Brownlie v TTPM Pty Ltd
[2003] NSWSC 480
•27 May 2003
Reported Decision:
(2003) 21 ACLC 1204
Supreme Court
CITATION: Brownlie v TTPM Pty Ltd [2003] NSWSC 480 HEARING DATE(S): 23 May 2003 JUDGMENT DATE:
27 May 2003JURISDICTION:
EquityJUDGMENT OF: Hamilton J DECISION: If company was in liquidation when deregistered and its liquidator remained in office at that time, upon restoration to the register it remains in liquidation and the liquidator is again in office. CATCHWORDS: CORPORATIONS [270] - Winding up - Conduct and incidents of liquidation - Dissolution - Restoration of defunct company to register - In general - Deregistration - Company in liquidation and liquidator in office at time of deregistration - Effect of restoration to register. LEGISLATION CITED: Corporations Act 2001 (Cth) s 601AH
ASIC Policy Statement 83 par 19(e)CASES CITED: Bianchi v Crewe & Sons Pty Ltd (1996) 135 FLR 15
Civil & Civic Pty Ltd v R W Bass Pty Ltd (1996) 20 ACSR 16
Kenney v McCann (1992) 7 WAR 329
McPherson, The Law of Company Liquidation (4th ed, 1999) 678PARTIES :
Elizabeth Brownlie (P)
TTPM Pty Limited (D)FILE NUMBER(S): SC 2952/03 COUNSEL: R Winarczyk, Solicitor (P)
No appearance (D)SOLICITORS: RTW & Associates (P)
No appearance (D)
IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
HAMILTON J
TUESDAY, 27 MAY 2003
2952/03 ELIZABETH BROWNLIE v TTPM PTY LTD
JUDGMENT
1 HIS HONOUR: This was an application made urgently last Friday for reinstatement of the registration of a company under s 601AH of the Corporations Act 2001 (Cth). The application was made for the purpose of making the company a defendant to an action for personal injuries in the District Court at the suit of the plaintiff. The application was made as a matter of great urgency as it was thought that a limitation period in favour of the company in relation to the cause of action expired that day. The requisite matters having been established, I made the order that day and indicated that I should give reasons for judgment subsequently. These are those reasons.
2 The company was in liquidation at the time of its deregistration. The purpose of the application and the intent to which the company’s registration was reinstated and leave was granted to begin and continue proceedings against it, although in liquidation, was to permit the plaintiff to have the benefit of any insurance policy held by the company in respect of the circumstances in which the plaintiff suffered injury. Thomas Javorsky was the liquidator of the company at the time of its deregistration. Upon being approached by the plaintiff's solicitor, Mr Javorsky indicated that he would consent to acting again as the liquidator of the company if it were restored to the register.
3 Curiously, the question of the status of a company restored to the register which was in liquidation when it was removed is not entirely clear, although restoration of deregistered companies is a common occurrence. Prior to 1998 there were two procedures by which a company left the register. The first was dissolution, which was the formal act at the end of a winding up. Usually associated with dissolution was the release of the liquidator, which had the effect of the liquidator leaving office. The other method was administrative deregistration, which was used in the case of companies which, whether in liquidation or not, had simply become defunct and ceased to function. In 1998, the process of dissolution was abolished and, since then, there has been only one process for the removal of companies from the register, being deregistration, which is used even where a winding up has been completed. The company was deregistered in 2001 under this uniform procedure.
4 In McPherson, The Law of Company Liquidation (4th ed, 1999) it is stated at 678:
- “It is likely that, as under the previous law, if a company that is reinstated had been wound up, the liquidator would be restored to office on reinstatement, if not released before deregistration.”
The authorities cited in support of that proposition are Kenney v McCann (1992) 7 WAR 329; sub nom Re Steelmaster Pty Ltd (in liq) (1992) 10 ACLC 176; and Civil & Civic Pty Ltd v R W Bass Pty Ltd (1996) 20 ACSR 16. In Kenney v McCann Owen J in the Supreme Court of Western Australia held in the case of a company which was in voluntary liquidation that the company would be reinstated as a company in voluntary liquidation. That company had been dissolved at the end of a liquidation. Upon the liquidation being declared to be void, his Honour did not find it necessary to make any fresh appointment of liquidator, but included in his orders directions as to what the liquidator might do: see also Bianchi v Crewe & Sons Pty Ltd (1996) 135 FLR 15. In the Civil & Civic case Olney J in the Federal Court ruled that the liquidator no longer held office because he had been released by order at the time of the dissolution. In those circumstances, his Honour found it necessary to appoint a new liquidator.
5 In my view, the statement made by the learned editors of McPherson on Company Liquidation and cited above is correct. I rely on that authority and also on the words of s 601AH(2) that the Court “may make an order that ASIC reinstate the registration of a company”. The import of those words appears to be that the company is put back on the register in precisely the state in which it left it.
6 I should add that, in the light of this ruling, ASIC’s Policy Statement 83 may require amendment insofar as it requires, for ASIC to refrain from opposition to an application to the Court under s 601AH:
- “19(e) except when the applicant also applies for a winding-up order, the applicant provides information sufficient to satisfy the court that the company would be solvent if its registration were to be reinstated.”
This is because a company in liquidation when deregistered will remain in liquidation when restored.
7 In this case, as I have said, Mr Javorsky has conveyed to the Court his consent again to act as liquidator. It is not necessary to reappoint him or appoint another liquidator. He has said that his consent is on condition that the plaintiff indemnify him in respect of any costs incurred in the conduct of the liquidation. The Court expects the plaintiff to meet that condition. If there is any problem, Mr Javorsky may make an application to the Court in the liquidation.
Last Modified: 06/12/2003
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