Oil Basins Limited v Bass Strait Oil Company [2012] FCA 1122

Oil Basins Limited v Bass Strait Oil Company [2012] FCA 1122

The Court found the appointment of the managing director at the BAS directors’ meeting was valid, thus a quorum existed and the Placement Resolution was validly passed. However, BAS breached ASX Listing Rule 7.1 by issuing 10 million more ordinary securities than allowed without shareholder approval, as issuance of options as underwriter fees was not covered by the exceptions to the rule. The breach did not cause substantial injustice or warrant further relief beyond the declaration, given the minor dilution and the undertaking given by BAS to the ASX.

Jurisdiction
Australia
Judgment Date
16 October 2012
Procedural Posture
Corporate Law Dispute / Final Judgment
Outcome
Declaration of contravention; no further substantive relief granted
Legal Topics
['construction of Constitution' "directors' Powers and Appointment" 'quorum Requirements' 'asx Listing Rule 7.1' 'validation Under Corporations Act S 1322' 'issue of Securities Without Approval']
['corporations Law' 'securities Regulation'] ['construction of Constitution' "directors' Powers and Appointment" 'quorum Requirements' 'asx Listing Rule 7.1' 'validation Under Corporations Act S 1322' 'issue of Securities Without Approval']

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Procedural Posture

Corporate Law Dispute / Final Judgment

Legal Issues

  1. 1 ['Was the appointment of the managing director and the placement resolution valid under the BAS Constitution?' 'Did the issue of Disputed Somerton Securities breach ASX Listing Rule 7.1?' 'Should relief be granted or acts validated under Corporations Act s 1322?']

Ratio Decidendi

The Court found the appointment of the managing director at the BAS directors’ meeting was valid, thus a quorum existed and the Placement Resolution was validly passed. However, BAS breached ASX Listing Rule 7.1 by issuing 10 million more ordinary securities than allowed without shareholder approval, as issuance of options as underwriter fees was not covered by the exceptions to the rule. The breach did not cause substantial injustice or warrant further relief beyond the declaration, given the minor dilution and the undertaking given by BAS to the ASX.

Court Disposition

Declaration of contravention; no further substantive relief granted

Orders

  • ['The Court declares that Bass Strait Oil Company breached ASX Listing Rule 7.1 by issuing 10,000,000 more ordinary securities than it was entitled to issue on 13 August 2012 without the approval of its ordinary security holders.' 'The parties are directed to confer and seek to agree orders as to costs. If unable to...