Clancy Exploration Limited, in the matter of Clancy Exploration Limited [2018] FCA 569

Clancy Exploration Limited, in the matter of Clancy Exploration Limited [2018] FCA 569

The Court granted relief because the failure to lodge a cleansing prospectus before trading was an inadvertent error rather than dishonest or deliberate disregard of the Act; the applicant acted promptly once the error was discovered; there was no suggestion shareholders acted other than honestly; validation and relief were just and equitable; and no substantial injustice was likely, particularly with liberty to affected persons to apply within 28 days.

Jurisdiction
Australia
Judgment Date
10 April 2018
Procedural Posture
Corporations Application for Declaratory Relief to Validate Share Trades and Relieve Sellers From Civil Liability Under S 1322(4) of the Corporations Act 2001 (cth) / Reasons for Final Orders Made on 10 April 2018
Outcome
Relief granted.
Legal Topics
['share Sale Disclosure Requirements' 'cleansing Notice' 'cleansing Prospectus' 'validation of Contraventions' 'relief From Civil Liability']
['corporations Law'] ['share Sale Disclosure Requirements' 'cleansing Notice' 'cleansing Prospectus' 'validation of Contraventions' 'relief From Civil Liability']

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Procedural Posture

Corporations Application for Declaratory Relief to Validate Share Trades and Relieve Sellers From Civil Liability Under S 1322(4) of the Corporations Act 2001 (cth) / Reasons for Final Orders Made on 10 April 2018

Legal Issues

  1. 1 ['Whether offers for sale or sales of 270,000,000 ordinary fully paid shares between 1 December 2017 and 21 March 2018 should be declared not invalid despite non-compliance with ss 707(3) and 727(1) of the Corporations Act 2001 (Cth).' 'Whether sellers of those securities should be relieved from civil liability under s 1322(4)(c) of the Corporations Act 2001 (Cth).' 'Whether the requirements of s 1322(6), including honesty, justice and equity, and absence of substantial injustice, were satisfied.']

Ratio Decidendi

The Court granted relief because the failure to lodge a cleansing prospectus before trading was an inadvertent error rather than dishonest or deliberate disregard of the Act; the applicant acted promptly once the error was discovered; there was no suggestion shareholders acted other than honestly; validation and relief were just and equitable; and no substantial injustice was likely, particularly with liberty to affected persons to apply within 28 days.

Court Disposition

Relief granted.

Orders

  • ["Pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth), it is declared that any offer for sale or sale of the quoted securities being 270,000,000 ordinary fully paid shares in the plaintiff during the period after their issue on 1 December 2017 to 21 March 2018 is not invalid by reason of the sellers' failure...