BSA Limited v Australian Securities and Investments Commission

In BSA Limited v Australian Securities and Investments Commission, BSA Limited applied to the Federal Court for an order under s 601AH(2) of the Corporations Act 2001 (Cth) to reinstate the registration of two companies, Southern Electrical and Data Pty Ltd and Escom Communications Pty Ltd. The purpose of this application was to allow BSA to pursue cross-claims against the Bradshaw applicants and the companies they formerly controlled, namely SED and Escom, in a representative proceeding that had been brought by Paul Bradshaw and Scott Uren on behalf of themselves and other group members. The Bradshaw applicants had commenced the representative proceeding, alleging that they had been treated unfairly by BSA, and BSA sought to defend itself and claim restitution by filing cross-claims against the Bradshaw applicants and the companies they formerly controlled. The court was required to consider whether the purpose of the application was sufficient to warrant the reinstatement of the companies' registration, and whether the cross-claims that had been issued were valid.

The court determined that the purpose of the application was sufficient to warrant the reinstatement of the companies' registration. The court noted that the cross-claims that had been issued were likely to be valid, as s 601AH(5) of the Corporations Act provides that a company that has been reinstated is taken to have continued in existence as if it had not been deregistered. However, the court decided to make orders under s 601AH(3) of the Corporations Act, which empowers the court to validate anything done between the deregistration of a company and its reinstatement, in order to ensure the validity of the cross-claims and the steps subsequently taken. The court granted the orders sought by BSA, ordering ASIC to reinstate the registration of SED and Escom, and confirming the validity of the institution of the cross-claims and the steps subsequently taken. No party sought costs and no order as to costs will be made.

This decision highlights the court's willingness to grant reinstatement of a company's registration in circumstances where it is necessary to enable the company to defend itself in proceedings. The court also considered the need to ensure the validity of the cross-claims and the steps subsequently taken, and made orders to that effect. The decision is likely to be of interest to companies that find themselves in a similar position, as well as to those who are involved in representative proceedings.