Re Perilya Broken Hill Ltd
[2024] WASC 202
•5 JUNE 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: RE PERILYA BROKEN HILL LTD; EX PARTE PERILYA BROKEN HILL LTD [2024] WASC 202
CORAM: HILL J
HEARD: 3 & 14 MAY 2024
DELIVERED : 14 MAY 2024
PUBLISHED : 5 JUNE 2024
FILE NO/S: COR 51 of 2024
MATTER: IN THE MATTER OF PERILYA BROKEN HILL LTD
EX PARTE
PERILYA BROKEN HILL LTD
First Plaintiff
PERILYA FREEHOLD MINING PTY LTD
Second Plaintiff
PERILYA LTD
Third Plaintiff
Catchwords:
Financial reporting - Group of companies - Relief from reporting obligations - Application for declaration that financial reports are not invalid - Application for extension of time to comply with ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 - Whether substantial injustice - Turns on own facts
Corporations - Financial reporting - Application for relief from civil liability - Whether substantial injustice - Turns on own facts
Legislation:
ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785
Corporations Act 2001 (Cth) s 292(1)(c), s 315(4), s 319(3)(b), s 1322(4)(d), s 1322(6)
Result:
Application granted
Category: B
Representation:
Counsel:
| First Plaintiff | : | T R Stephenson |
| Second Plaintiff | : | T R Stephenson |
| Third Plaintiff | : | T R Stephenson |
Solicitors:
| First Plaintiff | : | Marshall Lawyers |
| Second Plaintiff | : | Marshall Lawyers |
| Third Plaintiff | : | Marshall Lawyers |
Case(s) referred to in decision(s):
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 G8 Communications Ltd [2016] FCA 297; (2016) 122 ACSR 22
Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17
Re Helios Energy Ltd [2021] WASC 183
Re Jaxsta Ltd [2018] WASC 390
Re Sprint Energy Ltd [2012] FCA 1354
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396
HILL J:
By originating process filed 3 April 2024, the plaintiffs sought relief under s 1322(4)(d) and s 1322(4)(c) of the Corporations Act 2001 (Cth) (Act) to address various instances of non-compliance with their financial reporting and lodgement obligations under pt 2M.3 of the Act over an extended period, commencing with the financial year ending 30 June 2008.
Specifically, the plaintiffs sought orders:
(a)extending the time for the first and second plaintiffs to lodge a Form 389 and for the directors to pass resolutions and make certain statements until 14 days after today's date, to enable them to take advantage of the reporting relief under the Australian Securities and Investments Commission (ASIC) Corporations (Wholly-Owned Companies) Instrument 2016/785 (Instrument) and its predecessor; and
(b)for relief from civil liability in relation to a number of failures arising out of the plaintiffs' non-compliance with its financial reporting obligations.
The originating process was initially listed for hearing on 3 May 2024. Following queries from the court in respect of both the relief sought and an aspect of the evidence, the originating process was adjourned until 14 May 2024 to enable amendments to be made to the originating process and further evidence to be filed.
By the amended originating process, the plaintiffs also sought relief under s 1322(4)(a) declaring that the plaintiffs' acts in purporting to take advantage of the Instrument were not invalid by reason of the failure to prepare and lodge separate financial reports for the financial years between 30 June 2008 until 30 June 2023 or to take certain steps which were required under the Instrument.
The plaintiffs have provided a frank and relatively detailed explanation as to the circumstances surrounding their non-compliance and the steps taken since they became aware of the issue. I was and am satisfied that these failures were caused by inadvertence rather than any deliberate disregard of the plaintiffs' financial reporting obligations.
At the conclusion of the hearing on 14 May 2024, I made orders in terms of the orders sought by the plaintiffs (subject to one minor amendment). At that time, I stated I would subsequently publish written reasons for my decision. These are those reasons.
Evidence on the application
The plaintiffs filed six affidavits in support of their application: an affidavit of Darryl Allan Edwards, a former director of the first plaintiff and former company secretary of the plaintiffs, filed 8 April 2024; three affidavits of Christopher David Rodney Marshall, the current company secretary of the plaintiffs, filed 8 April 2024, 23 April 2024 and 10 May 2024; and two affidavits of Marie Morris, a solicitor employed by the plaintiffs' solicitors, filed 2 May 2024 and 13 May 2024.
Relevant legal principles
Reporting requirements under the Act
Part 2M.3 of the Act imposes financial reporting requirements on certain entities including public companies and 'large proprietary companies'.[1]
[1] Corporations Act 2001 (Cth) s 292(1)(c).
The requirements imposed on large proprietary companies include the requirement to:
(a)prepare a financial report and a directors' report for each financial year;[2]
(b)have the financial report audited and obtain an auditor's report;[3]
(c)report to members for a financial year by providing to members the financial report, directors' report and auditor's report for that year;[4] and
(d)lodge each of the reports referred to in (c) with ASIC.[5]
[2] Corporations Act 2001 (Cth) s 292(1)(c).
[3] Corporations Act 2001 (Cth) s 301(1).
[4] Corporations Act 2001 (Cth) s 314(1).
[5] Corporations Act 2001 (Cth) s 319(1).
The deadline to report to members and lodge the requisite documents with ASIC is four months after the end of the financial year.[6]
[6] Corporations Act 2001 (Cth) s 315(4), s 319(3).
Companies can obtain relief from compliance with these requirements in certain circumstances. Relevantly, for the purposes of this application, ASIC has made ASIC Class Order 98/1418 (Class Order) and the Instrument, pursuant to s 341(1) of the Act. Each provides a mechanism for relief from compliance with certain financial reporting requirements under the Act if the conditions set out in the Class Order or Instrument (as applicable) are met for that financial year.
The Class Order has been repealed but continues to apply for financial years prior to 1 January 2017. For the financial years commencing after 1 January 2017, the Instrument is in force and applies to these years.
Relevantly, the conditions which are required to be met include:
(a)the applicable entity is a wholly-owned (or closely-held) subsidiary of a holding entity and has executed a deed of cross‑guarantee with the holding entity as at the end of the relevant financial year;[7]
(b)for the first year in which it seeks to obtain relief, the applicable entity has lodged an 'opt-in' notice with ASIC using Form 389 which is entitled 'Opt-in/change of holding entity notice by wholly-owned company relieved from financial reporting obligations' (Form 389);[8] and
(c)the holding entity has prepared consolidated financial statements for the financial year, the notes to which include specific details about the parties to the deed of cross-guarantee.[9]
Power under s 1322 of the Act
[7] ASIC Class Order 98/1418, First order, para (b); ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 s 4, s 5, s 6(1)(c).
[8] ASIC Class Order 98/1418, First order, para (k); ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 s 6(1)(f), s 6(2).
[9] ASIC Class Order 98/1418, First order, para (i), subparas (i) - (iii); ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 s 6(1)(r), s 6(1)(v)(ii), s 6(1)(v)(iii), s 6(2).
Section 1322 of the Act 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;
…
(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.
On an application under s 1322 of the Act, it is necessary that the prescriptive requirements of the wording in s 1322(4) and the preconditions in s 1322(6) of the Act are satisfied.[10]
[10] Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396 [43] (French CJ), [53] (Hayne, Crennan & Kiefel JJ), [64] (Gageler J).
The powers conferred under s 1322 of the Act reflect the broad legislative policy that the law should not unnecessarily invalidate transactions or cause inconvenience because of non-compliance with the requirements of the Act, where such non-compliance is the result of honest error or inadvertence, and where the court can avoid such effects without causing prejudice to third parties or the public interest. This broad policy does not authorise the court to lightly set aside the requirements of the Act where its requirements have not been observed. It is necessary for the court to consider the circumstances of each individual case to ensure that it is appropriate to grant the indulgence sought and that, in making such orders, it does not undermine the requirements of the Act.[11]
[11] Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418 [29].
In considering an application under s 1322(4) of the Act, the essential principles are:[12]
(a)the prescriptive requirements of s 1322(4) and the pre‑conditions in s 1322(6) need to be satisfied;[13]
(b)the court retains a discretion as to whether it makes the orders sought;
(c)limitations to the broad powers in s 1322 will not be readily implied.[14] Section 1322 is remedial in character and should be applied broadly;
(d)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
(e)an order can be made under s 1322(4)(a) notwithstanding that the contravention or failure concerned resulted in the commission of an offence.[15]
[12] Re Helios Energy Ltd [2021] WASC 183 [31].
[13] Weinstock v Beck [43], [53], [64].
[14] Weinstock v Beck [43], [55] - [56], [64].
[15] Corporations Act 2001 (Cth) s 1322(5).
An application under s 1322(4)(d) of the Act involves what is, in essence, a two-stage process. As was stated by Barker J in Blaze Asset Pty Ltd v Target Energy Ltd:[16]
First, the Court needs to determine whether, having regard to the circumstances of the case and the general objects of the [Act] 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.
[16] Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488 [31]. See also Re Jaxsta Ltd [2018] WASC 390 [42].
Section 1322 of the Act confers broad authority on the court to extend time where the statutory pre-requisites are met.[17] 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 object and purpose 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.[18]
[17] David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, 275 ‑ 276.
[18] Re Jaxsta Ltd [43].
It is clear from the authorities that the time period can be extended even if it has expired.
Factual background
The third plaintiff, Perilya Ltd, is the ultimate holding company of the first and second plaintiffs. Together, these companies comprise the Perilya Group.
The first plaintiff is an unlisted public company and the second plaintiff is a proprietary limited company. The third plaintiff has, since 21 April 2000, been an unlisted public company, having been previously a listed public company, as well as a listed no liability public company and a no liability public company.
On 28 May 2008, following the receipt of legal advice some 18 months earlier, the board of the third plaintiff resolved to approve a restructure of the Perilya Group. This included entry into a deed of cross-guarantee to enable the plaintiffs to take advantage of the relief from financial reporting and auditing requirements under the Class Order (Deed). The Deed was entered into on 27 June 2008 and lodged with ASIC that day.
There was an amendment to the Class Order between the date the advice was provided (in 2006) and the date the Deed was signed (in 2008). As a result of this amendment, in order for an entity to take advantage of the relief under the Class Order, it was necessary for a Form 389 to be lodged with ASIC. No Form 389 was lodged at this time or subsequently.
The evidence of Mr Edwards, the then company secretary of the plaintiffs, was that he was not aware of the amendment to the Class Order or that it was a requirement in June 2008 for a Form 389 to be lodged. His evidence was that the relevant officeholders of the plaintiffs believed they had complied with all of the necessary steps in order to take advantage of the relief in the Class Order.
From that time, the first and second plaintiffs did not lodge separate financial reports for any of the financial years from 30 June 2008 until 31 December 2023 (Relevant Period). During this period, the third plaintiff lodged consolidated financial statements for the Perilya Group, which included the first and second plaintiffs. The consolidated financial statements specifically referred to the Deed.
Over the Relevant Period, the first and second plaintiffs failed to pass annual resolutions that each should continue to remain a party to the Deed. The evidence is that the plaintiffs were unaware of this requirement.
At the end of the financial year ended 30 June 2009, the plaintiffs transitioned from a financial year end of 30 June to 31 December. However, from Mr Marshall's review of the plaintiffs' records, he believes that the directors of the first and second plaintiffs did not pass any resolution to synchronise their financial year end with that of their parent, the third plaintiff, or notify ASIC of this change.
On or about 22 May 2023, the first plaintiff received a letter from ASIC notifying it of its failure to lodge its financial statements and reports for the 2022 financial year.[19] On 30 May 2023, Mr Marshall responded to ASIC on behalf of the first plaintiff. In this letter, he noted that the first plaintiff was a wholly-owned subsidiary of the third plaintiff, whose annual report covered its subsidiaries (including the first plaintiff).[20]
[19] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [10], 'CDRM-2'.
[20] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [12], 'CDRM-3'.
On 7 and 8 June 2023, Mr Marshall exchanged emails with ASIC and spoke with a representative of ASIC in relation to the issue. ASIC confirmed its position (that the first plaintiff was in breach of its obligations) and set out the options available to the third plaintiff.[21]
[21] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [13] ‑ [15], 'CDRM-4'.
Mr Marshall's evidence is that on receipt of the correspondence from ASIC, he liaised with the plaintiffs' auditor, as well as the General Manager - Finance, to understand the matters raised by ASIC. Following receipt of the email from ASIC on 8 June 2023, Mr Marshall commenced an examination of the historical records of the plaintiffs to understand what had occurred and reviewed the relevant Class orders and Instruments to understand the options available to the plaintiffs.[22]
[22] Third affidavit of Christopher David Rodney Marshall filed 10 May 2024 [14] ‑ [23].
On 3 October 2023, ASIC issued a formal notice to the first plaintiff under s 1274(11) of the Act requiring the first plaintiff to lodge its financial statements and reports for the 2022 financial year.[23]
[23] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [16], 'CDRM-5'.
On or about 13 October 2023, the plaintiffs' solicitors attempted to lodge a Form 389 and an annual financial report for the first plaintiff for the financial year ending 31 December 2022.[24] On 1 November 2023, ASIC notified the first plaintiff that it was unable to accept the Form 389 as it was not lodged within time and ASIC did not have the power to grant an extension of time.[25]
[24] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [17].
[25] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [18], 'CDRM-6'.
Following receipt of this letter, the plaintiffs engaged external counsel to prepare the papers for this application. This process took a considerable time period. The reasons for this included the necessity to obtain documents from ASIC and archive records to annexe to the affidavits, as well as the time taken to prepare and finalise the papers.[26]
[26] Third affidavit of Christopher David Rodney Marshall filed 10 May 2024 [24] ‑ [55].
Disposition
I am satisfied that, pursuant to s 1322(4) of the Act, each of the plaintiffs is an interested party who may seek the requested relief.
Position of ASIC
ASIC has been given notice of the application and served with the papers. On 2 May 2024, ASIC informed the plaintiffs that they neither support nor oppose the plaintiffs' application and did not intend to appear at the hearing.[27] After receipt of the further affidavit of Mr Marshall, ASIC confirmed this position on 13 May 2024.[28]
Application for extensions of time (s 1322(4)(d) of the Act)
[27] Affidavit of Marie Morris filed 2 May 2024, 'MM-4'.
[28] Second affidavit of Marie Morris filed 13 May 2024, 'MM-7'.
Two separate matters of non-compliance were the subject of the application for an extension of time. First, an extension of time for the first and second plaintiffs to lodge a Form 389, in compliance with the requirements of the Instrument. Second, an extension of time for the plaintiffs to pass board resolutions and for the directors to make the necessary statements to take advantage of relief under the Class Order.
I am satisfied that in respect of each of these matters, the Act or Instrument either expressly or impliedly imposes a time period which is capable of extension.
In respect of the failure to comply with the conditions of the Instrument, I am satisfied that a time period is imposed which is capable of extension under the Act. The Class Order required the first and second plaintiffs to lodge a Form 389 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 and for the directors of the plaintiffs to make the resolutions and statements required by the Instrument.
In the circumstances of this case, for the following reasons, I considered it was appropriate to extend the time limits for the lodging of the Form 389 and the passing of the resolutions until a date that was 30 days after the date of my order.
First, granting these extensions of time is consistent with the purpose of the Class Order, the Instrument and the Act. The purpose of the Class Order and the Instrument is to enable closely held or 'closed group' companies to prepare and lodge a consolidated set of financial statements where each company is a party to a deed of cross‑guarantee. The relief sought by the plaintiffs is consistent with this purpose. It also furthers the objects of the Class Order, Instrument and the Act by correcting the omission to lodge the requisite Forms. Granting the relief will more accurately reflect the intention of the plaintiffs that they be a 'closed group', as well as the contents of the consolidated financial statements that were lodged at the appropriate times in accordance with the Act.
Second, I am satisfied that the plaintiffs' non-compliance was unintentional, honest and inadvertent. I accept that had the first and second plaintiffs known the requisite documents were required to be filed with ASIC, each would have lodged a Form 389 and passed the necessary resolutions.
Third, in the absence of an extension of time, there will be significant costs incurred by the plaintiffs in excess of $3 million.[29]
[29] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [21(b)].
Fourth, there is no suggestion that any third party has acted or could have acted to its detriment as a result of the non-compliance or that any substantial injustice has been or is likely to be caused to any third party.
Fifth, ASIC did not oppose the application.
Pre-conditions in s 1322(6)(a) of the Act
In determining whether a person has acted honestly, the court looks to an absence of evidence of dishonesty and whether the party has taken prompt action to remedy the error.[30]
[30] Re G8 Communications Ltd [2016] FCA 297; (2016) 122 ACSR 22 [35]; Re Sprint Energy Ltd [2012] FCA 1354 [44]; Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17 [48].
The concept of acting honestly can embrace:[31]
(a)inadvertence or a failure to turn their mind to the relevant issue;
(b)an active, but incorrect, consideration of a legal issue as well as failure to consider the issue at all; and
(c)the failure to understand or appreciate the significance of non compliance.
[31] Re iCandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369 [55].
I am satisfied on the evidence before me that all persons concerned in or party to the contraventions have acted honestly. Specifically, I accept the evidence of Mr Marshall that the relevant directors and officers were unaware there had been a change in requirements of the Class Order in March 2008 or of the necessity to pass the resolutions.[32]
[32] Affidavit of Darryl Allan Edwards filed 19 March 2024 [32] ‑ [33]
I am also satisfied that the failure to lodge the Form 389 was not dishonest. The evidence before me supports a conclusion that the failure by the plaintiffs to comply with the Class Order, the Instrument and the Act was a result of inadvertence, rather than a deliberate disregard of the plaintiffs' obligations. The relief sought is appropriately confined to the specific omissions that caused the contraventions.
Section 1322(6)(a)(iii) of the Act gives the court a wide discretion in exercising its powers under s 1322 of the Act. Factors relevant in this matter include the circumstances in which the plaintiffs were made aware of the non-compliance and the steps taken to address the issue. In this case, I am also satisfied that it would be just and equitable to make the orders sought. In my view, the making of the orders sought by the plaintiff would be consistent with the public policy of pt 2M.3 of the Act, which is to ensure that financial documents are lodged within the timeframes specified by the Act.
On this basis, I am satisfied that the pre-conditions in s 1322(6)(a)(ii) of the Act and s 1322(6)(a)(iii) of the Act are satisfied.
No substantial injustice (s 1322(6)(c) of the Act)
Mr Marshall deposes that he is not aware of anyone who would suffer prejudice if the relief sought in the application was granted, or anyone who has been directly prejudiced by the instances of non‑compliance.[33] I accept this evidence.
[33] Affidavit of Christopher David Rodney Marshall filed 8 April 2024 [22] ‑ [23].
At all material times, the financial statements prepared by the third plaintiff were prepared on a consolidated basis which included a note that the plaintiffs were all parties to the Deed. These consolidated financial statements were lodged with ASIC and provided to shareholders of the third plaintiff. There is no evidence that any creditors or shareholders of any of the plaintiffs were adversely affected or suffered any detriment as a result of the failure to lodge the Form 389 or pass the resolutions.
For these reasons, I am satisfied that there is no basis for inferring that substantial injustice has been or is likely to be caused to any person by the making of the proposed orders.
No other discretionary reason to withhold relief
I accept and find that there is no evidence of any substantial misconduct, serious wrongdoing or flagrant disregard of the Act so as to warrant refusal of the relief sought.
In exercising the discretion to grant relief under s 1322(4)(a) of the Act, a relevant factor is the promptness with which the plaintiffs sought to remedy the irregularity once it was identified. In this case, upon being made aware of its non-compliance with its financial reporting obligations, I accept the plaintiffs took appropriate remedial measures and liaised with their legal representatives, who filed this application on their behalf. While the first time that the plaintiffs were made aware of the issues of non-compliance was in May 2023, I accept Mr Marshall's evidence that the delay in bringing the application was due to the complexity of completing investigations into the non-compliance, a task made more challenging given he was not employed by the plaintiffs at the time of the original contravention and the length of time that has passed since then. I accept that since being made aware of the issue, it has been necessary to undertake searches of archived records, as well to obtain advice from the plaintiffs' auditors and advisers, to ascertain the instances of non-compliance and the reasons for it.
I accept and find that the plaintiffs acted diligently in seeking to remedy the matters that are the subject of this application.
Application for declaratory relief (s 1322(4)(a) of the Act)
The plaintiffs also sought declarations under s 1322(4)(a) of the Act that their acts in purporting to take advantage of the relief available under the Class Order and Instrument were not invalid by reason of their failure to do the following. First, the failure to lodge separate financial statements as required by s 314 and s 319 of the Act. Second, to pass resolutions for the synchronisation of their financial years with the third plaintiff. Third, to comply with the steps required by the Class Order or the Instrument.
I accept that the prescriptive requirements of s 1322(4)(a) of the Act are satisfied in that:
(a)the proposed validation orders are framed in a declaratory form;
(b)the act, matter or thing has been identified; and
(c)the contravention in each case has been identified as a contravention of a specific section of the Act or the Instrument.
In each case, I am satisfied on the evidence before me that all persons concerned in or party to the contraventions have acted honestly and that it would also be just and equitable to make the orders sought.
In respect of the failure to comply with the conditions of the Instrument, the evidence of Mr Edwards is that he was not aware of any further administrative step that was required other than signing the Deed or that there had been an amendment to the Class Order since the receipt of external legal advice. I accept this evidence, which is supported by the steps that have been taken since the issues of non‑compliance were drawn to the plaintiffs' attention.
Counsel for the plaintiffs drew the court's attention to the fact that the first and second plaintiffs had not and did not intend to prepare financial reports for these financial years, primarily because of the costs involved. Consolidated financial reports have been previously lodged with ASIC. In the circumstances of this case, I accept, given these matters, that it is appropriate to make the orders sought. There is no evidence that any party has been or will suffer any prejudice or substantial injustice from any continued failure to have separate financial reports lodged by the plaintiffs.
Relief from civil liability (s 1322(4)(c) of the Act)
The plaintiffs also sought orders relieving the companies and their current and former directors from any civil liability arising out of their contraventions of the Act.
Section 1322(4)(c) of the Act permits the court to make an order relieving a person from civil liability for a broad range of contraventions or failures, subject to the conditions in s 1322(6) of the Act that the person concerned acted honestly and that no substantial injustice has been or is likely to be caused to any person.
A pre-condition to making an order under s 1322(4)(c) of the Act is that the person to be relieved from civil liability acted honestly.
For the reasons referred to at [46] ‑ [52] above, it is appropriate that the plaintiffs and their current and former officers be relieved of any civil liability arising out of their contraventions of the Act.
Conclusion
For these reasons, at the conclusion of the hearing on 14 May 2024, I made orders in terms of 'Annexure A' to these reasons.
Annexure A
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
JN
Associate to the Honourable Justice Hill
5 JUNE 2024
0
10
2