RE SPORTSHERO LIMITED; EX PARTE SPORTSHERO LIMITED [2025] WASC 504 (28 November 2025)

1. I have also had the significant benefit of an outline of written submissions, as well as oral submissions from counsel who appeared before me this morning.
2. On the evidence before me, I accept that the application and the affidavits have been served on the Australian Securities and Investments Commission (ASIC).[1] ASIC has informed the Company's solicitors that it neither consents nor opposes the application and does not wish to be heard.

1. The Company is an Australian public company whose securities have been listed on the Australian Securities Exchange (ASX) since June 2008. The Company is a social media company focused on the development of a real-time sports and sports prediction mobile application.[2]
2. As at 3 November 2025, the Company had more than 814 million shares on issue, approximately 1,100 shareholders, and a market capitalisation of approximately $32.5 million.[3]
3. In February 2024, Mr Pearson, who is an experienced company secretary with over four decades of experience as a senior finance and corporate executive across a range of sectors, was appointed as company secretary of the plaintiff.
4. On 30 July 2025, the Company announced a private placement of 71,747,921 fully paid shares to sophisticated and professional investors (Placement). Under the Placement, participants were entitled to one free attaching option for every two shares subscribed.
5. On 5 August 2025, Mr Pearson prepared and released a cleansing notice in relation to the Placement shares (August Cleansing Notice).[4]
6. On 23 September 2025 and 1 October 2025, Mr Pearson issued two separate tranches of shares, following the exercise by some of the Placement participants of options attached to the Placement shares. Specifically:

(a) 1,086,956 shares were issued to JDE Capital Pty Ltd as trustee for JDE Capital (JDE) on 23 September 2025; and

(b) 1,086,956 shares were issued to Trifon Capital Pty Ltd (Trifon) on 1 October 2025

1. Mr Pearson's evidence is that he did not prepare or release a cleansing notice in respect of either of the Share Issues, because he mistakenly believed that the August Cleansing Notice satisfied any disclosure requirements in relation to the shares issued upon exercise of the options.[6] He did not seek any advice from the Company's external legal advisors in forming this belief.
2. On 28 October 2025, Mr Pearson spoke with the Company's solicitors. During this conversation, the issue of the Company's non-compliance with s 708A(5) of the Act was identified.[7]
3. Following this, Mr Pearson immediately advised the Company's chief executive officer of the issue and took advice from the Company's external solicitors as to what was required to rectify the situation. The Company took immediate steps to address the issue by seeking a trading halt, reviewing its previous issues of securities and share register, and commencing these proceedings.[8]
4. On 4 November 2025, the Company issued a cleansing notice in respect of the Share Issues (November Cleansing Notice).[9]
5. Mr Pearson believes that some of shares issued as part of the Share Issues have been traded, as a recent share registry report show that Trifon now only holds only approximately 670,000 shares. The shares issued to JDE have not been traded.[10]
6. The Company drew to my attention the fact that it had issued a third tranche of shares on 27 October 2025, following the exercise of another option in relation to the shares issued as part of the Placement. This share issue is not the subject of the application, as Mr Pearson released a cleansing notice on 28 October 2025, after being informed earlier that day of the Company's non-compliance with its disclosure obligations.[11]

Should an extension of time be granted under s 1322(4)(d)?

1. Pursuant to pt 6D.2 of the Act, disclosure obligations are imposed on companies in relation to the issue and sale of securities. These obligations can be satisfied by the company lodging either a cleansing notice or a prospectus. If disclosure has not been made by the issuer and the securities are on-sold within a period of 12 months, the party to whom the securities are issued may be obliged to make disclosure.
2. The Company seeks relief under s 1322(4) that the period of five business days referred to in s 708A(6)(a) of the Act be extended to 4 November 2025 (being the date that it released its cleansing notice).
3. In considering an application under s 1322(4), the essential principles are well known and can be summarised as follows:[12]

(a) The prescriptive requirements of the wording in s 1322(4) and the pre‑conditions in s 1322(6) of the Act must be satisfied.[13]

(b) Even where this is the case, the court retains a discretion under s 1322(4) of the Act as to whether it will make the orders sought.

(c) The broad power that has been granted to the court under s 1322 of the Act reflects the 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 the public interest.[14]

(d) Limitations to the broad powers in s 1322 should not be readily implied.[15] This is because s 1322 is remedial in character and should be applied broadly.

1. In considering whether to grant an extension of time under s 1322(4)(d) of the Act, the court undertakes a two-stage process. First, the court considers whether it is appropriate to make an order extending the relevant period under the Act, having regard to the circumstances of the case and the general objects of the Act. Second, the court then considers whether any substantial prejudice has been, or is likely to be caused by the making of the proposed order.
2. The court must exercise its power in a manner which is consistent with the general objects and purpose of the relevant statutory provision and must not undermine the reason for the requirement of the Act.
3. The extension of the relevant period may be extended even if it has expired, as is the case in respect of each of the Share Issues.
4. The Company quite properly drew to my attention that this was not the first application of this nature it had brought. On 10 March 2021, I made orders of a similar nature to those sought in this application.[16] As part of that application, I was advised that the Company intended to prepare a checklist to prevent further breaches of its obligations. Mr Pearson's evidence, which I accept, is that the written checklist was not provided to him as part of his handover from the previous company secretary.[17]
5. Notwithstanding this previous application, for the following reasons, I am satisfied that, in the circumstances of this case, it is appropriate to grant the extension of time sought to extend the period of time referred to in s 708A(6)(a) to 4 November 2025.
6. First, the time period of the extension sought is relatively short; approximately five weeks in respect of the first issue and less than a month in respect of the second.
7. Second, on the evidence before me, I accept and find that the failure to lodge the cleansing notices was honest and inadvertent. It arose as a consequence of Mr Pearson's misunderstanding of the law.
8. Third, in the absence of an extension, there are adverse consequences for the Company and its shareholders. Unless orders are made by the court, the Company's shares will continue to be suspended from trading, which will deny shareholders the opportunity to trade their shares.
9. Fourth, there is evidence that some of the shares from at least the second of the Share Issues have been sold. Given that any sales will have occurred without disclosure, this potentially means the transactions are void or voidable, which will create title issues for these parties.
10. Fifth, in facilitating the transaction as originally contemplated, the making of these orders is, in my view, consistent with the conduct of commerce generally. As the courts have made clear, s 1322(4)(d) of the Act should be exercised in a manner which does not unnecessarily stifle corporate and financial activity on technical grounds.
11. Sixth, the Company has brought this application without delay. In this case, the issue was identified just over a week ago and since then, the Company has entered a trading halt, commenced the proceedings, and sought an urgent hearing of its application.
12. Seventh, the additional orders sought by the plaintiff provide for notice to be given to all persons affected and the ability for them to raise any issues with the court.
13. Finally, no party or either regulator appeared at the hearing today to oppose the orders that are sought by the Company.

Will any substantial injustice be caused by the making of the orders?

1. In considering whether there would be any substantial injustice if the orders sought are made, I have considered the classes of persons who may be impacted by the making of these orders. For the following reasons, I do not consider that any substantial injustice would be caused by the making of the orders, and, in fact, consider the reverse to be the case.
2. First, in my view, there would be prejudice to the recipients of the Share Issues if the orders sought are not made, as any future sales of these shares may be void or voidable. Alternatively, the consequence would be that these recipients may be prevented from dealing with their assets for a 12-month period, through no fault of their own.
3. Second, there will be prejudice to the Company in continuing to have concerns over the validity of some of its shares on issue, and the possibility that it may be required to stay involved.
4. Third, in relation to the Company's shareholders more broadly, the Company's failure to comply with the relevant provisions of the Act has caused it to enter into a trading halt. If orders are not made by the court, all shareholders will not have the benefit of an active market for their shares.

Should the declarations sought by the Company be made?

1. The Company seeks two declarations to be made under s 1322(4)(a) of the Act. First, in relation to the Share Issues, a declaration that the November Cleansing Notice is deemed to take effect as if it had been given to the ASX on the date of the issue of their shares. Second, that any offer for sale or sale of securities will not be invalid by reason of the failure to issue a cleansing notice, and the consequent failure to comply with s 707(3) and s 727(1) of the Act.
2. In respect of the first declaration, courts have on a number of previous occasions made similar orders. There is no 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. In Re Imdex Ltd, I discussed whether deeming orders should be made and the circumstances in which I consider it appropriate to make such deeming orders.[18] I do not propose to repeat those comments, as those comments represent my views on the matter.
3. In this case, for the following reasons, I consider it is appropriate to make the deeming order sought by the Company.
4. First, the evidence before me is that some of the shares the subject of the Share Issues have been on-sold. Where shares are on-sold, the deeming order is a corollary of the orders seeking an extension of time.
5. Second, at the time the application came on for hearing, a cleansing notice had been lodged by the Company. For that reason, the order did not concern a future act, but a past act. 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.
6. In relation to the second declaration, I note that:

(a) the proposed validation order is framed in a declaratory form;

(b) the act, matter or thing, is the offer and sale of securities; and

(c) the contravention is the offering of securities for sale or sales without proper disclosure as required under s 707(3) of the Act.

1. I accept that SportsHero's conduct in failing to lodge the cleansing notices required under the Act was inadvertent and not in blatant disregard of its obligations under the Act, notwithstanding the fact this is the second application of this kind. In my view, I do not consider that public policy will be undermined by granting SportsHero the relief sought.[19]

1. In this case, counsel for the Company submits that each of the preconditions in s 1322(6)(a) are satisfied. I accept this submission.
2. The issue of a cleansing notice has been routinely accepted by the courts as being a procedural matter within the terms of s 1322(6)(a)(i) of the Act.
3. In relation to the precondition in s 1322(6)(a)(ii) of the Act, on the evidence before me, I accept and find that the failure by Mr Pearson to lodge cleansing notices in relation to each of the Share Issues was honest and inadvertent. At the date of each of the Share Issues, Mr Pearson was operating on a misunderstanding that the August Cleansing Notice satisfied the Company's disclosure requirements.
4. I also accept that in the circumstances of this case, it would be just and equitable to make the orders sought under s 1322(4).

Should the court exercise its discretion to grant the relief sought?

1. In exercising the court's discretion to grant relief, a relevant factor is the promptness with which the plaintiff has sought to remedy the irregularity once it has been identified. As I have already indicated, remedial steps were taken immediately by the Company once the failure to comply with the relevant provisions of the Act was drawn to Mr Pearson's attention.
2. I accept and find that there is no evidence of any substantial misconduct, serious wrongdoing, or flagrant disregard of the Act or the Company's constitution that would warrant the exercise of the discretion to refuse the relief that is sought.
3. There is nothing in the evidence before me that suggests any minority interest might be oppressed or that any other interest could be affected by the orders that are sought by the Company.
4. I am satisfied that shareholders, ASIC, and the ASX, have been notified of the issue that has arisen and have been given notice of the application. No shareholder or either regulator has sought to be heard or to intervene at the hearing today.
5. Finally, in relation to public policy considerations, it is my view that no public policy will be undermined by making the orders sought by the Company.
6. In these circumstances, I consider it is appropriate to exercise my discretion to grant the relief sought.

1. For these reasons, it is my view it is appropriate to grant the relief in terms of the originating process.
2. In relation to the question of costs, the Company says that the appropriate order is that there be no orders as to costs. Given this is the second contravention of the Act, I have given some consideration as to whether this is the appropriate costs order. In my view, it is. This is because different company secretaries had primary responsibility for the Company's compliance with the Act at the time of each of the applications, and the applications were caused by different issues. In that regard, there is no suggestion that there is a systematic issue in relation to the Company's compliance with its corporate governance obligations.
3. Finally, it is usual in cases such as this to provide an opportunity for shareholders and any persons with a sufficient interest in the matter to raise a complaint or concern about the orders. The usual period is that there be liberty to apply within 28 days, which is the timeframe sought by the Company in its originating process.

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

[1] Affidavit of Ross Pearson filed 5 November 2025 [32(b)], [41], 'RP-18'; Affidavit of Philip Greaney filed 6 November 2025.

[2] Affidavit of Ross Pearson filed 5 November 2025 [8], [11].

[3] Affidavit of Ross Pearson filed 5 November 2025 [12].

[4] Affidavit of Ross Pearson filed 5 November 2025 [17] - [19], 'RP-03', 'RP-04'.

[5] Affidavit of Ross Pearson filed 5 November 2025 [26] - [27], 'RP-09', 'RP-10'.

[6] Affidavit of Ross Pearson filed 5 November 2025 [21].

[7] Affidavit of Ross Pearson filed 5 November 2025 [30] - [31].

[8] Affidavit of Ross Pearson filed 5 November 2025 [32(b)], [35], [37] - [38], 'RP-13' - 'RP-16'.

[9] Affidavit of Ross Pearson filed 5 November 2025 [40], 'RP-17'.

[10] Affidavit of Ross Pearson filed 5 November 2025 [37] - [38], 'RP-15', 'RP-16'.

[11] Affidavit of Ross Pearson filed 5 November 2025 [29].

[12] Re Helios Energy Ltd [2017] FCA 840; (2017) 122 ACSR 174 [20].

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

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

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

[16] Re Sportshero Ltd; Ex Parte Sportshero Ltd [2021] WASC 108.

[17] Affidavit of Ross Pearson filed 5 November 2025 [23]; Affidavit of Thomas Napong Lapping Tonavanik filed 5 November 2025 [14].

[18] Re Imdex Ltd [2020] WASC 298 [55] - [58].

[19] See Re Caeneus Minerals Ltd [2018] FCA 560 [39] - [40]; Re Classic Minerals Ltd [2018] FCA 2039 [35] - [36].