Gratifii Limited, in the matter of Gratifii Limited [2022] FCA 82

Gratifii Limited, in the matter of Gratifii Limited [2022] FCA 82

The Court granted relief because the failure to prevent trading before lodgement of the cleansing prospectus resulted from an administrative error, Gratifii's officers and the third party shareholders were found or inferred to have acted honestly, it was just and equitable to validate the transactions, no...

Source-derived case information.

Jurisdiction
Australia
Judgment Date
07 February 2022
Procedural Posture
Application for Declaratory Relief and Relief From Civil Liability Under S 1322(4) of the Corporations Act 2001 (cth) Concerning Contraventions of Part 6 D.2 Disclosure Obligations / Federal Court of Australia, General Division, Urgent Application Heard and Orders Made
Outcome
Relief granted, with Asenna Wealth Solutions Pty Ltd excluded from relief from civil liability and given liberty to apply.
Legal Topics
['disclosure to Investors' 'secondary Trading of Securities' 'cleansing Notice' 'cleansing Prospectus' 'validation of Share Sales' 'relief From Civil Liability' 'section 1322 Orders']
['corporations Law'] ['disclosure to Investors' 'secondary Trading of Securities' 'cleansing Notice' 'cleansing Prospectus' 'validation of Share Sales' 'relief From Civil Liability' 'section 1322 Orders']

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Procedural Posture

Application for Declaratory Relief and Relief From Civil Liability Under S 1322(4) of the Corporations Act 2001 (cth) Concerning Contraventions of Part 6 D.2 Disclosure Obligations / Federal Court of Australia, General Division, Urgent Application Heard and Orders Made

Legal Issues

  1. 1 ['Whether offers for sale or sales of 1,475,769 quoted ordinary shares before lodgement of a cleansing prospectus were invalid by reason of failures to comply with ss 707(3) and 727(1) of the Corporations Act 2001 (Cth).' 'Whether the Court should make orders under s 1322(4)(a) declaring the offers for sale not invalid.' 'Whether sellers of the shares, apart from Asenna Wealth Solutions Pty Ltd, should be relieved under s 1322(4)(c) from civil liability arising from contraventions of ss 707(3) and 727(1).' 'Whether the preconditions in s 1322(6), including honesty and absence of substantial injustice, were satisfied.']

Ratio Decidendi

The Court granted relief because the failure to prevent trading before lodgement of the cleansing prospectus resulted from an administrative error, Gratifii's officers and the third party shareholders were found or inferred to have acted honestly, it was just and equitable to validate the transactions, no substantial injustice had been or was likely to be caused, and the company's conduct did not involve blatant disregard of the Corporations Act. Asenna Wealth Solutions Pty Ltd was excluded from relief from civil liability because it had been expressly instructed not to transfer the shares and there was no admissible evidence from it explaining the sales.

Court Disposition

Relief granted, with Asenna Wealth Solutions Pty Ltd excluded from relief from civil liability and given liberty to apply.

Orders

  • ["Pursuant to s 1322(4)(a) of the Corporations Act 2001 (Cth), any offer for sale of the quoted securities, being 1,475,769 ordinary shares in the plaintiff, during the period from 19 November 2021 until 1 February 2022 is not invalid by reason of the seller's failure to issue a notice under s 708A or a prospectus...