Legal Research
Cases
Re Sprintex Ltd

Re Sprintex Ltd

Case [2022] WASC 188 30 May 2022

Declaratory Relief

Securities

Misrepresentation

Corporate Law & Governance

No judgment structure available for this case.

Type to search within this case.

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   RE SPRINTEX LTD; EX PARTE SPRINTEX LTD [2022] WASC 188
CORAM:   HILL J
HEARD:   11 APRIL 2022
DELIVERED          :   11 APRIL 2022
PUBLISHED           :   30 MAY 2022
FILE NO/S:   COR 66 of 2022
MATTER:   IN THE MATTER OF SPRINTEX LTD

EX PARTE
SPRINTEX LTD
Plaintiff

Catchwords:
Corporations law - Securities - Application for declaratory relief to validate trading in securities issued without a valid cleansing prospectus - One instance of securities being issued without a valid cleansing prospectus - Where no blatant or flagrant disregard of obligations - Where no substantial injustice if orders made - Application granted
Legislation:
Corporations Act 2001 (Cth), s 707(3), s 708A, s 727(1), s 1322(4)
Result:
Application granted
Category: B
Representation:
Counsel:

Plaintiff : M F Holler & D J Hird
Solicitors:

Plaintiff : Steinepreis Paganin
Cases referred to in decision:
Re Bellevue Gold Ltd [2021] WASC 80
Re Caeneus Minerals Ltd [2018] FCA 560
Re Classic Minerals Ltd [2018] FCA 2039
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
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 Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396

HILL J:
1On 6 April 2022, the plaintiff, Sprintex Limited (Sprintex), filed an originating process seeking orders under s 1322(4)(a) of the Corporations Act 2001 (Cth) (Act) relating to contraventions of s 708A(11), s 707(3) and s 727(1) of the Act. The contraventions occurred following the issue of shares by the plaintiff on 9 February 2022, without the prior lodgement of a cleansing prospectus pursuant to s 708A of the Act.
2Sprintex has provided a frank and detailed explanation as to the circumstances surrounding the issue of these shares. Based on the evidence before me, I was and am satisfied that the failure to issue a cleansing prospectus was caused by inadvertence rather than any deliberate disregard of the plaintiff's obligations.
3In light of the urgency with which the application was brought, I made orders at the conclusion of the hearing on 11 April 2022 granting the relief sought and said that I would subsequently publish reasons for my decision. These are the reasons for my decision.

Reporting requirements under Part 6D.2 of the Act
4Part 6D.2 of the Act imposes disclosure obligations in relation to the issue and sale of securities. In certain circumstances, these obligations can be satisfied by lodging what is commonly referred to as a cleansing notice or a prospectus.[1] If disclosure has not been made by the issuer and the securities are on-sold within 12 months, the party to whom the securities are issued may be obliged to make disclosure.[2]
[1] Corporations Act 2001 (Cth) s 708A(5).
[2] Corporations Act 2001 (Cth) s 707(3).…

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 Sprintex Ltd

Details

AGLC: Re Sprintex Ltd [2022] WASC 188
Case: [2022] WASC 188
Decision Date: 30 MAY 2022

CaseChat Overview and Summary

The matter involved a company seeking a declaration that securities issued by it were valid. The applicant, Sprintex Ltd, sought to validate the trading of its securities which were issued without a valid cleansing prospectus. The case was heard in the Supreme Court of Victoria. The primary issue for determination was whether the court should grant the applicant's request for declaratory relief, thereby validating the securities issued without a cleansing prospectus. This involved an examination of whether there was a blatant or flagrant disregard of obligations by the company and whether there would be substantial injustice if the orders were made.

The court noted that the applicant had not acted in a blatant or flagrant manner in issuing the securities without a valid cleansing prospectus. The applicant's actions were not driven by any intent to deceive or mislead, but rather by a misunderstanding of the legal requirements. The court further considered that there would be no substantial injustice if the orders were made. The applicant's actions did not harm any party, and the granting of the orders would not prejudice any rights of the respondents or any other party. Given these findings, the court held that it was appropriate to grant the relief sought by the applicant.

Based on the court's reasoning, it was determined that the application for declaratory relief should be granted. The court issued orders validating the trading of the securities issued by Sprintex Ltd, despite the absence of a valid cleansing prospectus. The court's decision was grounded in the absence of a flagrant disregard of obligations and the lack of substantial injustice if the orders were made. The court's ruling provided clarity and certainty to the parties involved, allowing the securities to be traded in accordance with the orders.

Orders