Australian Competition and Consumer Commission v Australian Securities and Investments Commission, in the matter of SensaSlim Australia Pty Limited (In Liquidation)

The Australian Competition and Consumer Commission (ACCC) brought an application under section 601AH(2) of the Corporations Act 2001 (Cth) seeking an order for the reinstatement of the registration of SensaSlim Pty Limited (in liquidation) (the company). The company had been deregistered on 22 June 2014 by its liquidator, who now acknowledges that the application was made in error. The Australian Securities and Investments Commission (ASIC) does not oppose the reinstatement of the company’s registration. The ACCC intends to pursue a pecuniary penalty against the company in a proceeding that is ongoing, despite the company being in liquidation. The central legal issue before the court was whether it was appropriate to exercise its discretion to reinstate the company's registration, particularly in light of the company's clear insolvency and the potential futility of pursuing a significant penalty against it.

The court found that the ACCC had standing to seek the reinstatement of the company’s registration under section 601AH(2)(a)(i) of the Corporations Act. The court acknowledged that while it is generally within the court's discretion to order the reinstatement of a company's registration, the appropriateness of such an order must be considered in the context of the specific circumstances. The court noted that in Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 174 ALR 688, Austin J had considered similar issues and decided to order the reinstatement of a company’s registration, leaving the question of the appropriateness of the penalty to the court hearing the penalty issue. Given the ACCC's ongoing proceeding against the company, the court decided it was appropriate to exercise its discretion to reinstate the company’s registration, ensuring that the ACCC's claim could proceed unhindered.

The court ordered that ASIC reinstate the registration of SensaSlim Pty Limited, with Trajan John Kukulovski, the former liquidator, appointed as liquidator upon reinstatement. It further ordered that all steps taken by the ACCC in the proceeding from 22 June 2014 be deemed to have been taken against the company as if it had not been deregistered. The court made no order as to costs. This decision ensures that the ACCC's proceedings against the company can continue without the impediment of the company's deregistration, while also addressing the procedural error made by the liquidator.