Re Silver Lake Resources Ltd

Case [2012] FCA 32


FEDERAL COURT OF AUSTRALIA

Silver Lake Resources Limited, in the matter of Silver Lake Resources Limited [2012] FCA 32

Citation: Silver Lake Resources Limited, in the matter of Silver Lake Resources Limited [2012] FCA 32
Party: SILVER LAKE RESOURCES LIMITED (ACN 108 779 782)
File number: WAD 518 of 2011
Judge: SIOPIS J
Date of judgment: 31 January 2012
Catchwords: CORPORATIONS – a company issued shares to which s 707(3) of the Corporations Act 2001 (Cth) applied – company did not comply with s 708A(5)(e) of the Corporations Act by issuing a cleansing notice – on‑market trading in the shares occurred without compliance with disclosure requirements of s 707(3) of the Corporations Act – whether a declaration should be made validating the trading in the shares.
Legislation: Corporations Act 2001 (Cth) ss 707(3), 708A(5)(e), 708A(11), 1322(4)(a), 1322(4)(c), 1322(6)(a), 1322(6)(c)
Cases cited: Re Golden Gate Petroleum Ltd (2010) 77 ACSR 17
Re Elemental Minerals Ltd (2010) 79 ACSR 277
Date of hearing: Determined on the papers.
Date of last submissions: 6 January 2012
Place: Perth
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 25
Counsel for the Plaintiff: Mr TP O’Leary
Solicitor for the Plaintiff: Gilbert + Tobin Lawyers

IN THE FEDERAL COURT OF AUSTRALIA

WESTERN AUSTRALIA DISTRICT REGISTRY

GENERAL DIVISION

WAD 518 of 2011

IN THE MATTER OF SILVER LAKE RESOURCES LIMITED (ACN 108 779 782)

SILVER LAKE RESOURCES LIMITED (ACN 108 779 782)
Plaintiff

JUDGE:

SIOPIS J

DATE OF ORDER:

31 JANUARY 2012

WHERE MADE:

PERTH

THE COURT ORDERS THAT:

1.Pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth) (Act), any offer for sale or sale of the shares of Silver Lake Resources Limited (Plaintiff) issued to the persons on the dates appearing at Annexure A to these orders by reason of the exercise of options granted by the Plaintiff, is not invalid by reason of the Plaintiff’s failure to comply with s 708A(5)(e) of the Act.

2.Pursuant to s 1322(4)(c) of the Act, the sellers of the shares referred to in Annexure A to these orders be wholly relieved from any civil liability arising out of contravention of s 707(3) of the Act, or by reason of the Plaintiff’s failure to comply with s 708A(5)(e) of the Act.

3.A sealed copy of these orders be served on the Australian Securities and Investments Commission (ASIC) as soon as reasonably practicable and upon service of these orders on ASIC, ASIC is to include these orders on its database.

4.As soon as reasonably practicable, the Plaintiff is to publish an announcement (Announcement) to the Australian Securities Exchange (ASX) that includes a copy of the orders made.

5.For a period of 28 days from the date of publication by the ASX of the Announcement, any person to whom substantial injustice has been or is likely to be caused by the making of order 1 and order 2 above, has liberty to apply to vary or discharge that order.

6.There be no orders as to costs.

Annexure A

Date of Issue

Name

Continue reading Re Silver Lake Resources Ltd

Sign in free to access the full text

Details
AGLC
Re Silver Lake Resources Ltd [2012] FCA 32
Case
[2012] FCA 32
Decision Date

CaseChat Overview and Summary

Silver Lake Resources Limited sought a declaration validating the trading of its shares, issued to certain persons, which occurred without compliance with disclosure requirements under the Corporations Act 2001 (Cth). The company had failed to issue a cleansing notice as required by section 708A(5)(e) of the Act, and the trading of the shares did not comply with section 707(3) of the Act. The court was required to determine whether it should declare the trading of the shares to be valid, notwithstanding the failure to comply with these statutory provisions.

The court considered the purpose of the disclosure requirements under section 707(3) of the Act, which is to ensure that information about the trading of securities is made available to the market. However, the court also noted that the primary responsibility for compliance with the disclosure requirements rests with the company. The court found that the failure to issue a cleansing notice and to comply with the disclosure requirements did not necessarily result in substantial injustice to the persons who traded the shares. The court also considered the discretion provided under section 1322(4) of the Act to declare the trading to be valid.

The court determined that the failure to comply with the statutory provisions did not render the trading of the shares invalid, and that the sellers of the shares should be relieved from any civil liability arising out of the contravention of the Act. The court made orders declaring that the trading of the shares was valid, relieving the sellers from any civil liability, and requiring the company to publish an announcement to the Australian Securities Exchange. Any person who suffered substantial injustice as a result of the orders had the right to apply to the court to vary or discharge the orders. The court made no orders as to costs.

In summary, the court validated the trading of the shares issued by Silver Lake Resources Limited, despite the company's failure to comply with certain statutory provisions. The court exercised its discretion under section 1322(4) of the Act to declare the trading to be valid, and to relieve the sellers from any civil liability. The company was required to publish an announcement to the Australian Securities Exchange, and any person who suffered substantial injustice had the right to apply to the court to vary or discharge the orders.

Orders

Orders of the court

1. Pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth) (Act), any offer for sale or sale of the shares of Silver Lake Resources Limited (Plaintiff) issued to the persons on the dates appearing at Annexure A to these orders by reason of the exercise of options granted by the Plaintiff, is not invalid by reason of the Plaintiff’s failure to comply with s 708A(5)(e) of the Act.

2. Pursuant to s 1322(4)(c) of the Act, the sellers of the shares referred to in Annexure A to these orders be wholly relieved from any civil liability arising out of contravention of s 707(3) of the Act, or by reason of the Plaintiff’s failure to comply with s 708A(5)(e) of the Act.

3. A sealed copy of these orders be served on the Australian Securities and Investments Commission (ASIC) as soon as reasonably practicable and upon service of these orders on ASIC, ASIC is to include these orders on its database.

4. As soon as reasonably practicable, the Plaintiff is to publish an announcement (Announcement) to the Australian Securities Exchange (ASX) that includes a copy of the orders made.

5. For a period of 28 days from the date of publication by the ASX of the Announcement, any person to whom substantial injustice has been or is likely to be caused by the making of order 1 and order 2 above, has liberty to apply to vary or discharge that order.

6. There be no orders as to costs.

Annexure A

Date of Issue

Name

Number of shares

24.10.11

UBS Nominess Pty Ltd

199,998

30.09.11

National Nominees Limited

249,996

06.10.11

Swiss Asia Capital (Singapore) Pte Ltd

129,996

03.10.11

National Nominees Limited

325,844

30.09.11

Bond Street Custodians Limited

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.