5G Networks Limited, in the matter of 5G Networks Limited [2019] FCA 698

5G Networks Limited, in the matter of 5G Networks Limited [2019] FCA 698

The evidence established that both the company and sellers acted honestly in relation to the non-lodgement of the cleansing notice; the error was inadvertent, promptly acted upon, and did not result in substantial injustice. The Court granted declaratory and liability relief accordingly under s 1322 of the Corporations Act 2001 (Cth).

Jurisdiction
Australia
Judgment Date
10 May 2019
Procedural Posture
Corporations – Application for Declaratory Relief / Final Judgment and Orders on Urgent Ex Parte Application
Outcome
Declaratory and civil liability relief granted under s 1322(4)(a) and (4)(c) Corporations Act; orders for communication and no order as to costs.
Legal Topics
['validation of Share Trades' 'cleansing Notice' 'civil Liability Relief' 'section 1322 Corporations Act' 'disclosure Obligations']
['corporations Law'] ['validation of Share Trades' 'cleansing Notice' 'civil Liability Relief' 'section 1322 Corporations Act' 'disclosure Obligations']

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Procedural Posture

Corporations – Application for Declaratory Relief / Final Judgment and Orders on Urgent Ex Parte Application

Legal Issues

  1. 1 ['Whether declaratory relief should be granted to validate offers or sales of shares where required disclosure was not made under the Corporations Act 2001 (Cth)' 'Whether sellers of shares should be relieved from civil liability for contravention of ss 707(3) and 727(1) due to non-issuance of a cleansing notice' 'Whether persons concerned acted honestly within the meaning of s 1322(6)(a)(ii)' 'Whether it is just and equitable that declaratory relief be granted']

Ratio Decidendi

The evidence established that both the company and sellers acted honestly in relation to the non-lodgement of the cleansing notice; the error was inadvertent, promptly acted upon, and did not result in substantial injustice. The Court granted declaratory and liability relief accordingly under s 1322 of the Corporations Act 2001 (Cth).

Court Disposition

Declaratory and civil liability relief granted under s 1322(4)(a) and (4)(c) Corporations Act; orders for communication and no order as to costs.

Orders

  • ['Declarations that offers/sales of 10,000,000 shares in the plaintiff after 12 April 2019 until 8 May 2019 are not invalid due to failure to issue a cleansing notice or comply with s 707(3), s 727(1).' 'Sellers of these securities are relieved from civil liability for such contraventions.' 'Copies of orders to...