Commissioner of State Revenue v Australian Securities and Investments Commission
[2024] WASC 392
•22 OCTOBER 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: COMMISSIONER OF STATE REVENUE -v- AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION [2024] WASC 392
CORAM: HILL J
HEARD: 16 OCTOBER 2024
DELIVERED : 16 OCTOBER 2024
PUBLISHED : 22 OCTOBER 2024
FILE NO/S: COR 141 of 2024
BETWEEN: COMMISSIONER OF STATE REVENUE
Plaintiff
AND
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Defendant
Catchwords:
Corporations - Application to reinstate deregistered company - Whether plaintiff is a 'person aggrieved' - Whether 'just' to reinstate deregistered company - Application granted - Turns on own facts
Corporations - Winding up - Reinstatement of registration for purpose of winding up - Just and equitable ground - Where no director or company secretary at time of deregistration and no likelihood of director or secretary being appointed - Whether requirements for service, notice and advertising should be waived - Turns on own facts
Legislation:
Corporations Act 2001 (Cth) s 461, s 466(2), s 601AB, s 601AH
Limitation Act 2005 (WA) s 10
Supreme Court (Corporations) (WA) Rules 2004 (WA)
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | M Olds |
| Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | State Solicitor's Office |
| Defendant | : | No appearance |
Case(s) referred to in decision(s):
Jit Sun Investments Pte Ltd (Singaporean Unique Entity Number:200308432W) v Australian Securities and Investments Commission [2021] WASC 235
HILL J:
(This judgment was delivered extemporaneously and has been edited from the transcript to include references, headings and to correct matters of grammar and expression.)
By originating process which was amended on 16 September 2024, the plaintiff seeks orders pursuant to s 601AH of the Corporations Act 2001 (Cth) (Act) for the reinstatement of the registration of Lakewood Estate Development (No. 1) Pty Ltd (ACN 119 975 852) (Deregistered) (Lakewood). If Lakewood is reinstated, the plaintiff seeks an order that it be wound up pursuant to s 461 of the Act on its reinstatement. The plaintiff also seeks ancillary orders dispensing with the requirement to comply with the service, notification and advertising requirements under the Act and the Supreme Court (Corporations) (WA) Rules 2004 (WA) (Corporations Rules).
Lakewood is the registered proprietor of Lot 13 of Diagram 41978 (certificate of title volume 556 folio 102A) (Property). The plaintiff has access to the records of RevenueWA, the department responsible for the assessment and collection of state taxation within Western Australia. Between October 2001 and November 2023, RevenueWA issued Lakewood with 13 land tax assessments in relation to the Property.[1]
[1] Affidavit of Matthew Cameron filed 12 September 2024 [5].
On 27 November 2011, Lakewood was deregistered by the Australian Securities and Investments Commission (ASIC) for a failure to pay fees pursuant to s 601AB of the Act. As a result of Lakewood's deregistration, all property owned by Lakewood at the time of its deregistration vested in ASIC and since that date, ASIC is the only party who is legally able to deal with Lakewood's property.[2]
[2]Affidavit of Matthew Cameron filed 12 September 2024, 'MC7'.
The purpose of the plaintiff's application is to enable them to recover the outstanding debts and enable other creditors to recover any debts that are owed by Lakewood.
In support of the application, the plaintiff relied on two affidavits of Matthew Cameron, which were filed on 12 September 2024 and 14 October 2024.
Legal principles
The legal principles that govern this application are well known and can be summarised as follows.[3]
[3] Jit Sun Investments Pte Ltd (Singaporean Unique Entity Number:200308432W) v Australian Securities and Investments Commission [2021] WASC 235 [5] ‑ [8] and the authorities cited therein.
Pursuant to s 601AH(2) of the Act, where a company has been deregistered, the court may make an order that ASIC reinstate the company if the conditions required by the Act are met. Relevantly, s 601AH(2) states that the application can be made by a 'person aggrieved by the deregistration' or 'a former liquidator of the company'. Where the court is satisfied that it is just to do so, the company's registration will be reinstated.
The term 'person aggrieved' is not expressly defined in the Act and should not be construed narrowly. In determining whether the plaintiff is a person aggrieved by the deregistration of the company, the court is required to consider whether the plaintiff has shown that deregistration has deprived them of something, or injured or damaged them in a legal sense, or that they became entitled in a legal sense to regard the deregistration as the cause of dissatisfaction.
There is no temporal limitation in the term 'person aggrieved' and there need only be a causal link between the grievance and the deregistration of the company. As a result, a person can become aggrieved as a result of events which occur after the time of deregistration.
Before the court can make an order for reinstatement, the court must be 'satisfied that it is just that the company's registration be reinstated'. This confers a broad discretion on the court. In exercising its discretion, relevant factors the court takes into account include:
(a)the circumstances in which the company came to be deregistered;
(b)the future activities of the company if an order is made;
(c)whether any particular person is likely to be prejudiced by the reinstatement; and
(d)the public interest generally.
Service of the application
On the evidence before me, I am satisfied that notice of the application has been given to ASIC, as well as to the former director and former sole shareholder of Lakewood.[4] ASIC does not oppose the application and has given notice that it does not intend to attend the hearing today.[5]
[4] Affidavit of Matthew Cameron filed 12 September 2024, 'MC5', 'MC6'.
[5] Letter from the Australian Securities and Investments Commission to the State Solicitor's Office dated 15 October 2024.
By letter dated 24 September 2024, the solicitors for the former sole shareholder informed the plaintiff that he did not wish to be heard on the application.[6] The former director has not given notice that he wished to be heard on the application, nor has anyone attended today's hearing.
[6] Letter from Rowick & Bucolo Lawyers to the State Solicitor's Office dated 24 September 2024.
Should an order for reinstatement be made?
The evidence before me is that at the date of the last assessment on 1 November 2023, Lakewood was indebted to the plaintiff in the sum of more than $84,000 for outstanding land tax on the Property.[7] As at the date of deregistration, this debt was only $9,263.65.[8]
[7] Affidavit of Matthew Cameron filed 12 September 2024, 'MC2'.
[8] Affidavit of Matthew Cameron filed 12 September 2024 [7].
Since the deregistration of Lakewood, the solicitors for the plaintiff have been unable to recover their outstanding land tax, pursuant to the Land Tax Assessment Act 2002 (WA) and the Taxation Administration Act 2003 (WA). Land tax continues to be assessed on a yearly basis. At present, ASIC has informed the plaintiff's solicitors that it does not agree to sell the Property to satisfy these debts.[9]
[9] Affidavit of Matthew Cameron filed 12 September 2024, 'MC7'.
Given these matters, I accept that the plaintiff is a 'person aggrieved' by the deregistration of Lakewood and has standing to bring this application.
I turn then to the question as to whether it is just to make the orders that are sought.
The plaintiff seeks an order for the reinstatement of Lakewood to enable it to recover the unpaid land tax liability. Previous attempts were made by RevenueWA in June 2015 to commence a process to sell Lakewood's land by instructing the plaintiff's solicitors to apply to this court to seek orders for the sale of the Property. However, there is no evidence before me that these instructions were progressed further, and the decision was made to bring the current application.[10]
[10] Supplementary affidavit of Matthew Cameron filed 14 October 2024 [14], [16] - [17], 'MC13'.
On the evidence before me, I accept that Lakewood was deregistered as a result of its failure to pay fees pursuant to s 601AB of the Act.
I also accept on the evidence before me that no one, except potentially for ASIC as the statutory inheritor of the company's property, will be prejudiced by the reinstatement of Lakewood. In contrast, if Lakewood is not reinstated, the plaintiff will suffer prejudice in not being able to recover the land tax debt.
The plaintiff is not clear as to what the future activities of Lakewood would be if an order for reinstatement is made. I accept on the evidence before me that there is no suggestion that there will be, in fact, any future activities. Neither the former director or shareholder of Lakewood has sought to be heard on the application, and the former shareholder has simply requested information as to whether it is likely he will receive a distribution from any sale of the Property.
A relevant factor in the exercise of the court's discretion as to whether to order reinstatement is the factor of delay. In this case, quite properly, counsel for the plaintiff accepts there has been a significant delay in bringing this application. The evidence before me is that RevenueWA first became aware that Lakewood was deregistered on 9 March 2012. However, land tax assessment notices were not lodged with ASIC until the 2017/2018 assessment year and then following years, due to an inadvertent administrative error as well as resourcing constraints.[11] In considering the relevance of this factor, it is important to stress that the claim by the plaintiff is not subject to the Limitation Act 2005 (WA), nor will it cause any prejudice to any party due to the destruction of records or any impact on memory of witnesses. This is because there is no relevant limitation period on an action by the Crown for the recovery of tax or interest on any outstanding taxation liability,[12] and any dispute to these assessments can only be made in accordance with the procedures set out in the relevant taxation legislation.[13]
[11] Supplementary affidavit of Matthew Cameron filed 14 October 2024 [9] - [12].
[12] Limitation Act 2005 (WA) s 10(2)(a).
[13] Taxation Administration Act 2003 (WA) pt 4.
Upon becoming aware of Lakewood's outstanding land tax obligations and deregistration, the plaintiff wrote directly to ASIC in relation to the reinstatement of the registration of Lakewood.[14] On being advised by ASIC that it was unable to address the matter administratively, the plaintiff then became aware it was necessary to bring the present application. I accept on the evidence before me that the plaintiff has taken the appropriate steps to bring the application and that any delay in bringing this application is a result of resourcing constraints.
[14] Affidavit of Matthew Cameron filed 12 September 2024, 'MC8'.
In my view, the public interest or public policy will not be undermined by granting the relief sought by the plaintiff. In fact, there is public interest in granting the application to ensure there is compliance with Lakewood's taxation obligations.
For these reasons, it is my view that it is 'just' to make the order that Lakewood's registration be reinstated.
Should Lakewood be wound up on reinstatement?
It is the usual position that when a company is reinstated, it is reinstated in the form in which it existed prior to deregistration. However, it is open to the court to make orders for the winding up of the company on reinstatement if there is a basis for such an order to be made.
It is apparent from the company search of Lakewood that at the time of the deregistration of the company, there was no director or company secretary of the company, with the last officers resigning on 27 November 2011 (as far as the last resignation of the director). There is no evidence before me to suggest that any person will act as a director or company secretary of Lakewood in the event the company is reinstated.
It is well-established that the court can make a winding up order on the just and equitable ground if there is evidence of mismanagement, misconduct or a lack of confidence in the conduct and management of the company's affairs. In these circumstances, given the purpose for which the company is to be reinstated and the fact that there is no person who is willing to act as a director or company secretary of Lakewood, I am satisfied that it is just and equitable for the company to be wound up on reinstatement.
Given this, I consider it is appropriate to both make an order to wind up the company and also to appoint the liquidators who have consented to act. I am also satisfied in the circumstances of this case that it is appropriate to dispense with the requirements for the plaintiff to comply with the service, notification, and advertisement obligations set out in the Act and the Corporations Rules. This is because I am satisfied that all relevant parties have been given notice of the application and that these obligations (apart from advertisement) have been substantively complied with.
Costs
The plaintiff sought an order that its costs of the application be reimbursed pursuant to s 466(2) of the Act and fixed in the sum of $3,718, being the filing fee that was incurred on the filing of this application. In the circumstances of this case, I accept this is the appropriate order.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
KC
Associate to the Honourable Justice Hill
22 OCTOBER 2024
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