Anglo Coal (Drayton Management) Pty Ltd [2004] NSWSC 604

Reported Decision : (2005) 23 ACLC 82

New South Wales Supreme Court

CITATION : Anglo Coal (Drayton Management) Pty Ltd [2004] NSWSC 604 HEARING DATE(S) : 05/07/04 JUDGMENT DATE : 5 July 2004

JURISDICTION: Equity Division Corporations List JUDGMENT OF : Barrett J DECISION : Order for reinstatement of registration

CATCHWORDS : CORPORATIONS - reinstatement of registration - deregistration for failiure to lodge returns - whether order may effect reinstatement for specified purpose only LEGISLATION CITED : Corporations Act 2001 (Cth), s.601 Re Equitable Life Enterprises Pty Ltd (1994) 33 NSWLR 559 CASES CITED : Queensland Building Services Authority v Dragonstone Pty Ltd [2004] QDC 078 Shaw v Goodsmith Industries Pty Ltd (2002) 41 ACSR 556 Anglo Coal (Drayton Management) Pty Ltd - First Plaintiff Anglo Coal (Drayton) Pty Ltd - Second Plaintiff Anglo Coal (Drayton) No 2 Pty Ltd - Third Plaintiff PARTIES : Mitsui Drayton Investment Pty Ltd - Fourth Plaintiff Mitsui Mining Aiustralia Pty Ltd - Fifth Plaintiff Hyundai Australia Pty Ltd - Sixth Plaintiff Daesung Australia Pty Ltd - 7th Plaintiff FILE NUMBER(S) : SC 3694/04 COUNSEL : Mr J V Nicholas SC - Plaintiffs SOLICITORS : Ebsworth & Ebsworth - Plaintiffs

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

BARRETT J

MONDAY 5 JULY 2004

3694/04 - ANGLO COAL (DRAYTON MANAGEMENT) PTY LTD & ORS - RE O&K AUSTRALIA PTY LTD (DE-REGISTERED)

JUDGMENT

1 The plaintiffs seek an order under s.601AH(2) of the Corporations Act 2001 (Cth) that ASIC reinstate the registration of O&K Australia Pty Ltd. The deregistration occurred under s.601AB, which must mean that the company's annual return was at least six months late, no other document had been lodged under the Act within 18 months and ASIC had no reason to believe that the company was carrying on business. The deregistration may therefore be characterised as in the nature of an administrative cleansing of the register by removal of an apparently superfluous entry without any detailed inquiry into the status of the company. 2 The plaintiffs consider themselves to have a claim against the deregistered company in relation to possible misrepresentation or misleading or deceptive conduct in connection with the supply of goods by the company some years ago. There is no evidence about the state of the company's assets and liabilities at the time it was deregistered. Any assets it had would now be vested in ASIC pursuant to s.601AD(2). 3 Of greater interest to the plaintiffs is the possibility that the company carried insurance that would respond to the claim the plaintiffs are considering pursuing. The evidence on this consists of correspondence between the plaintiffs' solicitors and the solicitors for the overseas corporation of which the company was a wholly owned subsidiary at the time of deregistration. That evidence is scanty, but can be said to give some credence to the possibility that insurance existed. In those circumstances, and having regard to the fact that the deregistration was, as I have said, in the nature of an administrative cleansing of the register, I am satisfied that it is "just" in terms of s.601AH(2)(b) that the registration be reinstated, the plaintiffs, because of their foreshadowed claim which will otherwise be unavailable, being a "person aggrieved" by the deregistration as referred to in s.601AH(2)(a). 4 As I have mentioned, the company was a wholly owned subsidiary of another corporation when deregistered and there has been correspondence between the plaintiff's solicitors and the solicitors for that other corporation. In those circumstances, I have no reservation about the fact that reinstatement will cause the former directors to go back into office. Any difficulties that presents may be resolved by the holding company. 5 The plaintiffs have tendered a letter from ASIC stating that ASIC will not oppose the application for reinstatement provided certain conditions are satisfied. The first condition is the standard one, that the order be couched in terms of s.601AH(2) as an order requiring ASIC to reinstate the registration, but with a rider, in this case, that the reinstatement be "for the limited purpose disclosed". 6 I do not consider it possible, in terms of the legislation, to make a reinstatement order in such a way that either the order or the reinstatement is for some limited purpose. It will, of course, always be the case that some particular purpose lies behind the reinstatement application, in that reinstatement will be sought so that the purpose in question may be pursued. But reinstatement, as I view it, is an all or nothing thing. 7 The issue to which I have just referred was recently examined by Judge McGill of the District Court of Queensland in Queensland Building Services Authority v Dragonstone Pty Ltd [2004] QDC 078. The respondent company in that proceeding had been deregistered. On 28 March 2001, the Chief Justice of the Supreme Court of Queensland had made an order pursuant to s.601AH that "Dragonstone Pty Ltd be restored to the register for the purpose of action Linda Ward v Dragonstone Pty Ltd in the District Court held at Brisbane Plaint number 2997 of 1998". It had been submitted before a Magistrate's Court that the reinstatement was not such as to expose the company to a quite separate proceeding initiated against it by the Building Services Authority. 8 After referring to the decision of McLelland CJ in Eq in Re Equitable Life Enterprises Pty Ltd (1994) 33 NSWLR 559 (involving predecessor legislation) and to the fact that, in Shaw v Goodsmith Industries Pty Ltd (2002) 41 ACSR 556, I had referred to the need to revive the particular company for a particular purpose but made a reinstatement order in unconditional and unqualified form, McGill DCJ continued: "In my opinion the reasoning of McLelland CJ [in Eq] in Re Equitable Life Enterprises Pty Ltd (supra) is still applicable to s 601AH in its present form. A company either exists or it does not exist, and the only power to re-register given by the section is a power to re-register generally under subsection (2), which has the effect set out in subsection (5). As a result of the order of 28 March 2001, the respondent company is back in existence for all purposes. Once an order for re-registration has been made, it is open to anybody else to bring a proceeding against the company without seeking any further preliminary order, unless of course the order for re-registration is coupled with an order that the company be wound up. Counsel for the respondent submitted that there could well be difficult consequences from such an approach, because an application for registration ordinarily turns on whether it is appropriate from the point of view of the applicant or the parties immediately before the court for the company to be re-registered. That may well be the case, but there are competing considerations, as McLelland CJ [in Eq] pointed out at p.562, and in any case what I have to decide is not whether it would be desirable for there to be a power to reinstate the company for a limited purpose only, but whether the legislature has conferred such a power on the court. In my opinion on the true construction of the section it has not, and that is the end of the matter. The only order the Chief Justice could have made was that the company be reinstated, that is, generally, so that must be the effect of his Honour's order." 9 I respectfully agree with his Honour's observations. The form of order with which ASIC expresses itself content in this case (that is, that reinstatement be "for the limited purpose disclosed") is not an order that the court should make. There is either reinstatement or no reinstatement and, since the plaintiffs have made out a case for relief, there should be reinstatement. 10 The other ASIC conditions pose no difficulty and I note the undertaking of the plaintiffs' solicitor to the court to advise ASIC when the proceedings that the plaintiffs intend to bring against the company have finished. There is an indication in the ASIC letter that the company may then again be deregistered, but that of course will be a matter for ASIC to determine, having regard to the circumstances that then exist and the applicability to them of the deregistration sections of the Act.