ICandy Interactive Limited, in the matter of ICandy Interactive Limited [2018] FCA 533

ICandy Interactive Limited, in the matter of ICandy Interactive Limited [2018] FCA 533

The Court was satisfied that it was just and equitable to make the validation and civil liability relief orders and that no substantial injustice had been or was likely to be caused. The shareholders likely offered or on-sold in good faith, had the benefit of an Appendix 3B representation that disclosure was not required, and there was no evidence of deliberate non-disclosure by them. Any prejudice to third party purchasers was addressed by liberty to apply. Although the conduct of iCandy's directors, particularly Mr Lau, was open to criticism and connected to the sellers' contraventions, it did not involve dishonesty or blatant disregard of the Corporations Act. Relief under s 1322(4)(a)...

Jurisdiction
Australia
Judgment Date
13 April 2018
Procedural Posture
Application for Declaratory Relief and Relief From Civil Liability Under S 1322(4) of the Corporations Act 2001 (cth) Relating to Contraventions of S 707(3) and S 727(1) / Final Orders and Reasons for Judgment
Outcome
Application granted; declarations and relief from civil liability made; no order as to costs.
Legal Topics
['disclosure to Investors' 'on Sale of Securities' 'cleansing Notice' 'cleansing Prospectus' 'validation of Acts Under S 1322' 'relief From Civil Liability' 'meaning of Acted Honestly' 'meaning of Concerned in a Contravention']
['corporations Law'] ['disclosure to Investors' 'on Sale of Securities' 'cleansing Notice' 'cleansing Prospectus' 'validation of Acts Under S 1322' 'relief From Civil Liability' 'meaning of Acted Honestly' 'meaning of Concerned in a Contravention']

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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) Relating to Contraventions of S 707(3) and S 727(1) / Final Orders and Reasons for Judgment

Legal Issues

  1. 1 ['Whether offers for sale or sales of 20,500,000 ordinary fully paid shares issued on 9 October 2017 to 11 January 2018 should be declared not invalid despite non-compliance with s 707(3) and s 727(1) of the Corporations Act 2001 (Cth).' 'Whether sellers of those securities should be relieved from civil liability arising out of contraventions of s 707(3) and s 727(1).' 'Whether the preconditions in s 1322(6), including honesty, just and equitable relief, and absence of substantial injustice, were satisfied.' 'Whether persons other than the selling shareholders, including company officers, could be persons concerned in or party to the contravention for the purposes of s 1322(6)(a)(ii).']

Ratio Decidendi

The Court was satisfied that it was just and equitable to make the validation and civil liability relief orders and that no substantial injustice had been or was likely to be caused. The shareholders likely offered or on-sold in good faith, had the benefit of an Appendix 3B representation that disclosure was not required, and there was no evidence of deliberate non-disclosure by them. Any prejudice to third party purchasers was addressed by liberty to apply. Although the conduct of iCandy's directors, particularly Mr Lau, was open to criticism and connected to the sellers' contraventions, it did not involve dishonesty or blatant disregard of the Corporations Act. Relief under s 1322(4)(a)...

Court Disposition

Application granted; declarations and relief from civil liability made; no order as to costs.

Orders

  • ["Pursuant to s 1322(4)(a) of the Corporations Act 2011 (Cth), it is declared that any offer for sale or sale of the quoted securities being 20,500,000 ordinary fully paid shares in the plaintiff during the period after their issue on 9 October 2017 to 11 January 2018 is not invalid by reason of the sellers' failure...