New South Wales Supreme Court CITATION : AMP Capital Investors Ltd & Ors v Parsons Brinckerhoff Australia Pty Ltd & Ors [2010] NSWSC 129 HEARING DATE(S) : 22 February 2010 JUDGMENT DATE : 22 February 2010 JURISDICTION : Equity Division Corporations List JUDGMENT OF : Palmer J EX TEMPORE JUDGMENT DATE : 22 February 2010 DECISION : Application granted. CATCHWORDS : CORPORATIONS – REINSTATEMENT – Whether identifying the existence of an insurance policy is a proper and practical purpose of reinstating de-registered company. LEGISLATION CITED : Corporations Act 2001 (Cth) – s 491, s 500(2), s 601AG, s 601AH(2) CATEGORY : Procedural and other rulings CASES CITED : Stone v ACN 000 337 940 Pty Ltd (2008) 68 ACSR 242 AMP Capital Investors Ltd (First Plaintiff) AMP Investment Services Pty Ltd (Second Plaintiff) Equipsuper Pty Ltd (Third Plaintiff) PARTIES : National Nominees Ltd (Fourth Plaintiff) Parsons Brinckerhoff Australia Pty Ltd (First Defendant) ACN 006 475 056 Pty Ltd (Second Defendant) Booz & Company (Australia) Ltd (Third Defendant) FILE NUMBER(S) : SC 2009/00290489 M.J. Steele (Plaintiffs) COUNSEL : S. Golledge (First Defendant) A. Lo Surdo (J.D. Gregg-Mantle, P. Hiley and G.W. Smallhorn) Baker & McKenzie (Plaintiffs) SOLICITORS : Colin Biggers & Paisley (First Defendant) DLA Phillips Fox (J.D. Gregg-Mantle, P. Hiley and G.W. Smallhorn) 2009/00290489 AMP Capital Investors Ltd & Ors v Parsons Brinckerhoff Australia Pty Limited & Ors JUDGMENT – Ex tempore 22 February, 2010 1 This is an application by the Plaintiffs ("AMPCI") pursuant to s 500(2) and s 601AH(2) of the Corporations Act 2001 (Cth) for the reinstatement of the company formerly known as Parsons Brinckerhoff International (Australia) Pty Limited ("PBI"). PBI was placed in voluntary liquidation by resolution of its members pursuant to s 491 of the Corporations Act on 22 October 2007. 2 In accordance with an Agreement described as the "Patronage Forecasting Pre-Bid Contract", the Defendant, Parsons Brinckerhoff Australia Pty Ltd ("PBA") and PBI made certain representations as to the future patronage and revenue of the Lane Cove Tunnel Project upon which AMPCI was entitled to rely in determining whether to invest in the project. AMPCI says that it did rely upon such representations and that the representations were made negligently or were made in a way that was misleading or deceptive. 3 AMPCI commenced proceedings against PBA and another company on 10 September 2009. PBI was deregistered on the application of its then liquidator on 23 December 2009. The Statement of Claim in which PBI is a party as a Defendant was not served on PBI prior to its deregistration. AMPCI now seeks the reinstatement of PBI in order that its claim against it may proceed. 4 The application is opposed by the former directors of PBI and its former shareholder. Mr Lo Surdo of Counsel appears for the former directors and the principal shareholder, and Mr Golledge of Counsel appears for the former liquidator, Mr Williams. 5 There are two grounds for opposition. Firstly, it is said that reinstatement of the company will be for no practical purpose as the company had no substantial assets and such nominal assets as there were were distributed to the shareholder shortly prior to the company's deregistration. Accordingly, enforcement of a judgment in these proceedings against PBI, if a claim against it were successful, would be pointless. 6 Secondly, it is said that if there is an insurance policy obtained by PBI in accordance with a requirement in the Pre-Bid Contract that it obtain such a policy, and if that policy would respond to the claim sought to be made against PBI in the present proceedings, that claim may be enforced directly against the insurer pursuant to s 601AG of the Corporations Act without reinstatement of the company itself. Section 601AG provides as follows: " Claims against insurers of deregistered company A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if: (a) the company had a liability to the person; and (b) the insurance contract covered that liability immediately before deregistration." 7 AMPCI accepts that an attempt to recover judgment against the assets of PBI itself would be futile. It says that it is seeking to proceed against PBI because it believes that there may well be an insurance policy which responds to its claim. However, AMPCI does not know whether there is such an insurance policy. In correspondence between its solicitors and PBA's solicitors it has requested information about whether such a policy exists, but no such information has been forthcoming. 8 It is clear, I think, that for obvious reasons neither the former officers of PBI nor its former parent company wish to divulge to AMPCI whether or not there is a policy which may respond to AMPCI's claim. In those circumstances, it is not clear that s 601AG applies or does not apply to the claim which the AMPCI wishes to make. 9 In Stone v ACN 000 337 940 Pty Ltd (2008) 68 ACSR 242, Barrett J said at [18]: "If s 601AG clearly applied and the re-creation of the deregistered company would put the prospective claimant for damages in a position from which no outcome better than that made available by s 601AG might be expected, that prospective claimant would not be a 'person aggrieved by' the deregistration." 10 His Honour was of the view, in which I respectfully agree, that if it is clear that s 601AG applies to a particular claim sought to be brought against a company which has been deregistered, then there is no practical utility in reinstating the company. In this case, I think I can infer that PBA and the former shareholder of PBI do not wish it to be apparent whether or not s 601AG clearly applies. They wish to keep confidential at the present time whether or not an insurance policy exists which may respond to AMPCI's claim. 11 In those circumstances it seems to me that there is a proper and practical purpose in reinstating the company so that a liquidator may investigate the existence or otherwise of an insurance policy. That this application has been made necessary and has to be pursued, and that costs and expense will be incurred in reinstating the company is regrettable. Commercially it is not a very pragmatic or satisfactory state of affairs. One would have thought that in what is obviously going to be substantial litigation between large corporations this sort of minor impediment ought not to have provoked an application to the Court – it should have been dealt with by frank communication between the parties as to whether or not there was an insurance policy, and then the parties could have come to grips with whatever legal consequences flowed. As it is, however, it seems to me that it is proper and necessary to reinstate the company so that the position can be made quite clear. 12 Having the benefit of the remarks which I have made, the parties may in the meantime choose to resolve this matter by means other than reinstatement of the company. But at the moment it seems to me that the orders ought to be made. 13 I make orders in terms of the Short Minutes of Order dated today, initialled by me and placed with the papers. Costs 14 An unopposed application for reinstatement would have been over and done with perhaps within ten minutes. It became a substantial matter. I think that the proper order is that AMPCI should bear only 50% of the costs of this application. 15 There was obviously commercial advantage perceived by the principal shareholder and former officers of PBI in opposing the application. The Court has power to order them to pay some of the costs of the application. I order that Parsons Brinckerhoff Australia Pty Limited, James Duncan Gregg-Mantle, Peter Hiley and Grant Wilton Smallhorn pay one half of the Plaintiffs' costs of these proceedings. – oOo – 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.