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Sprintex Limited [No 2]

Sprintex Limited [No 2]

Case [2025] WASC 15 21 January 2025

Compliance

Corporate Compliance

Regulatory Compliance

Costs

Corporate Governance

Shareholders' Interests

Corporate Law & Governance

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   SPRINTEX LIMITED [No 2] [2025] WASC 15
CORAM:   LUNDBERG J
HEARD:   18 NOVEMBER 2024
DELIVERED          :   21 JANUARY 2025
FILE NO/S:   COR 178 of 2024
MATTER:   IN THE MATTER OF SPRINTEX LIMITED

EX PARTE
SPRINTEX LIMITED
Plaintiff

Catchwords:

Corporations - Application for curative orders under s 1322(4) of the Corporations Act 2001 (Cth) - Failure by plaintiff to lodge annual reports as required by time frame in s 319(3)(a) - Notices issued by plaintiff under s 708(5)(e) stated that the plaintiff had complied with ch 2M when it had not - Various share issues undertaken by the plaintiff requiring validation as a result - Refusal by former company secretary and chief financial officer to provide affidavit evidence in support of plaintiff's application

Corporations - Application for curative orders under s 1322(4) of the Corporations Act 2001 (Cth) - Failure by plaintiff to issue cleansing notices under s 708A(5)(e) or cleansing prospectuses under s 708A(11) in respect of multiple share issues over a 4 month period - Appropriate for relief to be granted - Turn on own facts

Corporations - Whether usual costs orders should be made - Whether costs of the proceeding should be borne by shareholders - Importance of regulatory compliance and protection of the interests of shareholders - Relevance of prior contraventions of the Corporations Act, both at the plaintiff company and another entity - Relevance of failure to develop and implement compliance protocols - Nature of costs orders to be made - Turns on own facts

Legislation:

Corporations Act 2001 (Cth), s 254E, s 319, s 706, s 707, s 708,s 708AA, s 708A, s 727, s 1322

Result:

Orders made pursuant to s 1322(4)(a) and s 1322(4)(d) of the Corporations Act 2001 (Cth) as set out in Attachment C to the reasons.
Directions to be made as to costs.

Category: B

Representation:

Counsel:

Plaintiff

M Holler

Solicitors:

Plaintiff

Steinepreis Paganin

Case(s) referred to in decision(s):

Caeneus Minerals Ltd; in the matter of Caeneus Minerals Ltd [2018] FCA 560.
DAC Finance (NSW/Qld) Pty Ltd and other companies [2020] NSWSC 182.
Entertainment Publications of Australia Pty Ltd v ASIC [2022] FCA 960.
Ex parte Imdex Ltd [2020] WASC 298.
Ex parte Kaiser Reef Limited [2024] WASC 397.
Ex parte New Century Resources Ltd [2021] WASC 86.
Ex parte Re Omni Bridgeway Ltd [2024] WASC 133.
Ex parte Spenda Ltd [2023] WASC 351.
Re Barrick Middle East Pty Limited; Ex parte Barrick Middle East Pty Ltd [2023] WASC 122.
Re Bellevue Gold Ltd [2021] WASC 80.
Re Cyprium Metals Ltd; Ex parte Cyprium Metals Ltd [2022] WASC 241.
Re Force Commodities Ltd [2019] FCA 1815; (2019) 140 ACSR 408.
Re Golden Gate Petroleum Ltd [2010] FCA 40.
Re iCandy Interactive Limited [2018] FCA 533.
Re Jaxsta Ltd [2018] WASC 390.
Re Metalicity Ltd [2020] WASC 387.
Re Murray River Organics…

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 Sprintex Limited [No 2]

Details

AGLC: Sprintex Limited [No 2] [2025] WASC 15
Case: [2025] WASC 15
Decision Date: 21 JANUARY 2025

CaseChat Overview and Summary

The case of Sprintex Limited [No 2] involved the plaintiff, Sprintex Limited, which was seeking curative orders under section 1322(4) of the Corporations Act 2001 (Cth). The plaintiff's application stemmed from its failure to lodge annual reports within the required timeframe stipulated in section 319(3)(a) and its issuance of notices under section 708(5)(e) that falsely stated compliance with chapter 2M. Additionally, the plaintiff had undertaken various share issues requiring validation, which were left unaddressed due to these failures. The plaintiff's application was further complicated by the refusal of its former company secretary and chief financial officer to provide affidavit evidence in support of the application.

The legal issues before the court encompassed whether the plaintiff was entitled to curative orders under section 1322(4) of the Corporations Act, given its past failures to comply with certain statutory requirements. The court had to determine whether the plaintiff's failures to issue cleansing notices or prospectuses under section 708A(5)(e) and 708A(11) warranted relief, considering the specific facts of the case. The court also needed to decide on the appropriateness of a usual costs order and whether the costs of the proceeding should be borne by the shareholders, taking into account the importance of regulatory compliance and the protection of shareholders' interests. The relevance of prior contraventions of the Corporations Act, both by the plaintiff and another entity, as well as the failure to develop and implement compliance protocols, played a crucial role in the court's reasoning.

The court found that it was appropriate to grant the relief sought by the plaintiff, emphasizing that each case turned on its own facts. The court considered the importance of regulatory compliance and the protection of shareholders' interests, along with the plaintiff's prior contraventions and lack of compliance protocols. In determining the nature of the costs orders, the court concluded that the costs of the proceeding should be borne by the shareholders. This decision was based on the specific circumstances of the case, highlighting the need for careful consideration of each application on its own merits.

Orders