In the matter of Airtasker Limited [2021] NSWSC 629

In the matter of Airtasker Limited [2021] NSWSC 629

The Court granted relief because Airtasker was an interested person, the Placement shares could be issued without disclosure but their on-sale would require disclosure unless s 708A applied, and Airtasker's cleansing notice could not operate without Court relief because Airtasker's shares had not been quoted for...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
03 June 2021
Procedural Posture
Application Under S 1322(4) of the Corporations Act 2001 (cth) for Orders Validating a Cleansing Notice and Relieving Civil Liability / Originating Process Heard Urgently; Principal Judgment Giving Reasons for Orders Made on 28 May 2021
Outcome
Orders sought by Airtasker under s 1322(4)(a) and (c) of the Corporations Act 2001 (Cth) were made on 28 May 2021.
Legal Topics
['capital Raising' 'disclosure' 'cleansing Notice' 'sophisticated and Professional Investors' 'on Sale of Securities' 'validation Orders' 'civil Liability Relief']
['corporations Law' 'equity'] ['capital Raising' 'disclosure' 'cleansing Notice' 'sophisticated and Professional Investors' 'on Sale of Securities' 'validation Orders' 'civil Liability Relief']

Source-derived case record

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Procedural Posture

Application Under S 1322(4) of the Corporations Act 2001 (cth) for Orders Validating a Cleansing Notice and Relieving Civil Liability / Originating Process Heard Urgently; Principal Judgment Giving Reasons for Orders Made on 28 May 2021

Legal Issues

  1. 1 ["Whether the Court should declare under s 1322(4)(a) of the Corporations Act 2001 (Cth) that Airtasker's cleansing notice was not invalid despite non-compliance with ss 708A(5)(a) and 708A(6)(a)." 'Whether prospective sale offers or sales of shares issued under the Placement were not invalid by reason of failure of the cleansing notice to exempt sellers from disclosure obligations and any prospective failure to comply with ss 707(3) and 727(1).' "Whether prospective sellers of shares issued under the Placement should be relieved under s 1322(4)(c) from civil liability arising from contraventions of ss 707(3) and 727(1) or Airtasker's failure to satisfy s 708A(5)." 'Whether Airtasker and the Placement Investors acted honestly and whether substantial injustice had been or was likely to be caused.']

Ratio Decidendi

The Court granted relief because Airtasker was an interested person, the Placement shares could be issued without disclosure but their on-sale would require disclosure unless s 708A applied, and Airtasker's cleansing notice could not operate without Court relief because Airtasker's shares had not been quoted for three months and the notice was lodged prematurely. Airtasker had acted honestly on professional and legal advice, the Placement Investors were inferred to have acted honestly, the market had extensive disclosed information including the IPO prospectus and later announcements, the Zaarly opportunity arose after the IPO, and no substantial injustice had been or was likely to be...

Court Disposition

Orders sought by Airtasker under s 1322(4)(a) and (c) of the Corporations Act 2001 (Cth) were made on 28 May 2021.

Orders

  • ["An order under s 1322(4)(a) of the Corporations Act 2001 (Cth) declaring that the notice issued by Airtasker on 27 May 2021 under s 708A(6) in purported compliance with s 708A(5) was not invalid notwithstanding that Airtasker's shares had not been quoted for 3 months before the day on which the securities were...