St Hilliers Contracting Pty Ltd [2009] NSWSC 1460

New South Wales Supreme Court

CITATION : St Hilliers Contracting Pty Ltd [2009] NSWSC 1460

HEARING DATE(S) : 30 November, 14 December 2009 JURISDICTION : Equity Corporations List

JUDGMENT OF : Austin J

EX TEMPORE JUDGMENT DATE : 14 December 2009

DECISION : Orders made for reinstatement and winding up, and for leave to proceed with apportionment claim.

CATCHWORDS : CORPORATIONS - reinstatement - where purpose of reinstatement is to permit a litigant to bring an apportionment claim - winding up on just and equitable ground - where no director willing to act - whether court should dispense with advertising - leave to bring apportionment claim against company in liquidation - relevant considerations

LEGISLATION CITED : Corporations Act 2001 (Cth), ss 461, 465A, 467, 471B, 601AH Environmental Planning and Assessment Act 1979 (NSW), s 109ZK

CIC Insurance Ltd (prov liq apptd) v Hannan & Co Pty Ltd (2001) 38 ACSR 245 CASES CITED : Danich Pty Ltd; Re Cenco Holdings Pty Ltd (2005) 53 ACSR 484 Tyrrell v Tyrrells Building Consultancy Pty Ltd [2008] NSWSC 416

PARTIES : St Hilliers Contracting Pty Ltd (Plaintiff)

FILE NUMBER(S) : SC 5090/09

COUNSEL : D C Price (Plaintiff)

SOLICITORS : Colin Biggers & Paisley (Plaintiff)

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

AUSTIN J

MONDAY 14 DECEMBER 2009

5090/09 ST HILLIERS CONTRACTING PTY LTD JUDGMENT (Ex tempore, revised on 21 December 2009) 1 HIS HONOUR: The plaintiff ("St Hilliers") seeks orders as follows: (a) pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) , for ASIC to reinstate the registration of Rapidwall (NSW) Pty Limited ("Rapidwall"); (b) pursuant to s 461(k) of the Act, that Rapidwall be wound up; and (c) pursuant to s 471B of the Act, for leave to bring a cross-claim against Rapidwall in Supreme Court of NSW, Technology and Construction List proceedings, No 55005 of 2007. 2 St Hilliers is the defendant in the Construction List proceedings. On 16 October 2009, the plaintiff in those proceedings served a Further Amended Technology and Construction List Statement on St Hilliers. Having regard to the claims and their particularisation in that Statement, St Hilliers now seeks to bring an apportionment claim against Rapidwall under s 109ZK of the Environmental Planning and Assessment Act 1979 (NSW). 3 So that it can do so, it wishes, first, to reinstate Rapidwall and then put it into liquidation under the just and equitable ground so it is under the control of a liquidator, and then to obtain leave to permit it to make the apportionment claim by cross-claim in the Construction List proceedings. 4 I shall deal first with the reinstatement application. The first requirement to be satisfied before an order can be made under 601AH(2) is that there is a "person aggrieved". Those words are to be interpreted widely. A person will be aggrieved by deregistration of the company if the person has a real and direct interest in the deregistration. See Danich Pty Ltd; Re Cenco Holdings Pty Ltd (2005) 53 ACSR 484, Barrett J. I have previously held that a person wishing to bring an apportionment claim against a deregistered corporation is a person aggrieved within s 601AH(2): Tyrrell v Tyrrells Building Consultancy Pty Ltd [2008] NSWSC 416 at [17]. 5 The Court is required by that section to consider whether it is just with the registration being reinstated. In Tyrrell's case, at [21], I set out considerations that led me to conclude that in the circumstances of that case, it was just to make the reinstatement order: 21 Here the reinstatement of the Company will permit Mr Tyrrell to exercise the statutory rights with respect to apportionment that he would have if the Company had not been deregistered. In the absence of a reinstatement order he will not be able to do so. That would be unjust to him, in my opinion. The Company will be formally prejudiced in the sense that it will be exposed to the making of an apportionment order against it but if that occurs, it will be through the operation of the apportionment legislation and for the purpose of giving effect to the underlying legislative policy. The Owners Corporation should not be permitted to rely on the deregistration of the company so as to achieve the collateral outcome of protecting itself against the apportionment of liability in a building claim that s 109ZJ ordains. The reinstatement is likely to initiate a chain of events that will probably include Mr Tyrrell's cross-claims against the Company, and possibly a decision by the District Court apportioning liability between Mr Tyrrell and the Company. If those events occur, in all probability the Owners Corporation will be unable to recover that part of the judgment that is apportioned to the Company (there is no evidence as to whether the Company will be able to have recourse to any insurance). But in my opinion that outcome is not relevantly unjust to the Owners Corporation so as to dissuade the Court from ordering reinstatement. It is the consequence of the application of legislative policy as to apportionment of liability. 6 In my view, those reasons are applicable in the present circumstances and, therefore, the grounds for reinstatement have been made out. There has been no assertion by any person that they would be prejudiced if Rapidwall were reinstated. In particular, the plaintiff in the Construction List proceedings has been served and does not wish to oppose the making of the orders. The directors of Rapidwall have been notified, and the most recent evidence indicates that the application has been explained to Mr Geoffrey Wyett, who is a director of the company, in a letter from the applicant's solicitors, dated 4 December 2009. Although there was an earlier indication that upon receipt of that letter he would consent to the application, no reply has been received, but on the other hand he has not appeared to the purpose of resisting the application. ASIC has indicated it does not object to the reinstatement but requires payment of a fee. In those circumstances, I conclude that he has had ample opportunity to object and has not done so. 7 I turn to the winding up of Rapidwall. The Court has a very wide power to wind up a company on the just and equitable ground under s 461(k). This power permits the Court to wind up a company where it does not have a valid and effective management and no one is willing to act as a director: CIC Insurance Ltd (prov liq apptd) v Hannan & Co Pty Ltd (2001) 38 ACSR 245. Mr Wyett, the former director of Rapidwall, now resides in Dubai and has indicated he does not wish to undertake the duties of director. Therefore the ground for winding up is made out. The Court will relevantly frequently combine an order under s 601AH(2) with a winding up order, in circumstances where the former directors of the defunct company are unwilling to resume management or it is inappropriate for them to do so, yet there is a good reason to reinstate the company. 8 The applicant has not complied with s 465A(c), which requires advertising of the application to wind up. I agree with counsel, however, that this is an appropriate occasion for the Court to make an order under s 467(3) dispensing with that requirement. Rapidwall has been deregistered for a number of years and, therefore, the inference can be drawn that there are no dissatisfied creditors who might wish to assert some interest in opposition to the reinstatement (as opposed to proving in the winding up), and the director and the other potentially interested persons (in particular, the parties in the Construction List proceedings) have been notified of the application and do not oppose it. 9 As to the application for leave to proceed under s 471B, it seems to me there are good grounds for granting relief along the lines outlined in my judgment in Tyrrell's case. This is not an occasion where it is appropriate to leave the applicant to lodgement of a proof of debt in the winding up of the company, once reinstated. The point of the apportionment claim is to reduce the liability of St Hilliers in the Construction List proceedings, and the benefit that flows from doing so is not amenable to proof of debt. It may be that the plaintiff in the Construction List proceedings will have a provable claim against Rapidwall after the apportionment claim has be determined; that is a matter for the future. I am satisfied that the plaintiff's apportionment claim gives rise to a serious or substantial question to be tried having regard to the plaintiff's Construction List statement to which I have referred. 10 The attitude of the liquidator is a relevant factor for the Court to take into account in determining whether to grant leave under s 471B. Here the proposed liquidator has consented to act as such and has not raised any objection to leave being granted. Indeed, the whole point of the reinstatement and liquidation is to permit the apportionment claim to be made. As I have noted, there is no opposition of the plaintiff in the Construction List proceedings to the application for leave. 11 My conclusion is, therefore, that the plaintiff has made out a proper case for the orders sought. **********