Re Sprint Energy Ltd

In the Federal Court of Australia, Sprint Energy Ltd applied for declaratory relief to validate share trades and relieve sellers of shares from civil liability. The applicants, Sprint Energy Ltd, a public company listed on the Australian Securities Exchange (ASX), had issued shares to several persons between 30 December 2011 and 19 September 2012. The shares issued during this period, referred to as the Relevant Share Issues, were the subject of this application. The applicants submitted that the shares issued were subject to erroneous representations made by the company to the ASX and the public, stating that disclosure was not required for offers for sale and sale of shares. The applicants sought relief under sections 1322(4)(a) and (c) of the Corporations Act 2001 (Cth). The legal issues that the court had to decide included whether the applicants had acted honestly, whether sellers had relied on the applicants' representations in good faith, and whether any purchaser of the shares would suffer substantial injustice by the granting of declaratory relief.

The court found that the applicants had acted honestly in issuing the shares and making the representations to the ASX and the public. The court noted that the applicants had made the representations in good faith and had not acted with any intention to deceive or mislead the ASX or the public. The court also found that the sellers had relied on the applicants' representations in good faith. The sellers had not been aware of any issues with the representations made by the applicants and had acted in reliance on those representations. Finally, the court found that no purchaser of the shares would suffer substantial injustice by the granting of declaratory relief. The court held that the relief sought was appropriate in the circumstances and would not cause any substantial injustice to any party.

The court granted the relief sought by the applicants. The court declared that any offer for sale or sale of the quoted securities in question was not invalid by reason of the failure to issue a notice exempting the seller from the obligation of disclosure under the Act. The court also relieved any seller from any civil liability arising out of a contravention of the relevant sections of the Act or by reason of the applicants' failure to satisfy certain requirements. The court ordered that sealed copies of the orders be served upon the Australian Securities and Investments Commission (ASIC) and that the applicants publish an announcement to the ASX including a copy of the orders. The applicants were also ordered to make a request to the ASX for the reinstatement of the class of securities in question. Finally, the court made no order as to costs.