Reported Decision : 42 ACSR 138 New South Wales Supreme Court CITATION : Parker v Australian Asbestos [2002] NSWSC 520 CURRENT JURISDICTION: Equity FILE NUMBER(S) : SC 1740/02 HEARING DATE(S) : 30 May, 3 June 2002 JUDGMENT DATE : 11 June 2002 Leonard James Parker (P) PARTIES : Australian Asbestos Pty Ltd (D1) Australian Asbestos (NSW) Pty Ltd (D2) Asbestospray Fire Prf & Insul (NSW) Pty Ltd (D3) JUDGMENT OF : Austin J COUNSEL : D Trainor (Sol) (ex parte) SOLICITORS : W G McNally & Co (P) CATCHWORDS : CORPORATIONS - de-registration and re-instatement - companies de-registered more than 15 years ago - whether 15 year time limit for application to re-instate under s 459 of the Companies (NSW) Code applies Corporations Act 2001 (Cth), ss 601AH, 1370, 1378, 1400 LEGISLATION CITED : Corporations Law, s 1362CH Companies (NSW) Code, s 459 DECISION : Orders for reinstatement made IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION AUSTIN J TUESDAY 11 JUNE 2002 1740/02 LEONARD JAMES PARKER V AUSTRALIAN ASBESTOS PTY LTD & ORS JUDGMENT 1 HIS HONOUR: This is an application, by originating process filed on 4 March 2002, for orders reinstating three deregistered companies, and for an order that leave be given to the plaintiff to commence proceedings against those three companies for damages for personal injuries in the Dust Diseases Tribunal of New South Wales. 2 The plaintiff claims that he was employed by one of the three companies, Australian Asbestos Pty Ltd, from 1961 to July 1966. He says that from late 1966 to early 1967 he was employed by Australian Asbestos (NSW) Pty Ltd, the second of the companies, and that from 1968 until October 1971 he was employed by Asbestos Fire Prf & Insul (NSW) Pty Ltd, the third company. He says that throughout the course of his employment with the three companies, he was exposed to asbestos on a daily basis. The first company was deregistered on 16 September 1970, the second on 2 November 1979 and the third on 19 September 1980. The plaintiff was admitted to hospital in January 2000 and was later diagnosed to have asbestos related pleural disease. In December 2001 that diagnosis was upheld by the Dust Diseases Board. 3 The plaintiff's solicitor has identified the workers compensation insurers of the first and second companies, but has not been able to identify the insurer for the third company. Nevertheless the plaintiff seeks the reinstatement of all three companies, undertaking not to execute any judgment against any of them without further leave of the Court, on the basis that the insurer may yet be identified for the third company. The Australian Securities and Investments Commission does not oppose the application, provided certain conditions are satisfied, one of which is that the order for reinstatement must be sought under the appropriate applicable legislation. 4 That condition has led the plaintiff to file an amended originating process, seeking either reinstatement under s 601AH of the Corporations Act, 2001 (Cth), which is the present corporations legislation, or under ss 459 and 539 (4) (d) of the Companies (NSW) Code, which was in force from 1 July 1982 to 31 December 1990. His theory is that if the reinstatement provisions of the Companies Code have been preserved, notwithstanding the enactment of the Corporations Law, which was in force from 1 January 1991 to 14 July 2001, and the enactment of the Corporations Act which commenced on 15 July 2001, then the reinstatement order should be made under the Companies Code. 5 There is a problem, however, because the Court's power to reinstate a company under s 459 (6) of the Companies Code (unlike the power under s 601AH of the Corporations Act) permitted the Court to do so only on an application made within 15 years after cancellation of the registration. To overcome this problem, the amended application also invokes the Court's power to correct irregularities by making an order extending the period for an application for reinstatement to be made. That power was found in s 539 (4) (d) of the Companies Code, and is now found, in substantially the same terms, in s 1322 (4) (d) of the Corporations Act. 6 There may be another problem, not addressed in the amended originating process. The three companies were in fact deregistered before the commencement of the Companies Code on 1 July 1982. Therefore, if the Court is unable to make an order under s 601AH of the Corporations Act, it may be necessary to examine the provisions of the Companies Act 1961 (NSW), as it stood when the three deregistrations occurred in 1970, 1979 and 1980 respectively. 7 Generally the drafters of the Corporations Act endeavoured to prevent the old corporations legislation from having any continuing relevance, because of doubts about the constitutional validity of some aspects of the co-operative basis of the Corporations Law, which may also have infected the previous cooperative scheme. It would be anomalous, and contrary to the overall object of the Corporations Act (see s 1370), if the Companies Code continued to be an available source of jurisdiction. Moreover, the reinstatement provisions were overhauled in the Company Law Review Act 1998, which (as I shall explain) gave the Court broad new powers. One therefore approaches this problem with scepticism that the reinstatement provisions of the Companies Code can have any continuing relevance. 8 The first question to consider is whether the Court can order the reinstatement of the three companies under s 601AH of the present Corporations Act. Section 601AH (2) permits the Court to make an order that the Commission reinstate the registration of a company if, relevantly, the application for reinstatement is made to the Court by a person aggrieved by the deregistration, and the Court is satisfied that it is just that the company's registration be reinstated. Section 601AH of the present Corporations Act is in substance identical with s 601AH of the previous Corporations Law. Section 601AH was introduced into the Corporations Law by the Company Law Review Act 1998, which commenced on 1 July 1998. The 1998 Act also introduced the transitional provision in s 1362CH, to which I shall refer. 9 The Court's jurisdiction to make a reinstatement order under s 601AH is available only in the case of a "company". The word "company" is defined in s 9 of the Corporations Act, to mean a company registered under the Corporations Act. Section 1378 has the effect that if a body was registered as a company under the former Corporations Law and the registration was still in force immediately before the commencement of the Corporations Act on 15 July 2001, then as from 15 July 2001 the body is treated as if it were registered as a company under the new Corporations Act. Consequently, the body is a "company" for the purposes of the definition in s 9 of the Corporations Act, and if it is deregistered after the new Act commenced on 15 July 2001, the Court has jurisdiction to reinstate it under s 601AH (2). 10 For the sake of clarity, consider next the case of a body that was a company formed and registered under the Corporations Law of New South Wales, and was deregistered before 15 July 2001. That body is not a "company" within the definition in s 9 of the Corporations Act, since it has not been registered under the Corporations Act and is not deemed by s 1378 to have been so registered. Therefore the present power of the Court in s 601AH (2) of the Corporations Act could not be used to reinstate that body, absent any supplementation from the transitional provisions to which I shall refer below. 11 Section 1400 states that if a right was acquired under a provision of the Corporations Law that was in force immediately before 15 July 2001 and corresponds to a provision of the Corporations Act, then as from 15 July 2001 the person enjoying that right acquires, in substitution, an equivalent right under the corresponding provision in the new Corporations Act. Section 601AH of the Corporations Act corresponds with s 601AH of the Corporations Law as in force immediately before 15 July 2001, since they are substantially identical. Thus a person who, immediately before 15 July 2001, had the right under the Corporations Law to seek the reinstatement of a company under s 601AH of the Corporations Law now enjoys an equivalent right under s 601AH of the present Act. 12 The position is the same in the case of a body formed and registered under the corresponding provisions of previous New South Wales companies legislation, such as the provisions of the Companies (NSW) Code (the statutory company law of New South Wales prior to the Corporations Law of New South Wales), or the Companies Act 1961 (NSW) (the statutory company law of New South Wales before the Companies (NSW) Code). This is because of the effect of s 1362CH of the Corporations Law, which was in place immediately before the commencement of the Corporations Act. 13 Section 1362CH of the Corporations Law stated that s 601AH applied, with any modifications that the circumstances required, to the reinstatement of the registration of a body corporate that was at some time before 1 January 1991 incorporated under a previous law of New South Wales corresponding to the incorporation provisions of the Corporations Law, and was deregistered before 1 January 1991. Thus, by virtue of s 1362CH, s 601AH applied, immediately before 15 July 2001, to enable the Court to reinstate under that provision a company deregistered under the Companies (NSW) Code or even under the Companies Act 1961 (NSW). There is no 15 year time limit in s 601AH, and I see no basis for contending that the circumstances would require a modification of that section to impose a 15 year time limit. Indeed, to do so would run counter to the broad empowering scope of s 1362CH. 14 Thus, by virtue of s 1362CH, a person aggrieved by the deregistration of a company under the Companies (NSW) Code or the Companies Act 1961 (NSW) had a right immediately prior to 15 July 2001 to seek reinstatement of the company, and by virtue of s 1400 of the Corporations Act, that person now enjoys an equivalent right under s 601AH of the Corporations Act. There is no 15 year time limit under s 601AH. It follows that the Court has the power, in the present case, to order reinstatement of the three companies deregistered under the Companies Act 1961 (NSW), provided that the case falls within the requirements of the present s 601AH (2). 15 It is beyond doubt that the plaintiff is a person aggrieved by the deregistration of the companies, for those events now stand as obstacles to his obtaining compensation in respect of the dust-related disease from which he suffers. I am satisfied that in the case of the two companies whose workers compensation insurers have been identified, it is just that the two companies' registration be reinstated so that the plaintiff's claims against them can be heard and determined. Given the undertaking offered by the plaintiff not to enforce any judgment without the approval of the Court, I am satisfied that it is just to reinstate the third company as well, since a workers compensation insurer may be identified for that company after reinstatement has taken place. Thus, the substantive elements for an order to be made under s 601AH (2) in respect of each of the three companies are present in this case. The question is whether orders for the reinstatement of the three companies would be orders for the reinstatement of registration of "companies", and therefore within the Court's jurisdiction under s 601AH (2). 16 My view is that orders should be made for the reinstatement of the three companies under s 601AH of the Corporations Act 2001 (Cth), and that leave be granted to the plaintiff to commence proceedings in the Dust Diseases Tribunal of New South Wales for damages for personal injuries against those three companies. The plaintiff will have to comply, to the extent relevant and insisted upon by the Commission, with the requirements of Policy Statement 83, especially in paragraph 83.19. 17 I reached the above conclusions on 3 June 2002, and expressed them in reasons for judgment handed down on that day. However, I deferred making any orders for a period of seven days. I did so because my view is inconsistent with paragraph 83.19 (b) of the Commission's Policy Statement 83, which requires that "in the case of applications under the Companies Code, it is made within any relevant time limit (see s 459 (6) of the Code)", and also with paragraph 83.30, which states that s 601AH (2) does not apply to companies deregistered under the Companies Code or previous companies legislation. Since, in accordance with its usual practice, the Commission did not appear at the hearing and therefore the hearing effectively proceeded ex parte, I thought it was possible that something may have been overlooked by the plaintiff and the Court. I therefore stood the matter over to this morning, and I directed the Commission to make submissions on the matter. 18 By letter to my associate dated 5 June 2002, the Commission has stated that it does not have anything to submit in opposition to my reasoning, nor the orders I propose to make. The letter acknowledges that Policy Statement 83 may need to be updated. I shall now proceed to make the foreshadowed orders. ********** Last Modified: 06/18/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.