Reported Decision : (2004) 22 ACLC 22 New South Wales Supreme Court CITATION : Ramantanis v G & M Excavations; v I & M Excavations [2003] NSWSC 1250 HEARING DATE(S) : 17/12/03 JUDGMENT DATE : 17 December 2003 JURISDICTION: Equity Division JUDGMENT OF : Barrett J DECISION : Orders for reinstatement of registration and continuation of liquidator in office CATCHWORDS : CORPORATIONS - winding up - company deregistered - company in liquidation at time of deregistration - whether reinstatement to register causes liquidator to be again in office Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 34 ACSR 232 CASES CITED : Brownlie v TTPM Pty Ltd (2003) 21 ACLC 1204 Civil & Civic Pty Ltd v R W Bass Pty Ltd (1996) 20 ACSR 16 Re Steelmaster Pty Ltd (1992) ACSR 494 Vlassis Ramantanis - Plaintiff PARTIES : G & M Excavations Pty Limited - Defendant; I & M Excavations Pty Limited - Defendant FILE NUMBER(S) : SC 6194/03; 6189/03 COUNSEL : Mr A Giurtalis, Solicitor - Plaintiff SOLICITORS : Turner Freeman - Plaintiff IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION BARRETT J WEDNESDAY 17 DECEMBER 2003 6194/03 - RAMANTANIS v G & M EXCAVATIONS PTY LIMITED 6189/03 - RAMANTANIS v I & M EXCAVATIONS PTY LIMITED JUDGMENT 1 In each of these proceedings, the plaintiff seeks an order that ASIC reinstate the registration of a company deregistered by it pursuant to s.601AB of the Corporations Law, in one case on 2 November 1996 and in the other on 15 December 1999. The applications are made under s.601AH of the Corporations Act 2001 (Cth). 2 The plaintiff is also the plaintiff in certain proceedings in the Dust Diseases Tribunal in which he seeks compensation for a serious illness said to have been contracted in the course of his employment by one or more of eight companies in succession. The two companies with which I am now concerned are among these former employers. I made an order a few days ago reinstating the registration of another employer company. 3 The plaintiff's status as a person aggrieved by each deregistration, for the purposes of s 601AH(2)(a) of the Corporations Act, is clear. He needs each company to be a party to the Dust Diseases Tribunal proceedings so that the proceedings may be properly constituted in a way that will allow insurance to respond. The evidence shows that insurance was in place in respect of relevant risks of the employer in each case in the relevant period. 4 These circumstances also indicate that it is "just" in terms of s 601AH(2)(b) the registration be reinstated. Without reinstatement, the plaintiff will not be able to pursue bona fide claims he considers himself to have: see Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 34 ACSR 232. I am satisfied that a case for the making of a reinstatement order has been made out. 5 There is, however, one point that requires attention. Each company was, at the time of deregistration, in liquidation, in one case by way of winding up by the court and in the other under a creditors voluntary winding up. Section 601AH(5) says that, if a company is reinstated, it is taken to have continued in existence as if it had not been deregistered. In Brownlie v TTPM Pty Ltd (2003) 21 ACLC 1204, Hamilton J held that reinstatement of the registration of a company which had at the time of deregistration been in liquidation brought the company back to life in such a way that the continuity effected by s.601AH extended not only to its status as a company in liquidation but also so that the liquidator was still in office, with the result that it was unnecessary to reappoint that liquidator. His Honour approved the following statement at p. 678 of the fourth edition (1999) of McPherson's "The Law of Company Liquidation": "It is likely that, as under the previous law, if a company that is reinstated had been wound up, the liquidator would be restored to office on reinstatement, if not released before deregistration." 6 The cases cited by the learned author of McPherson in support of that proposition are Re Steelmaster Pty Ltd (1992) 6 ACSR 495 and Civil & Civic Pty Ltd v R W Bass Pty Ltd (1996) 20 ACSR 16. But, as the text indicates, they were cases under earlier legislation, being s.571 of the Corporations Law as it stood before the commencement of the Company Law Review Act 1998 which repealed that s.571 and inserted ss.601AA to 601AH which make up the present Chapter 5A. Dealing with the case where a company had been dissolved under the former s.481(6) or 509(5) (each of which was also superseded by the Act of 1998), the former s.571 empowered the court to make an order "declaring the dissolution to have been void". That concept is to be contrasted with that embodied in the present s.601AH. The concept reflected by the present legislation is one of reinstatement of registration carrying with it a deemed continuity, under s.601AH(5), of the company's existence (no doubt with the attributes it possessed at the time of deregistration) but without, it seems, all the other consequences that would follow if the cessation of the company's existence was simply made "void", as under the former s.471. 7 I have doubts about the applicability of the earlier case law to produce, under the current provisions, the result referred to by Hamilton J. This is because of part of the current s.601AH which, after referring to the deemed continuity of existence, says: "A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company." This suggests that, in the case of a director, the deemed continuity of existence of the company is not sufficient to cause a director to resume his former position upon reinstatement of the registration. It seems to be recognized that, if the company's existence comes to an end, so too does the tenure of each person who is then as a director: hence the need to have the statute cause each such person to become a director again. By like reasoning, it may well be that a reinstatement order, combined with the statutory deeming of continuity of existence of the company, is not sufficient to cause a liquidator in office at the time of deregistration to go back into office automatically on reinstatement of the company's registration. 8 As a matter of policy, however, a pre-existing and undischarged liquidator should resume office upon reinstatement of registration. Section 601AH(3)(b) empowers the court to make "any other order it considers appropriate", when making an order for reinstatement. I consider that that provides a suitable means of dealing with a situation where, as here, a liquidator was in office at the time of deregistration. The plaintiff has, in each case, approached the person who was the liquidator at the time the company was deregistered and has tendered a letter from that person. In each case, the person is content to continue as liquidator if the registration is reinstated, subject to protection in relation to costs. The plaintiff has also produced a consent to act signed by another official liquidator in relation to each company. 9 In view of the continuity that s.601AH(5) is intended to produce (which, in my view, entails continuity of that aspect of the company's characteristics which causes it to be in the course of winding up), the orders that the court makes should, in each case, put beyond doubt the ongoing tenure of the original liquidator. There are detailed provisions in the Act as to the resignation and replacement of liquidators. If a new liquidator is to be substituted, those provisions should be observed. 10 ASIC has indicated that it will not oppose the application for reinstatement provided uncontroversial conditions are satisfied. 11 In each case, I make the orders in the form of order that I initial and date. This includes not only the reinstatement order directed to ASIC but also an order that the person who was liquidator at the time of deregistration continue as liquidator. In the same way as was indicated by Hamilton J in Brownlie v TTPM Pty Ltd, it will be necessary for the plaintiff to make the required arrangements regarding the fees of these liquidators. The orders may be taken out forthwith. ********** Last Modified: 12/23/2003 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.