FEDERAL COURT OF AUSTRALIA Yeo v Australian Securities and Investments Commission, in the matter of Ji Woo International Education Centre Pty Ltd (deregistered) [2017] FCA 1480 File number: NSD 318 of 2017 Judge: GLEESON J Date of judgment: 8 December 2017 Catchwords: CORPORATIONS – application for reinstatement of registration of company pursuant to s 601AH of the Corporations Act 2001 (Cth) – whether applicant is an aggrieved person within the meaning of s 601AH – whether plaintiff's claim is not plainly hopeless – whether just that the company's registration be reinstated – purpose of proposed reinstatement to seek immediate winding up of company and appointment of liquidator to explore and pursue claims against former directors – whether winding up would be just and equitable within the meaning of s 461(1)(k) of the Corporations Act 2001 (Cth) – application granted Legislation: Corporations Act 2001 (Cth) ss 461(1)(k), 601AH Cases cited: Arnold World Trading Pty Ltd v ACN 133 427 335 Pty Ltd [2010] NSWSC 1369; (2010) 80 ACSR 670 Bing! Software Pty Ltd v Bing Technologies Pty Ltd (No 2) [2008] FCA 1761 Brereton v Australian Securities and Investment Commission [2007] FCA 651 Callegher v Australian Securities and Investments Commission [2007] FCA 482; (2007) 218 FCR 1 Casali v Crisp [2001] NSWSC 860; (2001) 165 FLR 79 CGU Workers Compensation (NSW) Ltd v Rockwall Interiors Pty Ltd [2006] NSWSC 690; (2006) 201 FLR 296 Deputy Commissioner of Taxation v Australian Securities and Investments Commission; re Civic Finance Pty Limited (Deregistered) [2010] FCA 1411; (2010) 81 ATR 456 Deputy Commissioner of Taxation; re James Hardie Australia Finance Pty Ltd (Deregistered) [2008] FCA 1181; (2008) 170 FCR 545 GIS Electrical Pty Ltd v Melsom [2002] WASCA 302; (2002) 43 ACSR 481 Holli Managed Investments Pty Ltd v Australian Securities Commission [1998] FCA 1675; (1998) 90 FCR 341 Inspector General in Bankruptcy v Bradshaw [2006] FCA 22 Melluish v Underwood Development Pty Ltd [2004] NSWSC 429 Newfront Pty Ltd (Deregistered) [2008] SASC 127 Pacanowski, DH v Australian Securities Commission [1995] FCA 336; (1995) 57 FCR 173 Partners v Sampson [2002] NSWSC 383 Pilarinos v Australian Securities & Investments Commission [2006] VSC 301; (2006) 24 ACLC 775 Re Brockweir Pty Ltd [2012] VSC 225 Re ERB International Pty Ltd (deregistered) [2014] NSWSC 200 Re Proserpine Pty Ltd [1980] 1 NSWLR 745 Vukasin v ASIC [2007] NSWSC 1341 WorkCover Authority (NSW) v Picton Truck & Trailer Repairs Pty Ltd [2004] NSWCA 371; (2004) 51 ACSR 102 Date of hearing: 19 and 20 June 2017 Registry: New South Wales Division: General Division National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Category: Catchwords Number of paragraphs: 143 Counsel for the Plaintiff: Mr J Baird Solicitor for the Plaintiff: Koffels Pty Limited Counsel for the Intervener: Mr A Blank Solicitor for the Intervener: David Chang Legal Pty Ltd ORDERS NSD 318 of 2017 IN THE MATTER OF JI WOO INTERNATIONAL EDUCATION CENTRE PTY LTD (DEREGISTERED) BETWEEN: MYOUNGHWA YEO Plaintiff AND: AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Defendant CHI HOON CHOI Intervener JUDGE: GLEESON J DATE OF ORDER: 8 December 2017 THE COURT ORDERS THAT: 1. Pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), the defendant reinstate the registration of Ji Woo International Education Centre Pty Ltd ACN 105 435 201 ("company"). 2. All notification and advertising requirements in relation to an application for the winding up of the company be dispensed with. 3. Upon reinstatement of its registration, the company be wound up pursuant to s 461(k) of the Corporations Act 2001 (Cth). 4. Upon reinstatement of its registration, Guy Baxendale of Baxendale & Associates Pty Ltd, an official liquidator, be appointed liquidator of the company pursuant to s 472 of the Corporations Act 2001 (Cth). 5. Upon reinstatement of its registration, the registered office of the company be Suite 403, Level 4, 88 Phillip Street, Parramatta, NSW 2150. 6. The intervenor, Chi Hoon Choi, file and serve any submissions (comprising no more than three pages) he may wish to make in opposition to an order that he pay the costs of the proceeding, on or before 15 December 2017. 7. The plaintiff file and serve any submissions (comprising no more than three pages) she may wish to make in response to submissions filed pursuant to order 6 above, on or before 22 December 2017. 8. The question of costs be determined on the papers. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. REASONS FOR JUDGMENT GLEESON J: 1 The plaintiff ("Ms Yeo") seeks orders that the defendant ("ASIC") reinstate the registration of Ji Woo International Education Centre Pty Ltd (deregistered) ("company" or "Ji Woo") pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) ("Act"), that the company be wound up and that a liquidator be appointed to the company. 2 Ms Yeo is a former shareholder and a former employee of Ji Woo. 3 Ji Woo was incorporated as a company in 2003 and, at least prior to late 2013, carried on an educational consulting business, providing referral services for overseas students who wished to study in Australia, and deriving its revenue by way of commission from the educational institutions to which it referred students. By 2013, the business traded under the name "IBN Education" (and, perhaps, other names). The company was incorporated by Bo Hyun Lee ("Mr Lee"), who was a director of Ji Woo between about 7 July 2003 and 26 September 2013. 4 The company was deregistered on 9 November 2016 pursuant to s 601AA of the Act on the application of the intervenor ("Mr Choi"). Mr Choi was the sole director of Ji Woo from about 26 September 2013. By s 601AA(2), a director may apply for a company's deregistration only if certain requirements are satisfied, including that all the members of the company agree to the deregistration and the company's assets are worth less than $1,000. 5 At all relevant times, there were ten issued shares in the company. According to an ASIC Current & Historical Organisation Extract, immediately prior to the company's deregistration, four of the shares were held by Mr Choi, three shares were held by Ms Yeo and three shares were held by Hye Young Han ("Ms Han"). Ms Han is the de facto partner of Mr Lee. 6 Mr Choi acquired one share in the company in about March 2011. On about 30 November 2012, Mr Lee submitted a change to company details form to ASIC, recording that on 28 November 2012 Mr Choi acquired a further three shares and each of Ms Han and Ms Yeo acquired three shares. The form records that the previous owner of the nine shares was Je Hun Hwang, a former director of Ji Woo, who has provided $30,000 on behalf of Ms Yeo to fund the proposed liquidator. 7 Ms Yeo received payments in respect of her shareholding on five dates between February 2013 and 10 July 2013. The payments totalled approximately $33,000. 8 Ms Yeo contends that the requirements of s 601AA(2) were not satisfied when the application for deregistration was made. In particular, Ms Yeo contends that she did not agree to the deregistration. She also contends that, immediately prior to its deregistration, the company had substantial assets in the form of causes of action against Mr Choi for breach of his fiduciary duties to the company and a claim to recover assets allegedly held on trust for the company by IBN Global Pty Ltd, a company owned by Mr Choi, Ms Han and Mr Lee and of which Mr Choi and Ms Han are directors. The latter contentions arise out of allegations that, in 2014, Ji Woo transferred its assets, principally its business name "IBN Education" and agency agreements with educational institutions in Australia, to IBN Global Pty Ltd for no consideration, to the detriment of Ji Woo (and Ms Yeo as a shareholder of Ji Woo). 9 In 2014 and 2015, Mr Yeo continued to work for the business called "IBN Education" although the precise identity of her employer is in dispute. In November 2015, her employment was terminated for reasons that are disputed. Legal Framework 10 Section 601AH(2) provides: (2) The Court may make an order that ASIC reinstate the registration of a company if: (a) an application for reinstatement is made to the Court by: (i) a person aggrieved by the deregistration; or (ii) a former liquidator of the company; and (b) the Court is satisfied that it is just that the company's registration be reinstated. Approach to application for reinstatement 11 In Deputy Commissioner of Taxation; re James Hardie Australia Finance Pty Ltd (Deregistered) [2008] FCA 1181; (2008) 170 FCR 545; ("James Hardie"), Lindgren J said (at [13]): An application under s 601AH for reinstatement of the registration of a company may be made by "a person aggrieved by the deregistration". According to s 601AH(2)(b), it is a condition of the enlivening of the Court's power to order reinstatement that the Court be "satisfied that it is just that the company's registration be reinstated". The Court has a residual discretion whether to make an order. These three matters will need to be considered. 12 On an application for reinstatement, the Court is concerned with the justice of reinstating the company, not the justice of any proceedings which it is proposed that the reinstated company might institute: Re ERB International Pty Ltd (deregistered) [2014] NSWSC 200 ("ERB International") at [10]. 13 In Deputy Commissioner of Taxation v Australian Securities and Investments Commission; re Civic Finance Pty Limited (Deregistered) [2010] FCA 1411; (2010) 81 ATR 456 at [14], Jagot J noted that it is "often not appropriate in an application for reinstatement to go into factual matters which may be the subject of dispute". At [16], her Honour noted that it was not the case that the Deputy Commissioner of Taxation was denied status as a person aggrieved because he had not shown any possibility of benefit from reinstatement of the relevant complaints. Her Honour accepted, in effect, that such a requirement would involve an attempt to second guess the outcome of a prospective winding up, including the liquidators' investigation of the relevant companies' affairs. Similarly in Pilarinos v Australian Securities & Investments Commission [2006] VSC 301; (2006) 24 ACLC 775 at [22], Gillard J rejected a submission that the Court should resolve disputed factual questions concerning whether it would futile to reinstate the relevant company. Person aggrieved 14 In Re Brockweir Pty Ltd [2012] VSC 225, Sifris J observed: In order to assess whether the plaintiffs are aggrieved parties, it is not necessary to embark upon a detailed and exhaustive analysis of the facts and the law underpinning the claim. The threshold is low. The assessment needs to be dealt with in a summary way. As long as the claim is not plainly hopeless and bound to fail, it should, subject to other relevant matters, proceed. 15 In Partners v Sampson [2002] NSWSC 383 at [8], Barrett J stated that "[t]he nature of the interest sufficient to make someone a person aggrieved and to distinguish them from an officious bystander or mere busybody is very much a matter to be judged in context." 16 The expression "a person aggrieved by the deregistration" should not be narrowly construed: James Hardie at [14]; GIS Electrical Pty Ltd v Melsom [2002] WASCA 302; (2002) 43 ACSR 481; Re Proserpine Pty Ltd [1980] 1 NSWLR 745 at [15]; Pacanowski, DH v Australian Securities Commission [1995] FCA 336; (1995) 57 FCR 173 at 175. 17 However, a "person aggrieved" is not someone who is merely dissatisfied by an event. A person aggrieved must be a person who has been damaged or injured in a legal sense: Callegher v Australian Securities and Investments Commission [2007] FCA 482; (2007) 218 FCR 1 at [50] ("Callegher"); Newfront Pty Ltd (Deregistered) [2008] SASC 127 at [10] ("Newfront"). If a shareholder can show that she might benefit from reinstatement by sharing in the assets of the company or obtaining a dividend of some kind, that may make the shareholder a person aggrieved: Callegher at [53] citing Casali v Crisp [2001] NSWSC 860; (2001) 165 FLR 79 ("Casali"). 18 In Arnold World Trading Pty Ltd v ACN 133 427 335 Pty Ltd [2010] NSWSC 1369; (2010) 80 ACSR 670, Barrett J stated (at [43]): The question whether an applicant under s 601AH(2) is a "person aggrieved by the deregistration" is considered by reference to legal rights and legal interests. It must be seen that the applicant has a genuine grievance that the dissolution of the company affected his or her interests because, for example, a right of some value or potential value has gone out of existence: Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316; (2000) 174 ALR 688 (at [24]–[26]). Under analogous English legislation, the applicant was expected to have "an interest of a proprietary or pecuniary nature in resuscitating the company": Re Wood & Martin (Bricklaying Contractors) Ltd [1971] 1 WLR 293; and see Re GA & RJ Elliott Pty Ltd (1978) 3 ACLR 523. 19 In Brereton v Australian Securities and Investment Commission [2007] FCA 651 at [2], Finkelstein J stated: The expression "person aggrieved", which is of wide import, has been interpreted to mean a person who has a genuine grievance because of prejudice suffered to his interest from the act complained of: Attorney-General of Gambia v N'Jie [1961] AC 617, 634. His interest must be a real and direct interest in the act or in the consequences of the act and he must be dissatisfied with it: Day v Hunter [1964] VR 845, 847, 849. The expression does not include a mere busy-body who is interfering in things that do not concern him: Deputy Commissioner of Taxation v Lanstel Pty Ltd (1996) 2 ACSR 314, 315-316. On the other hand, a person who is deprived of something or is adversely affected by the act is a "person aggrieved": Re Formcrete Services Pty Ltd (1976) 2 ACLR 46, 48. 20 At [4], Finkelstein J expressed the view that a shareholder of a solvent company who stands to lose at least their capital (subject to the possibility of getting some back under s 601AE(2)) has a sufficient basis for standing. That view was doubted by Austin J in Vukasin v ASIC [2007] NSWSC 1341 at [11] and [12], who said: [11] In Brereton v Australian Securities and Investments Commission [2007] FCA 651 Finkelstein J held that a shareholder of a solvent company who stands to lose his or her capital has a sufficient basis for standing (at [4]), and he expressed the opinion that there was a strong argument in favour of holding that a former director of a solvent company would also have standing (at [5]), though he found it unnecessary to resolve that question. The authorities to which his Honour's attention was drawn on this point were decided in the 1980s, and his attention does not appear to have been drawn to more recent cases (see Butterworths' Australian Corporations Law: Principles and Practice (looseleaf), Vol 2, [5.6.0 555], note 20) including the decision of Young CJ in Eq in Casali v Crisp, which has been followed in this and other courts (Euphron Pty Ltd (in liq) v Hunter Valley Piggery Pty Ltd [2003] NSWSC 543 at [12]; Melluish v Underwood Development Pty Ltd [2004] NSWSC 429 at [6]; Warton v Harris (2005) 56 ACSR 122 at [4]; Jones v 3R Gas Pty Ltd (2006) 24 ACLC 450 at [8]; Piccoli Tesori Pty Ltd (Deregistered); Ex parte Bertuol (2006) 151 FCR 109 at [23]; Herbert v Nozala Pty Ltd [2006] NSWSC 1437 at [38]; Callegher v Australian Securities and Investments Commission (2007) 25 ACLC 438 at [50] and [53]; Middleton Nominees Pty Ltd v Westpac Banking Corp [2007] FCA 845 at [6]). [12] It therefore seems to me doubtful that Brereton's case reflects the law on this point. It may be that Finkelstein J would not disagree with the proposition that the mere fact that the person is a shareholder is insufficient to establish standing, but additional facts showing that the company was solvent at the time of deregistration and that the shareholder stands to lose his or her capital unless deregistration occurs would tend to prove the existence of a factual interest sufficient to satisfy the statutory requirement. However, in the present case I did not find it necessary to reach a concluded view as to whether a shareholder/director has standing per se, because on any view of the law Mr Vukasin clearly had a sufficient factual interest to justify the conclusion that he is a person aggrieved by the Company's deregistration. 21 Mr Baird, counsel for Ms Yeo, accepted that a shareholder does not, by that status alone, have the character of a "person aggrieved by the deregistration": cf. Melluish v Underwood Development Pty Ltd [2004] NSWSC 429 at [6] ("Melluish"). In Melluish, Barrett J held that a shareholder needs to show some particular prejudice, such as also possessing the status of creditor or (citing Casali at [27]) "that there might well be a surplus of assets if the company was reinstated and certain events occurred". 22 Mr Baird argued that this is a case in which there might well be a surplus of assets if the company is reinstated. Whether reinstatement is just 23 In ERB International at [5], Brereton J said: The provision that the court "may" order reinstatement if satisfied that it is "just" to do so has been said to confer a broad discretionary judgment on the Court. Relevant considerations include the circumstances in which the company was de-registered, the purpose in seeking its re-instatement, whether any person is likely to be prejudiced by reinstatement, and the public interest generally [Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316, [27]-[28]; (2000) 174 ALR 688, 693; 34 ACSR 232; Promnitz v ASIC [2004] FCA 22, [19]-[20]; JP Morgan Portfolio Services Ltd v Deloitte Touche Tohmatsu [2008] FCA 433, [4]; (2008) 167 FCR 212; (2008) 65 ACSR 636; AMP General Insurance Ltd v Victorian Workcover Authority [2006] VSCA 236]. 24 At [8] and [9], Brereton J referred to two cases in which reinstatement was refused, saying: [8] In Herbert v Nozala Pty Ltd [2006] NSWSC 1437, White J declined to reinstate a company where his Honour was not satisfied that the applicant was a "person aggrieved", as the claim upon which his standing depended was "speculative at best" and he would be estopped from asserting that he was the beneficial owner of the shares of which he was the legal owner. Alternatively, his Honour was not satisfied that reinstatement would be just, as even if not so estopped, the applicant had allowed the potential respondents to conduct the company's affairs for eleven years without making any claim that might alert them to the possibility that he might seek to claim a benefit from their endeavours, then failed to object to the deregistration, and then delayed in making an application to the court, during which delay a substantial number of company documents were routinely destroyed. It is notable that this was a case in which the person claiming to be aggrieved and seeking reinstatement was found to have engaged in conduct which created detriment to the other interested parties. It affords a good illustration of where reinstatement would be unjust. [9] In Blazai Pty Ltd v Gateway Development (St Marys) Pty Ltd [2009] NSWSC 800, Tamberlin AJ refused to reinstate a company for "several interrelated reasons", being first, the lengthy delay of the plaintiff in pursuing its alleged right, secondly the contingent and speculative nature of the proceeding proposed to be brought against the company's director, and thirdly the prejudice and difficulties likely to be faced by the director having regard to the lapse of time. As to the second, his Honour was of the opinion "on the material before me that the case [proposed to be brought against the director] is not reasonably arguable". However, I do not think his Honour was articulating a test, but was expressing one of several relevant considerations which, together, resulted in a conclusion that it would not be "just" to reinstate the company – again, in circumstances where delay by the applicant had created detriment to the respondent should the company be reinstated. Discretion 25 In Newfront, at [9], Gray J stated that, if positive findings are made on the first two matters, then in the ordinary course an order for reinstatement will be made, citing CGU Workers Compensation (NSW) Ltd v Rockwall Interiors Pty Ltd [2006] NSWSC 690; (2006) 201 FLR 296 at [6], where Barrett J in turn cited WorkCover Authority (NSW) v Picton Truck & Trailer Repairs Pty Ltd [2004] NSWCA 371; (2004) 51 ACSR 102. Winding up 26 By s 462(2)(c) of the Act, a contributory has standing to apply for an order to wind up a company on a ground provided for by s 461. By s 461(1)(k), the Court may order the winding up of a company if the Court "is of opinion that it is just and equitable that the company be wound up". Grounds for reinstatement application 27 Ms Yeo contends that she was a shareholder of the company at the time of the application for deregistration and that she did not agree to the deregistration. Ms Yeo contends that she is a person aggrieved by the deregistration because: (1) it occurred without her consent, and Mr Choi did not have a basis for being satisfied that she agreed to the deregistration contrary to the requirement in s 601AA(2); and (2) by the registration, Ms Yeo was deprived of her valuable shareholding in the company. 28 Mr Baird acknowledged that, at the time of deregistration, the company was not carrying on a business and had no value but for the events that are the subject of Ms Yeo's complaint. Her allegation is that, in late 2013 or early 2014, the company had a valuable business which was transferred to IBN Global Pty Ltd for no consideration and without the consent of the company's shareholders (or, at least, without the consent of Ms Yeo). Mr Baird contended that there are only two documents recording the transfer of the business, being two ASIC business name extracts showing the cessation of the company's ownership of the business name "IBN Education" and the commencement of IBN Global Pty Ltd's ownership of that business name. 29 On Ms Yeo's case, prior to the transfer of its business, the company had principally earned its income from commissions, being a percentage of yearly tuition fees paid for each student introduced to an educational institution. The commissions were payable in accordance with agency agreements made between the company and various educational institutions. According to Ms Yeo, from 2014 onwards, all of the contracts that the company had made were effectively transferred or rewritten in the name of IBN Global Pty Ltd. 30 The application for reinstatement is neither opposed nor consented to by ASIC. 31 Mr Choi opposed Ms Yeo's application, arguing that: (1) Ms Yeo is not a person aggrieved by the deregistration; and (2) the Court should not be satisfied that it is just that the company's registration be reinstated. 32 Mr Choi further contended that, in the event that Ji Woo's registration is reinstated, the Court should not appoint a liquidator. 33 As articulated in Mr Choi's written submissions, Mr Choi's case was: (1) Ms Yeo agreed to relinquish all of her rights as a shareholder of Ji Woo after she was found to have embezzled money from the company in August 2013. At that time, her right to dividends and other entitlements to her shares were denied, although she retained her basic salary as an employee. Ms Yeo agreed to relinquish all her rights and entitlements to her company shares and was required to repay the amount taken. The company in turn allowed her to remain on as a paid employee and "forgave its rights" to make any further claim on the Ms Yeo. (2) Following the discovery that Ms Yeo had embezzled money from the company, an agreement was made between the shareholders of the company and Mr Lee at the company's annual general meeting ("AGM") held on 2 December 2013, that: (a) The company would cease trading in January 2014 and IBN Global Pty Ltd would commence trading. Ms Yeo was given the task of transferring the IBN Education business name from Ji Woo to IBN Global Pty Ltd in Korea, which she did. Ms Yeo's signature appears on the transfer document. (b) Mr Choi would take over from Ms Yeo the management of a Korean Bank account for IBN Global Pty Ltd. (c) Ms Yeo formally renounced her rights to and arising from her shareholding in the company. (3) The application is premature and/or it would be unjust to order reinstatement as it is unclear what rights Ms Yeo will seek to assert and it has not been demonstrated whether she has exhausted other potential remedies. (4) It would be unjust to reinstate and Ms Yeo cannot claim to be a person aggrieved when she, through her actions, caused detriment to the company, so that it could no longer function and, hence, was deregistered. 34 On Mr Choi's behalf, it was also contended that Ms Yeo's application was not genuine. The fact that the Mr Hwang had provided the funds for the proposed liquidator was suggested to indicate that the application was being "driven" by Mr Hwang, and was the consequence or part of a "long feud" between Mr Hwang and Mr Lee. Evidence 35 Ms Yeo gave evidence in support of her application and was cross-examined by Mr Blank, counsel for Mr Choi. In addition, Ms Yeo read an affidavit made by Ms Yuri Choi. Ms Yuri Choi was cross-examined by video link from Korea. 36 In support of his contentions, Mr Choi gave evidence and was cross-examined by Mr Baird. In addition, Mr Choi relied upon evidence from Mr Lee and Ms Han, each of whom was cross-examined. Criminal proceeding in Korea against Ms Yeo 37 As explained in more detail below, in about 2016, Ms Yeo was charged with criminal offences in Korea in relation to misappropriations and falsification of documents in 2014 and 2015. At the time of the hearing in this Court, the criminal proceeding concerning those charges had not concluded. Objection to evidence of Min Hur, solicitor for Ms Yeo 38 By an affidavit dated 15 June 2017, Min Hur gave evidence of the content of a Korean language letter from Ms Yeo's Korean attorney, dated 7 June 2017. The letter purports to report on criminal proceedings against Ms Yeo in Korea and to express a view as to the likely outcome of the proceedings. Mr Choi's counsel, Mr Blank, objected to the evidence as inadmissible opinion and inadmissible hearsay evidence. I reject the evidence on both grounds. Application for leave to re-open case 39 After the hearing, Mr Choi sought leave to re-open to adduce about events in the criminal proceedings against Ms Yeo, including Ms Yeo's submission of a guilty plea on 13 July 2017 and the Court's sentencing decision in August 2017. The evidence was that on 17 August 2017, Ms Yeo was sentenced to ten months imprisonment for embezzlement; executing falsified private documents; and alteration of a private document. 40 On an application for leave to re-open, the primary consideration is whether re-opening will serve the interests of justice. Fresh evidence is a recognised class of case in which a court may grant leave to re-open: Inspector General in Bankruptcy v Bradshaw [2006] FCA 22 at [24]. In Bing! Software Pty Ltd v Bing Technologies Pty Ltd (No 2) [2008] FCA 1761 at [14] and [15], Collier J stated: [14] With respect to fresh evidence, Muirhead J held in Murray v Figge 4 ALR 612 that fresh evidence should be admitted only when: (a) it is so material that the interests of justice require it; (b) the evidence if believed would most probably affect the result; (c) the evidence could not by reasonable diligence have been discovered before; (d) inadvertence was established; and (e) no prejudice was suffered by the other party by reason of its introduction at a late point of time. [15] To that list can be added: • it is necessary that the evidence sought to be adduced is relevant within the meaning of s 56 Evidence Act 1995 (Cth) and is of probative value (cf Australian Securities and Investments Commission v Rich [2006] NSWSC 826 at [18]); and • the court must be conscious of the principle of finality of litigation in deciding whether to exercise discretion to allow evidence after the conclusion of the trial (Bradshaw [2006] FCA 22 at [25]). 41 On behalf of Mr Choi, Mr Blank submitted that the fresh evidence is relevant because: (1) There was conflicting evidence about the reason for Ms Yeo's dismissal from her employment with "IBN Education". On Mr Choi's evidence, the reason was her misappropriation of funds from the business. On Ms Yeo's evidence, the reason was a dispute over payments of company expenses to the wrong account. (2) It corrected the evidence of Min Hur, referred to above. (3) Having been informed of the criminal charges against Ms Yeo, the Court should take into account the outcome of the charges. (4) A liquidator would be less likely to bring any proceedings against Mr Choi or IBN Global Pty Ltd because of the likely increased costs of obtaining instructions from Ms Yeo while she is completing her custodial sentence and because of the inevitable damage to Ms Yeo's credit resulting from her custodial sentence. 42 I accept that the fresh evidence is relevant to an assessment of Ms Yeo's credit, particularly concerning her account of her dismissal from "IBN Education". Although I have some doubts about the materiality of the evidence, it is in narrow compass and I will grant leave to Mr Choi to re-open his case to adduce the fresh evidence, which is contained in the two affidavits of Mr Lee sworn on 2 and 22 August 2017. Assessment of evidence 43 The evidence of Ms Yeo and Ms Yuri Choi was diametrically opposed to that of Mr Choi, Mr Lee and Ms Han in important respects. The witnesses (except Ms Yuri Choi) gave evidence, to different extents, with the assistance of a Korean interpreter. 44 Ms Yuri Choi worked at the office of "IBN Education" in Gangnam, Seoul in December 2013. Her role in the office included receiving offers from education institutions for students. Ms Choi's evidence concerned whether she attended an AGM of Ji Woo at the Gangnam office on 2 December 2013. Ms Choi said there was no such meeting. In cross-examination, she agreed that IBN had laid criminal charges against her, including for business obstruction. Ms Choi said that she did not have to appear in court in relation to the charges and that the "prosecutor already confirmed that I have no suspicion about it". Ms Choi was tested on her recollection of the events of 2 December 2013. She maintained that there was no meeting. Ms Choi presented as a reliable and credible witness. 45 Ms Yeo's evidence must be assessed in the light of documents, described below, in which she admitted to dishonesty including misappropriation of about $40,000. Ms Yeo sought to explain away some those admissions and I had difficulty in understanding precisely her position. Since the hearing, she pleaded guilty to misappropriation and other offences and is now serving a custodial sentence for those crimes. In those circumstances, I approach her evidence with caution even though, in the witness box, Ms Yeo appeared generally reliable and truthful. 46 In contrast, Mr Choi appeared to be argumentative and reluctant to accept basic, uncontroversial propositions. For example, when Mr Baird asked Mr Choi to agree that no notice of an AGM was sent to shareholders in connection with the disputed 2 December 2013 meeting, Mr Choi gave three successive non-responsive answers. When asked to agree that Ms Yeo did not give Mr Choi any document signed by her relinquishing her shares in Ji Woo, Mr Choi gave the following argumentative response: Actually after her embezzlement was discovered in August 2013 ever since that Ms Yeo was just receiving just basic salary as an employee but never received anything from the share. That means that she already acknowledged that her share was relinquished. So it was already in August, and in December we confirm that fact again, and also she never talked about her shares. 47 Mr Lee's evidence in cross-examination was confusing in important respects. For example, he said that the 2 December 2013 meeting followed embezzlements by Ms Yeo: in August 2013 and a "second" embezzlement in November 2013. Mr Lee used the word "second" to describe the alleged November 2013 embezzlement on four occasions in answer to a question about why he had attended the alleged 2 December 2013 meeting, and then said "[t]his is the second embezzlement" in answer to the following question. However, there was no affidavit evidence concerning a November 2013 embezzlement and the reference to such an incident was not explained by Mr Lee's other evidence (although Ms Han referred to a second embezzlement and a "big embezzlement. Second time" in her cross-examination and also see [80] below). Mr Lee also reiterated his affidavit evidence that the August 2013 embezzlement was for an amount of $150,000, but said that Ji Woo was earning monthly commissions in 2013 of less than $10,000 per month. When questioned about this apparent discrepancy, Mr Lee said that the embezzlement started in 2010. This suggests that there were several embezzlements, rather than only two. None of these serious allegations were substantiated by any documentation. 48 Ms Han's evidence in cross-examination was broadly consistent with her affidavit evidence. She stated that Ms Yuri Choi attended the 2 December 2013 meeting, and, as noted above, she referred to a "second embezzlement" by Ms Yeo. It was plain that Ms Han bore ill feelings towards Ms Yeo: she twice volunteered that she had been "really furious" with Ms Yeo after the alleged "first embezzlement". Factual findings Ji Woo's business 49 As noted earlier, Ji Woo had been carrying on an educational consulting business for several years prior to 2012. According to Mr Lee, in January 2006, the name of the business changed from "Ji Woo Education" to "Uhakstation". 50 There is no dispute that Ji Woo was actively carrying on its business during 2012 and 2013. 51 According to Ms Han, in the context of a dispute involving Mr Hwang, in late November 2012, Mr Lee proposed that the company be closed in a year's time and that a new company be opened. As I understood the evidence, the effect of the proposal was that Ji Woo would cease to carry on its business and the business would commence to be operated by the new company. Ms Han's evidence does not refer to any discussion around this time about the ownership of the new company said to have been proposed by Mr Lee. 52 Ms Han's evidence about the proposal that the company be closed in a year's time is not corroborated by contemporaneous records, or by Mr Choi or Mr Lee, or by any subsequent steps to prepare for the closure of the company. It is not plausible and I do not accept that there was such a proposal in November 2012. 53 According to Ms Yeo's evidence, which was unchallenged on this point, the name "IBN Education" was registered in her name in Korea from around August 2012. Annexed to her reply affidavit was a letter from Mr Lee addressed to "Dear Manager" and dated 3 December 2012 which stated that Ji Woo had changed its trading name to "IBN Education" from "Uhakstation" commencing 1 December 2012. On 5 December 2012, the name "IBN Education" was registered by ASIC, with the holder being Ji Woo. From around this time, the company conducted its business under the name "IBN Education" instead of, or perhaps as well as, the name "Uhakstation". 54 On 14 January 2013, a bank account was opened in the name of Ms Yeo and IBN Education with the Shinhan Bank in South Korea. The company's business, or a part of it, was transacted through this account. The company also operated a bank account in Australia, held with the ANZ Bank. 55 Ms Yeo's evidence included written contracts pursuant to which, she claimed, Ji Woo conducted its business in 2012 and 2013. The contracts cover various periods and refer to differently named parties who contracted with various Australian educational institutions. There are examples of contracts which appear to cover periods after the end of 2013 including: (1) a contract between Kangan Institute and Ji Woo International Education Centre trading as IBN Education for the period 31 May 2013 to 30 May 2014; and (2) several contracts for periods commencing prior to November 2012 between educational institutions and Uhak Station or Ji Woo trading as Uhak Station. 56 There is a dispute about which contracts were contracts pursuant to which Ji Woo received commissions after November 2012, however, as noted above, there is no dispute that Ji Woo was conducting a business of educational consulting after that time, using the name "IBN Education". Ms Yeo disputed the proposition that contracts referring to Uhak Station or Jason Hwang were not contracts pursuant to which Ji Woo operated its business. It is not necessary to resolve that issue on this application. 57 Ms Han gave evidence that Ji Woo conducted an education exhibition about three or four times a year in Korea, inviting education providers to recruit Korean students for Australian education providers. Exhibitions took place on 31 August 2013, 1 September 2013 and 1 November 2013. A list of offices of "IBN Education" as at August 2013, set out in an "Austrade & IBN Exhibition Participation Form" shows that "IBN Education" had offices in Sydney, Brisbane, Gangnam (Seoul), Sinchon (Seoul) and Busan. 58 On this evidence, I accept that there is a reasonable basis for Ms Yeo's contention that Ji Woo owned a valuable business trading under the name "IBN Education" in late 2013. Incorporation of IBN Global Pty Ltd and commencement of its business 59 IBN Global Pty Ltd was registered as a company on 2 October 2013. The directors, appointed on 2 October 2013, are Mr Choi and Ms Han. There are 100 issued shares: 80 owned by Mr Lee, 10 owned by Mr Choi and 10 owned by Ms Han. It was not clear when Mr Lee acquired his shares. 60 According to ASIC records, IBN Global Pty Ltd registered the business name "IBN Education" on 12 December 2013. 61 IBN Global Pty Ltd started operating from January 2014. 62 There is a business registration certificate dated 26 March 2014, which appears to record the registration of the name "IBN Education", by IBN Global Pty Ltd, with the Chief of Jongro Taxation Office in Korea. Ms Yeo certified that the certificate was a true copy of the original document on 27 March 2014. 63 There was no evidence that Ms Yeo signed an employment contract with IBN Global Pty Ltd. Mr Lee's 3 December 2012 letter had stated that Ji Woo "was used to make out contract with you". There was no evidence about who paid Ms Yeo's salary after IBN Global Pty Ltd commenced to trade. In her reply affidavit, Ms Yeo denied that she had been employed by IBN Global Pty Ltd. Circumstances in which Ji Woo's business ceased to trade 64 On 26 September 2013, Mr Lee resigned as a director of Ji Woo. 65 According to ASIC records, Ji Woo's holding of the business name "IBN Education" was cancelled on 12 January 2014. Both Mr Choi and Ms Han asserted, in their respective affidavits, that the "IBN Education" business name was "transferred" from Ji Woo to IBN Global Pty Ltd on or about 13 December 2013. Mr Choi agreed that no consideration was paid by IBN Global to take over the business name from Ji Woo. Alleged theft of $150,000 in August 2013 66 The events of August 2013 are relevant to Mr Choi's claim that Ms Yeo relinquished her shareholding in the company. 67 Mr Lee, Ms Han and Mr Choi gave evidence about an alleged discovery of serious misconduct by Ms Yeo including, allegedly, embezzlement of a tuition fee and lodgement of a forged student visa application. That evidence was denied by Ms Yeo. 68 According to Mr Lee's evidence, the amount of the embezzlement that he discovered in August 2013 was $150,000. Mr Lee gave evidence that he received a telephone call from a parent, whose name he did not recall, about a student's tuition fee for which no receipt had been given. It is strange that the student was not identified in the light of Ms Han's evidence that the complaint was investigated and Mr Choi's subsequent claim that Ji Woo was required to give compensation for amounts allegedly embezzled by Ms Yeo. Mr Choi's evidence referred to six students who were allegedly affected by Ms Yeo's misconduct in 2013, but the compensation allegedly paid in relation to those students totals approximately $58,000, not $150,000. 69 According to Ms Han's version of events, an investigation showed that the student was enrolled at a school known as Le Cordon Bleu. Mr Choi's evidence refers to one student enrolled in Le Cordon Bleu in 2013, to whom he alleges the company paid compensation of $11,499.00. 70 According to Ms Han, there was at least a suspicion of other instances of similar misconduct by Ms Yeo around that time. She recounted a conversation in which she referred to sorting out "all this messy situation between students and education providers" and in which Mr Lee suggested that he would "find out whether Yeo made further embezzlement". Ms Han also recounted another conversation in which Mr Lee allegedly told Ms Yeo that she had "hugely damaged our company in many ways". 71 Mr Choi also claims to have said to Mr Lee around this time, concerning Ms Yeo's continued employment with Ji Woo: We should fire her. We should send her to jail. What are you doing? This will damage Ji Woo's reputation. 72 However, there is no documentary evidence of the embezzlement, the forgery, any complaint or complaints by students (or their parents) or any impact upon the reputation of Ji Woo or "IBN Education". I infer that, ultimately, there was no concern about the reputation of "IBN Education" because IBN Global Pty Ltd commenced to trade under that name in 2014. 73 Ms Yeo was cross-examined on this issue, but her evidence was not entirely clear. As I understood it, she accepted that she was accused of taking money from the company in August 2013 following a report that she made about lack of funds in the company's account to pay operating expenses and staff wages. According to her, "it turned out that I was innocent". Ms Yeo also gave evidence that, in January 2017, Mr Lee and Mr Choi reported her to Korean authorities in relation to alleged misappropriations for transactions made between some time before 2013 to December 2013. Ms Yeo's evidence was that this complaint was dismissed. Mr Lee and Mr Choi did not give evidence about a complaint of this kind. 74 In the light of the evidence set out above, I reject Mr Lee's evidence that in August 2013, he discovered that Ms Yeo had applied $150,000 of money received by IBN Education for her own purposes. I also reject his evidence that, in August 2013, Ms Yeo confessed that she stole the company money and used $150,000. There is no contemporaneous record of the confession, which is denied by Ms Yeo. Further, the alleged theft of $150,000 is not referred to in Ms Yeo's various admissions of misconduct, described below, or in the Seoul Central District Prosecutor's Office written arraignment in relation to alleged offences by Ms Yeo. 75 Mr Choi gave evidence that, in August 2013, he agreed with Mr Lee that Ms Yeo should not be fired on the basis of Mr Lee's statement to Mr Choi that Ms Yeo had offered to give up "her severance pay, shares, incentives, dividends". Mr Lee does not recount such a conversation with Mr Choi. 76 Mr Lee says that he spoke with Ms Han in August 2013 and told her that Ms Yeo had said she would give up her shares, profit dividend and severance pay and even her salary. Ms Han broadly corroborates Mr Lee's version of the conversation. Ms Han says that, at this time, she agreed to give Ms Yeo one more chance on the understanding that "there will be no shares or incentives or profit dividend for her". 77 It is not plausible that, if the events of August 2013 occurred as Mr Choi, Mr Lee and Ms Han claim, they would not have included contemporaneous documentation of the events in their evidence. After all, they concern the serious matters of alleged substantial theft, admitted theft, loss of company money to compensate victims of theft and an agreement to retain the alleged thief as an employee on terms that included the loss of her shareholding in the company. It is also not plausible that, if the events of August 2013 occurred as Mr Choi, Mr Lee and Ms Han claim, nothing was done about Ms Yeo's shareholding and there was no discussion about whether the shares would be cancelled or transferred to someone else. 78 Having rejected this evidence, I conclude that Mr Lee, Ms Han and Mr Choi were not truthful witnesses in connection with the serious allegations of misconduct in August 2013. I also conclude that their evidence should generally be treated with scepticism. November 2013 "second embezzlement" 79 As noted earlier, in their cross-examination each of Mr Lee and Ms Han referred to a "second embezzlement" by Ms Yeo which was said to have contributed to the need for the December 2013 AGM. Ms Yeo was not cross-examined about any such incident and there was no contemporaneous evidence of it. 80 There are two pieces of evidence which may corroborate Mr Lee and Ms Han's evidence on this point: Ms Han's affidavit referred to Ms Yeo saying, at the December 2013 meeting, "I am very sorry about the two times of embezzlements" and Ms Yeo's November 2015 statement contained the admission "the first case occurred in 2013. I should have revealed everything at that time, but I did not tell everything. Then soon after that, the second case occurred". 81 However, again, it is strange that the evidence contained no details of the amount embezzled or the precise circumstances of the embezzlement. If this version of events is accepted, then Ms Yeo was caught out as a thief twice in the space of four months but did not lose her job even though, on the evidence of Ms Han and Mr Choi, they had to be persuaded that Ms Yeo should keep her job in August 2013. It is also strange that Mr Choi says nothing about an embezzlement detected in November 2013. 82 The evidence before me is insufficient to warrant a finding that there was a second embezzlement in November 2013. Alleged annual general meeting in December 2013 83 Detailed evidence was also given by Mr Choi, Mr Lee and Ms Han about a meeting allegedly held on 2 December 2013. Ms Yeo denied that the meeting took place and her denial was corroborated by the evidence of Ms Yuri Choi. On the versions of events given by Mr Choi, Mr Lee and Ms Han, the meeting was an AGM of Ji Woo. 84 In his affidavit, Mr Choi said that the meeting was attended by all staff of the IBN Education office in Gangnam. However, in cross-examination, he did not identify those people with any specificity, saying "there were a few – several more people from the IBN office – the staff. There were people." 85 Ms Han gave evidence of a conversation at the meeting to the following effect: Choi: Due to Yeo's misappropriation, we are now in deficit. Let us make a new company to work. Han: On top of that, we currently have the two former directors having a dispute in Korea. I'm afraid the legal suit might bring bad influence to our company. Let's forget about everything related to Ji Woo and start a new company. 86 To similar effect, Mr Choi gave the following evidence of what was said at the meeting: Han: Previous director Lee and Hwang they have been involved in a dispute. Choi: Not only we had that problem, but Yeo has also embezzled the money from the company. I think we should open a new company. I am happy to be a director of the new company with Hye Young Han. … Choi: Well, we should shut down Ji Woo. I don't want to be a director of legally disputed company by former two directors, I am happy to be a director of a new company. 87 This evidence is curious because IBN Global Pty Ltd had been registered two months before the alleged AGM, and Mr Choi and Ms Han had already been appointed its directors. These apparent anomalies were not explored in cross-examination and nor was that necessary in the context of the application for reinstatement. However, they provide further reason why Mr Choi and Ms Han's evidence should be viewed, at the least, with a degree of scepticism. 88 According to Ms Han and Mr Choi, the meeting resolved, relevantly, that Ji Woo would stop conducting business and would be deregistered, and that Ms Yeo would undertake whatever was necessary for the transfer of the "IBN Education" business name from Ji Woo to IBN Global Pty Ltd. There is no minute of these resolutions. 89 Another curious aspect of the evidence was a document identified Mr Choi, Mr Lee and Ms Han as the agenda of the meeting. The document is in Korean script. It does not refer to Ji Woo, or state that it is an agenda for the annual general meeting of Ji Woo. A certified translation of the document is in the following terms: Agenda for meeting, Monday, 02 Dec 2013 1) Reporting results from all staff after the overseas study exposition in Korea, 30 Nov, 01 Dec, 2013 2) After business closure of Jiwoo International Education Centre Pl since January, 2014, IBN Global pl opened 3) As for the management of Korea bank account for Ji woo, Myounghwa Yeo will be replaced by Chihoon Choi of IBN Global as soon as possible 4) To decide whether prosecuting Mylounghwa Yeo of embezzlement (to discuss in Korea) 5) Depriving Myounghwa Yeo of the right of the position 6) Necessary things for the operation of IBN Global pl at Jiwoo pl 7) Issue of increasing staff salaries for 2014 Venue: IBN UHAK Gangnam Persons: all staff 90 The agenda items referring to IBN Global as an existing entity (items 2, 3 and 6) are inconsistent with the evidence of Mr Choi and Ms Han, set out above, that the idea of opening a new company, of which Mr Choi and Ms Han would be directors, was discussed at the meeting. 91 Item 3 is surprising in the context of surrounding events. On its face, it appears to provide information about a decision that had already been made. It is not obvious why it is a matter that would warrant discussion. Item 3 casts doubt on the evidence that Mr Choi said, at the AGM, that he was "happy to be a director of the idea of a new company" because it refers to "Chihoon Choi of IBN Global". There was no evidence that a new company other than IBN Global Pty Ltd was ever contemplated. 92 Ms Han's evidence was that the prompt changeover of the Korean bank account management authority from Ms Yeo to Mr Choi for IBN Global Pty Ltd was discussed at the meeting. Mr Lee's evidence was that Ms Yeo promised to give Mr Choi authorisation to access the bank account. Mr Choi's evidence was that he told Ms Yeo that she should give him authorisation to access the bank account. 93 However, Mr Choi did not receive that authority until 26 February 2014, as set out below. Strangely, the affidavit evidence of Mr Lee and Ms Han stated that it was resolved at the meeting that Ms Yeo would transfer her authority to manage and access the IBN Education Korean bank account to Mr Choi on 26 February 2014. There was no logical (or any) explanation for why it was resolved that the transfer should occur on that date, and I do not accept that such a resolution was passed. 94 The words in item 4 "to discuss in Korea" suggest that the agenda item is based on another list. The subject for discussion is said to be whether to prosecute Ms Yeo for embezzlement. As to this matter: (1) Mr Choi's evidence was that he stated at the meeting that Ms Yeo had embezzled money from the company and Ms Yeo admitted it. It was resolved that Ji Woo would not seek to prosecute Ms Yeo in lieu of her forsaking any right she had in the Ji Woo shares and, it seems, that Ms Yeo would repay the money she had misappropriated from Ji Woo. (2) Mr Lee and Ms Han substantially corroborate Mr Choi's evidence about the resolution. (3) Ms Han says that there was discussion "whether or not we prosecute Yeo for misappropriation of money" but provides no details. She says that Ms Yeo said "I am very sorry about the two times of embezzlements". 95 On the subject of item 5 (depriving Ms Yeo of the right of the position): (1) Mr Choi says that Ms Yeo volunteered that she was happy to forget about her shares if she could be given a job in the new company. In response, he said: Yeo, you listen. If you want to work with us, you should resign all accounting position. You will be a branch manager instead. (2) Mr Choi also says that a resolution was passed that Ms Yeo would "relinquish her shares and all rights arising from her shareholding including rights to claim any profits and dividends". (3) Ms Han says that there was discussion about depriving Ms Yeo of her "current authority or position and titles" but gives no details. According to Ms Han, Ms Yeo said "Please let me work with you in a new company. I already gave up my share with Ji Woo". Ms Han says that there was a resolution of the kind described by Mr Choi. (4) Mr Lee says that Ms Yeo said "I am happy to forsake my shares and work in this new company with you." He also corroborates Mr Choi's evidence set out above. 96 The evidence that a resolution was passed that Ms Yeo would "relinquish" her shares in Ji Woo conflicts with evidence given about the events of August 2013. If Ms Yeo had offered to give up her shares in August 2013, and had been allowed to continue her employment on that basis, there would have been no reason for her to make the same offer in December 2013 and no reason for her to participate in a meeting of the shareholders of Ji Woo in December 2013. 97 These serious discrepancies in the evidence of Mr Choi, Mr Lee and Ms Han lead me to the conclusion that their evidence about the events of August 2013 included detailed fabrications. I also conclude that those three witnesses have fabricated their evidence of the 2 December 2013 meeting, including the 2 December 2013 meeting agenda. It is implausible that the company would have passed resolutions of the kind asserted without any documentary record of that fact in the form of minutes or even notes of the meeting. No such documentary records were included in the evidence and there was no explanation given for the absence of such records. 98 Conversely, I accept as truthful and reliable the evidence of Ms Yuri Choi that there was no meeting at the offices of Ji Woo on 2 December 2013, contrary to the claims of Mr Choi, Mr Lee and Ms Han. 99 It follows that I reject the evidence that Ms Yeo relinquished her shares or her interests in her shares in either August 2013 or December 2013. I also reject the evidence that Ms Yeo participated in a decision in about December 2013 that Ji Woo would cease to trade and that IBN Global Pty Ltd would commence to operate the business formerly operated by Ji Woo. Other events concerning the cessation of Ji Woo's business 100 Ms Han's evidence was that Ms Yeo "transferred" her authority to manage the IBN Education bank account on 26 February 2014. She refers to an email dated 26 February 2014 from Ms Yeo. According to a certified translation, the email records: I authorise Chihoon Choi to get access to Myounghwa Yeo's iBN Education account (100-028-424216), Shinhan. I notify that Myounghwa Yeo will take responsibility if any problems occur due to the Shinhan iBN Education account. 101 On the evidence before me, there are reasonable grounds to believe that Ji Woo ceased to trade around the end of 2013, that its business was thereafter operated by IBN Global Pty Ltd and that Ji Woo received no consideration from IBN Global Pty Ltd for its business. 102 There is conflicting evidence about whether Ms Yeo consented to the transfer of Ji Woo's business to IBN Global Pty Ltd, and the deregistration of Ji Woo. Her evidence is to the effect that she did not consent to either of those events. There is no contemporaneous record of the alleged consents. Alleged decision to refrain from deregistering Ji Woo 103 Mr Choi's written submissions contend that, following the 2 December 2013 meeting, the company did not immediately deregister, as it was engaged in litigation with Mr Hwang. Mr Choi contends that, when the litigation was finalised in August 2016, the company deregistered itself with the consent of all members. 104 In August 2016, Brereton J handed down his decision in Re Ji Woo International Education Centre Pty Ltd [2016] NSWSC 1060. The decision concerned two proceedings commenced in the Supreme Court of New South Wales in May 2014, by Mr Hwang and Mr Lee respectively. Ms Yeo was a defendant in the proceeding commenced by Mr Hwang. She was jointly represented in the action, with the company, Mr Choi and Ms Han, by Hans Kim Lawyer. From the judgment of Brereton J, it appears that Mr Hwang sought declaratory relief including to the effect that he was the holder of nine shares in Ji Woo and an order for rectification of the register maintained by ASIC which recorded Mr Choi, Ms Han and Ms Yeo as the owner of three each of the disputed shares. 105 There is evidence that litigation by Mr Hwang had been contemplated or foreshadowed prior to 2014. According to Ms Han, the November 2012 proposal to close down Ji Woo in one year's time was because Mr Lee could "sense that Mr Hwang will either come back to us or start litigation against us". Mr Lee said that he had stated that he could "sense that Jehun Hwang will either come back to us or start his litigation against us within a year when he faces financial difficulty to run his own business". Mr Lee identifies Jehun Hwang to be the same person as Jason Hwang. 106 By letter dated 6 December 2013 from Koffels Lawyers to the company, Mr Hwang sought access to the company's records and threatened legal proceedings in the event that access was not granted. The letter also foreshadowed proceedings "in relation to our client's shareholding in and directorship of the company". 107 Mr Choi's evidence was that, on about 9 December 2013, he received a telephone call from a staff member at Ji Woo in Sydney who said that: [W]e received a letter from Jehun Hwang's solicitors at Koffels saying that they will commence proceedings because Jehun Hwang never resigned as a director and did not transfer his shares. 108 This is not what the 6 December 2013 letter says. No other letter was identified as the letter to which the staff member at Ji Woo in Sydney was referring. 109 Mr Choi says that, upon receipt of the 6 December 2013 letter, he spoke with Mr Lee about the deregistration of the company. According to Mr Choi, Mr Lee said "I don't think we can just deregister the company knowing there is a dispute". Mr Choi says that he subsequently obtained legal advice that the company must remain registered but could be deregistered after any litigation. He says that he explained this to Ms Yeo who said that she understood. No contemporaneous records were produced in relation to these events. 110 I do not accept the evidence that there was any discussion of deregistration of the company around this time, or of the need to defer deregistration. The only relevant evidence is oral evidence of Mr Choi and Mr Lee. Having regard to my findings above, I do not accept their evidence on any matter unless it corroborated by independent or contemporaneous documentary evidence or is against their interests. 111 The trial was conducted in April 2015. According to Mr Choi, when Ms Yeo attended the trial in Australia they had another conversation concerning the de-registration of Ji Woo. Ms Yeo denied that conversation took place. In the absence of independent or contemporaneous documentary evidence, I do not accept Mr Choi's evidence on this point. Ms Yeo's admissions of misconduct and Korean criminal proceedings 112 There are several documents, translated from Korean, which appear to record admissions of misconduct by Ms Yeo. 113 The earliest in time is dated 17 February 2014. It is an email from Ms Yeo to Ms Lee. The translation states: I really apologize as I should email you for this matter again. When I sent you 50 million won on 17 January, I used the money of the students to fill the gap of the amount. So far, I used tuition fees of the students for robbing Peter to pay Paul. While I was in the accounting position, I used the money. I will take any punishment which you can decide. Student list Junhwan KANG /illegible/ 24 weeks ICMS - $10950.51 (KRW10,643,455) Huiseong PARK ICMS $12500 (KRW 12,083,000) Minhye KIM /illegible/ $9900 (KRW 9,582,400) The total is $33350.51, and I will settle this within this week. 114 The following day, Ms Yeo sent Mr Lee an email, translated as follows: It is true that I am a really bad girl. It seems that I became dull as if nothing happened. I will settle it anyhow. I would rather say nothing else. 115 On 16 July 2014, Ms Yeo wrote Mr Choi a longer email. The translation contains the subject heading "This is statement". The email referred to a bank account which began to be used from 12 March 2014, when tuition fees for a student named Jaehwan Oh were deposited into the account. The email appears to describe the misapplication of monies received on trust between 12 March 2014 and 23 April 2014, and perhaps after this date. The email confesses to forging documents in connection with three students, Jiwon and Sian Choi and Jiyeon Cho. 116 There is also a statement made by Ms Yeo, dated 19 November 2016 but said to have been written on 19 November 2015, the date on which Ms Yeo was dismissed from her employment. 117 The statement included admissions that "there was no boundary between my personal money and the corporate money" and "the first case occurred in 2013. I should have revealed everything at that time, but I did not tell everything. Then soon after that, the second case occurred". The statement contains a list headed "embezzlement details" and includes seven amounts totalling approximately $28,000. The statement concludes: I will take responsibility and compensate for the four rounds of embezzlement so far, including details above, and anything further that can be found in the future. 118 Next, there is an email from Ms Yeo to Mr Choi dated 20 November 2015 apparently recalculating the total amount owing by her in relation to four students as $40,717.65. Then, there is a chain of text messages on 30 November 2015 between Ms Yeo and Mr Choi, apparently concerning the need for her to pay 50 million won (which is approximately $50,000). 119 Mr Choi's evidence includes a translation of a document entitled "written arraignment" from the Seoul Central District Prosecutor's Office dated 26 August 2016. The document refers to a charge of misappropriation related to money received from Jiwon and Sian Choi on about 21 January 2014 and thereafter, until about 4 November 2015, receipt of a total of 163,771,414 won in the name of tuition fees from people who intended to go to Australia for studies. It alleges that the defendant used the money for other students' tuition for overseas studies or for personal usage such as credit card repayment. The document also refers to a charge of falsifying private documents on 17 August 2015. 120 Mr Choi alleges that Ji Woo and IBN Global Pty Ltd were required to compensate students in a total amount of $203,267.23 as a result of Ms Yeo's embezzlements. I was not satisfied that the documents provided in support of this claim demonstrated that either company had paid amounts by way of compensation. Ms Yeo's knowledge that Ji Woo stopped trading and IBN Global commenced trading 121 Ms Yeo's affidavit evidence was that, in around January 2014, the staff at the Seoul office were advised by email that all applications for student enrolments were to be stamped "IBN Global" and all student commissions and payments were to be directed to IBN Global's new account, not Ji Woo's account. However, in cross-examination, Ms Yeo said that the relevant email did not include the word "all" in the Korean language. Ms Yeo said that she did not understand, at this time, that a new company had been opened. 122 Around early February 2014, Ms Yeo observed that applications by students were being transferred from Ji Woo to IBN Global Pty Ltd. In her reply affidavit, Ms Yeo said that she was not aware of the difference between Ji Woo and IBN Global at this time, and she believed that Ji Woo and IBN Global were the same entity. 123 In her reply affidavit, Ms Yeo referred to the March 2014 registration certificate. She said that Mr Choi had specifically asked her to put IBN Global Pty Ltd's stamp on the certificate. Ms Yeo said that, at this time, "we had three different stamps being used in Korea being Ji Woo, IBN Education and IBN Global. We had no problem processing enrolments regardless of which stamp was used, and applications made with Ji Woo's stamp were all approved for IBN Global Pty Ltd." In cross-examination, Ms Yeo said that she continued to use the "Ji Woo stamp" after the beginning of 2014. 124 Ms Yeo annexed to her reply affidavit an application form for Griffith University dated 4 February 2014 affixed with the stamp of Ji Woo trading as "IBN Education". 125 Ms Yeo's first affidavit refers to a conversation with Mr Lee in Australia on about 20 April 2015, concerning Mr Lee's dispute with Mr Hwang, in which Mr Lee said words to the effect: I have established IBN so Ji Woo has nothing in it. It is an empty can. He can take it, one unit of Ji Woo's share is only worth one dollar. 126 In cross-examination, Ms Yeo claimed that she did not "fully trust" Mr Lee when he said this. 127 Ms Yeo denied saying to Mr Choi, around this time, "There's nothing with Ji Woo at the moment. We can concentrate our work with IBN Global". 128 It is not necessary to make findings about Ms Yeo's state of knowledge about the cessation of Ji Woo's business and the commencement of IBN Global's business, except to note that she was aware from January 2014 of the existence of the name "IBN Global" and the existence of a bank account in the name "IBN Global" which was to be used for the payment of student commissions and other payments, instead of the account in the name of Ji Woo which had been used previously. She was also aware of the existence of the company IBN Global Pty Ltd from at least March 2014, if not January 2014. Further, the last payment that Ms Yeo received in respect of her shareholding in Ji Woo was made in July 2013. In those circumstances, Ms Yeo was aware of facts from which she could have inferred that her shareholding in Ji Woo might have become worthless. Consideration Person aggrieved 129 On the evidence above, Ms Yeo was a member of the company at the time that Mr Choi applied for the company's deregistration. She did not agree to the deregistration. Accordingly, Ms Yeo was deprived of her shareholding in the company as a result of the application for deregistration contrary to the requirements of s 601AA(2). 130 I accept that Ms Yeo has a claim, which is not plainly hopeless, that Ji Woo's assets were transferred to IBN Global Pty Ltd for no consideration, thereby depriving Ms Yeo of the value of her three shares in Ji Woo. I recognise that there are several matters raised by Mr Choi in defence to that claim, including that Ms Yeo agreed to the transfer of Ji Woo's business to IBN Global or alternatively knew about it and acquiesced in it. However, those are factual matters that are not appropriate to be resolved on this application. 131 For these reasons, I accept that Ms Yeo is a person aggrieved by the deregistration. Whether reinstatement is just 132 The circumstances in which the company was de-registered are set out above. 133 The purpose of the reinstatement application is to permit the appointment of a liquidator, to investigate possible claims by the company against Mr Choi and IBN Global Pty Ltd. I accept that the circumstances in which Ji Woo ceased to trade are worthy of investigation because, on the face of it, it appears that Ji Woo gave up a valuable business for no consideration. 134 On the other hand, there are factors which might support a conclusion that reinstatement is not just, particularly, Ms Yeo's possible acquiescence in events about which she now complains. 135 There is no evidence of any likely prejudice if the company is reinstated. 136 Reinstatement would enable the possibility of proceedings, of the kind contemplated by Ms Yeo, to be investigated: cf ERB International at [16]. I accept that public policy favours reinstatement of the company to enable the proposed investigation to be conducted and the potential causes of action to recover funds for the benefit of Ms Yeo to be explored. On the current evidence, there appears to be a real question about whether Ms Yeo's legal rights as a shareholder were defeated by the manner in which Ji Woo's business was taken over by IBN Global Pty Ltd. 137 I do not accept that Ms Yeo's custodial sentence is a factor which weighs against reinstatement of the company. The main purpose of the reinstatement is to investigate the circumstances in which the business of the company was apparently transferred to IBN Global Pty Ltd for no consideration. The investigation will not focus on Ms Yeo's likely credit in relation to any proposed action to be brought on behalf of the company, although it is probably a relevant matter for assessment by a liquidator. I am not satisfied that Ms Yeo's custody will significantly impair a liquidator's investigation. 138 Contrary to Mr Blank's submission, this is not a case in which Ms Yeo should be required to exhaust other remedies before seeking reinstatement: cf Holli Managed Investments Pty Ltd v Australian Securities Commission [1998] FCA 1675; (1998) 90 FCR 341. Ji Woo's reinstatement is required in order to enable a liquidator to conduct the investigations identified on Ms Yeo's behalf and to determine whether to take action on the behalf of the company. 139 Taking all of the above matters into account, I am satisfied that it is just that the company's registration be reinstated and that I should exercise the discretion to make the order for reinstatement sought by Ms Yeo. Winding up 140 For the reasons given above, I am satisfied that Ms Yeo is a contributory of Ji Woo. Further, my conclusion that it is just to order reinstatement entails the conclusion that it is just and equitable that the company be wound up. The circumstances of the company's de-registration, particularly Mr Choi's application for deregistration in the absence of Ms Yeo's consent provides a further basis for the conclusion that it is just and equitable that a Ji Woo be wound up. 141 Guy Baxendale, official liquidator, has given his consent to be appointed as liquidator of the company and confirmed that he is unaware of any conflict of interest. There is no objection to his appointment. As Ji Woo has been deregistered and Mr Choi was served with the notice of originating process of these proceedings, orders should also be made dispensing with the requirements for notification and advertising in relation to an application for the winding up of the company. Conclusion 142 I will make orders to the effect sought by Ms Yeo. 143 The matter was substantially complicated by Mr Choi's intervention, including his reliance on evidence which I have disbelieved. In those circumstances, it may be an appropriate exercise of the Court's discretion to order that Mr Choi pay the costs of the proceeding. I will give Mr Choi an opportunity to make submissions in opposition to such an order. I certify that the preceding one hundred and forty-three (143) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson. Associate: Dated: 8 December 2017