RE VARISCAN MINES LTD; EX PARTE VARISCAN MINES LTD [2026] WASC 139 (20 April 2026)

(a) an affidavit of Mark Edward Pitts, Variscan's company secretary, filed on 9 March 2026;

(b) an affidavit of Stewart James Dixon, Variscan's managing director, filed on 11 March 2026; and

(c) two affidavits of Pia Melanie Drummond, a partner of Variscan's solicitors, filed on 11 and 13 March 2026.

1. I have also had the benefit of a written outline of submissions, as well as brief oral submissions from counsel who appeared before me this morning.
2. I am satisfied that notice of the application has been given to the Australian Securities and Investments Commission (ASIC) and the Australian Securities Exchange (ASX).[1] Both have informed the plaintiff's solicitors that they neither consent nor oppose the orders sought, and do not intend to appear at the hearing today.

1. Variscan is an Australian public company whose securities are listed on the ASX. It is a natural resources company, with a portfolio of base metal interests in Spain, Chile, and Australia.[2] As at 6 March 2026, Variscan had more than 1.2 billion shares on issue, a market capitalisation of approximately $11.2 million, and 1,712 shareholders.[3]
2. On 5 August 2025, Variscan announced its intention to undertake a placement of 500 million shares to sophisticated and professional investors to raise $2.5 million.[4]
3. On 13 August 2025, 117,428,656 shares were issued under tranche 1 of the placement (Shares). An Appendix 2A was lodged on the same day, but Variscan failed to lodge a cleansing notice on that day or within five days.[5]
4. On 4 March 2026, while conducting due diligence for the purposes of the preparation of a cleansing prospectus for Variscan, its solicitors identified that a cleansing notice had not been lodged in respect to the Shares.[6]
5. On being notified of the contravention, Variscan has:

(a) reviewed its share register to determine whether any of the Shares have been on-sold, which has occurred;[7]

(b) reviewed its previous share issues to ensure there were not any other instances of non-compliance;

(c) procured a trading halt and then a voluntary suspension of its securities;[8]

(d) lodged a cleansing notice in respect of the Shares on 9 March 2026 (Cleansing Notice); and

(e) commenced these proceedings.

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

1. Part 6D.2 of the Act imposes disclosure obligations in relation to the issue and sale of securities. In certain circumstances, these obligations can be satisfied by lodging what is commonly referred to as a cleansing notice or cleansing prospectus. If disclosure has not been made by the issuer and securities are on sold within 12 months, the party to whom the securities are issued may be obliged to make disclosure.
2. In this case, Variscan seeks relief under s 1322(4)(d) that the period of five business days referred to in s 708A(6)(a) be extended to 9 March 2026, when the Cleansing Notice was lodged with the ASX.
3. In considering whether to grant an extension of time under s 1322(4)(d), 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 considers whether any substantial prejudice has been or is likely to be caused by the making of the proposed order.[9]
4. The relevant period may be extended even where it has expired.
5. In exercising its power, the court must do so 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.[10]
6. In this case, the relevant period for Variscan to lodge a cleansing notice expired almost seven months ago. Despite the length of the extension sought, for the following reasons I am satisfied it is appropriate to grant an extension of time until 9 March 2026.
7. First, I accept that the failure to lodge a cleansing notice was inadvertent, as a consequence of Mr Pitts not turning his mind to the requirement at the time of the issue of the Shares.
8. Second, in the absence of an extension of time being granted, there are adverse consequences for both Variscan and its shareholders. Unless orders are made by the court, its shares will continue to be suspended from trading which would deny its shareholders the opportunity to trade their shares.
9. Third, shareholders who have purchased shares on market since 20 August 2025 may have purchased some of the Shares. Given that any such sales would have occurred without the necessary disclosure, this potentially means these transactions are void or voidable, which could create a title issue for a number of parties.
10. Fourth, each of the recipients of the issue of the Shares have been notified of the contravention.
11. Fifth, in facilitating the transaction as originally contemplated, the making of the orders sought is consistent with the conduct of commerce generally.[11] Section 1322(4)(d) of the Act should be exercised in a way which does not unnecessarily stifle corporate and financial activity on technical grounds.[12]
12. Sixth, Variscan has brought this application without delay. It first became aware of the error on 4 March 2026, approached the court on 9 March 2026, filed the originating process and relevant papers on 10 March 2026, and requested that the matter be listed for hearing today.
13. Seventh, the additional orders sought by Variscan in its minute of proposed orders provide for notice to be given to all persons affected and for them to have the ability to apply to the court to raise any matters that may be relevant to the making of the orders.
14. Eighth, neither the ASX nor ASIC oppose the application, nor do any shareholders of Variscan.

Should the proposed declarations be made under s 1322(4)(a)?

1. Variscan also seeks a declaration that the Cleansing Notice be deemed to take effect from the date the shares were issued and 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. I note that the prescriptive requirements of s 1322(4)(a) of the Act are satisfied[13] in that:

(a) the proposed orders are framed in a declaratory form;

(b) the act, matter, or thing has been identified, namely the offer and sale of securities; and

(c) the contravention has also been identified, namely the offering of securities for sale or sale without proper disclosure in contravention of s 707(3) or s 727(1) of the Act.

1. Counsel for Variscan submitted that each of the preconditions under s 1322(6)(a) are satisfied. I accept this submission. 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.
2. On the evidence before me, I also accept that Variscan's failure to comply with its disclosure obligations was inadvertent and honest within the meaning of that term in s 1322(6)(a)(ii) of the Act.
3. I also accept that in the circumstances of this case it would be just and equitable to make the orders sought.

Will the orders sought cause any substantial injustice?

1. In considering whether any substantial injustice has been or is likely to be caused 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, I find that there would be prejudice to the ultimate recipients of the share issue if the orders sought are not made, as they will effectively be unable to trade their shares until August 2026.
3. Second, there would be prejudice to Variscan in continuing to have concerns over the validity of some of the trading of its shares, and the possibility that it may be required to continue to monitor the position.
4. Third, Variscan'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, its shareholders more generally will not have the benefit of an active market for their shares.

Is there any discretionary reason to withhold relief?

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. In this case, I accept that remedial steps were taken immediately by Variscan once the failure to comply with the relevant provisions of the Act was identified.
2. I accept and find there is no evidence of any substantial misconduct, serious wrongdoing, or flagrant disregard of the law or Variscan's constitution which would warrant refusal of the relief sought. There is also nothing in the evidence before me to suggest that any minority shareholder might be oppressed or that any other interest might be affected.
3. I am satisfied on the evidence before me that the shareholders who were issued the shares the subject of this application, as well as the ASX and ASIC, have been notified of Variscan's contravention of the Act and given notice of this application and this hearing. No one has given notice that they object to the proposed orders or that they wish to be heard in relation to the application.
4. Finally, in relation to public policy considerations, it is my view that no public policy will be undermined by the making of the orders sought.
5. For these reasons I consider it is appropriate to exercise my discretion to grant the relief sought by the plaintiff.

1. Subject to a minor amendment, I am satisfied it is appropriate to make orders in terms of the minute of proposed orders.

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

[1] Affidavit of Mark Edward Pitts filed 9 March 2026 [37], 'MP-10'.

[2] Affidavit of Mark Edward Pitts filed 9 March 2026 [11].

[3] Affidavit of Mark Edward Pitts filed 9 March 2026 [12].

[4] Affidavit of Mark Edward Pitts filed 9 March 2026 [17].

[5] Affidavit of Mark Edward Pitts filed 9 March 2026 [19] - [20].

[6] Affidavit of Mark Edward Pitts filed 9 March 2026 [24].

[7] Affidavit of Mark Edward Pitts filed 9 March 2026 [30].

[8] Affidavit of Mark Edward Pitts filed 9 March 2026 [31]; Affidavit of Pia Melanie Drummond filed 11 March 2026 [13].

[9] Blaze Asset Pty Ltd v Target Energy Ltd [2009] FCA 698; (2009) 177 FCR 488.

[10] Re Jaxsta Ltd [2018] WASC 390 [43].

[11] Re Jaxsta Ltd; Ex Parte Jaxsta Ltd [50].

[12] Blaze Asset Pty Ltd v Target Energy Ltd [33].

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