In the matter of Insignia Financial Ltd [2022] NSWSC 488

In the matter of Insignia Financial Ltd [2022] NSWSC 488

The orders under s 1322(4)(a) were granted because it was just and equitable to validate the issues or transfers of shares or units of shares in Insignia Financial Ltd to its controlled entities, and no substantial injustice was likely to be caused by validation. Validation would give effect to the parties' intended and understood transactions, while failure to validate would cause substantial prejudice and disruption affecting shares likely traded many times, retail investors, scheme members, trust beneficiaries and counterparties. ASIC did not oppose the application, ASIC relief applied prospectively from 1 June 2021, and Insignia had taken steps to reduce future non-compliance risk.

Jurisdiction
Australia
Judgment Date
26 April 2022
Procedural Posture
Equity Corporations List Application for Curative Orders Under S 1322(4)(a) of the Corporations Act 2001 (cth) / Final Determination of Originating Process
Outcome
Application granted in part; orders under s 1322(4)(a) made, and the relief under s 1322(4)(c) was not pressed.
Legal Topics
['curative Orders' 'validation of Share Issues and Transfers' 'controlled Entities Acquiring Shares' 'managed Investment Schemes and Trusts' 'corporations Act 2001 (cth) Ss 259 C and 1322']
['corporations Law' 'equity'] ['curative Orders' 'validation of Share Issues and Transfers' 'controlled Entities Acquiring Shares' 'managed Investment Schemes and Trusts' 'corporations Act 2001 (cth) Ss 259 C and 1322']

Case Brief

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Procedural Posture

Equity Corporations List Application for Curative Orders Under S 1322(4)(a) of the Corporations Act 2001 (cth) / Final Determination of Originating Process

Legal Issues

  1. 1 ['Whether the Court should make orders under s 1322(4)(a) of the Corporations Act 2001 (Cth) validating issues or transfers of shares or units of shares in Insignia Financial Ltd to its controlled entities that would otherwise be void by reason of s 259C.' 'Whether the requirements of s 1322(6), including that it is just and equitable to make the orders and that no substantial injustice has been or is likely to be caused to any person, were satisfied.' 'Whether relief under s 1322(4)(c) from civil liability should be granted, noting that this relief was not pressed at the hearing.']

Ratio Decidendi

The orders under s 1322(4)(a) were granted because it was just and equitable to validate the issues or transfers of shares or units of shares in Insignia Financial Ltd to its controlled entities, and no substantial injustice was likely to be caused by validation. Validation would give effect to the parties' intended and understood transactions, while failure to validate would cause substantial prejudice and disruption affecting shares likely traded many times, retail investors, scheme members, trust beneficiaries and counterparties. ASIC did not oppose the application, ASIC relief applied prospectively from 1 June 2021, and Insignia had taken steps to reduce future non-compliance risk.

Court Disposition

Application granted in part; orders under s 1322(4)(a) made, and the relief under s 1322(4)(c) was not pressed.

Orders

  • ['Order pursuant to section 1322(4)(a) of the Corporations Act 2001 (Cth) that the issue or transfer to the Second Plaintiff of shares (or units of shares) in Insignia Financial Ltd in the period 5 December 2003 to 31 May 2021 are not void by reason of the operation of section 259C of the Act.' 'Order pursuant to s...