Commercial Law Series – How to Cure Cleansing Notice Failures – Part 2: Relief under section 1322(4) of the Corporations Act – Key Provisions and Principles

Introduction

It has been said of relief sought under ss 1322(4) to validate, relieve from liability or otherwise to cure the effects of failures to issue cleansing notices that^[1] –

All of the above relief is within the scope of s 1322. The importance of this section should not be underestimated. It contemplates that errors may occur in relation to complying with the intricacies of the Corporations Act. It is obviously remedial in nature and should be afforded a liberal operation: Re Wave Capital Ltd [2009] FCA 969 at [27] [French J]. Nevertheless, the relatively untrammelled scope of s 1322(4) is circumscribed by the need to satisfy the requirements of s 1322(6).

Section 1322 is commonly utilised in cases of cleansing notice failures to validate non-disclosure by shareholders who on-sell shares, and to relieve shareholders from liability: see cases collected in Re iCandy Interactive Limited [2018] FCA 533; (2018) 125 ACSR 369 (iCandy Interactive) at [43] per Banks-Smith J.^[2] See also the cases summarised in part 3 of this series.

Key Provisions

Section 1322 of the Corporations Act is entitled “Irregularities”. Relevantly section 1322(4) provides as follows –

Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following others, either unconditionally or subject to such conditions as the Court imposes:

(a) An order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation;

(b)…

(c) An order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a);

(d) …

and may make such consequential or ancillary orders as the Court thinks fit.

Section 1322(6) provides as follows –

The Court must not make an order under this section unless it is satisfied:

(a) In the case of an order referred to in paragraph 4(a):

i. That the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature;

ii. That the person or persons concerned in or party to the contravention or failure acted honestly; or

iii. That it is just and equitable that the order be made; and

(b) in the case of an order referred to in paragraph 4(c) – that the person subject to the civil liability concerned acted honestly; and

(c) in every case – that no substantial injustice has been or is likely to be caused to any person.

Principles

In order to satisfy the requirements of s 1322(4)(a), the Company must demonstrate that^[3] –

1. It is an interested person within the meaning of s 1322(4),
2. There was an act, matter or thing purporting to have been done under the Act or in relation to a corporation that may be invalid by reason of a contravention of a provision of the Act: s 1322(4)(a),
3. Either – (i) The act, matter or thing was essentially of a procedural nature, or (ii) The person or persons concerned in or party to the contravention or failure acted honestly, or (iii) It is just and equitable that the order be made: s 1322(6)(a), and
4. No substantial injustice has been or is likely to be caused to any person: s 1322(6)(c).

In order to satisfy the requirements of s 1322(4)(c), the Company must demonstrate similar – though not the same matters – as for s 1322(4)(a) –

1. It is an interested person within the meaning of s 1322(4),
2. There was a contravention or failure of a kind referred to in s 1322(4)(a) that may give rise to the civil liability of a person: s 1322(4)(c),
3. The person subject to the civil liability concerned acted honestly: s 1322(6)(b), and
4. No substantial injustice has been or is likely to be caused to any person: s 1322(6)(c).

Standing – Interested person

It is well-established that the company whose shares were on-sold in breach of the Act is an interested party with standing to bring the application.^[4]

The term is not defined in the Act, but as noted in Re Austpac Resources NL [2023] FCA 108; (2023) 16 ACSR 1 (Austpac Resources) by Goodman J at [92], it has been interpreted broadly. In circumstances where the company seeks relief concerning trading in its shares including the integrity of such trading, and the relief is sought in aid of a foreshadowed application for removal of a suspension of trading in its shares, the Courts are commonly satisfied that the company concerned is an interested person in such an application.^[5]

Relief under s 1322(4)(a) – the Validity Declaration

The validity declaration sought is, in summary, that any offer for sale, or sale, of any of the relevant shares occurring in the period after their issue is not invalid by reason of any failure of a notice under s 708A(5)(e) or prospectus under s 706A(11) to exempt the sellers from the obligation of disclosure, and any consequent contravention by selling shareholders of s 707(3) or s 727(1) of the Act.

There must first be an act, matter or thing purporting to have been done under the Act or in relation to a corporation that may be invalid, for s 1322(4)(a) to be engaged. It is for this reason – that on-sales of a company’s shares may be invalid – that orders are commonly made validating on-sales of shares which had been issued without a requisite cleansing notice.^[6]

Section 1322(4)(a) then confers upon the Court a discretion to make a validity declaration, such a discretion being enlivened upon the satisfaction of the pre-conditions set out in ss 1322(6)(a) and (c).

Satisfaction of one of the 3 alternative limbs of s 1322(6)(a)

Subsection 1322(6)(a) sets out 3 alternative limbs. Only one of those limbs need be satisfied in order to meet the requirements of this sub-section.^[7]

In my case in January, the Company relied solely on the third of these – the just and equitable limb.

(i) – Essentially of a procedural nature

It has been said that “the issuing of a cleansing notice has regularly been held as being essentially of a procedural nature”, and the Court has thereby been satisfied as to this limb.^[8]

However divergent views have been expressed as to this limb, some preferring the view that a contravention of s 707(3) in the nature of on-selling shares without disclosure where there had been no cleansing notice issued is not a procedural irregularity.^[9]

In my opinion, the difference appears to be whether, in evaluating whether something is essentially procedural, one is focussed upon the non-issuing of a cleansing notice by the company, or the on-selling of shares without disclosure by the shareholders. In my view it is the latter – the act, matter or thing which is sought to be declared valid – to which attention is directed by the wording of s 1322(6)(a)(i).

This may be why, as our research had suggested, in numerous cleansing notice cases this procedural limb is often not relied upon by applicants, who more commonly rely upon the just and equitable and the honesty limbs. Hence this issue is often not addressed by the Courts in the cleansing notice cases.

In any event, it is clear that the application of s 1322(4)(a) has not been confined to procedural or quasi procedural cases. “It may be used to cure substantive as well as procedural contraventions of the [Act].”^[10] I suggest that this is because the limb in s 1322(6)(a)(i) is not an essential pre-condition, but one of three alternatives. Hence clearly non-procedural irregularities may be cured through the gateway of one of the other two alternative limbs.

(ii) – That the person or persons concerned in or party to the contravention or failure acted honestly

The principles relevant to this limb were not set out at this point in my written submissions, as this limb was not relied upon in our case. Having said that, the principles relevant to this limb are addressed in a different context, later in these submissions (see below).

(iii) – Just and Equitable

The expression “just and equitable” are words of significant width and provide the Court with a broad discretion.^[11]

It has been observed that^[12] –

The words “just and equitable” are words of the widest significance and do not limit the jurisdiction of the court to any case. It is a question of fact, and each case must depend on its own circumstances. The words give the court a wide discretion. There is no necessary limit on their generality, and they are to be applied in their ordinary meaning as calling for the exercise of judgment in the conventional way.

The Courts have generally focused on the interests and conduct of the shareholders in assessing whether it is just and equitable to make orders validating the on-sales in these cases.^[13]

The grounds on which the Courts have held that it is just and equitable to make the validity declaration in these cleansing notice cases include –

1. that if relief is not granted, the title of any persons who had acquired (or any who in the future might acquire) the affected shares, may be impugned.^[14] It would be just and equitable to grant relief to the extent necessary to reasonably protect the interests of current shareholders and for the integrity of future trading in the company’s shares;^[15]
2. that it is in the interests of the company’s shareholders for the contraventions to be cured, so as to allow trading in the shares to resume;^[16]
3. that it is to be inferred that the on-sellers of the affected shares are likely to have acquired their shares on the basis that they were not required to provide disclosure,^[17] and that they have made offers or on-sold them in good faith on the assumption that no disclosure was required by them.^[18] Those shareholders were entitled to assume that the company had done what was necessary to comply with Part 6D.2;^[19]
4. that the effect of the failure of the company to lodge effective cleansing notices or to otherwise comply with Part 6D.2 has been to expose the on-sellers to claims for relief under s 1325 of the Act; ^[20]
5. that there is no evidence of knowledge or deliberate nondisclosure on the part of the shareholders.^[21]

No substantial injustice – s 1322(6)(c)

Subsection 1322(6)(c) requires – both for s 13224(a) and s 1322(4)(c) orders – that the Court must be satisfied that no substantial injustice has been or is likely to be caused to any person.

In this regard, the applicable principles may be distilled as follows –

1. “There are two aspects to this requirement: (a) the expression “has been” invites an inquiry as to the effect of the irregularity sought to be cured; and (b) the expression “likely to be” draws attention to the effect of the proposed order”;^[22]
2. The reference to “substantial injustice” in s 1322(6)(c) is to a real and not insubstantial or theoretical prejudice. Whether there is real injustice requires a weighing of any prejudice if the order is made, against the prejudice which would be suffered by those affected if an order is not made;^[23]
3. “A degree of prejudice to a person or persons may be outweighed if the overwhelming weight of justice is in favour of making the order”. ^[24] “[A]ny prejudice which may have existed may be powerfully outweighed by the benefit to shareholders of being able to resume trading in its shares”;^[25]
4. “Such an order is clearly in the interests of shareholders who have made offers or on-sold their shares, as they risk exposure to claims against them absent validation”;^[26]
5. “One mechanism by which the court may ensure that an order under s 1322(4) does not cause substantial injustice is to make an ancillary order permitting any interested person who may suffer substantial injustice to apply within a set period of time to vary or dissolve the s 1322(4) order”.^[27]

Factors to which the Courts have had regard in considering whether any substantial injustice has been or is likely to be caused to any person in these cleansing notice cases include –

1. whether there is evidence of substantial injustice caused by the contravention/s,^[28] or where there is any basis to infer that substantial injustice has been or is likely to be caused to any person by the making of the orders sought;^[29]
2. that if the orders were not made, there may be a substantial injustice to the company as the offers or sale of shares may be void or voidable which could give rise to commercial uncertainty and expense;^[30]
3. that there may be substantial injustice to other ordinary shareholders of the company if the orders are not made, as they may be unable to trade their shares on an open market if the ASX were not to lift the suspension;^[31]
4. that an opportunity is to be afforded in the orders for shareholders or other parties who can demonstrate a sufficient interest to raise a complaint about the proposed orders within 28 days from the date of the orders or their publication.^[32]

Exercise of the discretion

Once the Court is satisfied as to the jurisdictional matters identified in s 1322(6), the discretion in s 1322(4)(a) is enlivened, and the Courts then consider whether to exercise the discretion to make the order sought.^[33]

The factors to which the Courts have had regard in considering whether to proceed to exercise their discretion to make the validity declaration in these cleansing notice cases include –

1. that the orders would be just and equitable & no substantial injustice – the conclusions that it would be just and equitable to make the validity declaration, and that no substantial injustice has been or is likely to be caused to any person, not only enliven the discretion but also weigh in favour of the making of the validity declaration;^[34]
2. that the orders would restore integrity in share dealings – the making of the declaration will serve to remove doubts as to the integrity of dealings in the affected shares caused by the contraventions;^[35]
3. the regulators’ position – the position of the ASX and ASIC on the application, and whether they have any concerns about the making of the validity declaration.^[36]
4. notice to shareholders – whether the company’s shareholders have been on notice of application and have sought to be heard in opposition or support of the application;^[37]
5. public policy – whether public policy would be undermined by the making of the orders.^[38] Whether there is evidence of substantial misconduct, serious wrongdoing or flagrant disregard of the corporate law or the company’s constitution so as to warrant refusal of the relief sought;^[39]
6. that public policy is not undermined by protecting shareholders only – notably, in iCandy Interactive, the Court accepted ASIC’s submission that:^[40] “[I]nsofar as the s 1322(6)(a) preconditions are met and as no relief is sought for the benefit of directors, officers or the company itself, then there is no suggestion that the public policy of the remedial provision is undermined by the making of the orders.”
7. prompt action to remedy – the promptness with which the applicant company has acted to remedy the irregularity once it had been identified^.[41] Even considerable delay not enough to refuse – if there has been even considerable delay in seeking the relief sought^[42] – whether an explanation for the delay has been provided which demonstrates that the company acted promptly once concerns were raised but then was hampered by various factors. Applications such as these should be brought as soon as possible. However, subject to the explanation provided, and the strength of the reasons in favour of making the validity declaration, the delay may not be sufficient reason to refuse to make the validity declaration;^[43]
8. any other reason / whether company has taken steps to address causes of failures – whether there is any other matter which might inform the exercise of the discretion and which provides a reason not to make the declaration sought. For example, whether the company has not taken steps to address the causes of its previous failures to meet its obligations;^[44]
9. frank and detailed account – whether the company applicant has provided a frank and detailed account as to the circumstances surrounding each of the share issues.^[45]

As to factor (5) above, where on the evidence there are some concerns about the conduct of those involved in the contraventions, the following statements of principle are apposite –

1. when determining whether someone has acted honestly for the purposes of s 1322 of the Act, the Courts look to an absence of evidence of dishonesty; ^[46]
2. the Courts also take into account whether the applicant company has taken prompt action to remedy the error;^[47]
3. the concept of honesty can embrace the following – (a) inadvertence or a failure to turn their mind to the relevant issue, (b) an active, but incorrect, consideration of a legal issue as well as failure to consider the issue at all, (c) a failure to understand or appreciate the significance of non-compliance;^[48]
4. any concerns about the honesty of those involved in the contraventions may not be a sufficient reason to refuse to make the validity declaration in circumstances where, relevantly, there is no reason to believe that shareholders who received or purchased the affected shares have acted otherwise than honestly. There may be no reason why doubts as to the integrity of the transactions by which the affected shares have been transferred should not be removed;^[49]
5. “[Section] 1322(6)(a) envisages that the court can make an order under s 1322 even where the court is not satisfied that the person concerned in the contravention acted honestly. So even where a person acts dishonestly, which would normally involve an element of deliberate behaviour, the legislation will permit the court to make an order under s 1322(4)(a). For instance, if the court is justified that it is just and equitable that the order sought be made (see s 1322(6)(a)(iii)), then an order under s 1322(4)(a) can be made, even though an element of dishonesty is involved. The court, of course, may not make the order sought, but s 1322(6) does not prevent the court from doing so in the appropriate circumstance.”^[50]
6. “[A]n order can be made under s 1322(4)(a) even if that provision is concerned with “irregularities” and the order is to declare a deliberate irregularity valid.”^[51]

Two things were notable from our research. When I say “our”, I was ably assisted in this task by my reader, junior barrister Pan Pisani, whose research skills are exceptional (her profile may be viewed here) –

1. invariably in the cleansing notice s 1322 cases we reviewed, where it has been determined that it is just and equitable to make the s 1322(4)(a) order for the protection of affected shareholders, and where for both s 1322(4)(a) and (c) orders the Court has been satisfied that no substantial injustice has been or is likely to be caused to any person – the orders have been made;
2. indeed our research of over 60 cleansing notice cases found no cleansing notice s 1322 case where the s 1322(4)(a) and (c) orders protective of shareholders had been refused once the preconditions are satisfied, even where there had been concerns as to the conduct of the officer responsible for the contraventions.^[52]

Relief under s 1322(4)(c) – the Relief from Liability order

The relieving order sought is that any person who has on-sold the affected shares is relieved from any civil liability arising out of any failure of a notice under s 708A(5)(e) or prospectus under s 706A(11) to exempt the sellers from the obligation of disclosure, and any consequent contravention by selling shareholders of s 707(3) or s 727(1) of the Act.

Section 1322(4)(c) confers upon the Court a discretion to make such an order, the discretion being enlivened upon the satisfaction of the pre-conditions set out in ss 1322(6)(b) and (c).

Honesty of the affected shareholders – s 1322(6)(b)

Subsection 1322(6)(b) requires that the person the subject of the civil liability concerned acted honestly. This makes it necessary to identify the civil liability and the persons the subject of such liability, to consider if they acted honestly. The relevant liability is a liability under ss 707(3) or 727(1) of the Act. The persons the subject of such liability and for whom relief here is sought are shareholders – the persons who on-sold affected shares.^[53]

There is a body of authority that supports the view that it is open to the Court to readily infer that those shareholders have acted honestly in on-selling the shares.^[54]

No substantial injustice – s 1322(6)(c)

Subsection 1322(6)(c) requires – both for s 13224(a) and s 1322(4)(c) orders – that the Court must be satisfied that no substantial injustice has been or is likely to be caused to any person.

See above. The principles and factors cited above apply here also, but as to orders relieving of liability.

Exercise of the discretion

Once enlivened, there is a residual discretion as to whether or not to make the orders sought. Key principles to be distilled from the authorities as to the exercise of the discretion as to whether to make an order sought under s 1322(4)(c) include –

1. satisfaction of the pre-conditions not only enlivens the discretion under s 1322(4)(c) but also weighs in favour of making the relief order;^[55]
2. “Relief of this kind is not required in order to ensure the ongoing integrity of the market. However it may be justified to provide an assurance to innocent parties, particularly where their contravention arises from a failure to disclose consequent upon the issuing company creating the impression that the shares were freely tradable at any time”;^[56]
3. “[A]n order under s 1322(6)(c) operates only for the benefit of the party concerned and will not require a consideration of wider public interest issues of a kind that may support the making of an order under s 1322(6)(a) on the basis that it is just and equitable”;^;[57]
4. whether there is any reason, including delay, not to exercise the discretion so as to make the relief from liability order.^[58]

Relief from liability is sought for the protection of shareholders in these cleansing notice s 1322 cases. It is not customary to seek such relief to extend to the company or its officers.^[59] Where there have been concerns as to the conduct of the officer involved in the contraventions and he and a related entity are shareholders, the Court has made an order excluding them from the protection afforded by the relief from liability order.^[60]

The factors to which the Courts have had regard in considering whether to proceed to exercise their discretion to make the order to relieve shareholders from liability under s 1322(4)(c) in these cleansing notice cases have included –

1. that the order would relieve anyone who purchased the shares and on-sold them from potential liability or the concern of potential liability in circumstances where that potential has arisen through no fault on their part;^[61]
2. the position of the ASX and ASIC on the application, and whether they have any concerns about the making of the order relieving shareholders from liability; ^[62]
3. whether the company’s shareholders have been on notice of application and have sought to be heard in opposition or support of the application; ^[63]
4. whether there appears to be any reason such as delay not to exercise the discretion so as to make the relief from liability order.^[64

*****

Skipping past the ‘Contentions’ section of my written submissions, where the provisions and principles were applied to the particular facts of that case to make submissions as to why the orders sought should be granted, I will give you its conclusion –

Conclusion

It is submitted that the Company has acted promptly and diligently in this matter, in obviously difficult circumstances, which speaks to its intention to comply with the regulatory requirements. It has made early and appropriate announcements to the market and voluntarily moved to halt and then suspend trading in its shares. Its transparency and willingness to rectify the problems demonstrate the Company’s honesty and intention to properly comply. This case is not about absolution for the Company and what has occurred. The Company seeks these curative orders directed to the reasonable protection of affected shareholders and former shareholders, and in the interests of all its stakeholders. The relief sought is within the scope of s 1322, which provision is remedial in nature and should be afforded a liberal interpretation. In all the circumstances, it is submitted that the orders sought under s 1322(4) ought be made.

*****

To this conclusion I added a late postscript, as just a few days before our Court documents and my written submissions were filed, a new case was handed down in the West Australian Supreme Court in which an unusual costs order was made. It did not alter the Company’s position, and I made submissions as to why it ought not be followed in the circumstances of our case. However it involved the potential for adverse costs orders to be made against the Company officer involved in the failures and potentially Board members, in certain cases, subject to an opportunity to be heard. As the company’s application was to be heard without contradictor – ASIC and the ASX having both taken a neutral stance on the application and declined to appear – it needed properly to be brought to his Honour’s attention. It was also brought to ASIC and the ASX’s attention. A summary of the new case will be included in Part 3 of this Series.

The Court accepted the submissions made for the client in our case, and made the orders sought. The usual position on costs was followed.

*******

Next instalment – Part 3 of 4: Some Cleansing notice / section 1322(4) Cases of Note

*******

Liability limited by a scheme approved under Professional Standards Legislation

^[1] Re Lake Resources NL [2022] FCA 197 (Lake Resources) at [29] per Derrington J.

^[2] Re Caeneus Minerals Ltd [2018] FCA 560 (Caeneus Minerals) at [33] per Banks-Smith J.

^[3] Re Golden Gate Petroleum Ltd [2010] FCA 40; 77 ACSR 17 (Golden Gate) at [37] per McKerracher J.

^[4] iCandy Interactive at [46].

^[5] See also Golden Gate at [44] and Re Sprint Energy Limited [2012] FCA 1354 (Sprint Energy) at [38]-[40], both per McKerracher J, and Lake Resources at [23] per Derrington J.

^[6] See Sprint Energy at [41]; Golden Gate at [45]. See further submissions below at [89].

^[7] Golden Gate at [39], and the authorities there cited; Nenna v Australian Securities and Investment Commission [2011] FCA 1193; (2011) 198 FCR 32 (Nenna v ASIC) at [47] per Middleton J; Austpac Resources at [98], where Goodman J observed that being satisfied that it was just and equitable to make the validity declaration, this was sufficient to satisfy the pre-condition of s 1322(6)(a), such that it was unnecessary to consider the alternative limb there relied upon of the honesty of those concerned in the contraventions.

^[8] It can be seen that this has particularly been the case in decisions of the West Australian Supreme Court. See Re Nanoveu Ltd [2024] WASC 329 (Nanoveu) at [70] per Strk J, citing as examples: Re Sprintex Ltd [2022] WASC 188 at [28]; Re Yandal Resources Ltd [2022] WASC 338 at [82]; Re Memphasys Limited [2022] WASC 269 at [56]; Re Cyprium Metals Ltd [2022] WASC 241 at [54]. See also Re Power Minerals Ltd [2024] WASC 121 (Power Minerals) at [33] per Hill J.

^[9] See iCandy Interactive at [49] per Banks-Smith J and the authorities there cited in obiter (the applicant did not rely on the procedural limb in that case); Golden Gate at [46] and Sprint Energy at [42], both per McKerracher J.

^[10] Golden Gate at [40]-[41].

^[11] Austpac Resources at [96].

^[12] Re Superior Resources Ltd [2020] FCA 635; (2020) 144 ACSR 677 per Jackson J at 681 [18], and the authorities there cited; quoted with approval in Austpac Resources at [96].

^[13] iCandy Interactive at [110] per Banks-Smith J; Austpac Resources at [90(h)]; Nanoveu at [74] per Strk J.

^[14] Nanoveu at [75(a)].

^[15] Power Minerals at [36] per Hill J.

^[16] Nanoveu at [75(b)].

^[17] Austpac Resources at [97].

^[18] iCandy Interactive at [111].

^[19] Austpac Resources at [97]; see also iCandy Interactive at [112]; citing Sprint Energy at [48].

^[20] iCandy Interactive at [110(3)], quoted with approval in Austpac Resources at [97], citing the matter of exposure to such liability as also relevant as to whether it was just and equitable to validate on-sales under s 1322(4)(a).

^[21] iCandy Interactive at [113].

^[22] Austpac Resources at [99] per Goodman J, quoting with approval from Re Murray River Organics Ltd [2019] FCA 931; (2019) 138 ACSR 365 (Murray River Organics) at [35] per Anderson J.

^[23] Austpac Resources at [99], quoting with approval from Murray River Organics at [37]. The reference there was in fact to “the corporation and its directors and officers” rather than “those affected”. However Murray River Organics was not a cleansing notice case, where curative orders are properly sought under s 1322(4) for the protection of affected shareholders and not the company or its directors and officers. See also iCandy Interactive at [117]; Re QBiotics Limited [2016] FCA 873 at [46] per Gleeson J.

^[24] Austpac Resources at [99], quoting with approval from Murray River Organics at [36].

^[25] Nanoveu at [82], per Strk J accepting the submission that this factor supported the grant of relief.

^[26] iCandy Interactive at [117].

^[27] Austpac Resources at [99], quoting with approval from Murray River Organics at [38]; see also iCandy Interactive at [117].

^[28] See Lake Resources at [39]-[40], where the Court found the evidence showed that any information which would have been in the cleansing notices would have been somewhat minimal, or disclosed to the market, of minimal relevance, making it unlikely any person had acted in reliance on its absence. See also Austpac Resources at [100], where the Court noted that the company had provided regular updates to the ASX, and the retrospective review of one of the officers did not reveal any further information requiring disclosure.

^[29] Nanoveu at [83].

^[30] Nanoveu at [84].

^[31] Nanoveu at [84].

^[32] Nanoveu at [85]; Austpac Resources at [115]; Golden Gate at [55].

^[33] See for example Lake Resources at [43] et seq.

^[34] Austpac Resources at [106].

^[35] Austpac Resources at [107].

^[36] Austpac Resources at [108].

^[37] Austpac Resources NL at [109].

^[38] Caeneus Minerals at [58] per Banks-Smith J.

^[39] Nanoveu at [88].

^[40] iCandy Interactive at [122]-[123]. In that case, the Court found that while the conduct of directors was open to criticism, their conduct did not involve blatant disregard of the provisions of the Act: [120]. See Schedule (summaries of cases of note) for findings as to the relevant conduct in that case, including ignoring legal advice.

^[41] Nanoveu at [91]; iCandy Interactive at [54].

^[42] In Austpac Resources, the company took 11 months to request a suspension of shares from trading, and almost 2 years to commence the proceeding. The orders sought were still made.

^[43] Austpac Resources at [111]; see also fn99 above.

^[44] Austpac Resources at [112].

^[45] Power Minerals at [3], where this counted against the number of failures (61); Caeneus Minerals at [4], where this counted against the number of failures (31); Re Clancy Exploration Limited [2018] FCA 569 at [3]; Lake Resources at [32]; Re Astral Resources NL [2024] WASC 251 at [3]; Re Haranga Resources Ltd [2024] WASC 105 at [2].

^[46] iCandy Interactive at [54]; Austpac Resources at [115].

^[47] iCandy Interactive at [54]; Austpac Resources at [115].

^[48] iCandy Interactive at [55]; Austpac Resources at [115].

^[49] Austpac Resources at [110].

^[50] Nenna v ASIC at [80] per Middleton J. The authority of his Honour’s dicta at [80]-[82] has been widely accepted as well established, including in the cleansing notice case of iCandy Interactive at [44] and, for example, in Re Investa Listed Funds Management Limited as responsible entity for the Armstrong Jones Office Fund and the Prime Credit Property Trust [2018] NSWSC 1432 at [21] per Black J, and De Kun Holding (Aust) Pty Ltd v Yuan [2017] NSWSC 106 at [19] per Pembroke J.

^[51] Nenna v ASIC at [82] per Middleton J.

^[52] For example in Austpac Resources, there was evidence of self-dealing by the responsible officer. The former company secretary (who did not give evidence) had apparently made a clandestine placement of shares to his own service company, which cast doubt on his integrity. See further the summary in the Schedule. The orders sought were made, with a carve out from relief from liability for the former officer and his service company.

^[53] Austpac Resources at [114].

^[54] iCandy Interactive at [58].

^[55] Austpac Resources at [124].

^[56] Austpac Resources at [126].

^[57] Austpac Resources at [126].

^[58] Austpac Resources at [124].

^[59] In Golden Gate, relief was initially sought to afford protection from liability arising from the share issue contraventions also for the issuing company, its company secretary and its consultant. After concerns were raised by ASIC, the application was amended to remove them from the protections by the orders sought.

^[60] See Austpac Resources at [127], where Goodman J also observed that it was open for the officer and his service company to make their own application should they choose to do so. See also [78]-[79] and [117]-[118].

^[61] Lake Resources at [45(b)].

^[62] Austpac Resources at [124].

^[63] Austpac Resources at [124].

^[64] Austpac Resources at [124].