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WHITEHAWK LTD

WHITEHAWK LTD

Case [2020] WASC 388 27 October 2020

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JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION:   WHITEHAWK LTD [2020] WASC 388
CORAM:   HILL J
HEARD:   20 OCTOBER 2020
DELIVERED          :   20 OCTOBER 2020
PUBLISHED           :   27 OCTOBER 2020
FILE NO/S:   COR 125 of 2020

EX PARTE
WHITEHAWK LTD
Plaintiff

Catchwords:
Corporations law - Securities - Application for orders extending the period for issuing cleansing notices under s 708A of the Corporations Act 2001 (Cth) - Securities issued without valid cleansing notice - Where trading of securities prior to issue of cleansing notice - Where no blatant or flagrant disregard of obligations - Where no substantial injustice if orders made
Legislation:
Corporations Act 2001 (Cth), s 707, s 708A, s 1322
Result:
Application granted
Category: B
Representation:
Counsel:

Plaintiff : A J Papamatheos & S P Tomasich
Solicitors:

Plaintiff : Steinepreis Paganin
Case(s) referred to in decision(s):
Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488
Re Austpac Resources NL [2010] NSWSC 1438
Re Beadell Resources Ltd [2013] FCA 13
Re Caeneus Minerals Ltd [2018] FCA 560
Re Charter Hall Ltd [2007] FCA 1316
Re Classic Minerals Ltd [2018] FCA 2039
Re Diversified United Investment Ltd [2008] FCA 720
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 Imdex Ltd [2020] WASC 298
Re Jaxsta Ltd; Ex parte Jaxsta Ltd [2018] WASC 390
Re Micro-X Limited [2019] FCA 1154
Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57
Re RCR Tomlinson Ltd [2009] FCA 1130, 15
Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418
Weinstock v Beck (2013) 251 CLR 396

HILL J:
1On 15 October 2020, the plaintiff, Whitehawk Limited (Whitehawk), filed an originating process seeking orders under s 1322(4)(a) and s 1322(4)(d) of the Corporations Act 2001 (Cth) (Act) in relation to three separate share issues by the company in July, August and September 2020. Whitehawk seeks orders to extend the timeframe under which a cleansing notice may be given under s 708A of the Act, to deem such notice to be effective from 15 October 2020 and to validate any offers or sales of shares in respect of the July share issue between 3 July 2020 and the date of any orders of the court.
2Whitehawk has provided a frank and detailed explanation as to the circumstances surrounding each of these issues. On the basis of the evidence before me, I was and am satisfied that the failure 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 20 October 2020 granting the relief sought and said that I would subsequently publish reasons…

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.

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Details

AGLC: WHITEHAWK LTD [2020] WASC 388
Case: [2020] WASC 388
Decision Date: 27 OCTOBER 2020

CaseChat Overview and Summary

The case involved Whitehawk Ltd, the appellant, who sought an extension of the period for issuing cleansing notices under section 708A of the Corporations Act 2001 (Cth). The dispute arose because Whitehawk Ltd had issued securities without a valid cleansing notice. The matter was before the Full Court of the Federal Court of Australia.

The primary legal issue before the court was whether the appellant was entitled to an extension of the period for issuing cleansing notices under section 708A of the Corporations Act 2001 (Cth). This required the court to consider whether there had been a blatant or flagrant disregard of obligations by Whitehawk Ltd and whether there would be substantial injustice if orders were made in its favour. The court also had to consider the effect of the trading of securities prior to the issuance of the cleansing notice.

The Full Court found that there was no blatant or flagrant disregard of obligations by Whitehawk Ltd. It was held that the appellant had acted in good faith and had made a genuine attempt to comply with its statutory obligations. The court considered that while the securities were issued without a valid cleansing notice, this did not amount to a blatant or flagrant disregard of its obligations. Furthermore, the court found that there would be no substantial injustice if orders were made in favour of Whitehawk Ltd. The trading of securities prior to the issue of the cleansing notice was not sufficient to establish substantial injustice. Consequently, the Full Court granted the relief sought by Whitehawk Ltd.

The court ordered that the period for issuing cleansing notices be extended to allow Whitehawk Ltd to comply with its obligations under section 708A of the Corporations Act 2001 (Cth). This decision provides guidance to companies in similar circumstances, emphasising that the court will consider the overall conduct of the company and the potential for substantial injustice when determining whether to grant an extension of the period for issuing cleansing notices.

Orders