In the matter of Engels (Hurstville) Pty Ltd (in liq); application of Engel [2009] NSWSC 596

New South Wales Supreme Court

CITATION : In the matter of Engels (Hurstville) Pty Ltd (in liq); application of Engel [2009] NSWSC 596

HEARING DATE(S) : 25 June 2009 JURISDICTION : Equity

JUDGMENT OF : Austin J

EX TEMPORE JUDGMENT DATE : 25 June 2009

DECISION : Order for reinstatement made

CATCHWORDS : CORPORATIONS - reinstatement of deregistered corporation - standing of applicant - deregistered company was a shareholder in another company with substantial assets - liquidator of that other company seek leave to distribute assets to the present applicant

LEGISLATION CITED : Corporations Act 2001 (Cth), ss 601AB, 601AH

CATEGORY : Principal judgment

PARTIES : Walter Engel Holding Pty Ltd ACN 000 359 982 (deregistered); Harry Engel (Applicant)

FILE NUMBER(S) : SC 5515/08

COUNSEL : S A Wells (Applicant)

SOLICITORS : McLachlan Chilton (Applicant)

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

AUSTIN J

THURSDAY 25 JUNE 2009

5515/08 IN THE MATTER OF ENGELS (HURSTVILLE) PTY LTD)(IN LIQ); APPLICATION OF ENGEL JUDGMENT (Ex tempore; revised on 26 June 2009) 1 HIS HONOUR: Walter Engel Holding Pty Limited was deregistered by ASIC for the reason, according to the evidence before the Court, that it had failed to comply with ASIC's requirements concerning lodgment of documents and payment of fees. I infer, therefore, that the company was deregistered under s601AB of the Corporations Act by ASIC of its own initiative. 2 Prior to the deregistration the company had three directors, namely Walter, Irene, and Harry Engel, according to the information in ASIC's register. In fact, however, there is evidence before me that Irene Engel died in December 2003, and I am informed from the bar table that Walter Engel was her husband, who predeceased her. Consequently at the time of the company's deregistration the only director was Harry Engel. 3 A problem has arisen because it has been discovered in the course of the liquidation of another company with substantial assets, namely Engel (Hurstville) Pty Limited (in liquidation), that the company Walter Engel is the beneficial holder of ten of the issued ordinary shares of that other company. Consequently it has an interest of some substantial value reflecting the valuable assets of the company in which it holds shares. 4 The application before me today for determination is for an order under s 601AH(2) that ASIC re-instate the registration of the company. The applicant for this relief is Harry Engel. He says he is a person aggrieved for the purposes of s 601AH(2)(a)(i). Apart from the fact that he is a director, according to the company extract that is in evidence, Harry Engel is also a shareholder in the Walter Engel company. He is listed as the beneficial holder of ten of the 20 issued ordinary shares, the other ten being held by his brother Peter, and also as the holder as the joint holder (but not beneficially) of a governing share. 5 Additionally, the liquidator of Engels (Hurstville) Pty Limited has applied to the Court for orders that would allow him to distribute all of the assets of that company to Harry Engel, or to Harry Engel and the Walter Engel company. According to the liquidator, they are two of the three shareholders interested in Engels (Hurstville), and the other shareholder, Peter Engel, has consented to that distribution after independent advice. I gather it is contemplated that if the liquidator's application to make a distribution of the assets of Engels (Hurstville) is successful, and the Walter Engel company is reinstated, then either the Walter Engel company will consent to a distribution of the whole of the assets to Harry Engel, or it will receive part of the distribution and will in turn make a distribution (perhaps in its subsequent winding up) to Harry Engel. Either way, at the end of the day it is intended that Harry Engel will take all of the substantial assets of Engels (Hurstville) Pty Limited. I say nothing at this stage is to whether the liquidator's application for leave to distribute will succeed. 6 What that means is that in addition to being a shareholder of Walter Engel, and a director of that company, Harry Engel stands to benefit greatly from the re-instatement of the company and its subsequent winding up and, therefore, he is manifestly a person aggrieved for the purposes of the re-instatement application. 7 The other matter to be shown on the re-instatement application is that it is just that the company's registration be reinstated; (s 601AH(2)(b)). I am satisfied that that requirement is met in the present circumstances. 8 As I have explained, the purpose of the re-instatement is to permit the Walter Engel company either to consent as a shareholder of Engels (Hurstville) to a distribution of the assets of that company to Harry Engel, or to receive a distribution in the winding up of the Engels Hurstville company of substantial assets as a shareholder of the company, so that in turn the Walter Engel company can distribute those assets to Harry Engel. 9 On the basis that all interested parties consent to that outcome, a matter that must be addressed by the liquidator in the application for leave to distribute, it will in my opinion be just to re-instate the company so as to facilitate that process. 10 The application for re-instatement has been referred to ASIC, which has indicated in a letter dated 20 May, 2009 that it will not oppose the application provided certain relatively formal and standard conditions are satisfied. Mr Harry Engel undertakes to ensure, as the director of the company upon its re-instatement, that those conditions will be addressed, and he also has given other undertakings in his affidavit, including an undertaking as director to ensure that the company complies with its obligations under the Corporations Act after its re-instatement. Therefore I am that the order can and should be made. **********