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SANDFIRE RESOURCES LIMITED

SANDFIRE RESOURCES LIMITED

Case [2024] WASC 261 19 July 2024

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   SANDFIRE RESOURCES LIMITED [2024] WASC 261
CORAM:   STRK J
HEARD:   31 MAY 2024
DELIVERED          :   31 MAY 2024
PUBLISHED           :   19 JULY 2024
FILE NO/S:   COR 87 of 2024
MATTER:   IN THE MATTER OF SANDFIRE RESOURCES LIMITED

EX PARTE
SANDFIRE RESOURCES LIMITED
Plaintiff

Catchwords:

Corporations - Application for orders under s 1322 of Corporations Act 2001 (Cth) - Failure of company to ratify the appointment of auditor at annual general meeting - Where prompt action taken to rectify irregularity - Notice given to ASIC, the ASX and shareholders - Whether it is just and equitable to make the orders sought - Where no substantial injustice caused by proposed orders - Where no blatant or flagrant disregard of obligations - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 1322

Result:

Application granted

Category: B

Representation:

Counsel:

Plaintiff

AJ Papamatheos and KJ Travaglione

Solicitors:

Plaintiff

Allen Overy Shearman Sterling

Cases referred to in decision:

Ex parte Bellevue Gold Ltd [2021] WASC 80
In the matter of Centuria Property Funds Ltd [2022] NSWSC 1056; (2022) 162 ACSR 699
In the matter of New Century Resources Ltd [2021] WASC 86
Re Bernsteen Pty Ltd (in liq) [2018] SASC 76
Re Caeneus Minerals Ltd [2018] FCA 560
Re Classic Minerals Ltd [2018] FCA 2039
Re Enova Mining Ltd; Ex parte Enova Mining Ltd [2023] WASC 492
Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22
Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174
Re ICandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369
Re Kalamazoo Resources Ltd [2024] WASC 83
Re Matador Mining Ltd; Ex parte Matador Mining Ltd [2021] WASC 132
Re Memphasys Ltd; Ex parte Memphasys Ltd [2022] WASC 269
Re Omni Bridgeway Ltd; Ex parte Omni Bridgeway Ltd [2024] WASC 133
Re Order of AHEPA NSW Inc [2018] NSWSC 458
Re Spenda Ltd; Ex parte Spenda Ltd [2023] WASC 351
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396

STRK J:

Introduction

Sandfire Resources Limited purported to appoint Deloitte Touche Tohmatsu as its auditor from 29 November 2023. It later came to appreciate that it had failed to comply with the relevant provisions of the Corporations Act 2001 (Cth) with respect to that appointment. Upon discovering its error, Sandfire applied to the court for a declaration pursuant to s 1322(4)(a) of the Corporations Act that:
(a)the appointment of Deloitte as its auditor from 29 November 2023 was not invalid by reason of Sandfire's:
(i) failure to comply with s 327B(1)(b) of the Corporations Act by not having the appointment of Deloitte approved at Sandfire's annual general meeting on 29 November 2023 (2023 AGM);
(ii) purported appointment of Deloitte in the absence of a member's prior nomination of Deloitte as auditor, being a failure to comply with s 328B of the Corporations Act;

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 SANDFIRE RESOURCES LIMITED

Details

AGLC: SANDFIRE RESOURCES LIMITED [2024] WASC 261
Case: [2024] WASC 261
Decision Date: 19 JULY 2024

CaseChat Overview and Summary

The application was brought by Sandfire Resources Limited, a mining company listed on the Australian Securities Exchange, to seek orders under section 1322 of the Corporations Act 2001 to remedy the failure to ratify the appointment of the company's auditor at the annual general meeting. The dispute arose due to an administrative oversight which led to the company's failure to properly ratify the appointment at the meeting. The matter was heard in the Federal Court of Australia, where the company sought to regularise its compliance with the statutory requirements for auditor appointment.

The legal issues before the court were whether it was just and equitable to grant the orders sought by Sandfire Resources Limited, and if there had been any substantial injustice caused by the proposed orders. Additionally, the court had to determine whether the company's actions amounted to a blatant or flagrant disregard of its obligations under the Corporations Act. The primary consideration was whether the irregularity could be remedied by the proposed orders and if doing so would not cause substantial injustice to any party.

The court found that the irregularity was promptly addressed by the company, which had taken immediate action to rectify the situation by notifying the Australian Securities and Investments Commission, the Australian Securities Exchange, and the shareholders. The court held that the company had not acted in a manner that demonstrated a blatant or flagrant disregard of its statutory obligations. The court was satisfied that the orders sought would rectify the irregularity without causing substantial injustice to any party and that it was just and equitable to grant the relief sought by the company.

Consequently, the court made orders under section 1322 of the Corporations Act 2001 to regularise the appointment of the auditor, allowing Sandfire Resources Limited to treat the appointment as if it had been duly ratified at the annual general meeting. This decision underscores the importance of prompt remedial action in addressing compliance issues and the court's willingness to grant relief where there is no substantial injustice and the company has acted in good faith.

Orders