described the circumstances in which Ms Haydari had identified the compliance failure that had occurred in relation to the issue of the June shares, and identified other notification omissions (not the subject of this application); deposed to her belief that there had been no trading of the June shares and to the placement of the June shares into a holding lock; described the circumstances in which Ms Haydari had identified the compliance failure that had occurred in relation to the issue of the January shares; deposed to her belief that there had been trading of the January shares and to the request made of the ASX on 19 July 2023 that Nanoveu be placed into a trading halt; deposed to the request made of ASX on 21 July 2023 that the trading halt be extended to a voluntary suspension (which remained in placed as at the date of her affidavit); deposed to the due diligence investigations into Nanoveu's compliance with the secondary sale provisions of the Corporations Act since 16 November 2018; deposed to not being aware of any other failure on the part of Nanoveu to issue a cleansing notice or to effectively cleanse an issue of shares other than the share issues the subject of this application; deposed to her belief as to the cause of the cleansing failures; deposed to the notice given to recipients of the share issues of the omissions and of Nanoveu's intention to apply to this court for relief under s 1322 of the Corporations Act; described other security issues that Ms Haydari identified as part of the due diligence investigations that she conducted, and the remedial action taken in relation to each of the compliance errors; described the steps intended to be taken to ensure compliance in the future, including the development of protocols for the handover of duties of the Company Secretary and Chief Financial Officer, for when shares are issued; deposed to the improvements made to Nanoveu's record keeping and the introduction of an action register; deposed to the circumstances which led to the delay in the completion of Nanoveu's half year reports; deposed that due to the numerous errors identified and the time required to correct them so as to ensure that half year reports accurately reflected the financial position of Nanoveu, Nanoveu was unable to provide the half year reports to ASIC and the ASX by the reporting deadline of 13 September 2023; deposed to the email communications sent to ASIC and to the ASX on 6 September 2023 informing them of Nanoveu's failure to properly cleanse the share issues, its failure to submit the half year reports by the reporting deadline, and its intention to make this application; deposed to Ms Haydari's belief that if the application was granted, there would be no substantial injustice suffered by any person; and deposed to Ms Haydari's belief that it would be in the interests of Nanoveu's 814 shareholders if curative orders were made.

Affidavit of Alfred Chong Teck Eng

The second was the affidavit of Alfred Chong Teck Eng affirmed on 27 February 2024 to which Mr Chong annexed three documents marked ACH‑01 to ACH‑03.
Mr Chong is the Managing Director and Chief Executive Officer of Nanoveu and the Chief Executive Officer of Nanoveu Pte Ltd, a wholly owned subsidiary of Nanoveu. He has held these roles since 1 June 2018 and 23 November 2012, respectively.
Among other things, Mr Chong deposed to the circumstances in which Mr van Uffelen was replaced with Ms Haydari as the Company Secretary and Chief Financial Officer of Nanoveu in June 2023; deposed to the circumstances in which Mr Chong became aware of the compliance failure that had occurred in relation to the issue of the June shares and other notification omissions (not the subject of this application); deposed to the circumstances in which he became aware of the compliance failure that had occurred in relation to the issue of the January shares; deposed to the basis for his belief that the compliance failures that had occurred were honest and inadvertent errors; described the steps he undertook to ascertain whether there was any excluded information that must be set out in a cleansing notice; deposed to being satisfied that on the date that the share issues were completed, there was no excluded information, and a cleansing notice could have been lodged for the June shares and January shares within five business days after the day on which the June shares and January shares were issued; described the steps taken to ensure compliance in the future including a protocol for the handover of duties of the Company Secretary and Chief Financial Officer, a protocol for the issue of securities, and the development of a risk committee; described the process by which the board of Nanoveu became satisfied with and adopted financial reports of Nanoveu; deposed to the circumstances which led to the delay in the completion of the half year reports; deposed that the board of Nanoveu had resolved to establish an audit committee to monitor and review any matters of significance affecting financial reporting and compliance going forward; deposed that Nanoveu was in the process of developing protocols regarding its reporting and accounting systems with the assistance of an independent accounting practice; deposed to his belief that if the application was granted, there would be no substantial loss or injustice suffered by any person because there was no excluded information being held by Nanoveu; and deposed to his belief that it would be in the interests of Nanoveu's 814 shareholders if curative orders were made, particularly in circumstances where the cleansing errors were inadvertent and there had been on sales of the January shares within 12 months of the date of their issue.

Affidavit of Michael Scott van Uffelen

The third was the affidavit of Michael Scott van Uffelen affirmed on 23 February 2024 to which Mr van Uffelen annexed 11 documents marked MVU‑01 to MVU‑11.
Mr van Uffelen was the former Chief Financial Officer and Company Secretary of Nanoveu, having held those roles from 14 February 2018 to 15 June 2023.
Among other things, Mr van Uffelen deposed that he was the Company Secretary and Chief Financial Officer of Nanoveu when the January shares were issued; described the circumstances in which the January shares were issued; acknowledged that when he lodged the application for quotation of securities with the ASX, due to inadvertent oversight, he had failed to lodge a cleansing notice under s 708A(5)(e) of the Corporations Act within five business days after 27 January 2023 (being the day on which the January shares were issued), and deposed that the failure was an honest mistake; described the circumstances in which the June shares were issued; and described how he came to cease to be the Company Secretary and Chief Financial Officer of Nanoveu.

Affidavit of Alexander Ritchie

The fourth was the affidavit of Alexander Ritchie sworn on 18 March 2024 to which Mr Ritchie annexed nine documents marked AR‑01 to AR‑09. Mr Ritchie is an associate at Steinepreis Paganin, the solicitors for Nanoveu.
In his affidavit, Mr Ritchie outlined the process undertaken by Nanoveu to give notice to the ASX and ASIC of the compliance failures and of this application.
Among other things, Mr Ritchie attached to his affidavit correspondence received from the ASX, by which the ASX communicated that it did not intend to appear at the hearing of this application and did not consider that it was in a position to comment on the application; and correspondence from ASIC, by which ASIC communicated that it did not intend to appear at the hearing of this application and neither supported nor opposed the application.
As to correspondence with shareholders, Mr Ritchie deposed to the basis for his belief that no recipient of shares pursuant to the share issues had indicated any objection to the relief sought by Nanoveu, or intention to oppose the application.

Overview - factual background

Nanoveu is an ASX listed Australian public company. It was incorporated on 14 February 2018 and was admitted to the official list of the ASX in 2018.[4] Nanoveu specialises in developing cutting‑edge technology.[5] Based on Nanoveu's total issued share capital (being 445,695,613 shares), it was estimated that Nanoveu had a market capitalisation of approximately $10,250,999.[6]

The January shares

[4] Affidavit of N Haydari affirmed on 8 March 2024 par 9.

[5] Affidavit of N Haydari affirmed on 8 March 2024 par 12.

[6] Affidavit of N Haydari affirmed on 8 March 2024 par 13.

As noted above, the January shares were issued by Nanoveu in connection with a share placement announced on 5 October 2022.[7] The shares were issued in two tranches, as some of the shares could be issued under Nanoveu's existing placement capacity under the ASX Listing Rules, while the remainder required shareholder approval at a general meeting.[8]
[7] Affidavit of MS van Uffelen affirmed on 23 February 2024 par 9, MVU‑01 (pages 8 ‑ 10).
[8] Affidavit of MS van Uffelen affirmed on 23 February 2024 pars 9, 11.
The first tranche was issued on 14 October 2022 within Nanoveu's existing placement capacity, and the application for quotation of securities and a cleansing notice were lodged with the ASX on the day of issue.[9] As to the second tranche of shares, shareholder approval of the issue was granted at a general meeting held on 15 December 2022,[10] and the shares were issued on 27 and 30 January 2023, respectively.[11]
[9] Affidavit of MS van Uffelen affirmed on 23 February 2024 pars 9 ‑ 10.
[10] Affidavit of MS van Uffelen affirmed on 23 February 2024 par 12.
[11] Affidavit of N Haydari affirmed on 8 March 2024 pars 8, 47.
An application for quotation of securities was submitted to the ASX but this incorrectly indicated the date of issue for all of the January shares as Monday 30 January 2023.[12] This was subsequently corrected.
[12] Affidavit of N Haydari affirmed on 8 March 2024 par 47(b); affidavit of MS van Uffelen affirmed on 23 February 2024 par 14; MVU‑07 (pages 55 ‑ 60).
By what was described as an inadvertent oversight, no cleansing notice was lodged with the ASX at the time the January shares were issued.[13] As noted above, Mr van Uffelen deposed that he was not aware of any reason why cleansing notices were not lodged at the time.[14] The cleansing notices for the January shares were ultimately lodged on 7 March 2024.[15]

The June shares

[13] Outline of submissions par 54.

[14] Affidavit of MS van Uffelen affirmed on 23 February 2024 par 15.

[15] Affidavit of N Haydari affirmed on 8 March 2024 par 53, NH‑31 (page 301), NH‑33 (page 322).

As to the issue of the June shares, Nanoveu announced on 26 April 2023 that it had completed a share placement to investors raising $1,250,000, which included one free attaching unquoted option for every two shares issued.[16] In addition to the April placement, Nanoveu proposed to issue a total of 6,730,769 shares together with options to Nanoveu's directors and to Sixty‑Two Capital Pty Ltd (in lieu of fees as lead manager for the April placement).[17]
[16] Affidavit of MS van Uffelen affirmed on 23 February 2024 par 16.
[17] Affidavit of N Haydari affirmed on 8 March 2024 par 22; affidavit of MS van Uffelen affirmed on 23 February 2024 par 16, MVU‑08 (page 61).
The issue of the June shares required shareholder approval, which was received at a general meeting held on 31 May 2023.[18] The shares were issued on 20 June 2023, and Nanoveu failed to lodge an application for quotation of securities and a cleansing notice with the ASX.[19] The omission occurred at a time when a change in Nanoveu's Chief Financial Officer and Company Secretary had been instigated.
[18] Affidavit of MS van Uffelen affirmed on 23 February 2024 pars 16, 18.
[19] Affidavit of N Haydari affirmed on 8 March 2024 par 28.
Ms Haydari became aware of Nanoveu's compliance failure with respect to the June shares upon her review of the handover materials on 10 July 2023.[20] The application for quotation of securities and cleansing notices for the June shares were lodged on 7 March 2024.[21]

Steps taken following discovery of the cleansing error

[20] Affidavit of N Haydari affirmed on 8 March 2024 par 28.

[21] Affidavit of N Haydari affirmed on 8 March 2024 par 44, NH‑25 (pages 256 ‑ 275), NH-26 (page 276).

As noted by counsel, following the discovery of the compliance error relating to the June shares, Nanoveu took prompt action consisting of:[22]
(a)immediately taking steps to ascertain whether any of the June shares had been traded;
(b)immediately placing the June shares into a holding lock;
(c)immediately seeking external legal advice on the cleansing error and receiving initial legal advice on 11 July 2023;
(d)on 11 July 2023, notifying the ASX;
(e)on 17 July 2023, instructing external lawyers to commence preparation of a cleansing prospectus for the June shares. (As the June shares had not been traded, it was still possible for Nanoveu to lodge a cleansing prospectus and thus avail itself of the exception in s 708A(11) of the Corporations Act.)
[22] Outline of submissions par 61.
On 19 July 2023, while undertaking due diligence in connection with the cleansing prospectus, Nanoveu's lawyers identified the failure to cleanse the January shares, and identified that there had been trading in the January shares.[23]
[23] Outline of submissions par 62; affidavit of N Haydari affirmed on 8 March 2024 pars 45 ‑ 47.
As was submitted by counsel, again Nanoveu acted promptly to limit any prejudice to shareholders (and prospective shareholders). On the same day as the cleansing error relating to the January shares was discovered, Nanoveu placed its shares into a trading halt and, two days later, requested a voluntary suspension.[24] The ASX announcement of the trading halt disclosed the cleansing error.[25] The ASX announcement of the suspension indicated, in addition, that Nanoveu would apply to this court for relief.[26]
[24] Outline of submissions par 63; affidavit of N Haydari affirmed on 8 March 2024 pars 48, 49.
[25] Outline of submissions par 63; affidavit of N Haydari affirmed on 8 March 2024 par 48, NH‑27 (page 277), NH‑28 (page 278).
[26] Outline of submissions par 63; affidavit of N Haydari affirmed on 8 March 2024 par 49, NH‑29 (pages 279, 280).
After the cleansing error relating to the January shares had been discovered, Nanoveu decided to seek relief from this court with respect to both the January shares and the June shares (rather than to prepare a cleansing prospectus for the June shares).[27]
[27] Outline of submissions par 64; affidavit of N Haydari affirmed on 8 March 2024 par 43; affidavit of A Chong affirmed on 27 February 2024 par 37.
Nanoveu also initiated an investigation, aided by external lawyers, of its compliance with the secondary sale provisions of the Corporations Act from 16 November 2018. That investigation did not uncover any further cleansing errors.[28] It did, however, uncover inaccuracies in some of the ASX notices that had been lodged, and uncovered that there had been some admissions (described by Ms Haydari in her affidavit) which had since been remedied.[29]
[28] Outline of submissions par 65; affidavit of N Haydari affirmed on 8 March 2024 pars 50, 52.
[29] Outline of submissions par 65; affidavit of N Haydari affirmed on 8 March 2024 pars 57, 58.
In addition to the announcements made to the ASX, Nanoveu also wrote directly to affected shareholders (those that held January shares and June shares) to notify them of the cleansing errors and of Nanoveu's intention to apply to this court for relief.[30] No formal responses were received to those communications, although some shareholders enquired when the suspension of trading in Nanoveu's shares would be lifted.[31]

The half year reports

[30] Outline of submissions par 66; affidavit of N Haydari affirmed on 8 March 2024 par 55, NH‑34 (page 323).

[31] Outline of submissions par 66; affidavit of N Haydari affirmed on 8 March 2024 par 56.

Nanoveu was required to lodge its half year reports for the half year ended 30 June 2023 by 13 September 2023. The half year reports were lodged on 4 December 2023, 82 days late.[32] Nanoveu engaged BDO regarding its accounts, and was informed by BDO that BDO had detected the use of incorrect formulas in the consolidation worksheet used to prepare the half year reports which were not previously identified due to administrative oversight by BDO and/or insufficient internal accounting systems within Nanoveu.[33]
[32] Affidavit of N Haydari affirmed on 8 March 2024 par 76, NH-53 (pages 481 ‑ 505).
[33] Affidavit of N Haydari affirmed on 8 March 2024 pars 65 ‑ 69, 71.
Ms Haydari worked with BDO to address the outstanding items and errors which had been detected. Ms Haydari described in her affidavit some 15 issues which had to be addressed, and the measures taken to address each issue.[34]
[34] Outline of submissions par 72; affidavit of N Haydari affirmed on 8 March 2024 pars 68(a) ‑ (o), 70(a) ‑ (o).
The board of Nanoveu met with the audit partner within BDO to discuss, review and sign off on the auditing of the half-year financial report on 1 December 2023. The half year reports were lodged with ASIC and the ASX on 4 December 2023, and Nanoveu notified ASIC and the ASX that it would seek relief from this Court regarding the late filing of the half year reports.[35]

Steps taken to ensure future compliance

[35] Outline of submissions pars 73 - 74; affidavit of N Haydari affirmed on 8 March 2024 pars 75, 76, NH‑53 (pages 481 ‑ 505), 89, NH‑63 (pages 560, 561), NH‑64 (pages 562 ‑ 564).

Ms Haydari opined that the cleansing errors, while inadvertent, were ultimately caused by the lack of a systematic process for the issue of securities (including to assess cleansing requirements and to keep records of securities to be issued and/or cleansed).[36] It was submitted on behalf of Nanoveu that it could properly be inferred that such a systematic process might have ensured that these requirements were not overlooked amid the disruption of the transition from one Chief Financial Officer and Company Secretary to another.[37]
[36] Affidavit of N Haydari affirmed on 8 March 2024 par 54; see also affidavit of A Chong affirmed on 27 February 2024 par 20.
[37] Outline of submissions par 67.
As was noted on behalf of Nanoveu, in order to address these issues and assist future compliance with the Corporations Act, Nanoveu had:[38]
(a)adopted a protocol for the handover of duties of the Chief Financial Officer and Company Secretary in the event that the existing Chief Financial Officer and Company Secretary were to be replaced or was unable to act;[39]
(b)adopted a protocol/checklist to determine whether securities had been issued under a disclosure document or with disclosure relief and, if not, whether a cleansing notice or cleansing prospectus was required;[40]
(c)created a central register to track securities which had been issued and/or were to be issued;[41]
(d)created an action register to record all capital issue information, to be reviewed at the end of each reporting period;[42]
(e)implemented a document management system to store all of Nanoveu's corporate documents;[43] and
(f)allocated responsibility to two of Nanoveu's directors (Dr David Pevcic and Mr Michael Winlo) for keeping Ms Haydari updated as to Nanoveu's activities.[44]
[38] Outline of submissions par 68.
[39] Affidavit of N Haydari, affirmed on 8 March 2024 par 59(a), NH-51 (pages 478, 479).
[40] Affidavit of N Haydari, affirmed on 8 March 2024 par 59(b), NH-52 (p 480).
[41] Affidavit of N Haydari, affirmed on 8 March 2024 par 61.
[42] Affidavit of N Haydari, affirmed on 8 March 2024 par 61.
[43] Affidavit of N Haydari, affirmed on 8 March 2024 par 61.
[44] Affidavit of A Chong affirmed on 27 February 2024 par 24.
In his affidavit, Mr Chong expressed his commitment to ensuring the protocols described above at [46(a)] and [46(b)] were promulgated and followed within Nanoveu.[45] Further, Mr Chong deposed that it was planned that Nanoveu would establish a risk committee to prevent and resolve any risks identified within Nanoveu's operations; and to the extent required, additional resources and support would be provided to Ms Haydari.[46]
[45] Affidavit of A Chong affirmed on 27 February 2024 par 23.
[46] Affidavit of A Chong affirmed on 27 February 2024 par 24.
As to the steps taken to ensure future compliance with respect to the lodgement of its accounts, Nanoveu was taking steps to:
(a)establish an audit committee to assist Nanoveu's board to monitor significant matters affecting financial reporting and compliance;[47] and
(b)develop accounting protocols (with respect to which it intended to seek advice from an independent accounting practice).[48]
[47] Affidavit of N Haydari affirmed on 8 March 2024 par 77, NH-54 (pages 506‑509), affidavit of A Chong affirmed on 27 February 2024 par 32.
[48] Affidavit of N Haydari affirmed on 8 March 2024 par 79, affidavit of A Chong affirmed on 27 February 2024 par 32.
It was anticipated that these protocols would be in effect for the preparation of the annual report for the year ended 31 December 2024.[49]
[49] Affidavit of N Haydari affirmed on 8 March 2024 par 79.

Requirements and the power to grant relief

Requirements for disclosure - Corporations Act pt 6D.2

Part 6D.2 of the Corporations Act imposes disclosure obligations in relation to the issue and sale of shares. In certain circumstances, these obligations can be satisfied by lodging what is commonly referred to as a cleansing notice or cleansing prospectus.[50]
[50] Corporations Act s 708A(5).
Where securities are issued, s 706 of the Corporations Act requires disclosure to investors, unless the conditions in s 708 or s 708AA of the Corporations Act are met. In the case that securities are sold s 707 of the Corporations Act sets out when disclosure to investors is required. More specifically, where securities are offered for sale within 12 months of issue, s 707(3) and (4) set out when disclosure is required, unless the conditions in s 708 or s 708A are met.
If disclosure has not been made by the issuer and the shares are on‑sold within 12 months, the party to whom the shares are issued may be obliged to make disclosure.[51] However, the sale offer does not need disclosure to investors under pt 6D.2 if the preconditions in s 708A(5) of the Corporations Act are met.
[51] Corporations Act s 707(3). See also Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17.
If the shareholder on‑sells securities within 12 months of issue in the absence of a required cleansing notice or cleansing prospectus (and no other exception to the need for disclosure applies), then the shareholder will be in breach of s 707(3) of the Corporations Act. Offering securities for sale without the required disclosure under pt 6D.2 is also prohibited by s 727(1) of the Corporations Act, which is a civil penalty provision.[52] Further, such sales may create uncertainty as to the validity of title of those who have acquired the securities (or those who may acquire them through future dealings).[53]

Requirements to lodge half year reports - Corporations Act pt 2M.3

[52] Corporations Act s 727(6).

[53] Outline of submissions par 20, referring to Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57 [62]; Re Golden Gate Petroleum Ltd [45].

Part 2M.3 of the Corporations Act imposes obligations on disclosing entities to file half year reports.[54]
[54] Corporations Act s 292(1).
Section 111AC(1) of the Corporations Act defines a disclosing entity as an entity with any securities that are enhanced disclosure securities; and s 111AE of the Corporations Act provides that enhanced disclosure securities include securities issued by a body corporate included in the official list of a prescribed financial market and to which that market's listing rules apply. The ASX is a prescribed financial market.[55]
[55] Corporations Regulations 2001 (Cth) reg 1.0.02A.
Section 302 of the Corporations Act requires disclosing entities incorporated or formed in Australia to prepare a financial report and directors' report for each half year; to have the financial report audited or reviewed in accordance with div 3 of the Corporations Act and to obtain an auditor's report; and to lodge the financial report, the directors' and the auditor's report on the financial report with ASIC.
By operation of s 320(1) of the Corporations Act, lodgement with ASIC must occur within 75 days after the end of the half year. Failure to meet this deadline is a strict liability offence.[56]

The power to grant the relief sought - Corporations Act s 1322

[56] Corporations Act s 320(2).

The power of the court to make orders avoiding the effects of irregularities is set out in s 1322 of the Corporations Act, which relevantly provides:
(4)Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes:
(a)an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;
(b)an order directing the rectification of any register kept by ASIC under this Act;
(c)an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a);
(d)an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding;
and may make such consequential or ancillary orders as the Court thinks fit.
...
(6)The Court must not make an order under this section unless it is satisfied:
(a)in the case of an order referred to in paragraph (4)(a):
(i)that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;
(ii)that the person or persons concerned in or party to the contravention or failure acted honestly; or
(iii)that it is just and equitable that the order be made; and
(b)in the case of an order referred to in paragraph (4)(c) - that the person subject to the civil liability concerned acted honestly; and
(c)in every case - that no substantial injustice has been or is likely to be caused to any person.
The principles to be applied when considering an application under s 1322 of the Corporations Act are well established.
As was noted by counsel, the remedial nature of s 1322(4) of the Corporations Act should be interpreted liberally,[57] and applied pragmatically.[58] Further, orders can be made with retrospective effect.[59] That said, care must be taken to ensure that relief is given in a manner that is consistent with the justification of the application, and each case should be considered on its merits to ensure that it does not undermine the requirements of the Corporations Act.[60]
[57] Outline of submissions par 26, citing Re Insurance Australia Group Ltd [2003] FCA 581; (2003) 45 ACSR 702; (2003) FCR 581 [27].
[58] Outline of submissions par 26, citing Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396 [39].
[59] Outline of submissions par 26, citing Re Golden Gate Petroleum Ltd [42].
[60] Outline of submissions pars 27 - 28, citing Re Poseidon Nickel Ltd [14]; Re Golden Gate Petroleum Ltd [43].

On a number of occasions, s 1322(4) of the Corporations Act has been used to cure transactions in respect of s 707, s 708AA and s 708A of the Corporations Act.[61]
[61] See for example Re Cyprium MetalsLtd; Ex Parte Cyprium Metals Ltd [2022] WASC 241 and the authorities referred to at [47].
In considering an application under s 1322 of the Corporations Act, the essential principles have been described (and adopted with approval) as follows:[62]
(a)the prescriptive requirements of the wording in s 1322(4) and the preconditions in s 1322(6) need to be satisfied;
(b)the court retains a discretion under s 1322(4) as to whether it makes the orders sought;
(c)the broad powers reflect a 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 to the public interest in compliance with the law;
(d)limitations to the broad powers in s 1322 will not be readily implied. Section 1322 is remedial in character and should be applied broadly;
(e)the court can make orders under s 1322(4)(a) on conditions and also make such consequential and ancillary orders as it thinks fit; and
(f)an order can be made under s 1322(4)(a) notwithstanding that the contravention or failure concerned resulted in the commission of an offence. (footnotes omitted)
[62] Re Sprintex Ltd; Ex Parte Sprintex Ltd [2022] WASC 188 [22], citing Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174 [20]. Adopted and applied in Re Yandal Resources Ltd; Ex Parte Yandal Resources Ltd [2022] WASC 338 [75]; Re Memphasys Limited; Ex Parte Memphasys Limited [2022] WASC 269 [46]; Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [48].
In the determination of this application, I adopted and applied the principles summarised above.

Disposition

Position of ASX and ASIC

ASIC and the ASX were on notice of the application and neither sought to be heard. [63]

Standing - application by an 'interested person'

[63] Affidavit of A Ritchie sworn on 18 March 2024, AR‑04 (page 16), AR‑08 (pages 30 ‑ 31); see also ts 2 (19 March 2024).

An application may be made under s 1322 of the Corporations Act by an interested person.
As to the curative orders sought with respect to the cleansing errors, as was observed by counsel, the prospect that dealings in Nanoveu's shares may be invalid if the relief sought was not granted was sufficient to ground standing.[64] I accepted that Nanoveu was an interested person, with requisite standing to seek relief under s 1322 of the Corporations Act as to this omission.
[64] Outline of submissions par 79, referring to Re EHR Resources Ltd [2018] FCA 997 [5]. See also Sprint Energy Limited, in the matter of Sprint Energy Limited [2012] FCA 1354[40]; Caeneus Minerals Ltd, in the matter of Caeneus Minerals Ltd [2018] FCA 560 [38]; Classic Minerals Limited, in the matter of Classic Minerals Limited [2018] FCA 2039 [34]; Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [52].
As to the curative orders sought with respect to the half year reports, I also accepted that Nanoveu was an interested person, with requisite standing to seek relief under s 1322 of the Corporations Act.

Prescriptive requirements - orders pursuant to s 1322(4)(a) of the Corporations Act

As to the declarations sought on behalf of Nanoveu, I was satisfied that the prescriptive requirements of s 1322(4)(a) of the Corporations Act had been met as:
(a)the proposed validation orders had been framed in a declaratory form;
(b)the relevant act, matter or thing was the offer and sale of securities; and
(c)the contravention was the offering of securities for sale or sales without proper disclosure in contravention of s 707(3) of the Corporations Act.[65]

Preconditions to the making of orders pursuant to s 1322(4)(a) and (d)

[65] Re Argent Minerals Ltd; Ex Parte Argent Minerals Ltd [54] citing Caeneus Minerals Ltd [39] ‑ [40] and Classic Minerals Limited, in the matter of Classic Minerals Limited [35] ‑ [36].

As to the relief sought on behalf of Nanoveu under s 1322(4)(a), I found as follows.

Section 1322(6)(a)(i) - essentially of a procedural nature

First, as to s 1322(6)(a)(i), I was cognisant that the issuing of a cleansing notice has regularly been held as being essentially of a procedural nature,[66] and I accepted the same.

Section 1322(6)(a)(ii) - acted honestly

[66] For example, see Re Sprintex Ltd; Ex Parte Sprintex Ltd [28]; Re Yandal Resources Ltd; Ex Parte Yandal Resources Ltd [82]; Re Memphasys Limited; Ex Parte Memphasys Limited [56]; Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [54].

Secondly, as to s 1322(6)(a)(ii), I considered whether the person or persons concerned in or party to the contravention or failure the subject of the application acted honestly. In so doing, I was cognisant that:[67]
[67] Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [56] citing Re iCandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369 [54] ‑ [104]. See also Ex Parte Imdex Ltd [2020] WASC 298 [40].
(a)when determining whether someone has acted honestly for the purposes of s 1322, the courts look to absence of evidence of dishonesty and prompt action to remedy the error;
(b)the concept of acting honestly can embrace:
(i)inadvertence or failure to turn one's mind to an issue;
(ii)active, but incorrect consideration of a legal issue;
(iii)failure to consider an issue at all; or
(iv)failure to understand or appreciate the significance of noncompliance; and
(c)when testing for honesty, the authorities reveal that the courts look at the company itself, the directors, the Company Secretary and others as may be concerned. (footnotes omitted)
I accepted that in this case, a frank and detailed explanation of the circumstances in which the omissions arose had been deposed to, and there was no evidence or indicia of any lack of honesty. As was submitted on behalf of Nanoveu, I was satisfied that the evidence established that the need for relief arose due to honest oversight. Further, I accepted that the errors occurred through inadvertence (contributed to by a lack of robust processes and protocols), and not the deliberate disregard by Nanoveu or its officers of their obligations under ch 2M or ch 6D of the Corporations Act.
I also took comfort from Nanoveu's candour. In the evidence filed in support of the application, Nanoveau disclosed to the court that in the course of its investigations, other errors and deficiencies had been identified, which were rectified and did not require orders of the court. Given the nature of the additional omissions, they were appropriately disclosed and addressed in the application.

Section 1322(6)(a)(iii) - just and equitable

Thirdly, as to s 1322(6)(a)(iii), I was cognisant that the court has generally focused on the interests of the shareholders to assess whether it is just and equitable that orders be made.[68]
[68] Re iCandy Interactive Ltd [110].
While it was not necessary for Nanoveu to satisfy both subsections (ii) and (iii) before making an order under s 1322(4)(a),[69] I accepted the submission made on behalf of Nanoveu that it was just and equitable to make the orders sought pursuant to s 1322(4)(a), having regard to the fact that:
(a)if relief was not granted, the title of any persons who had acquired (or any in the future might acquire) the January shares or the June shares may be impugned; and
(b)it was in the interest of Nanoveu's shareholders for the contraventions to be cured, so as to allow trading in the shares to resume.

Section 1322(6)(c) - no substantial injustice

[69] Re iCandy Interactive Ltd [49].

As to the relief sought on behalf of Nanoveu under s 1322(4)(a) and (d), I was also cognisant that by operation of s 1322(6)(c) of the Corporations Act, it was necessary that I be satisfied that 'no substantial injustice has been or is likely to be caused to any person'. As to how the court ought approach this requirement, counsel for Nanoveu referred to the observations made by Hallen J in Bull v Australian Quarter Horse Association [2014] NSWSC 1665 at [314],[70] which I reproduce below:
(h)… [I]n every case when an order is made, the requirements of s 1322(6)(c) must be satisfied. The onus of establishing one of the conditions in s 1322(6)(a), and of establishing the absence of substantial injustice, rests upon the applicant for an order: Australian Hydrocarbons NL v Green (1985) 10 ACLR 72, per Hodgson J, at 83; Jordan v Avram, per Gillard J, at 159.
(i)The word 'injustice' requires the court to consider real, and not merely insubstantial, or theoretical, prejudice. A degree of prejudice to a person or persons may be outweighed if the overwhelming weight of justice is in favour of making the order: Elderslie Finance Corporation Ltd v Australian Securities Commission (1993) 11 ACSR 157, per Owen J, at 160; Super John Pty Ltd v Futuris Rural Pty Ltd [1999] NSWSC 627, per Santow J, at [15]. In other words, it is necessary to consider the prejudice that will be suffered by, for example, a member by the making of an order, and to weigh this in the scales against the prejudice to the company and, relevantly, other members, if an order is not made.
(j)A substantial injustice depends upon whether the remedial order which gave rise to the detriment was unjust in the sense that it would have caused such prejudice overall as to have been unfair or inequitable, taking into account the interests of all those who would have been directly affected by such dispensation.
[70] Outline of submissions par 34.
In turning to consider whether s 1322(6)(c) was satisfied in this case, I was first required to identify the classes of person who might have been impacted by the making of the orders sought.[71]
[71] ReMetalicity Ltd [2020] WASC 387 [46] ‑ [51]; ReWhitehawk Ltd [2020] WASC 388 [45] ‑ [50]; Ex Parte Imdex Ltd [42] ‑ [47].
First, as to the orders which concerned the cleansing errors, the first class of persons who may have been impacted were those persons who were issued the January shares and the June shares. If they were to seek to offer or sell the shares, in the absence of relief, such offers or sale may be void or voidable for want of compliance with the statutory requirements.[72] The second class were those persons who purchased the impugned January shares from on‑sellers who traded their shares on the open market of the ASX since their issue. Any further sale, in the absence of relief, would have been elected without the requisite disclosure under pt 6D.2 of the Corporations Act.
[72] Re Poseidon Nickel Ltd [63]; Re Whitehawk Ltd [46]; Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [64].
On the evidence filed, there was no basis for inferring that substantial injustice had been or was likely to be caused to any of these classes of person by the making of the proposed orders. Further, no person had communicated to Nanoveu that they would suffer prejudice, or sought to be heard with respect to the orders sought.
Secondly, as to the orders concerning the half year reports lodgement failure, I accepted that it was conceivable that third parties may have been affected by this failure during the extension period.[73] However, again, there was no evidence of any such prejudice having been suffered.
[73] Outline of submissions par 91; ts 8 (19 March 2024).
At the hearing of the application, counsel for Nanoveu submitted that there was no evidence of any substantial prejudice, nor was there any evidence likely to exist given:
(a)the shares of Nanoveu had been suspended from trading;
(b)there was no evidence of any actual prejudice in particular transactions or dealings with Nanoveu; and
(c)given Nanoveu's delay in lodging the half year reports was a matter in the public domain, third parties could have taken a cautious approach and refrained from dealing with Nanoveu.[74]
[74] ts 8 (19 March 2024).
Further, counsel pressed that there was a countervailing public interest in Nanoveu taking additional time to produce accurate accounts,[75] and, in any case, any prejudice which may have existed was powerfully outweighed by the benefit to the shareholders of Nanoveu being able to resume trading in its shares.[76] I considered the matters raised on behalf of Nanoveu to support the grant of relief.
[75] ts 8 (19 March 2024).
[76] ts 6 (19 March 2024).
Again, on the evidence filed, there was no basis for inferring that substantial injustice had been or was likely to be caused to any person by the making of the orders sought concerning the half year reports lodgement failure.
I also proceeded on the basis that if the orders sought were not made, there may be a substantial injustice to Nanoveu as the offers of sale of shares may be void or voidable which could give rise to commercial uncertainty and expenses for Nanoveu. I also accepted that there may be substantial injustice to other ordinary shareholders of Nanoveu, as they may not be able to trade their shares on an open market if the ASX were not to lift the suspension.
It is usual in cases such as this to provide an opportunity for shareholders or other parties who can demonstrate a sufficient interest to raise a complaint about the proposed orders within 28 days from the date of the order.[77] I accepted that 28 days was an appropriate time frame and made an order granting liberty to apply, as reflected in order 9 of my extracted orders.[78]
[77] Re Whitehawk Ltd [50].
[78] Order 9 of the orders made on 19 March 2024 is reproduced at sch A to these reasons.
With the comfort afforded by proposed order 9, for the reasons set out above I found the precondition to the making of the orders prescribed in s 1322(6)(c) of the Corporations Act to have been satisfied and that no substantial prejudice or injustice had been or was likely to be caused to any person by granting the relief sought.
For these reasons, I was satisfied that the preconditions to the grant of relief as set out in s 1322(6)(a) and s 1322(6)(c) had been satisfied.

No other discretionary reason to withhold relief

Even where the relevant pre‑conditions in s 1322(6) are satisfied, the court retains a discretion whether to make orders under s 1322(4), and may make such orders either unconditionally or subject to conditions.[79] Discretionary considerations may include whether there is evidence of substantial misconduct, serious wrongdoing or flagrant disregard of the corporate law or the company's constitution so as to warrant refusal of the relief sought.[80]
[79] Sprint Energy Limited, in the matter of Sprint Energy Limited [29].
[80] Re Yandal Resources Ltd; Ex Parte Yandal Resources Ltd [99].
The evidence established that the non‑compliance was inadvertent. There was no evidence of any substantial misconduct, serious wrongdoing or flagrant disregard of the corporate law or of Nanoveu's constitution so as to warrant the refusal of the relief sought.[81]
[81] Re Wave Capital Ltd, 426 [29]; Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [29]; Whitehawk Ltd [51].
Further, I was satisfied that there was nothing in the evidence before me to suggest that any minority shareholder interest might be oppressed or any other interest might be affected by the grant of the relief sought. I was satisfied that all shareholders impacted by the contravention, as well as the ASX and ASIC, were given notice of this hearing. No shareholder or regulator sought to intervene, nor gave notice that they wished to be heard on the application.[82]

Delay

[82] ts 10 - 11 (19 March 2024).

In exercising the discretion to grant relief under s 1322(4), a relevant factor is the promptness with which the applicant remedied the irregularity once it had been identified.[83]
[83] Re Cyprium Metals Ltd; Ex Parte Cyprium Metals Ltd [73]; Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22 [60].
As to the cleansing notice failure, Nanoveu acknowledged that there had been delay between the initial discovery of the cleansing errors and the filing of the application for the relief in this court.[84] It was submitted on behalf of Nanoveu that a range of circumstances had contributed to the delay in seeking relief. I weighed in the balance the matters raised by counsel, summarised below:
(a)considerable time was taken to investigate further compliance errors regarding the securities of Nanoveu between July 2023 and January 2024, by which a number of further compliance errors were identified and which errors also required remedial action;[85]
(b)contemporaneously, Nanoveu was dealing with the accounting issues which ultimately caused the half year reports to be delayed;[86]
(c)Nanoveu's failure to lodge cleansing notices overlapped, in part, with the period of handover from Mr van Uffelen to Ms Haydari as Chief Financial Officer and Company Secretary of Nanoveu;[87] and
(d)Ms Haydari was the main employee of Nanoveu at the time tasked with rectifying the cleansing errors of the share issues and the accounting errors in relation to the half year reports. Ms Haydari was also engaged in other business activities during the period.[88] A combination of these factors were time consuming and required her to work extended hours.[89]
[84] Outline of submissions par 94.
[85] Affidavit of N Haydari affirmed on 8 March 2024 pars 36 ‑ 44, 47 ‑ 53, 57, 58.
[86] Affidavit of N Haydari affirmed on 8 March 2024 pars 68 ‑ 73.
[87] Affidavit of N Haydari affirmed on 8 March 2024 pars 16 - 26, 65, 66, 69.
[88] Affidavit of N Haydari affirmed on 8 March 2024 pars 79 ‑ 88.
[89] Affidavit of N Haydari affirmed on 8 March 2024 par 73.
I weighed these matters in the balance, and I also accepted that Nanoveu acted diligently and promptly after discovering the cleansing errors in taking steps to halt and later suspend the trading of Nanoveu's shares, in seeking legal advice and in commencing compliance investigations.[90]
[90] As counsel for the plaintiff submitted at the hearing, see ts 6 (19 March 2024).
As Goodman J had found in Austpac Resources N.L., in the matter of Austpac Resources N.L. [2023] FCA 108; (2023) 167 ACSR 1 at [111], in this case, I found that in light of the considerations set out above, while there had been delay, the delay is not a sufficient reason to refuse the relief sought with respect to the cleansing errors.
There was also a delay in Nanoveu seeking relief with respect to its late lodgement of the half year reports.
In Ashley & Martin Pty Ltd [2022] WASC 20, Hill J granted an application for relief regarding the late lodgement of financial reports having regard to the following:
[41]Two main reasons were given for the delay in filing proceedings between May 2021 and December 2021. First, the complexity of the issues raised and the structure of the plaintiff which required affidavits to be obtained from its shareholders, some of whom are located outside Australia. This had the inevitable impact caused by working across different time zones. Second, a significant portion of the delay was caused by the turn‑around time between solicitors and counsel in drafting the necessary documents.
[42]While it could not be said that the plaintiff has acted urgently in finalising the application and seeking a hearing date, I accept that the plaintiff has acted diligently in seeking advice from solicitors and counsel once the issue was drawn to its attention. In particular, I accept that a significant portion of the delay was as a result of the time taken by the plaintiff's solicitors and counsel to finalise documents. In all of the circumstances, I do not consider the delay is a reason I should withhold granting the relief sought.

In Re Bellavista Resources Limited; Ex Parte Bellavista Resources Limited [2023] WASC 40, Lundberg J also extended time to seek a waiver with respect to the lodgement of half year accounts under s 1322(4)(d). However, as to the applicant's delay in that case, his Honour made the following observations:
[28]It goes without saying, I hope, that this degree of delay in seeking relief under s 1322(4) is unacceptable and far from consistent with good corporate governance. A listed entity which becomes aware of a contravention, including of its reporting obligations under Chapter 2M, should seek relief from a court in a prompt fashion.
Counsel for Nanoveu submitted that in this case, a range of circumstances had contributed to the delay in seeking relief. I weighed in the balance the circumstances described by counsel, summarised below:
(a)Nanoveu was dealing with the accounting issues which ultimately caused the half year reports to be delayed;[91]
(b)Ms Haydari was the main employee of Nanoveu tasked with rectifying the cleansing errors of the share issues and the accounting errors in relation to the half year reports. She was also engaged in other business activities during the periods,[92] and the combination of factors were time consuming and required Ms Haydari to work extended hours;[93] and
(c)it would have been inappropriate for Nanoveu to have brought an application for relief until all compliance and accounting issues raised by Nanoveu in its application had been dealt with and resolved.[94]
[91] Affidavit of N Haydari affirmed on 8 March 2024 pars 68 ‑ 73.
[92] Affidavit of N Haydari affirmed on 8 March 2024 pars 79 ‑ 88.
[93] Affidavit of N Haydari affirmed on 8 March 2024 par 73.
[94] Outline of submissions par 94(g).
On the evidence read, I accepted that Nanoveu had acted diligently to identify and address the accounting errors that it had identified so that it was able to finalise its half year reports. The delay, while not excused, was adequately explained. In particular, I accepted that a significant portion of the delay occurred as a result of the time taken by Nanoveu to identify and rectify the accounting errors in relation to the half year reports. I also note that Nanoveu had (properly) taken steps to develop protocols and improved processes in order to promote future compliance with the CorporationsAct.[95] Again, I considered that the delay was not a sufficient reason to refuse the relief sought with respect to late lodgement.

Relief pursuant to s 1322(4)(d) - orders extending the period for doing an act under the Corporations Act

[95] Affidavit of N Haydari affirmed on 8 March 2024 pars 59 ‑ 61, 78; see also ts 8 (19 March 2024).

By the application, Nanoveu sought relief pursuant to s 1322(4)(d) with respect to the period by which it was required to do two acts under the Corporations Act: its failure to lodge cleansing notices within the time prescribed by the Corporations Act, and its failure to lodge the half year reports within the time prescribed by the Corporations Act.
The test to extend the period for doing any act under s 1322(4)(d) of the Corporations Act was described by Vaughan J in Re Jaxsta Ltd; Ex Parte Jaxsta Ltd [2018] WASC 390 as follows:[96]
[41]… As to s 1322(4)(d), I derived more guidance from the two‑stage process embraced by Barker J in Blaze Asset Pty Ltd v Target Energy Ltd.
[42]There Barker J stated:
'[T]he exercise of the power under s 1322(4) [referring to s 1322(4)(d)] involves in effect a two stage process. First, the Court needs to determine whether, having regard to the circumstances of the case and the general objects of the [Corporations Act 2001 (Cth)], it is appropriate to make an order extending a relevant period, or abridging a relevant period. Secondly, if those circumstances are made out, then the Court must address the question whether any substantial prejudice has been or is likely to be caused to any person by the making of such an order.'
[43]Also, the power under s 1322(4)(d) must be exercised having regard to the general objects and purposes of the relevant statutory provision within the Corporations Act 2001 (Cth) - here the statutory purpose evinced by s 723(3). The court's order must not undermine the reasons for the requirements of the Act. The power must be exercised having regard to the interests of all parties affected and the public interest in ensuring compliance with the Act. (footnotes omitted)
[96] The two-stage test has been consistently applied in this court. See for example Re Pilbara Minerals Ltd; Ex Parte Pilbara Minerals Ltd [2021] WASC 330 [26]; Re BPM Minerals Ltd; Ex Parte BPM Minerals Ltd [2021] WASC 329 [21]; Re Matador Mining Ltd; Ex Parte Matador Mining Ltd [2021] WASC 132 [66] ‑ [67]; Re Yandal Resources; Ex Parte Yandal Resources Ltd [106]; Re Memphasys; Ex Parte Memphasys Ltd [79]; Re Cyprium Metals; Ex Parte Re Cyprium Metals Ltd [2022] WASC 241 [75].
An extension of time may be sought notwithstanding that the relevant period has already expired.[97]
[97] Outline of submissions par 38, citing Re Whitehawk Ltd [31].
As to the relief sought on behalf of Nanoveu, I considered each act in turn below.

Extending the time for lodgement of cleansing notices pursuant to s 708A

Nanoveu moved for an order pursuant to s 1322(4)(d) of the Corporations Act that for the January shares and the June shares, the period of five business days referred to in s 708A(6)(a) be extended to 7 March 2024.
As to the two‑stage test in Re Jaxsta Ltd; Ex Parte Jaxsta Ltd, it was submitted on behalf of Nanoveu that:[98]
[98] Outline of submissions par 80.
(a)first, having regard to the circumstances and the general objects of the Corporations Act, the court could be satisfied that it was appropriate to make the order extending time, particularly when regard was had to the following:
(i)the cleansing errors were inadvertent. It was submitted that the evidence established that the error did not come about by reason of the officers' reckless disregard of the requirements of the Corporations Act, rather the evidence made clear that the cleansing errors were the result of honest oversights, likely caused by the lack of systematic internal processes and, in the case of the June shares, the transition of the Chief Financial Officer and Company Secretary role from Mr van Uffelen to Ms Haydari;
(ii)once the cleansing errors were identified, Nanoveu had acted promptly to ensure that no trading in the relevant shares (and no further trading of the January shares) could occur, sought external legal advice, undertook appropriate investigations, and made appropriate disclosures to the ASX and ASIC;
(iii)Nanoveu had given a frank and detailed explanation to the court of the circumstances of the cleansing errors. Counsel submitted that it was to Nanoveu's credit that it had disclosed to the court, as a matter of candour, the other irregularities in its lodgements required under the ASX Listing Rules, and had taken action to remedy the same;
(iv)Nanoveu had demonstrated insight as to the need to improve its internal processes so as to ensure that it would be better placed to comply with the Corporations Act in the future. In this regard, it was submitted that it was significant that the new Chief Financial Officer and Company Secretary was engaged to devote more time to the company secretarial functions of Nanoveu than her predecessor, and that Nanoveu had expressed its willingness to provide additional support and resources to Ms Haydari as may be required;
(v)if granted, the order would allow Nanoveu to request the ASX to lift the voluntary suspension, which would allow shareholders, if they wished, to trade their shares and/or to assess their value by reference to normal market trading; and
(vi)the title of any parties who had acquired (or may in future acquire) the January shares or June shares may be impugned if the relief sought were not granted. It was noted that any on‑market sale of the shares would have occurred without the requisite disclosure required by pt 6D.2 of the Corporations Act. It was further noted that there was no question that any current or prospective shareholders (with the possible exception of officers of Nanoveu) were involved in the cleansing errors, and it was submitted that it would be unjust to those shareholders if their title was to remain in question due to Nanoveu's honest mistakes, over which the shareholders had no knowledge or control;
(b)secondly, the court could be satisfied that no substantial prejudice or injustice had been or was likely to be caused to any person by the grant of the relief sought. In this regard, it was noted that as to the June shares, they had not yet been traded, whereas there had been trading of the January shares. However, despite Nanoveu's ASX announcements and correspondence with shareholders, no person has communicated to Nanoveu that it has been prejudiced or suffered any loss.[99] Further, as to the classes of persons who may be affected by the making of the orders, it was submitted that there is no basis for inferring that substantial injustice has been or was likely to be caused to any person. It was also noted that as an additional safeguard, Nanoveu moved for the making of an order granting shareholders and other persons an opportunity to apply to vary or set aside the order within 28 days from the date of the order.
[99] Outline of submissions par 80(b); affidavit of N Haydari affirmed on 8 March 2024 par 90.
I found the submissions made on behalf of Nanoveu persuasive. In light of the evidence, the matters emphasised by counsel for Nanoveu (summarised above), and having regard to the circumstances and the general objects of the Corporations Act, I was satisfied that it was appropriate to make the order sought. Further, for the reasons set out above, I was satisfied that the statutory requirements of s 1322(4)(d) and s 1322(6)(c) had been met, and that there were no other discretionary reasons to withhold relief.
I also took comfort neither ASIC nor the ASX opposed the application, and no shareholder of Nanoveu sought to be heard. Further, Nanoveu sought orders that expressly contemplated the holders of the January shares and the June shares being notified of the orders made, and there being liberty to apply.

Extending the time for the lodgement of the half year reports

Nanoveu moved for an order pursuant to s 1322(4)(d) of the Corporations Act that the statutory deadline under s 320(1) of the Corporations Act be extended to 4 December 2023 (the date of lodgement of the half year reports).
As to the two‑stage test in Re Jaxsta Ltd; Ex Parte Jaxsta Ltd, it was submitted on behalf of Nanoveu that:
(a)first, having regard to the circumstances and the general objects of the Corporations Act, the court could be satisfied that it was appropriate to make an order extending time, particularly when regard was had to the following:[100]
(i)Nanoveu's Chief Executive Officer and Company Secretary had been placed in a difficult situation on 28 June 2023 when Nanoveu's auditors informed her of accounting errors which were required to prepare the half year reports. It was noted that Ms Haydari had only been in the Chief Executive officer and Company Secretary role little more than a week, and the accounting errors were discovered in the final days before the end of the half year accounting period;
(ii)a significant amount of work was undertaken in the period between the discovery of the accounting errors and the finalisation of the half year reports in order to address the errors and prepare an accurate and compliant set of half year reports. Even if some of the errors involved relatively small amounts, it was submitted that the overall amount of work involved was substantial. Given Nanoveu was a relatively small listed company and the primary responsibility for addressing the issues fell upon a single individual (Ms Haydari), it was submitted that the need for additional time to finalise the half year reports was understandable. It was also noted that during this period, Ms Haydari worked extended hours beyond her usual part‑time commitment (indeed, sometimes greater than full time hours);
(iii)the experience and knowledge gained by Nanoveu through the process of addressing the accounting errors would be of use in completing the 2023 Annual Report. Further, Nanoveu was taking steps to develop accounting protocols for use in preparing its annual accounts for the year ended 31 December 2024 and beyond; and
(iv)as with the cleansing errors, Nanoveu had given a full and frank explanation of the circumstances in which the issue arose, and there was no evidence of any dishonesty;
(b)secondly, the court could be satisfied that no substantial prejudice or injustice had been or was likely to be caused to any person.[101] In this regard, it was submitted that there was no reason to believe that any person had suffered or was likely to suffer substantial prejudice or injustice by the making of the order. Nanoveu's shares had been suspended from trading during the whole period over which the extension was sought. As such, there was no possibility that shares had been traded on the ASX at a time when investment decisions may have been impaired or affected by the absence of the half year reports. Further, while it was accepted that it was conceivable that third parties may have been affected in some sense by the lack of half year reports (for example, by entering into commercial transactions with Nanoveu on a less informed basis), there was no evidence of any such prejudice. It was also submitted that, to the extent any such prejudice may have existed, it could be addressed by the making of an order granting liberty to apply.
[100] Outline of submissions par 90.
[101] Outline of submissions par 91.
Again, I found the submissions made on behalf of Nanoveu persuasive, and again in light of the evidence, the matters emphasised by counsel for Nanoveu (summarised above), and having regard to the circumstances and the general objects of the Corporations Act, I was satisfied that it was appropriate to make the order sought. Further, for the reasons set out above, I was satisfied that the statutory requirements of s 1322(4)(d) and s 1322(6)(c) had been met, and that there were no other discretionary reasons to withhold relief.
I also took comfort that neither ASIC nor the ASX opposed the application, and no shareholder of Nanoveu sought to be heard. Further, Nanoveu had sought orders that expressly contemplated there being an announcement to the ASX of the making of the orders, and liberty to apply. I took comfort from the same.

Relief pursuant to s 1322(4)(a) - declarations

By this application Nanoveu sought two declarations. First, a declaration pursuant to s 1322(4)(a) of the Corporations Act that the notice under s 708A(5)(e) of the Corporations Act given to the ASX on 7 March 2024 in respect of the January shares and the June shares (that is, in respect of the ordinary fully paid shares in Nanoveu issued on 27 January 2023, 30 January 2023 and 20 June 2023), be deemed to take effect as if it had been given to the ASX on the date of issue of the shares. Secondly, a declaration pursuant to s 1322(4)(a) of the Corporations Act that any offer or sale of the January shares (that is, of the ordinary fully paid shares in Nanoveu identified in the issue of 52,500,000 shares on 27 January 2023 and 6,000,000 shares on 30 January 2024), during the period after their issue to the date of the court order, was not invalid by reason of:
(a)any failure of a notice under s 708A(5)(e) of the Corporations Act to exempt the sellers from the obligation of disclosure under the Corporations Act; and
(b)the sellers' consequent failure to comply with s 707(3) of the Corporations Act.
For the reasons set out above, the prescriptive requirements of s 1322(4)(a) of the Corporations Act had been met; the preconditions to the making of orders pursuant to s 1322(4)(a) had been met; there were no other discretionary reasons to withhold relief; and I could take comfort that Nanoveu moved for orders in a form adopted in similar circumstances, which had concerned the inadvertent failure to lodge a cleansing notice.
In considering whether to make the declarations pressed, I was cognisant that such an order was not strictly necessary given the operative effect of the extension order.[102] In this regard, I noted the observations made by Hill J in Ex Parte Imdex Ltd as to whether a deeming order should be granted:
[102] Re Argent Minerals Ltd; Ex Parte Argent Minerals Ltd [55] citing In the matter of Weebit Nano Limited [2023] NSWSC 43 [16].
[54]In respect of the first order, courts have on a number of previous occasions made similar orders. It is not in doubt that the court has power to make orders that are consequential or ancillary to an order extending the period for doing an act, matter or thing under the Act.
[55]The question as to whether the court should make such a deeming order was discussed by Colvin J in Re Spectur Limited as follows:
'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.'
[56]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. I accept that in such a case, there was no utility in making any orders for declarations of validity nor a deeming order.
[57]In Re Micro-X Ltd, Moshinsky J expressed the view that 'deeming orders' were a corollary of the orders seeking an extension of time.
[58]In my view, for the following reasons, I consider it is appropriate in this case to make the ancillary orders sought by the plaintiff, including the 'deemed order'. First, the evidence before me is that the shares the subject of the July share issue have been sold and it cannot be discounted that there have been resales of these shares. In these circumstances, I consider that it is appropriate to make the orders sought to remove any question as to title in the shares of the plaintiff. Second, at the time the application came on for hearing, the cleansing notice had already been lodged. For that reason, the order did not concern a future act but a past act. Third, I agree with Moshinsky J that where shares are on‑sold, the 'deeming order' is a corollary of the orders seeking an extension of time. (footnotes omitted)

In the circumstances of this case, I was satisfied to make the deeming orders sought for the following reasons:
(a)there was evidence that the January shares had been traded and it could not be discounted that there had been re‑sales of the January shares. In the circumstances, I considered that it was appropriate to make the orders sought to remove any question as to title in the shares of Nanoveu;
(b)at the time the application came before me, all of the cleansing notices in respect of all the share issues had already been lodged. Therefore, I was satisfied that the orders sought concerned past acts, rather than future acts;
(c)I agreed with Moshinsky J's observations in Re Micro‑X Ltd that where shares are on‑sold, the deeming order is corollary of the orders seeking an extension of time; and
(d)I took comfort that similar deeming orders had been made as the corollary to an order extending time.[103]
[103] ReMicro-X Limited, in the matter of Micro-X Limited [2019] FCA 1154 [13], cited with approval in Ex Parte Imdex [58]; Re Yandal Resources; Ex Parte Yandal Resources Ltd [121]; Re Argent Minerals Ltd; Ex Parte Argent Minerals Ltd [55].

Ancillary orders

Section 1322(4) also empowers the court to make such consequential and ancillary orders as the court thinks fit.
In this case, I considered that it was appropriate to make orders 6 to 9 of the orders made on 19 March 2024 (reproduced at sch A to these reasons), which orders were based on orders previously made when relief under s 1322 of the Corporations Act was granted.[104]
[104] For example, see Re Argent Minerals Ltd; Ex Parte Argent Minerals Ltd; Re Yandal Resources Ltd; Ex Parte Yandal Resources Ltd; Re Great Boulder Resources Ltd; Ex Parte Great Boulder Resources; Sandfire Resources Ltd [2024] WASC 261.

Conclusion

I did not consider that public policy would be undermined by the making of the orders or declarations sought on behalf of Nanoveu. I was satisfied on the evidence that Nanoveu's conduct did not involve a failure to act honestly or a blatant disregard of the provisions of the Corporations Act.
In the circumstances of this case, I was satisfied that the relief sought on behalf of Nanoveu ought be granted. At the conclusion of the hearing on 19 March 2024 I made orders substantially in the form sought in the amended originating process. The final form of the orders made are reproduced at sch A to these reasons.
As to costs, counsel for Nanoveu referred to the view expressed by Hill J in Re Metalicity Ltd at [62], to the effect that where the court is satisfied that there has been no failure of the persons concerned or the company to act honestly under s 1322(6)(a)(ii) of the Corporations Act, it would only be in the most unusual circumstances that an order for costs would be made against the officers of the company. Counsel respectfully adopted those comments and sought that the court make no order as to costs.
The circumstances which gave rise to the application concerned four instances of non‑compliance where there was no failure to act honestly and no deliberate disregard by Nanoveu or its officers of the obligations under ch 2M or ch 6D of the Corporations Act. In such circumstances, I accepted that it was appropriate to make no order as to costs, as was reflected in order 10 of my extracted orders.

Sch A - Orders made on 19 March 2024

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
SE
Associate to the Honourable Justice Strk
9 SEPTEMBER 2024