Chong v Cheshire Securities Pty Ltd - [2001] WASC 266

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: CHONG -v- CHESHIRE SECURITIES PTY LTD [2001] WASC 266

CORAM: MASTER BREDMEYER

HEARD: 20 SEPTEMBER 2001

DELIVERED : 4 OCTOBER 2001

FILE NO/S: COR 302 of 2001

BETWEEN: KELVIN CHONG CHI HOONG
Plaintiff
AND
CHESHIRE SECURITIES PTY LTD (ACN 009 264 082)
Defendant

Catchwords:

Corporations - Reinstatement of deregistered company

Legislation:

Corporations Law, s 601AH

Result:

Application dismissed

Category: B

Representation:

Counsel:

Plaintiff: Mr S S Ludher by leave
Defendant: Mr J R N Rowe

Solicitors:

Plaintiff: In person
Defendant: Australian Securities & Investments Commission

Case(s) referred to in judgment(s):

Cheshire Holdings Pty Ltd v Yap Cheng See, unreported; SCt of WA; Library No 950634; 22 November 1995
Fermanis v Cheshire Holdings Pty Ltd, unreported; SCt of WA; Library No 7739; 12 July 1989
Yap & Anor v ASIC [2000] WASC 159
Yap v Cheshire Holdings Pty Ltd, unreported; FCt SCt of WA; Library No 980181; 9 April 1998
Yap v Esanda Finance Corporation, unreported; FCt SCt of WA; Library No 980182; 9 April 1998

Case(s) also cited:

Nil

MASTER BREDMEYER: This is an application by Mr Chong that the company, Cheshire Securities Pty Ltd, be reinstated to the company register by the Court and for such other orders as the Court shall think just. The application is supported by a short affidavit of Mr Chong sworn 20 August 2001 and a longer affidavit of Mr Chong sworn 5 September 2001. Cheshire Securities Pty Ltd was formerly known as Cheshire Holdings Pty Ltd and each of these two affidavits in the headings still refer to Cheshire Holdings Pty Ltd. I will refer to the company as "Cheshire".
Mr Chong says he was a director and shareholder of Cheshire previously. I take it that means prior to the deregistration of the company. His two affidavits refer to numerous factual matters which only Mrs Yap could know. Although he does not say that he is swearing these affidavits based on information supplied to him by Mrs Yap, it is quite apparent to me that that is what he is doing. These are in truth affidavits relating events which occurred when Mrs Yap was the driving force of the company. The longer of the two affidavits annexes the judgment of Steytler J in Cheshire Holdings Pty Ltd v Yap Cheng See, unreported; SCt of WA; Library No 950634; 22 November 1995. In that judgment, for reasons there given, Steytler J declined to reinstate the company. Steytler J's decision was upheld by the Full Court in Yap v Cheshire Holdings Pty Ltd, unreported; FCt SCt of WA; Library No 980181; 9 April 1998. At the time of deregistration the company was in liquidation. Mrs Yap also asked for a permanent stay of the liquidation and that order was also refused.
I consider that this application has been definitively decided by Steytler J and affirmed on appeal by the Full Court and the matter is now closed. It is issue estoppel and res judicata and this application should be dismissed for that reason.
Undeterred by the failure of her application to reinstate the company before Steytler J in 1995, Mrs Yap tried again in COR 131 of 1997 filed on 14 May 1997. I should add that the appeal against the decision of Steytler J had been lodged but not then heard. That application came on for hearing before Sanderson M on 19 July 1997. It was opposed by ASIC. The application was dismissed and the applicant was ordered to pay the costs of Esanda Finance and the costs of ASIC fixed at $450. Reasons were not published.
The Full Court's decision affirming the decision of Steytler J dismissing her 1995 application for reinstatement was handed down on 9 April 1998. Undeterred by that, Mrs Yap applied again for reinstatement on 23 July 1998 in COR 209 of 1998. That application was heard by Sanderson M on 19 August 1998 and the application was dismissed. The applicant was ordered to pay the costs of ASIC. In that case the application was opposed by ASIC and, I think, Esanda. Reasons were not published.
Mr Chong states in both affidavits that he wants Cheshire reinstated to pursue Mr Peter Fermanis in action CIV 1172/88, which was an action by Mr Fermanis against Cheshire, and in COR 256/90, which was a petition by Mr Fermanis also against Cheshire to have it wound up. In the first action Mr Fermanis sued Cheshire for a procuration fee of $125,000 for having secured a loan for Cheshire from Esanda. Mr Fermanis was a mortgage broker. Mr Chong says that that action should be declared illegal and void because of fraud practiced by Mr Fermanis. Some details of that fraud are given in the affidavits. The large affidavit is a lengthy one covering 15 pages of text and many pages of exhibits. I will mention one matter of fraud said to have been practised by Mr Fermanis. Mr Chong quotes Mrs Yap as saying that she agreed to pay a procuration fee of $125,000 to Mr Fermanis if he could arrange a $2 million loan, but if she cancelled the loan within 28 days of it being offered, the fee would be reduced by 50 per cent. She said she did that because she was able to get the loan from Esanda without his help, so the fee was $60,000. Despite this Mr Fermanis charged her company $125,000.
The action CIV 1172 of 1988 was a trial heard by Nicholson J and resulted in a judgment for the plaintiff in the sum of $105,000 plus interest and costs. That judgment is Fermanis v Cheshire Holdings Pty Ltd, unreported; SCt of WA; Library No 7739; 12 July 1989. Cheshire was represented at that trial by a lawyer, Mr C R Clarke, whom I think is now retired. Mrs Yap's argument, that the procuration fee had been varied by agreement to $60,000 in the event of cancellation, was run but not accepted. The defence was amended to allow that defence to be run. The trial Judge reviewed the written and oral evidence on that matter and found against Mrs Yap's version of events. I am not sure if there was an appeal against that judgment or not, but, in any event, there was an opportunity to appeal. There is nothing in Mr Chong's two affidavits in the way of fresh evidence to indicate any "fraud" by Mr Fermanis in relation to this fee. I am unable to see any fresh evidence of fraud in the affidavits which might justify a reinstatement of the company to enable the judgment to be attacked.
Another allegation at par 41 of Mr Chong's second affidavit relates to COR 256 of 1990. That was a petition by Mr Fermanis for the winding‑up of Cheshire in insolvency because part of the judgment debt in CIV 1172/88 was unpaid. The company was wound‑up on the order of Master White, as he then was, made on 25 September 1990. The petition was served on Cheshire at care of KMG Hungerfords, 10th floor, 190 St George's Terrace, Perth. The allegation at par 41 of Mr Chong's second affidavit is as follows:
"Mr Fermanis served his petition on Cheshire, who was never a party in his agreement dated 20/10/87 (KCCH‑1) at No 109 St George's Terrace Perth, knowing that this was not the company's registered office evidenced in his letter 11/12/87 (KCCH‑5). Mr Fermanis failed to serve his petition to each of the two directors of Cheshire as the WA Code requires, thereby his service is bad and the company had no notice of his petition."
The winding‑up order was made ex parte.
An application was made by Mrs Yap on that file on 18 April 2000 to set aside that default judgment and the matter of improper service was raised there. At par 10 of Mrs Yap's affidavit in support of 18 April 2000 she said that the registered office of Cheshire at that time was 449 Canning Highway, Melville 6156 and not at 190 St George's Terrace, Perth. She said that the petitioner was guilty of blatant fraud which had caused "us" some 10 years of deep suffering. That application was dismissed by Acting Master Chapman on 28 April 2000.
Later in the year 2000 Mrs Yap and Mr Chong applied in the same file, COR 256 of 1990 to terminate the winding up of the company based on the non‑service of the petition at the registered office of the company. That application was heard by me and was dismissed for reasons given on 16 June 2000. See Yap & Anor v ASIC [2000] WASC 159. In my reasons there I referred to other actions in which Mrs Yap has raised the same point on behalf of Cheshire that the petition was not served at the registered office. They were applications heard by Steytler J. My final paragraph in that judgment reads:
"The non‑service argument is not a good one. The registered office was not at 449 Canning Highway, Melville, in 1990. This application will be dismissed. Costs should follow the event …"
As previously stated the aim of this application, as set out in Mr Chong's first affidavit, is to have Cheshire reinstated to the register so that it can have the judgment obtained by Mr Fermanis in CIV 1172 of 1988 set aside. A second aim, as set out in par 2(42) of Mr Chong's second affidavit, is to have Esanda joined "as a second defendant" in the Fermanis action CIV 1172 of 1988 to "pursue the fraud practised on the company" by Esanda. In the course of many lengthy paragraphs Mr Chong makes a number of allegations of misconduct against Esanda, eg in subpar 24(10):
"(10)On 31/5/91 Esanda illegally sold Mrs Yap's Lot 1978 Pinjar to Minga Pty Ltd for $130,000 pursuant to first mortgage E126848 which Cheshire had paid out on 11/1/90.
(11)Esanda has never been the mortgagee of Lot 1978 Pinjar. Consequently its mortgagee sale of Lot 1978 Pinjar to Minga Pty Ltd is illegal and void."
At subpar 28 and subpar 29 Mr Chong, quoting Mrs Yap, gives details of $427,499.92 which she says "Esanda misappropriated from Cheshire's account".
At subpar 35 and following he makes allegations about a clandestine agreement made between Esanda and Mr Vivante, director of P Vivante & Co Pty Ltd, who was a subcontractor of Cheshire. At subpar 36 he sets out details of payments wrongly made, according to Mrs Yap, by Esanda to Mr Vivante.
It is premature to consider whether Esanda should be joined in the Fermanis action. There are substantial hurdles to be overcome first. Some of those hurdles have been mentioned above. Cheshire is deregistered and Mrs Yap's and Mr Chong's several attempts to reinstate it, have failed. She has appealed to the Full Court and that appeal has been dismissed. The Fermanis action has been tried. Cheshire failed in that to prove the fraud etc and failed again on appeal.
The Esanda action has also been litigated. Cheshire failed in that and its appeal has been dismissed. Cheshire borrowed money from Esanda to build some student accommodation at Curtin University. Mrs Yap or Cheshire sued Esanda in the District Court in 1994. Esanda filed an application for summary judgment on behalf of the defendant and was successful. Mrs Yap failed to attend on the hearing date and the judgment was entered by default. She later applied by summons to have that judgment set aside and the Principal Registrar of the District Court dismissed her application. She appealed to Barlow DCJ out of time. On 3 May 1996 he dismissed her appeal for reasons given. In the course of that hearing she made various far‑reaching allegations against Esanda. The Judge concluded that there was not a serious question to be tried upon any cause of action raised by Mrs Yap. He considered that her explanation for the delay in bringing the application was inadequate. In the course of those reasons he made a number of adverse findings on the credibility and integrity of Mrs Yap. She then sought leave to appeal to the Full Court in FUL 86 of 1996. She got out of time. Leave to appeal was refused and the appeal was struck out for want of prosecution by the Full Court in Yap v Esanda Finance Corporation, unreported; FCt SCt of WA; Library No 980182; 9 April 1998. The Full Court gave 13 pages of reasons. In the course of giving those reasons the Full Court said it assumed that the appeal had merit. Her appeal failed on procedural grounds.
For these reasons the application will be dismissed.