Re Perilya Broken Hill Ltd - [2024] WASC 202

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…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Perilya Broken Hill Ltd

Details

AGLC: Re Perilya Broken Hill Ltd [2024] WASC 202
Case: [2024] WASC 202
Decision Date: 5 JUNE 2024

CaseChat Overview and Summary

The case of Re Perilya Broken Hill Ltd involved the Perilya Group, consisting of three companies, with the third being the ultimate holding company. The plaintiffs sought relief from financial reporting obligations and an extension of time to comply with ASIC regulations. The court was tasked with deciding whether the plaintiffs could be granted relief from reporting obligations and an extension of time to comply with the ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785. The case hinged on whether substantial injustice would result from the failure to grant relief, a determination that depended on the specific facts of the case.

The court examined the legal authority to extend time for compliance, noting that section 1322 of the Act provided broad authority to do so if statutory prerequisites were met. The court had to consider the interests of all affected parties and the public interest in compliance with the Act, as well as the object and purpose of the statutory provision imposing the time period. The court referenced previous cases that supported the extension of time even if the statutory period had expired. The court had to determine whether the plaintiffs' failure to comply with the ASIC regulations would result in substantial injustice, given the circumstances and the evidence presented.

In its reasoning, the court found that the plaintiffs had not lodged a Form 389 with ASIC as required by an amendment to the Class Order, despite believing they had complied with all necessary steps. The court also noted that the plaintiffs had not passed annual resolutions to remain parties to the Deed or notified ASIC of the change in financial year end. The court concluded that the plaintiffs' failure to comply was due to a lack of awareness of the requirements, rather than any intentional disregard. The court granted relief from reporting obligations and extended the time for compliance, finding that substantial injustice would result from denying relief.

The court's final orders included a declaration that the financial reports of the first and second plaintiffs were not invalid for the Relevant Period and an extension of time for the plaintiffs to comply with the ASIC regulations. The court's decision was based on the specific facts of the case, including the plaintiffs' lack of awareness of the requirements and the potential for substantial injustice if relief was not granted.

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 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. 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.