RE MEMPHASYS LIMITED; EX PARTE MEMPHASYS LIMITED [2022] WASC 269 (22 August 2022)

1. Of the four omissions, three were in circumstances where the notice was issued late, and one involved a failure to issue a notice at all.
2. The omissions were identified in the evening of 27 July 2022 and the following day.[2] At this time, Memphasys was already in a trading halt and had been since the morning of 27 July 2022 in connection with an announcement by Memphasys regarding a capital raising.[3] On 29 July 2022, at the request of Memphasys, the securities of Memphasys were suspended from quotation by the ASX,[4] which remained in place pending the hearing of this application. By an originating process Memphasys brought this application on 2 August 2022 seeking curative orders under s 1322 of the Corporations Act and an order under s 254E of the Corporations Act. The orders moved for by Memphasys are set out in sch A to these reasons. Notice of the omissions and of the hearing of this application was promptly given to recipients of the shares issued under the Share Issues and SPP Issue,[5] and to ASIC and the ASX.[6]
3. Pursuant to s 1322(4) of the Corporations Act, Memphasys sought in respect of the Share Issues that the period of five business days referred to in s 708A(6)(a) of the Corporations Act be extended, and that such notice be deemed to be effective from the date on which each of the Share Issues took place. Memphasys also by this application sought to validate any offers or sales of shares in respect of the each of the Share Issues and the SPP Issue by a declaration that any on-sale of the relevant securities from the date of issue is not invalid by reason of any consequent contravention of the Corporations Act.
4. Counsel submitted that curative orders were sought in order to ensure two things.[7] First, that there was no extant concern as to the validity of the issue, transfer or sale in any subsequent trade of the impugned shares. Secondly, that the ASX suspension was lifted.
5. Counsel for Memphasys emphasised that Memphasys was not applying for declaration or orders that the persons who on-sold the shares the subject of the SPP Issue and Share Issues themselves be relieved of any alleged failure to comply with the Corporations Act (including, for example, the requirement and prohibition in s 707(3) and s 727(1), respectively).[8] Counsel further emphasised that Memphasys was not applying for declarations or orders that the directors or other officers or the company be relieved of any alleged failure to comply with the Corporations Act (including, for example, s 181, s 674(2) and s 674(2A)).[9] In this regard, the view was taken that such relief would be of negligible utility if the relief pressed was obtained.[10]
6. The circumstances which gave rise to the application were characterised by counsel for Memphasys as:[11]

(a) an error by the respective company secretaries and other executives of Memphasys in not appreciating the requirements of Ch 6D of the Corporations Act (or utilising the services of external lawyers) for the issue of shares under the SPP Issue and the Share Issues;

(b) in relation to the Share Issues, an error in making no disclosure by lodgement of a prospectus and, relevantly, omitting to lodge a cleansing notice on three occasions in time and on one occasion at all, which at the relevant times, Memphasys was entitled to rely upon under s 708A(6) of the Corporations Act; and

(c) in relation to the SPP Issue, an error in failing to give the ASX notice pursuant to par 7(f) of ASIC Class Order 09/425 within the required 24 hours prior to the share purchase plan offer being made.

1. Upon considering the materials filed and hearing counsel for Memphasys on 10 August 2022, I was and am satisfied that Memphasys made frank and honest admissions as to the circumstances of the failure to issue the notice under ASIC Class Order 09/425 for the SPP Issue within 24 hours prior to the share purchase plan offer, and the failure to issue valid cleansing notices for the Share Issues in time or at all. On the basis of the evidence before me, I was and am satisfied that the failure was caused by inadvertence rather than any deliberate disregard of Memphasys' obligations.
2. In light of the urgency with which the application was brought, I made orders at the conclusion of the hearing on 10 August 2022 granting the relief sought and said that I would publish reasons for my decision. These are my reasons. The final form of the orders I made are reproduced at sch B.

1. Five affidavits were filed and read in support of the application.
2. The first was the affidavit deposed on 4 August 2022 by Alison Coutts, who has been the managing director and chief executive officer of Memphasys since 29 November 2013. Ms Coutts deposed to the need for the orders sought and the context in which the application was made, including the process by which she was notified of the error; to being satisfied that on the date of the SPP Issue and each of the Share Issues, there was no excluded information; to being satisfied that on the date of the SPP Issue a notice under ASIC Class Order 09/425 could have been lodged; and to being satisfied that on the date of each of the Share Issues a cleansing notice could have been lodged. She further deposed to the basis of her belief that if the orders sought by this application were granted, no person would suffer substantial injustice; to her belief that it was in the interests of Memphasys' 2,178 shareholders that the curative orders be made; and to the prejudice that would flow if the curative orders were not made.
3. The second was the affidavit deposed on 4 August 2022 by Andrew William Metcalfe, who has been the company secretary of Memphasys since 30 November 2016. Mr Metcalfe attached to his affidavit 15 documents marked AWM-02 to AWM-16.
4. Among other things, Mr Metcalfe deposed to general information about Memphasys, including its history and current total issued share capital; and to his responsibilities in the performance of the company secretarial role for Memphasys. In this regard, Mr Metcalfe deposed that as company secretary of Memphasys, he is responsible for lodging, or arranging the lodgement of, various documents with ASIC and the ASX, including documentation pertaining to any issuance of shares or other securities, to ensure compliance with the ASX Listing Rules and the Corporations Act. Except where additional (or external) assistance is required, Mr Metcalfe deposed to undertaking this work himself.
5. Mr Metcalfe further deposed to his failure on three occasions to lodge a cleansing notice under s 708A(5)(e) of the Corporations Act due to his inadvertent oversight and misunderstanding of the cleansing requirements, and the circumstances in which the errors occurred in 2017, 2019 and 2020. Further, he deposed to the circumstances by which the failures to issue cleansing notices and notice under ASIC Class Order 09/425 were identified on 27 and 28 July 2022; to securing the continuing trading halt from the ASX; to the issue of a cleansing notice on 2 August 2022; to his review of previous issues of shares in Memphasys since 28 July 2015 and to not being aware of any other failure to issue a cleansing notice; to having undertaken a review of the trading history Memphasys' shares by accessing the share register; to having identified that there had been trading in relation to some of the shares issued under the SPP Issue and each of the Share Issues; to being satisfied that on the date of the SPP Issue and each of the Share Issues, there was no excluded information and a cleansing notice and a notice under ASIC Class Order 09/425 could have been lodged; to having put all recipients of shares issued under the SPP Issue and the Share Issues on notice that correct notices were not issued and to having informed them of Memphasys' intention to bring this application; to putting the ASX and ASIC on notice of the same; to the steps that would be taken to ensure shares are cleansed in the future; to the basis of his belief that if the orders sought by this application were granted, no person would suffer substantial injustice; to Memphasys being in the process of commencing a placement and pro‑rata non‑renounceable entitlement offer to raise essential funds for working capital purposes which timetable has been delayed pending the determination of this application; to his belief that it was in the interests of Memphasys' 2,178 shareholders and the capital raising participants that the curative orders be made.
6. Mr Metcalfe attached to his affidavit a copy of the ASIC historical company search for Mephasys dated 1 August 2022; a copy of Memphasys' constitution; copies of announcements made to the ASX on 4 April 2017 and 27 July 2022; copies of the application for quotation of securities as announced to the ASX on 30 May 2017, 21 October 2019 and 19 August 2020; copies of cleansing notices dated 9 June 2017, 19 August 2020, 2 August 2022 the subject of this application, as well as various valid cleansing notices issued by Memphasys between 2017 and 2022; copies of announcements released by the ASX on 27 July 2022; copies of letters dated 4 August 2022 sent to share recipients of the SPP Issue and the Share Issues; and copies of email communications between Steinepreis Paganin and the ASX, and Steinepreis Paganin and ASIC.
7. The third was the affidavit deposed on 4 August 2022 by Mark Hadrian Studd, who was the company secretary of Memphasys in the period from 10 August 2015 to 30 September 2016. Mr Studd deposed to his responsibilities in the performance of the company secretarial role for Memphasys at the time of the SPP Issue; to his failure to lodge a notice under ASIC Class Order 09/425 within the correct timeframe due to his inadvertent oversight and misunderstanding of the timing requirements; and to the circumstances in which the error occurred.
8. Mr Studd attached to his affidavit 4 documents marked MHS-02 to MHS-05. The documents attached to Mr Studd's affidavit included copies of announcements made to the ASX; a copy of the application for quotation of securities; and a copy of the notice under ASIC Class Order 09/425 lodged with the ASX on 4 September 2015.
9. The fourth was the second affidavit of Mr Metcalfe deposed to on 9 August 2022,[12] in which he deposed to the specific compliance measures that Memphasys proposed to take so as to ensure that it does not contravene its obligations under Ch 6D of the Corporations Act in the future. To his second affidavit Mr Metcalfe attached documents AWM-17 to AWM-19, which were copies of correspondence between ASIC and Steinepreis Paganin which had been forwarded to Mr Metcalfe, as well as a protocol intended to be followed by Memphasys in relation to the issue and cleansing of securities going forward.
10. The fifth and final affidavit was the affidavit of Jack Andrew Manolas Moore, a solicitor employed by the firm Steinepreis Paganin who acts for Memphasys, sworn on 10 August 2022, which attached documents JAM-2 to JAM‑8. Mr Moore deposed to having corresponded with the ASX and ASIC regarding this application; and to the absence of correspondence from shareholders regarding the Share Issues, SPP Issue and this application. Mr Moore attached all referenced correspondence to his affidavit.

1. As noted above, Memphasys was admitted to the official list of the ASX in 2007. Based on the latest closing price of shares in Memphasys traded on the ASX (being 25 July 2022) and Memphasys' total issued share capital (being 792,178,337 shares), Memphasys has a market capitalisation of approximately AU$35,648,025.[13] As at the hearing of the application there were 2,178 shareholders in Memphasys.
2. Mr Studd was the company secretary of Memphasys from 10 August 2015 to 30 September 2016.[14] Since 30 November 2016, Mr Metcalfe has been the company secretary of Memphasys.[15] At all material times since his appointment, Mr Metcalfe has been responsible for lodging, or arranging the lodgement of, various documents with ASIC and the ASX, including documentation pertaining to any issue of shares or other securities to ensure compliance with the ASX Listing Rules and the Corporations Act. Except where additional (or external) assistance was required, Mr Metcalfe undertook this work himself.[16]
3. Ms Coutts, in her capacity as the managing director of Memphasys, deposed that after the directors resolve to proceed with an issue of securities, it is the practice of Ms Coutts and the other directors to rely on the company secretary for compliance and procedural matters, such as the timing for release of a cleansing notice.[17]

Failure to lodge a notice under ASIC Class Order 09/425

1. On 10 August 2015, Memphasys announced to the ASX that it had decided to offer shareholders the opportunity to purchase shares in it under a share purchase plan,[18] and on 11 August 2015, Memphasys announced to the ASX that it had made an amendment to the indicative timetable of the share purchase plan document released the day prior.[19]
2. On 4 September 2015, Mr Studd arranged for quotation of 9,887,044 shares, being shares issued on 3 September 2015 under the share purchase plan, through the lodgement of an application for quotation of securities with the ASX.[20] Contemporaneously with the application, Mr Studd lodged a notice under par 7(f) of the ASIC Class Order 09/425.[21] The notice was not lodged within the requisite period (that is, within 24 hours prior to the share purchase plan offer being made).
3. Mr Studd proffered an explanation for the failure. He explained that his understanding had been that a company which is admitted to the official list of the ASX did not have to issue a prospectus (or other compliant disclosure document) under Ch 6 of the Corporations Act for an offer of shares for issue under a share purchase plan, so long as the requirements of ASIC Class Order 09/425 were adhered to, including the requirement to give ASX the notice prescribed by par 7(f) of ASIC Class Order 09/425.[22] At the time of lodging the notice, Mr Studd had held the mistaken belief that the required time for the issue of the notice under ASIC Class Order 09/425 was within five business days of the date of issue of the shares under the share purchase plan (akin to a cleansing notice under s 708A(5)(e) of the Corporations Act).[23]

1. On 4 April 2017, Memphasys announced that it had entered into a bond facility with Platinum Road Pty Ltd for a principal amount of $500,000. Under the terms of that facility, Platinum Road had the right to convert the loan plus accrued interest to ordinary shares in Memphasys.[24]
2. On 30 May 2017, Mr Metcalfe arranged for quotation of 23,529,412 shares, being a conversion of a drawn down in the amount of $20,000 against the facility, through the lodgement of an application for quotation of securities with the ASX.[25] Eight business days later, on 9 June 2017, Mr Metcalfe lodged a cleansing notice under s 708A(5)(e) of the Corporations Act in relation to the shares issued on 30 May 2017.[26] As to how this failure to lodge within time came about, Mr Metcalfe explained that it was due to his inadvertent oversight. He had failed to consider whether a cleansing notice was required until 9 June 2017, at which point he promptly lodged a cleansing notice.[27]

1. On 21 October 2019, Mr Metcalfe arranged for quotation of 1,333,334 shares, being shares issued on the exercise of options exercisable at $0.03, through the lodgement of an application for quotation of securities with the ASX.[28]
2. Mr Metcalfe deposed that due to an inadvertent oversight, he failed to consider whether a cleansing notice was required. Mr Metcalfe further deposed that the failure to lodge a cleansing notice under s 708A(5)(e) of the Corporations Act was an honest mistake on his part.[29]

1. On 19 August 2020, Mr Metcalfe arranged for quotation of 500,000 shares, being shares issued on 17 July 2020 upon the exercise of options exercisable at $0.0332 on or before 28 September 2021, through the lodgement of an application for quotation of securities with the ASX.[30] Contemporaneously with the application, Mr Metcalfe lodged a cleansing notice on 19 August 2020 under s 708A(5)(e) of the Corporations Act.
2. Mr Metcalfe deposed that due to an inadvertent oversight, he failed to lodge a cleansing notice within the required five business days of the date on which the shares were issued (that is, 17 July 2020).[31] Mr Metcalfe proffered the explanation that he had made an honest mistake in having failed to consider that the cleansing notice was required to be given to the ASX within five business days after the day on which the securities were issued, irrespective of the date on which the quotation was sought.

1. The issues were identified by Memphasys' solicitors, Steinepreis Paganin, in the evening of 27 July 2022 (as to the 2020 Share Issue) and on 28 July 2022 (as to the 2017 Share Issue and 2019 Share Issue, and the SPP Issue).[32] At this time, Memphasys was already in a trading halt and had been since the morning of 27 July 2022 when Mr Metcalfe sent a request to the ASX to place Memphasys in a trading halt in connection with an announcement regarding a capital raising.[33] On 29 July 2022, at Memphasys' request, the suspension was voluntarily extended.[34]
2. In order to regularise its affairs and to prevent further inadvertent contraventions by shareholders, Memphasys brought this application on 2 August 2022 seeking curative orders under s 1322 and s 254E of the Corporations Act. On the same day, it issued a cleansing notice for the 2019 Share Issue.[35]

1. Mr Metcalfe conducted a review of the trading history of the shares issued under the SPP Issue and the Shares Issues by accessing Memphasys' share register, which is hosted electronically by Boardroom Pty Ltd.[36] Mr Metcalfe identified that there had been trading in relation to some of the shares issued under the SPP Issue and the Shares Issues.[37]

1. A review of the ASX announcements by Memphasys on and around the date of the SPP Issue and each of the Share Issues was undertaken, together with a review of internal documentation and correspondence for the purpose of determining whether there was any excluded information that must be set out in a cleansing notice, as required by s 708A(6)(e) of the Corporations Act. From their respective reviews, Mr Metcalfe and Ms Coutts were satisfied that:[38]

(a) in the 24 hour period before the SPP Issue offer was made, there was no excluded information;

(b) on the dates that each of the Share Issues were completed, there was no excluded information;

(c) a valid notice pursuant to ASIC Class Order 09/425 could have been lodged for the SPP Issue within the requisite period;

(d) a valid cleansing notice could have been lodged for the shares issued on 30 May 2017 and 17 July 2020, within five business days after the day on which the shares were issued; and

(e) a cleansing notice could have been lodged for the shares issued on 21 October 2019.

1. By letters dated 4 August 2022, recipients of the shares issued under the Share Issues and the SPP Issue were given notice of Memphasys' failure to lodge the requisite s 708A cleansing notice (for each of the Share Issues); failure to lodge the requisite notice under ASIC Class Order 09/425 (for the SPP Issue); and of this application.[39] Mr Moore deposed to having been informed by Mr Metcalfe that no substantive response to the letters issued was received.[40]

1. On behalf of Memphasys, on 1 August 2022 Steinepreis Paganin informed the ASX and ASIC of Memphasys' failure to lodge a cleansing notice in relation to each of the Share Issues and the requisite notice in relation to the SPP Issue, and of Memphasys' intention to make this application.[41]

1. I understood that Memphasys is in the process of commencing a placement and pro-rata non-renounceable entitlement offer in order to raise funds for working capital purposes.[42] Further, I understood that the announcement and timetable of the capital raising had been delayed until the hearing and determination of this application.

Investigation of all shares issued since 28 July 2015

1. Following discovery of the compliance failures, Memphasys has caused an investigation to be undertaken of all share issues since 28 July 2015. Mr Metcalfe deposed to having undertaken the review and to not being aware of any other failure to issue a cleansing notice, or otherwise effectively cleanse an issue of securities.[43]
2. Counsel for Memphasys explained that the selection of 28 July 2015 as the appropriate date from which to undertake a review was based on s 1317K of the Corporations Act, which provides that 'proceedings for a declaration of contravention, a pecuniary penalty order or a compensation order may be started no later than six years after the contravention'.[44] Counsel submitted that in light of s 1317K, a review from 28 July 2015 was a sufficient time period, given that any uncleansed share issues that may have been issued prior to 28 July 2015, which were traded within 12 months of their respective date of issue, could now not be subject to a pecuniary penalty order or a compensation order as the relevant time limit (six years) has passed.[45]

Obligations on the company to issue valid notices in connection with a share issue Part 6D.2 of the Corporations Act

1. Part 6D.2 of the Corporations Act imposes disclosure obligations in relation to the issue and sale of shares. In certain circumstances, these obligations can be satisfied by lodging what is commonly referred to as a cleansing notice or a prospectus.[46] If disclosure has not been made by the issuer and the shares are on‑sold within 12 months, the party to whom the shares are issued may be obliged to make disclosure.[47] However, the sale offer does not need disclosure to investors under pt 6D.2 if the preconditions in s 708A(5) of the Corporations Act are met.

1. ASIC Class Order 09/425, which was issued by ASIC under s 741 and s 1020F(1)(a) of the Corporations Act, relevantly provided that a body which is admitted to the official list of the ASX does not have to comply with pt 6D.2 or pt 6D.3 of the Corporations Act (other than s 736 and s 738) for an offer of shares for issue under a purchase plan, subject to certain requirements.[48] One of these requirements was found in par 7(f) of the Class Order, which provided as follows:

(f) the issuer has either:

(i) not more than 30 days before the offer, given a notice to ASX that complies with subsection 708A(6) or 1012DA(6) of the Act in relation to an issue of shares or interests in the class made otherwise than under a purchase plan; or

(ii) within the 24 hour period before the offer, given a notice to ASX that:

(A) states that the issuer will make offers to issue shares and/or interests (as applicable) under a purchase plan without disclosure to investors under Part 6D.2 and/or without giving a Product Disclosure Statement under Division 2 of Part 7.9 of the Act (as applicable); and

(B) states that the notice is being given in accordance with this instrument; and

(C) states that, as at the date of the notice, the issuer has complied with the provisions of Chapter 2M of the Act as they apply to the issuer (or if the issuer is the responsible entity of a registered scheme, as they apply to the scheme) and section 674 of the Act; and

(D) sets out any information that is excluded information as at the date of the notice (in accordance with the requirements of subsections 708A(7) and (8) or subsections 1012DA(7) and (8) of the Act as if the notice were a notice under paragraph 708A(5)(e) or 1012DA(5)(e) of the Act).

The power to grant the relief sought Section 1322 of the Corporations Act

1. The power of the court to make orders avoiding the effects of irregularities is set out in s 1322 of the Corporations Act, which relevantly provides:

(4) 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 orders, 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) an order directing the rectification of any register kept by ASIC under this Act;

(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) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this 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) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding;

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

(6) 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.

1. As counsel for Memphasys noted at par 42 of the written outline of submissions, orders under s 1322(4) to cure aspects of transactions have been variously made by courts in respect of the disclosure provisions in s 707, s 708AA and s 708A of the Corporations Act, which have included:

(a) validating orders and relief from liability when companies had inadvertently neglected to issue a cleansing notice under s 708A(5)(e) (see Re Silver Lake Resources Ltd [2012] FCA 32; (2012) 87 ACSR 436);

(b) validating orders and relief from liability when companies had issued cleansing notices, instead of and in the absence of a prospectus, when under s 708A(5)(a) this course of using a cleansing notice was not open to them by reason of their being less than three months of trading in that class of securities (see Re Golden Gate Petroleum Ltd); and

(c) validating orders and relief from liability when companies had issued cleansing notices, instead of and in the absence of a prospectus, when under s 708A(5)(b) this course of using a cleansing notice was not open to them by reason of suspensions from trading (see Re Sprint Energy Ltd [2012] FCA 1354).

1. The principles to be applied when considering an application under s 1322 of the Corporations Act are well established. As Hill J recently observed in Re Sprintex Ltd [2022] WASC 188 at [22], in considering an application under s 1322 of the Corporations Act, the essential principles are:[49]

(a) the prescriptive requirements of the wording in s 1322(4) and the preconditions in s 1322(6) need to be satisfied;[50]

(b) the court retains a discretion under s 1322(4) as to whether it makes the orders sought;

(c) the broad powers reflect a legislative policy that the law should not inflict unnecessary liability or inconvenience or invalidate transactions because of non-compliance with its requirements where such non-compliance is the product of honest error or inadvertence and where the court can avoid its effects without prejudice to third parties or to the public interest in compliance with the law;[51]

(d) limitations to the broad powers in s 1322 will not be readily implied.[52] Section 1322 is remedial in character and should be applied broadly;

(e) the court can make orders under s 1322(4)(a) on conditions and also make such consequential and ancillary orders as it thinks fit; and

(f) an order can be made under s 1322(4)(a) notwithstanding that the contravention or failure concerned resulted in the commission of an offence.[53]

Section 254E of the Corporations Act

1. While s 1322(4)(a) of the Corporations Act enables the court to declare that shares are not invalid by reason of a contravention, s 254E allows the court to positively validate and confirm a share issue. Section 254E of the Corporations Act provides:

(1) On application by a company, a shareholder, a creditor or any other person whose interests have been or may be affected, the Court may make an order validating, or confirming the terms of, a purported issue of shares if:

(a) the issue is or may be invalid for any reason; or

(b) the terms of the issue are inconsistent with or not authorised by:

(i) this Act; or

(ii) another law of a State or Territory; or

(iii) the company's constitution (if any).

(2) On lodgment of a copy of the order with the Registrar, the order has effect from the time of the purported issue.

1. In Re Force Commodities Ltd [2019] FCA 1815; (2019) 140 ACSR 408, McKerracher J construed s 254E of the Corporations Act in circumstances similar to this application with respect to the SPP Issue. His Honour noted as follows:

[16] Section 254E of the Act should be construed widely. In Laserbond Ltd (ACN 057 636 692), Re Laserbond Ltd (ACN 057 636 692) [2007] FCA 2056 (at [25]), I said:

In the circumstances of this case there is no doubt that the company has brought an application in relation to a purported issue of shares which may be invalid for any reason. In construing the meaning of 'invalid' in s 254E, the liberal approach is again applied. This is because of the remedial purpose behind the section and thus requires that 'invalid' includes 'void'. This is consistent with the approach taken in the cases on which Austin J commented in Howard v Mechtler [1999] NSWSC 232; (1999) 30 ACSR 434 at [47] - [48]. It was also expressly the view of Lee J in Golden Gate at [34] where his Honour said:

I am satisfied that s 254E uses the word 'invalid' in a broad sense to encompass not only an issue of shares which is liable to be declared void under the Act but also an issue of shares which the Act stipulates to be void (see: Swan Brewery Co Ltd (No 2) (1976) 3 ACLC 168 per Gillard J at 171-2; cf Harman v Energy Research Group Australia Ltd [1986] WAR 123 per Brinsden J at 127).

[17] In Laserbond I also noted that the Court's discretion in relation to making remedial orders under s 254E is substantially the same as the approach to be adopted in relation to the making of validating orders under s 1332 of the Act.

[18] Orders can be made under s 254E notwithstanding that the non-compliance was with provisions of Class Order 09/425 as opposed to a provision of the Act. In Australian Dairy Farms Ltd, Re Australian Dairy Farms Ltd and Dairy Funds Management Ltd [2018] FCA 2056, Colvin J made orders under s 254E extending the time for giving a notice to ASX under para 7(f)(ii) of ASIC Class Order 09/425 (CO 09/425) and declaring an offer to issue stapled securities to be not invalid. Colvin J found that there was a contravention of a provision of the Act by reason of the failure to fall within CO 09/425 so as to obtain exemption from disclosure, so that a declaration could be made under s 1322(4)(a) that the subject offer was not invalid. The Court also found that an order could be made under s 1322(4)(d) extending the time for compliance with the notice requirement.

1. I agree with his Honour's observations and construction of s 254E. I proceeded on the basis that the approach to be adopted in the making of remedial orders under s 254E is substantially the same as the approach to be adopted in the making of validating orders under s 1332 of the Corporations Act.
2. In the determination of this application, I adopted and applied the principles summarised above.

1. As to the position of the ASX, by an email communication dated 8 August 2022 and subsequently confirmed on 10 August 2022, Memphasys was advised that the ASX did not intend to appear at the hearing of the application and that it did not oppose the application.[54]
2. Prior to the hearing of the application, ASIC by letter dated 9 August 2022 that also indicated that it neither supported nor opposed the application and it did not intend to appear.[55]

1. An application may be made under s 1322 of the Corporations Act by an interested person. I accepted that Memphasys was an interested person who may seek relief, as required by s 1322(4) of the Corporations Act.[56]
2. An application may be made under s 254E of the Corporations Act by a company, a shareholder, a creditor or any other person whose interests have been or may be affected.[57] Memphasys therefore had standing to seek relief under s 254E of the Corporations Act.

Preconditions to the making of orders pursuant to s 1322

Section 1322(6)(a) of the Corporations Act - three preconditions

1. Counsel for Memphasys submitted that the preconditions in s 1322(6)(a) had been satisfied.
2. First, as to subsection (i), counsel submitted that the issuing of a cleansing notice has regularly been held by the courts to be essentially of a procedural nature, and so too has the failure to issue a notice to the ASX under par 7(f)(ii) of ASIC Class Order 09/425.[58] I accepted the same.
3. Secondly, as to subsection (ii), counsel submitted that in this case there is no failure of the persons concerned or the company to act honestly.[59]
4. I note that in Re ICandy Interactive Ltd [2018] FCA 533; (2018) 125 ACSR 369 [54] - [104],[60] Banks‑Smith J undertook a comprehensive review of the principles relevant to determining whether someone has acted honestly in this context. Relevantly, Banks‑Smith J considered that:

(a) when determining whether someone has acted honestly for the purposes of s 1322, the courts look to absence of evidence of dishonesty and prompt action to remedy the error;[61]

(b) the concept of acting honestly can embrace:[62]

(i) inadvertence or failure to turn one's mind to an issue;

(ii) active but incorrect consideration of a legal issue;

(iii) failure to consider an issue at all;

(iv) failure to understand or appreciate the significance of non-compliance; and

(c) when testing for honesty, the authorities reveal that the courts look at the company itself, the directors, the company secretary and others as may be concerned.[63]

1. I adopted and applied the above in determining this application.
2. In short, counsel for Memphasys submitted that in this case, there was the absence of dishonesty.[64] It was submitted that the evidence established that there was a genuine misunderstanding on the part of the company secretaries, Mr Metcalfe and formerly Mr Studd, and that Mr Metcalfe promptly took action to rectify the non-compliance once it was identified.[65] Counsel further submitted that this is not a case where there had been a failure of Memphasys' directors to take an active interest in the company's compliance with the Corporations Act, or to perform properly define the roles of the officers of the company. Ms Coutts, in her capacity as the managing director and chief executive officer of Memphasys, deposed that the board relied on the company secretaries to carry out compliance work of a routine nature,[66] and to her belief that the failure to issue valid notices was not an issue of Mr Metcalfe or Mr Studd being unaware of their duties, but rather inadvertent misunderstandings which led to a failure to lodge valid notices.[67]
3. I accepted that in this case, the errors occurred through inadvertence rather than any deliberate disregard by Memphasys or its officers of the obligations under ch 6D of the Corporations Act. I particularly noted that the compliance failures which occurred in relation to the SPP Issue and the 2020 Share Issue came about in circumstances where there was active but incorrect consideration of a legal issue. I also accepted that this was not a case where there had been a failure of the directors to take an active interest in Memphasys' compliance with the Corporations Act, or to properly define the roles of company officers.[68]
4. In reaching these conclusions, I was also cognisant that while an enforceable undertaking was in place between 18 December 2014 and 31 December 2017, Memphasys had appointed an ASIC nominated independent compliance expert from the law firm Holding Redlich to report both to ASIC and Memphasys.[69] In each report, the independent compliance expert considered that Memphasys had been compliant with the Compliance Procedures (as defined in the enforceable undertaking). Neither the compliance expert nor Memphasys identified the compliance failure that occurred in relation to the SPP Issue or the 2017 Share Issue, which failures occurred despite the oversight of the compliance expert. Errors made in this context did not suggest a lack of diligence or honesty.
5. Thirdly, as to subsection (iii), counsel submitted that it would be just and equitable to make the orders sought.[70] While it was not necessary for Memphasys to satisfy both subsections (ii) and (iii), I accepted that it was just and equitable to make the orders sought in all of the circumstances deposed. While I came to this conclusion having weighed all of the circumstances, I was particularly cognisant that there was evidence of the shares the subject of the SPP Issue and Share Issues having been on-sold,[71] and it could not be discounted that there had been resales of these shares, which weighed heavily in the balance.
6. For these reasons, I found the preconditions to the making of orders prescribed in s 1322(6)(a) to have been satisfied.

Section 1322(6)(b) of the Corporations Act - honesty

1. As no order was pressed pursuant to s 1322(4)(c), the need to consider the precondition prescribed by 1322(6)(b) (which requires the court to be satisfied that the person subject to the civil liability concerned acted honestly) did not arise in this case.

Section 1322(6)(c) of the Corporations Act - no substantial injustice

1. Section 1322(6)(c) of the Corporations Act was enlivened, as it is enlivened in every case where relief is sought pursuant to s 1322. Section 1322(6)(c) provides that the court cannot make an order unless it is satisfied that no substantial injustice has been or is likely to be caused to any person.
2. Counsel for Memphasys submitted that in Metalicity Ltd [2020] WASC 387 at [46] ‑ [51], Whitehawk Ltd [2020] WASC 388 at [45] ‑ [50], and in Ex Parte Imdex Ltd at [42] ‑ [47], this court identified the classes of persons who may be impacted by the making of orders akin to those sought in this case, and found that there was no basis for inferring that substantial injustice had been or was likely to be caused to any person by the making of the proposed orders.[72] Counsel for Memphasys respectfully adopted the court's comments in the three decisions of Hill J, and sought that a similar approach be adopted in this case.
3. As I did recently in Re Cyprium Ltd [2022] WASC 241 at [64], in considering whether the precondition prescribed by s 1322(6)(c) had been met in this case, I proceeded by first seeking to identify the classes of persons who may be impacted by the making of the orders sought. From the evidence filed, I discerned that they would include those persons who were issued the shares under the Share Issues or SPP Issue. The prejudice to them was that if they were to seek to offer to sell or sell the shares, such offers or sales may be void or voidable for want of compliance with the statutory requirements.[73]
4. Those impacted would also include any person who purchased the Share Issues or SPP Issue shares from on‑sellers who traded their shares on the open market of the ASX since their issue. Any such further sales will have occurred without the requisite disclosure under pt 6D.2 of the Corporations Act.
5. I considered that these classes of persons would benefit from the making of the orders sought. Further, on the evidence filed, I found there to be no basis for inferring that substantial injustice had been or was likely to be caused to any person by the making of the proposed orders.
6. I also proceeded on the basis that if the orders sought were not made, there may be substantial injustice to Memphasys as the offers of and sales of shares may be void or voidable which could give rise to commercial uncertainty and expense for Memphasys, as it must remain involved in problems caused by void or voidable offers and sales of its shares. I also accepted that there may be substantial injustice to the other ordinary shareholders of Memphasys, as they may not be able to trade their shares on an open market if the ASX were not to lift the suspension from trading.
7. It is usual in cases such as this to provide an opportunity for shareholders or other parties to raise a complaint about the proposed orders. The usual timeframe is that there be liberty to apply within 28 days from the date of the order. I accepted that this was an appropriate timeframe in this case for two reasons. First, the parties which may be impacted by the court's orders were given prior notice on 4 August 2022 of Memphasys' intention to apply to the court for these curative orders.[74] Secondly, as noted at [7] above, Memphasys did not move for orders which would relieve any person of liability that might flow from the failure to comply with the Corporations Act. Rather, the relief sought was of a nature that would benefit the broader population of Memphasys' shareholders (to maintain trading on the ASX), and any on-sellers of the shares issued pursuant to the SPP Issue and the Share Issues, being those persons to whom it issued shares and including some whom have variously on-sold them.[75]
8. With the comfort afforded by proposed order 14, for the reasons set out above I found the precondition to the making of orders prescribed in s 1322(6)(c) to have been satisfied. I was satisfied that that no substantial injustice had been or was likely to be caused to any person.

1. I also considered whether there was evidence of any 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.[76]
2. The evidence established that the non-compliance was inadvertent. Two of the compliance failures came about in circumstances where there was active but incorrect consideration of a legal issue (the 2019 Share Issue); one came about by a failure to consider an issue at all (the SPP Issue and the 2020 Share Issue); and one came about by an inadvertence and a failure to appreciate the significance of non-compliance (the 2017 Share Issue). There was no evidence of any 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. Other than the failure to lodge a cleansing notice for the Share Issues, Memphasys has a demonstrated record of compliance in this regard, having validly issued cleansing notices on 19 other occasions between 2017 and 2022.[77]
3. Further, I was and am satisfied that there was nothing in the evidence before me to suggest that any minority shareholder interest might be oppressed or any other interest might be adversely affected by the grant of the relief sought. I was and am satisfied that all shareholders impacted by the contravention as well as the ASX and ASIC were given notice of this hearing. No shareholder or regulator sought to intervene or gave notice that they wished to be heard.
4. In exercising the discretion to grant relief under s 1322(4), a relevant factor is the promptness with which applicant has sought to remedy the irregularity once it had been identified.[78] In this case, Memphasys discovered the cleansing notices and notice under ASIC Class Order 09/425 had not been issued on 27 and 28 July 2022; took legal advice; was at this time already in a trading halt and on 29 July 2022 secured the continuing trading halt from the ASX; gave the court notice of the proposed application on 1 August 2022; and formally commenced this proceeding on 2 August 2022, with notice to all interested parties.
5. In the circumstances of this case, I accepted that Memphasys acted diligently after discovering the omissions, and I was satisfied that there was no discretionary reason to withhold relief.

Proposed orders 3, 6 and 9 - extension of time under s 1322(4)(d) of the Corporations Act

1. The test under s 1322(4)(d) of the Corporations Act was described by Vaughan J in Re Jaxsta Ltd [2018] WASC 390 as follows:[79]

[41] ... As to s 1322(4)(d), I derived more guidance from the two-stage process embraced by Barker J in Blaze Asset Pty Ltd v Target Energy Ltd.

[42] There Barker J stated:

'[T]he exercise of the power under s 1322(4) [referring to s 1322(4)(d)] involves in effect a two stage process. First, the Court needs to determine whether, having regard to the circumstances of the case and the general objects of the [Corporations Act 2001 (Cth)], it is appropriate to make an order extending a relevant period, or abridging a relevant period. Secondly, if those circumstances are made out, then the Court must address the question whether any substantial prejudice has been or is likely to be caused to any person by the making of such an order.'

[43] Also, the power under s 1322(4)(d) must be exercised having regard to the general objects and purposes of the relevant statutory provision within the Corporations Act 2001 (Cth) - here the statutory purpose evinced by s 723(3). The court's order must not undermine the reasons for the requirements of the Act. The power must be exercised having regard to the interests of all parties affected and the public interest in ensuring compliance with the Act. (footnotes omitted)

1. I adopted and applied the same test in the determination of this application. I also proceeded on the basis that the period to be extended may be extended even if it had expired.
2. On behalf of Memphasys, counsel submitted that it would be appropriate to make an order extending the relevant period having regard to the following.
3. First, Memphasys acted promptly to inform investors of its failure to issue a cleansing notice, to ensure the shares in the company remained in a trading halt, and to bring this application to remedy the irregularity.[80] This prompt response was a relevant factor for the court to consider in exercising the discretion to grant relief under s 1322(4): see Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22, 34 [60]; see also Ex Parte Archtis Ltd [2021] WASC 55 [51].
4. Secondly, in the absence of extensions, there would be adverse consequences for Memphasys and shareholders.[81] In this regard, counsel referred to the capital raising and noted that Memphasys was ready to commence a placement and pro-rata non‑renounceable entitlement offer in order to raise essential funds for working capital purposes, subject to the court making the proposed orders.[82] Unless orders were made by the court, Memphasys' shares would continue to be suspended from trading which would deny the shareholders of Memphasys the opportunity to trade their shares. This would be prejudicial to all of the Memphasys' shareholders and may inhibit its ability to complete the capital raising.
5. Thirdly, the shareholders who have purchased shares on market since the SPP Issue and Share Issues may have purchased some shares that were originally issued under the SPP Issue and Share Issues. Given that any such sales will have occurred without disclosure, this potentially means that these transactions are void or voidable creating title issues for these parties.[83]
6. Fourthly, each of the recipients of the Share Issues and SPP Issue have been notified of the error.[84]
7. Fifthly, the errors did not come about by reason of the officers' reckless disregard towards the requirements of the Corporations Act.[85] The evidence filed in support of the application made plain that an investigation was undertaken promptly and upon a review of all share issues since 28 July 2015, no failure in addition to those the subject of this application was identified. Further, as soon as Mr Metcalfe became aware of the errors from his communications with Steinepreis Paganin, Memphasys requested a voluntary suspension from the ASX and proceeded with this application to rectify the position.[86] Further, steps have since been taken to ensure that the potential for there to be future non-compliance is mitigated.[87] Steinepreis Paganin has drafted a protocol which Memphasys will follow in relation to the issue and cleansing of securities as an additional compliance measure going forward.[88]
8. Sixthly, in facilitating the transaction as originally contemplated, the making of the orders sought would be consistent with the conduct of commerce generally.[89] I proceeded on the basis that s 1322(4)(d) should be exercised in a way which did not unnecessarily stifle corporate and financial activity on technical grounds.[90]
9. Seventhly, the additional orders sought by Memphasys provided for notice to be given to all persons affected and the ability for them to apply to raise any matters with the court (proposed order 14).[91]
10. Eighthly, neither ASIC nor the ASX opposed the application nor sought to be heard. Further, no shareholder of Memphasys sought to be heard.[92]
11. I was satisfied that no substantial prejudice had been or was likely to be caused to any person by the making of the order. Having regard to all of the matters summarised above, and in circumstances where the preconditions to the making of such an order had been satisfied, I was and am satisfied that it is appropriate to grant the extension of time within which to lodge the cleansing notice for the 2019 Share Issue to 2 August 2022; for the 2017 Share Issue to 9 June 2017; and for the 2020 Share Issue to 19 August 2020, as sought in the originating summons.

Proposed orders 1, 2, 4, 5, 7, 8, 10 and 11 - declarations under s 1322(4)(a) and s 254E of the Corporations Act

1. By this application, Memphasys sought a number of declarations.
2. Memphasys applied for three 'deeming order' declarations pursuant to s 1322(4)(a) of the Corporations Act that:

(a) a notice under s 708A(5)(e) of the Corporations Act given to the ASX on 2 August 2022 in respect of the 1,333,334 ordinary fully paid shares in Memphasys, which were issued on 21 October 2019, be deemed to take effect as if it had been given to the ASX on 21 October 2019;

(b) a notice under s 708A(5)(e) of the Corporations Act given to the ASX on 9 June 2017 in respect of the 23,529,412 ordinary fully paid shares in Memphasys, which were issued on 30 May 2017, be deemed to take effect as if it had been given to the ASX on 30 May 2017; and

(c) a notice under s 708A(5)(e) of the Corporations Act given to the ASX on 19 August 2020 in respect of the 500,000 ordinary fully paid shares in Memphasys, which were issued on 17 July 2020, be deemed to take effect as if it had been given to the ASX on 17 July 2020.

1. With respect to the SPP Issue, Memphasys sought a declaration of validity pursuant to s 1322(4)(a) and s 254E of the Corporations Act, that the issue of 9,887,044 ordinary fully paid shares in Memphasys on 3 September 2015 is validated and confirmed. Memphasys also sought a declaration pursuant to s 1322(4)(a) of the Corporations Act that any offer for sale or sale of 9,887,044 shares issued on 3 September 2015 is not invalid by reason of:

(a) the failure to give a notice to the ASX under par 7(f)(ii) of ASIC Class Order 09/425 within the 24 hour period prior to the offer to issue the shares; and

(b) the sellers' consequent failure to comply with s 707(3) of the Corporations Act.

1. Memphasys sought declarations of validity pursuant to s 1322(4)(a) of the Corporations Act with respect to the Share Issues that any offer for sale or sale of the 23,529,412 shares issued on 30 May 2017, 1,333,334 shares issued on 21 October 2019, and the 500,000 shares issued on 17 July 2020, during the period after their issue to the date of the court order is not invalid by reason of:

(a) any failure of a notice under s 708A(5)(e) of the Corporations Act to exempt the sellers from the obligation of disclosure under the Corporations Act; and

(b) the sellers' consequent failure to comply with s 707(3) of the Corporations Act.

1. For all declarations sought, the 'act, matter or thing' was the lodgement of the cleansing notice on 2 August 2022, 9 June 2017 and 19 August 2020; the lodgement of a notice under par 7(f) of the ASIC Class Order 09/425 on 3 September 2015; and sales of securities 3 September 2015, 30 May 2017, 21 October 2019 and 19 August 2020, respectively. The relevant contraventions were the offering of securities for sale or sales without proper disclosure in contravention of s 707(3) of the Corporations Act (in relation to the Share Issues),[93] and the failure to meet the conditions for the operation of the exemption afforded by ASIC Class Order 09/425 (in relation to the SPP Issue).[94]

1. As to the 'deeming order' declarations sought, counsel for Memphasys observed that in Ex Parte Imdex Ltd, Hill J granted an order in the same form as proposed orders 4, 7 and 10 of the originating process.[95] It is convenient to set out her Honour's observations at [54] ‑ [58] below:

[54] In respect of the first order, courts have on a number of previous occasions made similar orders. [Her Honour citing Re Charter Hall Ltd [2007] FCA 1316; Re Diversified United Investment Ltd [2008] FCA 720; Re RCR Tomlinson Ltd [2009] FCA 1130; Re Austpac Resources NL [2010] NSWSC 1438; Re Beadell Resources Ltd [2013] FCA 13 and Re Micro-X Limited [2019] FCA 1154.] It is not in doubt that the court has power to make orders that are consequential or ancillary to an order extending the period for doing an act, matter or thing under the Act.

[55] The question as to whether the court should make such a deeming order was discussed by Colvin J in Re Spectur Limited as follows:

Spectur also sought orders to the effect that when cleansing notices are issued in accordance with the orders extending time that the notices be deemed to take effect as if they had been given within the period of five business days specified in s 708A(6)(a). The effect of such an order would be to go further than extend the period after the time for compliance had passed (which is a possibility that is expressly contemplated by s 1322(4)(d)). It would give the cleansing notice retrospective operation.

The Court has power to make orders that are consequential upon or ancillary to an order extending the period for doing an act, matter or thing under the Corporations Act. There may be circumstances in which a period may be extended to a date which has already passed by the time of the application so as to bring an act that has occurred outside a period specified by the Corporations Act within the specified period. In such a case, there may be an ancillary order to the effect that the act which had already occurred was to take effect as if performed when time had been extended. However, the proposed order would go further and give a future act retrospective effect. In particular, it would seek to authorise the service of cleansing notices with retrospective effect. It is an order which would make the extension of the period of time unnecessary. As indicated in the course of submissions in support of the application I am not presently persuaded that such an order would be within the scope of s 1322(4)(d) or the power to make consequential or ancillary orders. In those circumstances, counsel for Spectur did not press for the making of those additional orders.

[56] In that case, at the time of the hearing, there was no evidence that there had been any trading in the shares nor had a cleansing notice been lodged. I accept that in such a case, there was no utility in making any orders for declarations of validity nor a deeming order.

[57] In Re Micro-X Ltd, Moshinsky J expressed the view that 'deeming orders' were a corollary of the orders seeking an extension of time.

[58] In my view, for the following reasons, I consider it is appropriate in this case to make the ancillary orders sought by the plaintiff, including the 'deemed order'. First, the evidence before me is that the shares the subject of the July share issue have been sold and it cannot be discounted that there have been resales of these shares. In these circumstances, I consider that it is appropriate to make the orders sought to remove any question as to title in the shares of the plaintiff. Second, at the time the application came on for hearing, the cleansing notice had already been lodged. For that reason, the order did not concern a future act but a past act. Third, I agree with Moshinsky J that where shares are on-sold, the 'deeming order' is a corollary of the orders seeking an extension of time. (Footnotes omitted.)

1. Counsel for Memphasys submitted that as the circumstances of the present case are practically the same as that which were before Hill J in Ex Parte Imdex Ltd, Memphasys respectfully adopted the court's reasoning therein and applied for deeming orders in the form of proposed orders 4, 7 and 10 of the originating process.[96]
2. In the circumstances of this case, I was and am satisfied that the prescriptive requirements of the wording in s 1322(4) of the Corporations Act were met.
3. Further, for the following reasons, I considered that it is appropriate in this case to make the ancillary orders sought by Memphasys, including the 'deemed orders':

(a) the evidence before me was that shares the subject of the Share Issues had been sold and it could not be discounted that there had been resales of the shares. In the circumstances, I considered that it was appropriate to make the orders sought to remove any question as to title in the shares of Memphasys;

(b) at the time the application came on for hearing, all of the cleansing notices in respect of the Share Issues had already been lodged. For that reason, the orders sought did not concern future acts but past acts; and

(c) I also agreed with Moshinsky J that where shares are on-sold, the 'deeming order' is a corollary of the orders seeking an extension of time.

Proposed orders 1, 2, 5, 8 and 11 - declaration of validity

1. Counsel on behalf of Memphasys submitted that the declarations of validity were sought in order to remove any uncertainty as to the validity of the title to the shares so as to enable them to be offered for further sale.[97] Counsel submitted that these orders are sought to the benefit of shareholders and if orders are not granted then the integrity of future dealings in the shares by current holders may be called into question.[98]
2. In respect of the proposed orders 1, 2, 5, 8 and 11, for the reasons set out above in respect of the extension of time, I also considered that it was appropriate to make the orders sought pursuant to s 1322(4)(a).
3. In respect of proposed order 1, which was sought pursuant to s 254E and s 1322(4)(a) of the Corporations Act, as I identified at [49] above, the court's approach in making an under pursuant to s 254E is substantially the same to the approach when considering the making of orders under s 1322(4). In the determination of this application, I proceeded on the basis that the discretionary considerations identified in respect of the extension of time applied with equal force to the making of proposed order 1 pursuant to s 254E, and was satisfied that the circumstances warranted the validation and confirmation of the SPP Issue pursuant to pursuant to s 254E of the Corporations Act.

1. I did not consider that public policy would be undermined by the making of the orders promoted on behalf of Memphasys. I was satisfied on the evidence that Memphasys' conduct did not involve blatant disregard of the provisions of the Corporations Act.
2. In all of the circumstances of this case, I was and am satisfied that the relief sought on behalf of Memphasys should be granted. At the conclusion of the hearing on 10 August 2022 I made orders substantially in the form sought in the originating process. The final form of the orders made are reproduced at sch B to these reasons.
3. As to costs, counsel for Memphasys referred to the view expressed by Hill J Metalicity Ltd at [62], to the effect that where the court is satisfied that there has been no failure of the persons concerned or the company to act honestly under s 1322(6)(a)(ii) of the Corporations Act, it would only be in the most unusual circumstances that an order for costs would be made against the officers of the company.[99] Counsel for Memphasys submitted that in the circumstances of his case, it would be appropriate for there be no order made as to costs.
4. The circumstances which gave rise to the application concern four isolated instances of non‑compliance where there was no failure to act honestly and no deliberate disregard by Memphasys or its officers of the obligations under ch 6D of the Corporations Act or ASIC Class Order 09/425. In such circumstances, I accepted that it was appropriate for there to be no order as to costs, reflected in order 15 of my extracted orders.

Sch A - Orders moved for in the originating process

1. Pursuant to ss 1322(4)(a) and 254E of the Corporations Act, the issue of 9,887,044 ordinary fully paid shares in the Plaintiff on 3 September 2015 is validated and confirmed.
2. Pursuant to s 1322(4)(a) of the Corporations Act, it is declared that any offer for sale of the quoted securities being 9,887,044 ordinary fully paid shares in the Plaintiff during the period after their issue on 3 September 2015 to 27 July 2022 is not invalid by reason of:

(a) The failure to give a notice to the Australian Securities Exchange (ASX) under paragraph 7(f)(ii) of the Australian Securities and Investment Commission (ASIC) Class Order 09/425 within the 24-hour period prior to the offer to issue the shares; and

(b) The seller's consequent failure to comply with s 707(3) of the Corporations Act.

1. Pursuant to section 1322(4)(d) of the Corporations Act, in respect of the 1,333,334 ordinary fully paid shares in the Plaintiff, which were issued on 21 October 2019, the period of five business days referred to in section 708A(6)(a) of the Corporations Act be extended to 2 August 2022.
2. Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that a notice under section 708A(5)(e) of the Corporations Act given to the Australian Securities Exchange Limited (ASX) on 2 August 2022 in respect of the 1,333,334 ordinary fully paid shares in the Plaintiff, which were issued on 21 October 2019, be deemed to take effect as if it had been given to the ASX on 21 October 2019.
3. Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that any offer for sale or sale of the 1,333,334 ordinary fully paid shares in the Plaintiff, which were issued on 21 October 2019, during the period after their issue to the date of the Court orders is not invalid by reason of:

(c) any failure of a notice under section 708A(5)(e) of the Corporations Act to exempt the sellers from the obligation of disclosure under the Corporations Act; and

(d) the sellers' consequent failure to comply with section 707(3) of the Corporations Act.

1. Pursuant to section 1322(4)(d) of the Corporations Act, in respect of the 23,529,412 ordinary fully paid shares in the Plaintiff, which were issued on 30 May 2017, the period of five business days referred to in section 708A(6)(a) of the Corporations Act be extended to 9 June 2017.
2. Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that a notice under section 708A(5)(e) of the Corporations Act given to the Australian Securities Exchange Limited (ASX) on 9 June 2017 in respect of the 23,529,412 ordinary fully paid shares in the Plaintiff, which were issued on 30 May 2017, be deemed to take effect as if it had been given to the ASX on 30 May 2017.
3. Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that any offer for sale or sale of the 23,529,412 ordinary fully paid shares in the Plaintiff, which were issued on 30 May 2017, during the period after their issue to the date of the Court orders is not invalid by reason of:

(a) any failure of a notice under section 708A(5)(e) of the Corporations Act to exempt the sellers from the obligation of disclosure under the Corporations Act; and

(b) the sellers' consequent failure to comply with section 707(3) of the Corporations Act.

1. Pursuant to section 1322(4)(d) of the Corporations Act, in respect of the 500,000 ordinary fully paid shares in the Plaintiff, which were issued on 17 July 2020, the period of five business days referred to in section 708A(6)(a) of the Corporations Act be extended to 19 August 2020.
2. Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that a notice under section 708A(5)(e) of the Corporations Act given to the Australian Securities Exchange Limited (ASX) on 19 August 2020 in respect of the 500,000 ordinary fully paid shares in the Plaintiff, which were issued on 17 July 2020, be deemed to take effect as if it had been given to the ASX on 17 July 2020.
3. Pursuant to section 1322(4)(a) of the Corporations Act, it is declared that any offer for sale or sale of the 500,000 ordinary fully paid shares in the Plaintiff, which were issued on 17 July 2020, during the period after their issue to the date of the Court orders is not invalid by reason of:

(c) any failure of a notice under section 708A(5)(e) of the Corporations Act to exempt the sellers from the obligation of disclosure under the Corporations Act; and

(d) the sellers' consequent failure to comply with section 707(3) of the Corporations Act.

1. A sealed copy of these orders is to be served on the ASIC as soon as reasonably practicable and upon service of these orders on ASIC. ASIC is to include these orders on its database.
2. A copy of these orders is to be given to each person to whom the shares in orders 1 to 11 were issued and as soon as reasonably practicable the plaintiff is to publish an announcement to ASX in which a copy of these orders is included.
3. For a period of 28 days from the date of publication of a copy of this order on the ASX website, any person who claims to have suffered substantial injustice or is likely to suffer substantial injustice by the making of this order has liberty to apply to vary or to discharge the order within that period.
4. There be no order as to costs.
5. Such other orders as this Honourable Court sees fit.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] First affidavit of AW Metcalfe par 11.

[2] First affidavit of AW Metcalfe pars 31 - 34; affidavit of A Coutts, pars 10 - 12.

[3] First affidavit of AW Metcalfe par 30, AWM-10.

[4] First affidavit of AW Metcalfe par 35, AWM-11.

[5] First affidavit of AW Metcalfe par 41, AWM-14.

[12] While Mr Metcalfe's second affidavit was dated 4 August 2022, at the hearing counsel confirmed that the affidavit was deposed to on 9 August 2022: ts 2 - 3 (10 August 2022).

[13] First affidavit of AW Metcalfe par 12.

[15] First affidavit of AW Metcalfe par 1.

[16] First affidavit of AW Metcalfe par 14.

[18] Affidavit of MH Studd par 9, MHS-02.

[19] Affidavit of MH Studd par 10, MHS-03.

[20] Affidavit of MH Studd par 11, MHS-04.

[21] Affidavit of MH Studd pars 11 and 12, MHS-05.

[24] First affidavit of AW Metcalfe par 19, AWM-04.

[25] First affidavit of AW Metcalfe par 20, AWM-05.

[26] First affidavit of AW Metcalfe par 21, AWM-06.

[27] First affidavit of AW Metcalfe pars 22 and 23.

[28] First affidavit of AW Metcalfe par 24, AWM-07.

[29] First affidavit of AW Metcalfe pars 25 and 26.

[30] First affidavit of AW Metcalfe par 27, AWM-08.

[31] First affidavit of AW Metcalfe pars 28 and 29.

[32] First affidavit of AW Metcalfe pars 31 - 34; affidavit of A Coutts, pars 10 - 12.

[33] First affidavit of AW Metcalfe par 30, AWM-10.

[34] First affidavit of AW Metcalfe par 35, AWM-11.

[35] First affidavit of AW Metcalfe par 36, AWM-12.

[36] First affidavit of AW Metcalfe par 39.

[37] First affidavit of AW Metcalfe par 39.

[38] First affidavit of AW Metcalfe par 40; affidavit of A Coutts par 14.

[39] First affidavit of AW Metcalfe par 41, AWM-14.

[40] Affidavit of JAM Moore par 14, JAM-8.

[41] First affidavit of AW Metcalfe par 42, AWM-15, AWM-16; affidavit of JAM Moore pars 4, 9, JAM-2, JAM-5.

[42] First affidavit of AW Metcalfe par 48.

[43] First affidavit of AW Metcalfe par 38.

[46] Corporations Act s 708A(5).

[47] Corporations Act s 707(3). See also Re Golden Gate Petroleum Ltd [2010] FCA 40; (2010) 77 ACSR 17.

[48] ASIC Class Order 09/425, pars 4 and 5. I note that ASIC Class Order 09/425 was subject to a sunset clause and was repealed on 29 August 2019. It has since been remade, with an adjustment to certain conditions, in ASIC Corporations (Share and Interest Purchase Plans) Instrument 2019/547.

[49] Hill J citing Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174 [20]; reproduced in the submissions at par 43.

[50] Weinstock v Beck [2013] HCA 14; (2013) 251 CLR 396 [43], [53] and [64].

[51] Re Wave Capital Ltd [2003] FCA 969; (2003) 47 ACSR 418 [29].

[52] Weinstock v Beck [43], [55] - [56], [60], [64].

[53] Corporations Act s 1322(5).

[54] Affidavit of JAM Moore pars 6 - 8, JAM-4.

[55] Affidavit of JAM Moore par 13, JAM-7.

[56] Re Sprint Energy Ltd [40]; Re Caeneus Minerals Ltd [2018] FCA 560 [38]; Re Classic Minerals Ltd [2018] FCA 2039 [34]. See also submissions par 2.

[57] Corporations Act s 254E(1).

[58] Submissions par 60, citing Re Australian Dairy Farms Ltd [2018] FCA 2056; Re Force Commodities Ltd [18].

[60] As noted by Hill J in Ex Parte Imdex Ltd [2020] WASC 298 [40]; submissions par 61 footnote 27.

[61] Re ICandy Interactive Ltd [54], [106] - [107].

[63] Re ICandy Interactive Ltd [60] - [104].

[69] Second affidavit of AW Metcalfe par 7.

[71] First affidavit of AW Metcalfe par 39.

[73] Re Poseidon Nickel Ltd [2018] FCA 1063; (2018) 129 ACSR 57, 67 [63].

[74] First affidavit of AW Metcalfe par 41, AWM-14.

[77] First affidavit of AW Metcalfe par 38, AWM-13; submissions pars 66 and 67.

[78] Re G8 Communications Ltd [2016] FCA 297; (2016) 112 ACSR 22, 34 [60].

[79] The two-stage test has been consistently applied in this court. See for example Re Pilbara Minerals Ltd [2021] WASC 330 [26]; Re BPM Minerals Ltd [2021] WASC 329 [21]; and Re Matador Mining Ltd [2021] WASC 132 [66] - [67].

[82] First affidavit of AW Metcalfe par 48.

[84] Submissions par 50; affidavit of AW Metcalfe par 41.

[86] First affidavit of AW Metcalfe par 35.

[87] First affidavit of AW Metcalfe pars 43 - 46; second affidavit of AW Metcalfe pars 7 - 8.

[88] Second affidavit of AW Metcalfe par 8, AWM-19.

[90] Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488 [33]; as applied in Whitehawk Ltd [37] and Re Cyprium Ltd [83(b)].

[92] Affidavit of JAM Moore pars 6 - 8, 13, 15, JAM-4, JAM-7.

[93] As was the case in Re Caeneus Minerals Ltd [39] - [40]; Re Classic Minerals Ltd [35] - [36].

[94] As was the case in Re Australian Dairy Farms Ltd [15].