Superior Resources Limited, in the matter of Superior Resources Limited

Superior Resources Limited, the applicant, sought relief from the court in relation to the omission to lodge an effective 'cleansing notice' required by the Corporations Act 2001 (Cth). The case involved the sale of 57,375,000 fully paid ordinary shares in Superior Resources that were issued on 15 August 2019. A cleansing notice was announced on ASX on the same day, but it did not comply with the statutory requirements as it was not issued within the five business day window after the day of the issue. The applicant sought declaratory relief to validate the share sales and sale offers and relief from civil liability for the sellers of shares.

The key legal issues before the court were whether the omission to issue a cleansing notice within the five business day window after 15 August 2019 was an honest mistake, and whether it was just and equitable to validate the secondary sales of the shares issued on that date. The court considered the principles outlined in Re Golden Rim Resources Ltd and Re iCandy Interactive Ltd, which emphasised the remedial nature of s 1322, the importance of honesty in determining whether those concerned in or party to the breaches acted honestly, and the wide discretion of the court in considering whether it is just and equitable to validate the on-sales.

The court accepted the evidence of Mr Fernicola, the chairman and company secretary of Superior Resources, that the omission to issue a cleansing notice within the five business day window was an honest mistake. The court found that the applicant had taken prompt action to remedy the error and that it was just and equitable to validate the secondary sales of the shares issued on 15 August 2019. The court also considered that the shareholders who sold the shares without disclosure had acted honestly.

The court made the following orders pursuant to s 1322(4)(a) and (c) of the Corporations Act: (1) the secondary sales of the shares issued on 15 August 2019 are not invalid by reason of any contravention of s 707(3) or s 727(1) of the Corporations Act; (2) any person offering to sell or selling the shares is relieved from any civil liability arising out of any such contravention; (3) Superior Resources must send a copy of these orders to each person to whom the shares were issued and publish an announcement to the Australian Securities Exchange (ASX) in which a copy of these orders is included; (4) a sealed copy of these orders must be served on the Australian Securities and Investments Commission (ASIC) as soon as reasonably practicable and upon service of these orders on ASIC, ASIC must include these orders on its database; and (5) for a period of 28 days from the date of publication of these orders on the ASX website, any person who claims to have suffered substantial injustice or who claims that they are likely to suffer substantial injustice by reason of the contraventions referred to above or the making of these orders may apply within that period to vary or to discharge the orders.