Baker, P.E. v Australian Securities Commission (in matter of Alexander Barry Pty Limited)

[1993] FCA 88

*, lYdi .3

JUDGMENT NO. ........ ........ .. ........ ..,

IN THE FEDERAL COURT OF AUSTRALIA	) )
NEW SOUTH WALES DISTRICT REGISTRY	) No. NG 3271 of 1992
)
GENERAL DIVISION	)

BETWEEN:  PAUL EDWARD BAKER
Applicant

AND AUSTRALIAN SECURITIES

COMMISSION (IN MATTER OF ALEXANDER BARRY PTY LIMITED)

Respondent

Beaumont J.

5 February 1993

EX TEMPORE REASONS FOR JUDGMENT
This is an application under S.

Corporations Law for the reinstatement of a company which registration has been cancelled. The application is made by Paul Edward Baker who is a director and secretary of the company and who is the registered proprietor of certain shares in the capital of the company and is beneficially entitled to

one half of the share capital.

section in that he is a person aggrieved by the cancellation.

A preliminary point was taken on behalf of the Australian Securities Commission ("the Commission") that Mr Baker was not a person aggrieved by the cancellation. In my opinion his interest as shareholder and as an officer of the company indicates that he has the standing required by the

Under the provisions of S. 574 (3) , provided an

application is made at any time within fifteen years after the cancellation the court may, if satisfied that the company was at the time of the cancellation carrying on business or in operation, or otherwise satisfied that it is just that the registration be reinstated, order the reinstatement.

The circumstances in which the cancellation of registration took place are recited in the affidavit of Mr Baker sworn on 19 November 1992. It appears that the registered office of the company was at the premises of certain accountants who carried on business in Eastwood. It further appears that those accountants were originally retained by the company but that in the early 1980s new accountants were appointed.

However, annual returns were not lodged as required

by the legislation then in force. By letter dated 24 October

Commission informed the company that it would be deregistered	1991 addressed to the company at its registered office the
if it did not comply with the lodgement of outstanding annual returns.
This complaint was reiterated by the Commission in a further letter dated 24 January 1992, again addressed to the company at its registered office. Regrettably the company did not arrange for the filing of a notice of change of registered office with the consequence that Mr Baker was not aware of the genuine and justified complaint made on behalf of the Commission.
However, it appears that the cancellation of the registration which took place on 27 February 1992 was made at a time when, according to the evidence, the company was in operation, although it may be said that its business activities were limited. The evidence indicates that the only outstanding activity of the company at that stage was its participation as a joint venturer under the terms of a joint venture arrangement with an independent company.
During the course of argument reference was made to the question whether the company was solvent. The Commission relied upon the decision of Mr Justice Needham in Re: Great Eastern Cleanlna Services Ptv Ltd and the Companies Act (1978) 2 NSWLR 278 and it was suggested that there was no evidence as to the solvency of the company. However, during the course of the hearing, evidence was called from Mr Baker who confirmed
that although the company's only business interest was its participation in the joint venture already mentioned, nonetheless it had no liabilities. There is a suggestion in the evidence that the company's interest in the joint venture is at least of some value. As I have said, the evidence is that the company has no liabilities. It seems to me therefore that the reasoning of Mr Justice Needham in the Great Eastern Cleanins Services Ptv Ltd case may be distinguished for present purposes.
In all the circumstances I am satisfied that the company was, at the time of cancellation, in operation. If I needed to consider the matter I would be, in any event, of the view that it is just that the registration of the company be reinstated. I have in mind on this aspect of the matter the circumstance that the company's jolnt venturer has offered a sum of $300,000 to acquire Mr Baker's shares in the capital of the company and for that purpose prima facie at least it is appropriate to permit the reinstatement of the registration.
However, in order to ensure a just result overall it will be necessary to impose certain conditions upon the grant of the relief sought. In this context an undertaking has already been given to the court on behalf of Mr Baker that he will as soon as practicable inform the Australian Taxation
Office of this application and of the orders made. I note also that in para.2 of his affidavit, sworn on 4 February
1993, Mr Baker has offered an undertaking to the Court to
first comply with the notifications of the Cor~orations Law to lodge wlth the Commission notification of registered office, notification of change of office holders and of all outstanding annual returns; secondly, to pay all outstanding fees and penalties payable to the Commission and, thirdly, to be caused to be met any outstanding judgments against the

company or any officer of the company in respect of the non- lodgement of any document required to have been lodged with the Commission.

Upon noting those undertakings I order the

reinstatement of the company.

I hereby celrtify that this and the preceding four (4) pages are a true copy of the Reasons for Judqment of his Honour Mr. Justice

Associate: