A J Lucas Group Limited, in the matter of A J Lucas Group Limited [2008] FCA 999

REASONS FOR JUDGMENT 1 The plaintiff, A J Lucas Group Limited (the Company), issued 25 million unsecured redeemable convertible notes to sixteen parties on 28 June 2007, pursuant to a deed poll executed by the Company on that day (the Deed Poll). The Deed Poll provided that the notes may be converted into ordinary shares in the circumstances set out in Clause 4 of the Deed Poll, following delivery by a note holder to the Company of a conversion notice. Clause 17.5 of the Deed Poll relevantly provided that, upon the issue of shares, the subject of a conversion notice, the Company would apply for quotation of the shares on the Australian Securities Exchange Limited (ASX) as soon as is reasonably practicable, and that it would give ASX a notice in accordance with s 708A(5)(e) of the Corporations Act 2001 (Cth) (the Act) as soon as is reasonably practicable, but in any case within the time limit prescribed by the Act. 2 The Company received conversion notes from seven noteholders on 2, 3, 4, 6 and 10 June 2008. On receipt of the conversion notices, the Company allotted shares to each of the noteholders on the respective dates on which the conversion notices were received. However, the Company failed to give ASX notice within the time limit prescribed by s 708A(5)(e) of the Act. The circumstances surrounding this failure are outlined in an affidavit of the secretary of the Company, Mr Nicholas Swan. Mr Swan explains that because of other pressures imposed on him in the course of his duties, he overlooked the requirement for the giving of notice under s 708A(5)(e). The notice contemplated by the provision was in fact given on 20 June 2008. The Company has now applied to the Court for an order extending the time within which that notice may be given. 3 Section 707 of the Corporations Act deals with sale offers that need disclosure. Section 707(3) relevantly provides that an offer of a body's securities for sale, within 12 months after their issue, needs disclosure to investors under Part 6D.2 if certain prerequisites are satisfied and either ss 707 or 708A does not say otherwise. Those prerequisites were satisfied in the present case. Accordingly, unless either ss 708 or 708A says otherwise, there was a requirement for disclosure. 4 Section 708 is not presently relevant. Section 708A(1)(a) provides that s 708A applies to an offer of a body's securities for sale by a person if, relevantly, but for s 708A(5), disclosure to investors under Part 6D.2 would be required by s 707(3) for the sale offer. Section 708A(5) relevantly provides that the sale offer does not need disclosure to investors under Part 6D.2 if five prerequisites are satisfied. The first four were satisfied but the last, required by s 708A(5)(e), is that the relevant body gives the relevant market operator for the body a notice that complies with s 708A(6) before the day on which the sale offer is made. 5 ASX is the relevant market operator for the Company. Section 708A(6) relevantly provides that a notice complies with s 708A(6) if it is, inter alia, given within five business days after the day on which the relevant securities were issued by the body and sets out any information that is excluded information as at the date of the notice. There are three other requirements which have been satisfied in the present case. As to the last, that the notice sets out any information that is excluded information, the notice given by the company to ASX on 20 June 2008 states that, as at that date, there was no excluded information within the meaning of ss 708A(7) or 707A(8). However, that notice was not given within five days after the day on which the shares were issued to the note holders. 6 The Company's application is based on s 1322(4)(d) of the Act. Section 1322(4)(d) relevantly provides that, subject to the subsequent provisions of s 1322, the Court may, on application by any interested person, make an order extending the period for doing any act under the Act or in relation to a corporation, including an order extending a period where the period concerned ended before the application for the order was made. Section 1322(6) of the Act provides that the Court must not make an order under s 1322, relevantly, unless it is satisfied that no substantial injustice has been or is likely to be caused to any person. 7 The object of the provisions of Division 2 of Part 6D.2 to which I have referred, is to ensure that there has been adequate disclosure to persons who might purchase shares which are or are to be listed on an exchange. The provisions are designed to make life easier, in a sense, where disclosure has in fact been made. The notice of 20 June 2008, as I have indicated, states that there is no excluded information that would have been disclosed had that notice been given within the time limited by s 708A(6)(a). Accordingly, I am satisfied that no substantial injustice would be caused by the notice of 20 June 2008 having effect as though it were given within the relevant time. 8 Having regard to the circumstances in which the oversight occurred, I am satisfied that the time for giving a notice under s 708A(5) should be extended up to and including 20 June 2008. I propose to make orders accordingly. I certify that the preceding eight (8) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Emmett.