Brown, in the matter of Summer Swim Pty Ltd (in liq) v Sam Riley Promotions Pty Ltd
[2020] FCA 1607
•4 November 2020
FEDERAL COURT OF AUSTRALIA
Brown, in the matter of Summer Swim Pty Ltd (in liq) v Sam Riley Promotions Pty Ltd [2020] FCA 1607
File number: NSD 496 of 2020 Judgment of: FARRELL J Date of judgment: 4 November 2020 Catchwords: CORPORATIONS – second application under s 509(2) of the Corporations Act 2001 (Cth) for order that Australian Securities and Investments Commission deregister company on a specified day – where orders made under first application to deregister company six months after the end of the deregistration period – where second application made outside deregistration period – application dismissed. Legislation: Corporations Act 2001 (Cth) s 509 Cases cited: Billingham re W M Ritchie (Aust) Pty Ltd [2007] NSWSC 325 Division: General Division Registry: New South Wales National Practice Area: Commercial and Corporations Sub-area: Corporations and Corporate Insolvency Number of paragraphs: 10 Date of hearing: 4 November 2020 Counsel for the Plaintiff: The plaintiff appeared in person Counsel for the Defendants: The defendants did not appear ORDERS
NSD 496 of 2020 IN THE MATTER OF SUMMER SWIM PTY LTD (IN LIQUIDATION)
ACN 167 452 879BETWEEN: ALEX SANDY BROWN
Plaintiff
AND: SAM RILEY PROMOTIONS PTY LTD ACN 071 286 523
First Defendant
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Second Defendant
ORDER MADE BY:
FARRELL J
DATE OF ORDER:
4 NOVEMBER 2020
THE COURT ORDERS THAT:
1.The plaintiff’s application dated 2 November 2020 is dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
FARRELL J:
By originating process lodged with the Court on 2 November 2020, Alex Sandy Brown, the sole director and shareholder of Summer Swim Pty Ltd (in liquidation) (or company), sought an order deferring the date of the company’s deregistration under s 509(2) of the Corporations Act 2001 (Cth). I heard this application in my capacity as Commercial and Corporations Duty Judge on 4 November 2020.
Section 509 of the Corporations Act provides as follows:
509 Deregistration
ASIC must deregister at the end of 3 month period
(1)If an end of administration return for a company is lodged with ASIC on the basis that the affairs of the company are fully wound up, ASIC must deregister the company at the end of the period of 3 months beginning on the day after the return is lodged (the deregistration period).
ASIC must deregister on a day specified by the Court
(2)On application by the liquidator or any other interested party, the Court may make an order that ASIC deregister the company on a specified day. The Court must make the order before the end of the deregistration period.
(3)The person on whose application an order under subsection (2) is made must, within 10 business days after the making of the order, lodge a copy of the order.
This is the second application Mr Brown has made under s 509(2). I heard Mr Brown’s first application on 4 May 2020, also in my capacity as Commercial and Corporations Duty Judge. In both applications, Mr Brown sought orders that deregistration of Summer Swim occur on a specified day beyond the end of the deregistration period as defined in s 509(1).
A company extract of Summer Swim dated 1 May 2020 annexed to Mr Brown’s affidavit sworn on 3 May 2020 records that an end of administration return was lodged with the Australian Securities and Investment Commission (ASIC) on 4 February 2020. Accordingly, Summer Swim’s deregistration period ended three months later, on 4 May 2020.
Mr Brown’s first application sought a six month deferral of the date of deregistration of Summer Swim. This was on the basis that Mr Brown had a discrimination complaint before the Australian Human Rights Commission (AHRC) in relation to the proceedings which led to Summer Swim’s winding up. The complaint had been filed in June 2019 but had not been determined as at 4 May 2020. I granted this application, satisfied there was no apparent prejudice to anyone and the company’s continued existence may serve a useful purpose of avoiding costs should Mr Brown’s complaint to the AHRC be upheld. I made orders on 4 May 2020 for deregistration of Summer Swim to occur on 4 November 2020 and joining ASIC as a defendant.
Mr Brown’s second application sought a further six month deferral of the date of deregistration of Summer Swim on the basis that he had appealed his discrimination complaint to the Federal Court of Australia and those proceedings were ongoing.
At the hearing of the first application on 4 May 2020, I said the following to Mr Brown:
HER HONOUR: …What is exercising my mind is the fact that this order can’t be made twice. In the event that the six months expired and you got an outcome that you were looking for from the Human Rights Commission, you would then need to seek the reregistration of the company …
This comment was made on the basis that the Court’s jurisdiction under s 509(2) cannot be exercised after the expiry of the three month deregistration period. This is evident in the text of s 509(2) which states that “[t]he Court must make the order before the end of the deregistration period” and earlier authorities dealing with s 509(6) of the Corporations Act, being the predecessor to s 509(2): see Billingham re W M Ritchie (Aust) Pty Ltd [2007] NSWSC 325 (Barrett J) at [11] (Billingham).
In Billingham, Barrett J granted an application by liquidators to defer the deregistration of W M Ritchie (Aust) Pty Ltd to 10 October 2007 to allow ongoing litigation related to the company in South Australia to continue. His Honour provided a similar warning in that case to my comments to Mr Brown recorded above. In Billingham at [11], Barrett J said:
11… should the South Australian matter not be satisfactorily resolved or determined by 10 October 2007, the court will not be able to maintain the existence of W M Ritchie (Aust) beyond that date by means of any further order. It will, however, have jurisdiction to order reinstatement of the registration under s.601AH, assuming that an application in that respect is made by a former liquidator or a person aggrieved and it is shown that reinstatement would be just.
As the deregistration period set out in s 509(1) has passed, Mr Brown’s second application must be dismissed.
I certify that the preceding ten (10) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Farrell. Associate:
Dated: 4 November 2020