Clarity Pharmaceuticals Ltd, in the matter of Clarity Pharmaceuticals Ltd [2021] FCA 804

Clarity Pharmaceuticals Ltd, in the matter of Clarity Pharmaceuticals Ltd [2021] FCA 804

Relief under s 1322 was appropriate because the failures to properly appoint or re-appoint Grant Thornton Audit Pty Ltd after Clarity Pharmaceuticals Ltd converted to a public company arose from honest inadvertence, Clarity acted expeditiously after discovering the issue, Grant Thornton had in fact audited the relevant financial reports and confirmed its audit opinions, it was just and equitable to validate the appointment and relieve civil liability, and no substantial injustice had been or was likely to be caused to any person.

Jurisdiction
Australia
Judgment Date
15 June 2021
Procedural Posture
Application for Relief Under S 1322 of the Corporations Act 2001 (cth) Concerning Auditor Appointment Non Compliance / Final Judgment; Declarations and Orders Made
Outcome
Application allowed; declarations and orders made under s 1322 of the Corporations Act 2001 (Cth).
Legal Topics
['auditor Appointment' 'annual General Meetings' 'financial Reporting Obligations' 'relief From Non Compliance' 'civil Liability Relief Under S 1322 of the Corporations Act 2001 (cth)']
['corporations Law'] ['auditor Appointment' 'annual General Meetings' 'financial Reporting Obligations' 'relief From Non Compliance' 'civil Liability Relief Under S 1322 of the Corporations Act 2001 (cth)']

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Procedural Posture

Application for Relief Under S 1322 of the Corporations Act 2001 (cth) Concerning Auditor Appointment Non Compliance / Final Judgment; Declarations and Orders Made

Legal Issues

  1. 1 ['Whether relief under s 1322(4)(a) of the Corporations Act 2001 (Cth) should be granted in respect of failures to appoint or re-appoint Grant Thornton Audit Pty Ltd as auditor after Clarity Pharmaceuticals Ltd converted from a proprietary company to a public company.' 'Whether Clarity Pharmaceuticals Ltd and its current and former directors should be relieved under s 1322(4)(c) of the Corporations Act 2001 (Cth) from civil liability arising from contraventions concerning auditor appointment and financial reporting obligations.' 'Whether the relevant failures arose from honest inadvertence and whether no substantial injustice had been or was likely to be caused to any person.']

Ratio Decidendi

Relief under s 1322 was appropriate because the failures to properly appoint or re-appoint Grant Thornton Audit Pty Ltd after Clarity Pharmaceuticals Ltd converted to a public company arose from honest inadvertence, Clarity acted expeditiously after discovering the issue, Grant Thornton had in fact audited the relevant financial reports and confirmed its audit opinions, it was just and equitable to validate the appointment and relieve civil liability, and no substantial injustice had been or was likely to be caused to any person.

Court Disposition

Application allowed; declarations and orders made under s 1322 of the Corporations Act 2001 (Cth).

Orders

  • ['Pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth), the appointment of Grant Thornton Audit Pty Ltd as auditor of the plaintiff in the period from 3 March 2017 to 1 June 2021 is not invalid by reason of the specified failures to comply with ss 327A(1), 327B(1)(a), 327B(1)(b), 327C(1), 301(1) and 314(1),...