Baldwin v Australian Securities and Investments Commission

[2009] NSWSC 936

CITATION:	Baldwin v ASIC [2009] NSWSC 936 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	04/09/09
JUDGMENT DATE :	4 September 2009
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
EX TEMPORE JUDGMENT DATE:	4 September 2009
DECISION:	Order for reinstatement of registration of company
CATCHWORDS:	CORPORATIONS - company deregistered - application for reinstatement by former director - applicant in receipt of notice under taxation legislation that will make him liable for company's tax obligations unless company promptly wound up - applicant wishes to place company into voluntary liquidation - need to revive company for that purpose - whether applicant a person aggrieved by deregistration - whether resinstatement just
LEGISLATION CITED:	Corporations Act 2001 (Cth), ss 201A(1), 601A. 601AH(2), 601AH(5) Income Tax Assessment Act 1936. s 222AOE
CATEGORY:	Principal judgment
CASES CITED:	Application of Stojic [2006] NSWSC 608; (2006) 24 ACLC 844 Beckton v Australian Securities and Investments Commission [2007] NSWSC 780
PARTIES:	Anthony William Baldwin - Plaintiff Australian Securities and Investments Commission - Defendant
FILE NUMBER(S):	SC 4376/09
COUNSEL:	Ms V E Whittaker - Plaintiff Ex parte
SOLICITORS:	Kemp Strang - Plaintiff Ex parte

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

BARRETT J

FRIDAY 4 SEPTEMBER 2009

4376/09 ANTHONY WILLIAM BALDWIN v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

JUDGMENT

1 The plaintiff was one of two directors of Tipglisten Pty Ltd, the registration of which was terminated by Australian Securities and Investment Commission pursuant to s 601A of the Corporations Act 2001 (Cth) on 15 July 2009. The plaintiff, who was also one of the shareholders of Tipglisten, was the applicant for deregistration.

2 On 24 August 2009, the directors of Tipglisten received a notice issued by the Commissioner of Taxation under s 222AOE of the Income Tax Assessment Act 1936 in respect of PAYG withholdings which, according to the Commissioner, Tipglisten had failed to remit. The amount involved is $45,099.

3 Having regard to the statutory regime under which that notice was issued, the directors of Tipglisten, being the plaintiff and his wife, will become liable to pay the sum of $45,099 to the Commissioner of Taxation unless Tipglisten is promptly wound up. The plaintiff and his wife desire to avoid that consequence and for that reason have it in mind to put Tipglisten into voluntary liquidation. They cannot do so, of course, because, as things now stand, Tipglisten does not exist.

4 It is for that reason that the plaintiff now seeks an order under s 601AH(2) of the Corporations Act that Australian Securities and Investment Commission reinstate the registration of Tipglisten. If that order is made the existence of Tipglisten as a legal entity will be resumed with the kind of limited intervening continuity provided for by s 601AH(5).

5 In the circumstances I have described, there can be no real doubt that the plaintiff is, in terms of s 601AH(2)(a)(i), a person “aggrieved by” the deregistration. The ongoing non-existence of Tipglisten and, therefore, the impossibility of complying with the condition necessary to avoid personal liability of the plaintiff for the unsatisfied PAYG instalments is sufficient to warrant that conclusion.

6 The second question posed by s 601AH(2) therefore arises, that is, whether the court is satisfied that it is “just” that the company's registration be reinstated.

7 Where, as here, the deregistration occurred as a result of a decision of the company's controllers, one must be strongly inclined to think that it will be just that registration should be reinstated in accordance with their wishes, since the reinstatement will allow them to take steps for their own protection under the taxation regime.

8 Of course, one question posed by the requirement that the court be satisfied that it is just that the company's registration be reinstated whether any person will be prejudiced by the reinstatement. In the circumstances before me the only person who might possibly be said to be prejudiced is the Commissioner of Taxation, but I do not think that that is an accurate view. That possibility was addressed by White J in Application of Stojic [2006] NSWSC 608; (2006) 24 ACLC 844 but the reality is that the ability of the Commissioner to recover what is owed will not be interfered with if the company is brought back to life so that the condition imposed by the commissioner for avoidance of personal liability by the directors may be satisfied (see also Beckton v Australian Securities and Investments Commission [2007] NSWSC 780).

9 I note, in any event, that the Australian Taxation Office was given notice of the application and indicated that it did not oppose it.

10 ASIC’s attitude to the application is conveyed by its letter to the plaintiff's solicitors. It is indicated that ASIC will not oppose the application if certain conditions are satisfied. Those conditions present no difficulty. I would, however, comment on one of them. It is a condition that the applicant, that is, the plaintiff, "appoints a director who ordinarily resides in Australia as per section 201A(1) of the Act". Since s 601AH(5) will operate upon reinstatement of the registration and says that “a person who was a director of the company immediately before the deregistration becomes a director again as from the time when ASIC or the Court reinstates the company …", that condition will be fulfilled by the simple operation of the statutory scheme, noting that both the plaintiff and his wife, the directors at the time of deregistration, appear to be ordinarily resident in Australia.

11 I make order 1 in the originating process. The orders may be taken out forthwith.

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08/09/2009 - Typo in name of Plaintiff's solicitor - Paragraph(s) Front sheet