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Re Spenda Ltd

Re Spenda Ltd

Case [2023] WASC 351 6 September 2023

Contract Formation

Unconscionable Conduct

Statutory Interpretation

Relief from Civil Liability

Jurisdiction

Corporate Law & Governance

Commercial Law

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE SPENDA LTD; EX PARTE SPENDA LTD [2023] WASC 351
CORAM:   HILL J
HEARD:   6 SEPTEMBER 2023
DELIVERED          :   6 SEPTEMBER 2023
PUBLISHED           :   15 SEPTEMBER 2023
FILE NO/S:   COR 138 of 2023
MATTER:   IN THE MATTER OF SPENDA LTD

EX PARTE
SPENDA LTD
Plaintiff

Catchwords:

Corporations - Application for orders under s 1322 of Corporations Act 2001 (Cth) - Failure of company to ratify appointment of auditor at annual general meeting - Failure of company to reappoint auditor following annual general meeting - Where no blatant or flagrant disregard of obligations - Whether orders should be made relieving officers of civil liability - Turns on own facts

Corporations - Securities - Application for orders that sales of securities are not invalid - Application for order that options issued under prospectus are valid - Where no blatant or flagrant disregard of obligations - Where no substantial injustice if orders made - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 301, s 314, s 327B, s 327C, s 344, s 706, s 707, s 708A, s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

D P Butler

Solicitors:

Plaintiff

Murcia Pestell Hillard Lawyers

Cases referred to in decision:

Cordiant Communications (Australia) Pty Ltd v Communications Group Holdings Pty Ltd [2005] NSWSC 1005; (2005) 55 ACSR 185
Gofur v Bangladesh Islamic Centre of NSW (BIC) [2020] NSWSC 652
Re Bellevue Gold Ltd [2021] WASC 80
Re Caeneus Minerals Ltd [2018] FCA 560
Re Classic Minerals Ltd [2018] FCA 2039
Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re ICandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Murray River Organics [2019] FCA 931; (2019) 138 ACSR 365
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396

HILL J:

On 5 September 2023, the plaintiff, Spenda Limited (Spenda), filed an originating process seeking orders under s 1322(4) of the Corporations Act 2001 (Cth) (Act) arising out of contraventions of s 327B(1)(b), s 327C(1), s 301(1) and s 314(1) of the Act. The contraventions occurred as a result of Spenda's failure to have the appointment of HLB Mann Judd (HLB) as their auditor approved at their annual general meeting (AGM) in 2021, and to subsequently appoint HLB as its auditor.
Following discovery of the contraventions, Spenda undertook a review of its issues of securities between 26 May 2021 and 15 August 2023. The review identified twelve separate share and option issues, between 28 February 2022 and 15 August 2023.[1] Each of the cleansing notices lodged in respect of these issues contained a statement that there had been compliance with the provisions of ch 2M of the Act, which, given the…

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 Spenda Ltd

Details

AGLC: Re Spenda Ltd [2023] WASC 351
Case: [2023] WASC 351
Decision Date

CaseChat Overview and Summary

Spenda Limited filed an application in the Supreme Court of Western Australia, seeking orders under s 1322(4) of the Corporations Act 2001 (Cth) (Act) to validate the appointment of HLB Mann Judd as its auditor and to validate twelve separate share and option issues between 26 May 2021 and 15 August 2023. Spenda also sought relief from civil liability for the contraventions of the Act and an order validating options issued under a prospectus on 21 July 2023. The court had to decide whether the prescriptive requirements of s 1322(4) and the pre-conditions in s 1322(6) of the Act were satisfied, and whether it was appropriate to grant the relief sought. The court found that the appointment of HLB as auditor was not invalid by reason of the failure to comply with the relevant statutory provisions. The court was satisfied that the pre-conditions in s 1322(6) of the Act were satisfied, and that it was appropriate to grant the relief sought. The court granted orders validating the appointment of HLB as auditor, validating the twelve share and option issues, and validating the options issued under the prospectus. The court also granted orders relieving Spenda and its current and former officers from any civil liability arising out of the contraventions of the Act.

Orders