Australia, Aug. 19 -- New South Wales Land and Environment Court issued text of the following judgement on July 18:

1. The plaintiff is a sports and community club that has around 13,000 members and employs around 90 staff. Its annual revenue for the year that ended on 30 June 2024 was around $12.5m. It is an Australian public company and, as such, is subject to various requirements in the Corporations Act 2001 (Cth) concerning the appointment of an auditor and the auditing of the company's financial reports.

2. For the financial year commencing in 2016 and through to March 2025, the plaintiff had a qualified auditor who conducted audits of its annual financial reports. However, it came to the attention of the plaintiff (in the sense that it became actually known) in late March or early April 2025 that the auditor who undertook the audit function from August 2016 to March 2025 was not validly appointed in accordance with the requirements of the Corporations Act.

3. By an originating process filed on 25 June 2025, the plaintiff seeks relief under s 1322(4)(a) of the Corporations Act. That section gives the Court power to declare that things purporting to have been done by a corporation are not invalid by reason of a contravention of the Corporations Act.

4. The matter was heard on 7 July 2025 and was relisted to deal with various matters on 8 July 2025. Mr Mirzai of counsel, who appeared for the plaintiff, provided some further submissions (and supporting documents) on 14 July 2025.

The relevant legislative provisions

5. Section 1322(4) of the Corporations Act 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;...

(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);...

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

6. Section 1322(6) of the Corporations Act relevantly provides:

(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...

(c) in every case - that no substantial injustice has been or is likely to be caused to any person.

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/197e87db4af60491c6029ac1)

Disclaimer: Curated by HT Syndication.