JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL
CITATION: RE EX PARTE; NAVITAS BUNDOORA PTY LTD [2020] WASC 87
CORAM: HILL J
HEARD: 26 FEBRUARY 2020
DELIVERED : 26 FEBRUARY 2020
PUBLISHED : 16 MARCH 2020
FILE NO/S: COR 13 of 2020
MATTER: NAVITAS BUNDOORA PTY LTD AND OTHERS listed in the Schedule to the amended originating process
EX PARTE
NAVITAS BUNDOORA PTY LTD
First Plaintiff
HAWTHORN LEARNING PTY LTD
Second Plaintiff
NAVITAS USA PTY LTD
Third Plaintiff
NAVITAS SAE HOLDINGS PTY LTD
Fourth Plaintiff
SAE INSTITUTE PTY LIMITED
Fifth Plaintiff
NAVITAS PTY LIMITED
Sixth Plaintiff
Catchwords:
Corporations - Group of companies - Financial reporting - Relief from reporting obligations - Opt-in notice not lodged as required by Class Order - Application for relief under s 1322 of the Corporations Act - Extension of time sought - Whether procedural irregularity - Whether substantial injustice
Legislation:
Corporations Act 2001 (Cth), s 1322(4)(d), s 1322(6)
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | P A Walker |
| Second Plaintiff | : | P A Walker |
| Third Plaintiff | : | P A Walker |
| Fourth Plaintiff | : | P A Walker |
| Fifth Plaintiff | : | P A Walker |
| Sixth Plaintiff | : | P A Walker |
Solicitors:
| First Plaintiff | : | Ashurst Australia |
| Second Plaintiff | : | Ashurst Australia |
| Third Plaintiff | : | Ashurst Australia |
| Fourth Plaintiff | : | Ashurst Australia |
| Fifth Plaintiff | : | Ashurst Australia |
| Sixth Plaintiff | : | Ashurst Australia |
Case(s) referred to in decision(s):
Allatech Pty Ltd v Construction Management Group Pty Ltd [2002] NSWSC 293; (2002) 41 ACSR 587
Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488
David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265
Re iCandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Jaxsta Ltd [2018] WASC 390
Re Murray River Organics Ltd [2019] FCA 931; (2019) 138 ACSR 365
Twin v Deputy Commissioner of Taxation [2004] 1 Qd R 450; [2003] QSC 329
HILL J:
The plaintiffs, by amended originating motion filed 12 February 2020, seek relief under s 1322(4)(d) of the Corporations Act 2001 (Cth) (Act) from compliance with financial reporting and lodgement obligations under pt 2M.3 of the Act for various financial years commencing with the financial year ending 30 June 2011.
Specifically, the plaintiffs seek relief in respect of two types of irregularities:
(a)the failure by the first to fifth plaintiffs to lodge a Form 389 'opt‑in' notice with ASIC for the first financial year in which relief is sought from compliance with these obligations; and
(b)the omission of certain details from consolidated financial statements prepared and lodged by the sixth plaintiff for the 2013, 2015 and 2018 financial years.
The plaintiffs have provided a frank and detailed explanation as to the circumstances surrounding each of these instances of non-compliance. I was and am satisfied that each of the failures was caused by inadvertence rather than any deliberate disregard of their financial reporting obligations.
At the conclusion of the hearing on 26 February 2020,…
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- AGLC
- Re Navitas Bundoora Pty Ltd [2020] WASC 87
- Case
- [2020] WASC 87
- Decision Date
CaseChat Overview and Summary
The court considered whether the procedural irregularity caused by the failure to lodge the opt-in notice constituted a substantial injustice to the plaintiffs. It was noted that the court's power under s 1322 to extend time must be exercised with regard to the interests of all parties affected, the public interest in compliance with the Act, and the general objects and purposes of the relevant statutory provision. The court determined that each plaintiff had a real financial interest in the outcome, sufficient to confer standing as an interested person. The court concluded that the failure to lodge the Forms was a procedural irregularity, and the plaintiffs' financial interests would be adversely affected if relief was not granted. The court found that a time period was either expressly or impliedly imposed, which was capable of extension.
The court granted relief to the plaintiffs, extending the time for them to comply with the financial reporting obligations. The court ordered that the plaintiffs were relieved from the requirements of pt 2M.3 of the Corporations Act for the relevant financial years. This decision was made to prevent substantial injustice to the plaintiffs, while ensuring that the public interest in compliance with the Act was maintained.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
Section 1322 confers broad authority on the court to extend time where the statutory pre-requisites are met.[43] The power must be exercised having regard to the interests of all parties affected and the public interest in ensuring compliance with the Act. It must also take account of the general objects and purposes of the relevant statutory provision of the Act imposing the time period; the court's order must not undermine the object of the relevant requirement.[44] [43] David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, 275 ‑ 276.[44] Re Jaxsta Ltd [43]. Counsel for the plaintiffs submitted that if they were unable to rely on the Class Order or the Instrument to obtain relief from the requirements of pt 2M.3 of the Act, the financial interests of the plaintiffs are likely to be affected. This is because of the significant cost involved in the consequential requirement by the plaintiffs to prepare and have audited financial statements and reports. On this basis, it was contended that the each of the plaintiffs was an interested party. Courts have previously accepted that a real financial interest in the result is sufficient to confer standing as an 'interested person'.[45] [45] Twin v Deputy Commissioner of Taxation [2004] 1 Qd R 450; [2003] QSC 329 [16]; Allatech Pty Ltd v Construction Management Group Pty Ltd [2002] NSWSC 293; (2002) 41 ACSR 587 [21]. On the basis of the evidence before me, I accept that each of the plaintiffs is an interested person for the purpose of s 1322(4)(d). I am satisfied that in respect of each of the irregularities for which the plaintiffs seek relief, a time period is either expressly or impliedly imposed which is capable of extension. Dealing first with the failure to lodge the Forms. The Class Order required each of the plaintiffs to lodge a Form with ASIC within four months from the end of the financial year for the first year in which it sought to obtain relief from the reporting requirements under the Act.[46][46] See also Re Murray River Organics Ltd [2019] FCA 931; (2019) 138 ACSR 365. In respect of the financial years ending before 1 January 2017, I accept that on a proper construction of the Class Order together with pt 2M.3 of the Act, the sixth plaintiff was required to file consolidated statements within four months after the end of the relevant financial year. A pre‑condition for relief under the Class Order is that the holding entity has prepared consolidated financial statements which include the notes specified in the Class Order.[47] The Act requires financial statements to be lodged within four months after the end of the relevant financial year.[48] As such, it is implicit under the Class Order that the relevant time limit for Navitas, as the holding company, to file consolidated financial statements was four months after the end of the relevant financial year. [47] Class Order, (e) and (i).[48] Corporations Act 2001 (Cth), s 315(4) and s 319(3). In respect of the preparation and lodgement of consolidated financial statements for the financial years after 1 January 2017, the Instrument expressly required Navitas, as the holding company, to prepare consolidated financial statements by four months after the end of each relevant financial year.