Case: Re Wave Capital Ltd (2003) 47 ACSR 418
Outcome: followed
There is now a considerable body of case law on the nature of the discretion conferred by s 1322. In Re Wave Capital Ltd (2003) 47 ACSR 418 French J indicated at paras 29 and 30 that: "29. ... Like the discretion to validate invalid share issues under s 254E, the power conferred by s 1322 must be exercised having regard to the requirements of the purposes of the Corporations Act and any other relevant statutes whose application may be in issue. It must also be exercised having regard to the interests of all parties affected and the public interest in ensuring compliance with statute law and company constitutions. Evidence of a blatant disregard of the provisions of the Act or the constitution of the company may lead to refusal of relief: Re Onslow Salt Pty Ltd (2003) 198 ALR 344; 45 ACSR 322 and cases there cited. The provision is, however, remedial in character and should be given a liberal construction: Re Insurance Australia Group Ltd [2003] FCA 581 ; (2003) 45 ACSR 702 at 707, [27] per Lindgren J citing Re Australian Koyo Ltd (1984) 8 ACLR 928 at 930 and Elderslie Finance Corp Ltd v Australian Securities Commission (1993) 11 ACSR 157 at 160. 30. There is a constructional question whether the time limits for seeking quotations referred to in ss 723 and 724 are time limits which can be extended by the court under s 1322(4)(d). The power conferred by s 1322(4)(d) is to make an order 'extending the period for doing any act ... under the Act or in relation to a corporation'. Section 723(3) does not in terms impose an obligation to apply for quotation within 7 days after the date of the prospectus. Rather, it conditions the validity of the share issue or transfer in response to an application under the prospectus upon the application for quotation having been made within that time. I am satisfied, however, that the ordinary meaning of the words of s 1322(4)(d) can readily accommodate the extension of the period for making an application for quotation. The same is true in my opinion of the 7 day period referred to in s 724(1)(b). This accords with the approach taken by Lindgren J in Re Insurance Australia Group Ltd [2003] FCA 581 ; (2003) 45 ACSR 702 at 707, [28] where his Honour said: '[28] Courts have had no difficulty in treating s 1322(4)(d) as being available even though the "period for doing any act, matter or thing or instituting or taking any proceeding under [the legislation] or in relation to a corporation" in question did not form part of a provision which in terms imposed an absolute positive obligation to do the act, matter or thing or to institute or take the proceeding.' - citing Elderslie , above: Super John Pty Ltd v Futuris Rural Pty Ltd (1999) 32 CSR 398; 17 ACLC 1242; Pinnacle VRB Ltd v Reliable Power Inc [2001] VSC 262 ; (2001) 39 ACSR 8; 163 FLR 215; 19 ACLC 1450 and Brown v DML Resources Pty Ltd (in liq) (No 6) [2002] NSWSC 6 ; (2002) 40 ACSR 669; 166 FLR 393; 20 ACLC 537." These observations have been repeated and acted upon in some number of decisions of this Court: see for example Re Tony Barlow Australia Ltd (2005) 53 ACSR 1 at pars 20 to 21; Re Biron Capital Ltd (2005) 54 ACSR 548 at par 14 ff. It is important to re-emphasise in this matter that as yet no shares have been issued pursuant to the prospectus. For that reason no question of invalidity as such arises at this stage, see s 254E(1) of the Act. Nonetheless, it is the case that extending time in a manner proposed in this application, that is up to and including 5 December 2007 (the date upon which the quotation application was in fact lodged with the ASX) will have the effect of depriving subscribers of a right that they would otherwise enjoy by virtue of the provisions of s 724(2) of the Act.