In the matter of Estate Rubino v ANZ Banking Group Ltd [2018] NSWSC 121

Supreme Court New South Wales

Medium Neutral Citation: In the matter of Estate Rubino v ANZ Banking Group Ltd [2018] NSWSC 121 Hearing dates: Monday, 29 January 2018 Date of orders: 29 January 2018 Decision date: 29 January 2018 Jurisdiction: Equity - Corporations List Before: Brereton J Decision: An order under (CTH) Corporations Act 2001, s 601AH (3) validating an act whilst deregistered made Catchwords: CORPORATIONS — Dissolution — Reinstatement – application for orders validating acts during period of deregistration per s 601AH(3) – an act whilst deregistered validated Legislation Cited: (CTH) Corporations Act 2001, s 601AH Cases Cited: Data Tech Communications (Aust) Limited [2009] NSWSC 402 Category: Procedural and other rulings Parties: Pineview Property Holdings Pty (Applicant) Susan Elizabeth Huybers (Applicant) George Dimitriou (Respondent) Representation: Counsel: D. Allen (Applicants) G. Dimitriou (in person) (Respondent)

Solicitors: Kekatos Lawyers (Applicants) File Number(s): 2013/301976

Judgment (EX TEMPORE) 1. Before the Court is an application by Susan Huybers and Pineview Property Holdings Pty Limited for orders pursuant to (CTH) Corporations Act 2001 s 601AH validating the service and other acts in connection with a bankruptcy notice on the respondent George Dimitriou, which occurred during a period in or about June 2017, while Pineview was deregistered. The applicants wish to proceed on the application today. Mr Dimitriou seeks an adjournment. Essentially his purpose in seeking an adjournment is to obtain on subpoena from ASIC the application for reinstatement made by Ms Huybers in respect of the deregistration and also an earlier application for reinstatement made by her in connection with an earlier deregistration of the company. As I understand it, Mr Dimitriou wishes to use that information to argue that the reinstatement was procured by false evidence to ASIC. 2. The company has already been reinstated administratively by ASIC. In those circumstances the Court is not concerned with whether or not the company should or should not have been reinstated. The starting point for the Court's consideration is that the reinstatement has taken place. 3. I am prepared to accept that if the Court were persuaded that the reinstatement had been procured by false evidence that might well go as a matter of discretion as to whether the Court would grant the relief sought. However, one needs to bear in mind the overall context of what has happened, to see whether there is any reasonable basis for supposing that the reinstatement was procured by false evidence such as to justify the issue of a subpoena as anything more than a fishing expedition. 4. Mr Dimitriou has put into evidence the pro forma application and statutory declaration that ASIC requires in connection with a reinstatement. It is not apparent on a reading of that pro forma documentation how anything that Ms Huybers might have declared would be false. The only precise suggestion made was that she might have ticked the box in paragraph 4: "The company was carrying on business or was in operation at and subsequent to the time that the registration of the company was cancelled". 1. It may be that the company was not carrying on business but it was plainly in operation because it was conducting, inter alia, the bankruptcy proceedings to which reference has been made. It is not self-evident that there would have been any annexures to the statutory declaration, nor is there any reason for supposing that they would have been false, let alone intentionally false. 2. The overall context to which I refer includes that this is a company which is a judgment creditor and has been opposing an appeal against the judgment and prosecuting bankruptcy proceedings against Mr Dimitriou. There is simply no way that it's deregistration would have been intentional. It may well be that it was the result of neglect of one degree or another. It appears to have been a result of not having notified a change in its registered office so that it did not receive the notice of intention to deregister. That is a very common occurrence in the context of the Court or ASIC being asked to reinstate a deregistered corporation. 3. Mr Dimitriou has prepared submissions on legal issues and on factual issues relating to the past history of deregistration of the company which it remains open to him to advance, but it seems to me that it is not on the cards, in the sense in which that term is used in the law of subpoenas. That a subpoena to ASIC would procure evidence of intentional falsity in the making of the application for reinstatement. I am not minded to grant an adjournment of the application. 4. The applicants are judgment creditors for $535,000 and $1,276,000 respectively pursuant to a judgment given in these proceedings on 30 June 2016. An appeal is pending from that judgment and a stay previously granted lapsed, although another stay application is apparently pending and to be heard on 6 March 2018. 5. On 26 May 2017 the present applicants, Ms Huybers and Pineview, caused to be issued a bankruptcy notice against Mr Dimitriou in respect of the judgment debt. The bankruptcy notice is issued for the total sum of the two judgment debts by each of the judgment creditors. It is not for this Court to be troubled as to whether that bankruptcy notice is valid in those circumstances or not. 6. The bankruptcy notice was allegedly served on Mr Dimitriou on 5 June 2017. Again, whether service was validly effected on that occasion is not a matter for this Court and remains to be argued in the bankruptcy proceedings. Immediately prior to service of the bankruptcy notice, however, on 4 June 2017, Pineview was deregistered. Presumably on account of failing to lodge annual returns or some similar default and presumably because notice of the intention to deregister was not received in circumstances where its directors had failed to give notice of a change of the registered office. 7. Pineview was reinstated by ASIC on the application of Ms Huybers on 21 July 2017. The applicants have issued a creditor's petition in the Federal Circuit Court. In his amended notice of grounds of opposition Mr Dimitriou relies, inter alia, on the contention that service of the bankruptcy notice could not have been validly authorised because at the time of service Pineview was deregistered. 8. Corporations Act s 601AH(5) provides that if a company is reinstated the company is taken to have continued in existence as if it had not been deregistered. While that provision provides a measure of retrospectivity, it has been said that the retrospectivity is not absolute. For that reason s 601AH(3) provides that if: (a) ASIC reinstates the registration of a company under subsection (1) or (1A); or (b) the Court makes an order under subsection (2). 1. The Court may validate anything done during the period of deregistration and make any other order it considers appropriate. 2. Mr Dimitriou invoked the judgment of Barrett J, as he then was, in Data Tech Communications (Aust) Limited [2009] NSWSC 402 in support of the proposition that the Court's power to make a validating order under s 601AH(3) was limited to a case in which the Court had ordered reinstatement and did not extend to a case where the company had already been reinstated administratively by ASIC. Data Tech Communications was certainly authority for that proposition, but it was after, and probably as a result of Data Tech, that ss 3(a) was inserted in the Act with effect from 1 July 2012 so as to extend the Court's validating power to a case in which ASIC had reinstated the registration of the company. For that reason the argument that the Court has no power to order reinstatement does not succeed. 3. As I have said, in the context that Pineview was defending the appeal and prosecuting the bankruptcy proceedings, any notion that its deregistration was some intentional device is absurd. Certainly it might be said that the deregistration was the result of neglect on its part or the part of its directors, but so are most deregistrations. It may well be as a result of s 601AH(5), to which I have referred, that no further remedial order is required, but the present application is made, as I understand it, for more abundant caution to ensure that the deregistration does not of itself invalidate any aspect of the bankruptcy proceedings. 4. The real question in that case is whether any prejudice is done to any other person by making the validating order. That really means unfair prejudice. In the context of this case making no validating order will deprive Mr Dimitriou of one possible defence he has in the bankruptcy proceedings. I say possible because it may well be that 6601AH(5) does the work in any event as I have mentioned. Mr Dimitriou has raised many other defences in those proceedings which remain open to him, including as to whether there was any or valid service of the bankruptcy notice and as to whether the notice was valid and whether the debts exist. All of those defences remain available and are unaffected by the validating order proposed. It has not been shown that he acted to his detriment in any relevant way on the assumption that the company had been deregistered, and that is the key issue in the present context. 5. In those circumstances I am satisfied that no unfair prejudice would be done to him by making the validating order sought and that given the prima facie effect of s 601AH(5) and the overall purpose of s 601AH in overcoming the effect of unintended deregistrations, that it is appropriate to make the order sought. 6. On the applicants' notice of motion filed on 23 January 2018, the Court orders that: 1. Pursuant to Corporations Act s 601AH(3) service on 5 June 2017 of bankruptcy notice BN213800 issued on 26 May 2017 by Pineview Property Holdings Limited and all other acts undertaken by Pineview Property Holdings Pty Limited relating to that bankruptcy notice in the period 4 June to 21 July 2017 be validated. 1. I should make clear that that order does not or is not intended to state that service was effected on 5 June. Whether or not it was effected remains a matter for the Federal Circuit Court. It simply validates it to the extent that it would otherwise be invalid by reason of the company's then deregistration. 2. In circumstances where the applicants have by one means or another brought about the requirement to make this application and needed the assistance of the Court, it is appropriate that there be no order as to costs.