Feng v GMS Fulfilment Services Limited

[2004] NSWSC 855

Reported Decision: 50 ACSR 527
(2004) 22 ACLC 1371

Supreme Court

CITATION:	Feng v GMS Fulfilment Services Limited [2004] NSWSC 855
HEARING DATE(S):	13/09/04
JUDGMENT DATE:	16 September 2004
JURISDICTION:	Equity Division Corporations List
JUDGMENT OF:	Barrett J
DECISION:	Originating process dismissed
CATCHWORDS:	CORPORATIONS - application by plaintiff in common law proceedings against defendant for order restoring defendant's name to register of foreign companies - name struck off register by ASIC on basis of belief that defendant no longer carrying on business in Australia - ability of plaintiff to pursue common law proceedings in no way dependent on or facilitated by restoration of defendant's name to register - ability of plaintiff to proceed by service on defendant in place of incorporation - plaintiff not aggrieved by striking off - no reason to consider restoration just.
LEGISLATION CITED:	Companies Act 1993 (NZ) Companies Act 1955 (NZ), s.27(3) Companies Reregistration Act (NZ), s.12 Company Law Review Act 1998 (Cth) Corporations Act 2001 (Cth), ss.601AH, 601CL, Division 2 Part 5B.2 Corporations Law, ss.102A, 344
CASES CITED:	Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 34 ACSR 232 Best v Yellow Express Carriers Ltd [2004] NSWSC 666 In the Marriage of VR & N Gould (1993) 17 Fam LR 156 Newby v Von Oppen and the Colt's Patent Firearms Manufacturing Co (1872) LR 7 QB 293 Victorian Workcover Authority v Orientstar Shipping Corp [2003] VSC 311 Williams v Lips-Heerlen BV (unreported, NSWSC, Giles J, 1 November 1991):
PARTIES :	Jerry Quan Feng - Plaintiff GMS Fulfilment Services Limited - Defendant
FILE NUMBER(S):	SC 2619/04
COUNSEL:	Mr D P M Ash - Plaintiff
SOLICITORS:	Bryden's Law Office - Plaintiff

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

THURSDAY, 16 SEPTEMBER 2004

2619/04 – JERRY QUAN FENG v GMS FULFILMENT SERVICES LIMITED

JUDGMENT

1 By an amended originating process filed in court on 13 September 2004, the plaintiff seeks an order under s.601CL(10) of the Corporations Act 2001 (Cth) in respect of the defendant.

2 The defendant is a company incorporated under and owing its existence to the general companies legislation of New Zealand. A copy of its certificate of incorporation is in evidence. It shows that the defendant was incorporated on 25 August 1989 under the Companies Act 1955 (NZ). By virtue of s.27(3) of that Act, the members for the time being and from time to time thereby became a body corporate. The defendant was on 30 June 1997 reregistered pursuant to the Companies Reregistration Act 1993 (NZ) so that it became a company under the Companies Act 1993 (NZ). The reregistration did not create a new legal entity or affect the defendant’s continuity as a legal entity (Companies Reregistration Act, s.12). As a company registered under the Companies Act 1993, the defendant is, in the words of s.15 of that Act, “a legal entity in its own right separate from its shareholders”.

3 The evidence also shows that the defendant was registered as a “foreign company” by the Australian Securities Commission (as ASIC then was) on 24 May 1991. Having regard to the structure and effect of ss.102A and 344 of the Corporations Law of each Australian jurisdiction as in force at that time, the registration effected on 24 May 1991 was registration under Division 2 of Part 4.1 of each such Corporations Law and was effected by entry of the defendant’s name in the register kept by the Commission for the purposes of each such Division 2: see s.344(h) as then in force. By virtue of renumbering effected by the Company Law Review Act 1998, that register later became a register kept for the purposes of Division 2 of Part 5B.2 of each Corporations Law. When, on 15 July 2001, the Corporations Act 2001 (Cth) came to supersede the Corporations Laws of the States, the Australian Capital Territory and the Northern Territory, the relevant register became, by operation of the transitional provisions in Part 10.1 of that Act, a register kept for the purposes of Division 2 of Part 5B.2 of the Act.

4 The registration effected on 24 May 1991, being the result of an application for registration made by the defendant, may be taken to have been prompted by the defendant’s intention to commence to carry on business in some relevant part of Australia. Under s.343 of the several Corporations Laws as they then stood, a foreign company was forbidden to carry on business in a particular State, the Australian Capital Territory or the Northern Territory unless it was the subject of the composite form of registration provided for in ss.102A and 344. Under both the Corporations Act and the predecessor legislation, a foreign company so registered is defined as a “registered foreign company”.

5 The order the plaintiff now seeks under s.601CL(10) is an order that the name of the defendant be restored to the register kept for the purposes of Division 2 of Part 5B.2 of the Corporations Act . The plaintiff’s application follows strike-off action taken by ASIC on 20 January 2004. I shall refer to that action presently.

6 Sections 601CL(9) and (10) are in the following terms:

“(9) A person who is aggrieved by a foreign company's name having been struck off the register may, within 15 years after the striking off, apply to the Court for the foreign company's name to be restored to the register.


(10) If, on an application under subsection (9), the Court is satisfied that:

(a) at the time of the striking off, the foreign company was carrying on business in this jurisdiction; or
(b) it is otherwise just for the foreign company's name to be restored to the register;
the Court may, by order:
(c) direct the foreign company's name to be restored to the register; and
(d) give such directions, and make such provision, as it thinks just for placing the foreign company and all other persons in the same position, as nearly as practicable, as if the foreign company's name had never been struck off.”

7 These sections apply where the name of a foreign company has been “struck off the register”. The only power to strike a foreign company’s name off the register is the power conferred by s.601CL(5):

“At the end of the period specified in a notice sent under subsection (4), ASIC may, unless cause to the contrary has been shown, strike the foreign company's name off the register and must publish in the Gazette notice of the striking off.”

8 Section 601CL(4) enables ASIC to set certain machinery in motion with a view to striking off if it has reasonable cause to believe that a registered foreign company does not carry on business in “this jurisdiction”, being, in the context, the Australian States, the Australian Capital Territory and the Northern Territory. The search material in evidence shows that the relevant procedures were implemented by ASIC and that the defendant’s name was struck off the register pursuant to s.601CL(5) on 20 January 2004. I infer from this that ASIC formed and acted upon a belief that the defendant was, at that time, no longer carrying on business in “this jurisdiction”.

9 There being no suggestion by the plaintiff that the defendant was, on the date of striking off, carrying on business in “this jurisdiction” (see s.601CL(10)(a)), the issues arising upon the present application are:

(a) whether the plaintiff is a “person who is aggrieved” by the striking off (s.601CL(9)); and

(b) if so, whether it is “just” that the defendant’s name be restored to the register (s.601CL(10)(b)).

I turn, therefore, to the circumstances in which the plaintiff now finds himself in relation to the defendant.

10 In May 2001, the plaintiff was employed by a courier company. In the course of his employment, he went to premises of the defendant at Alexandria to make a delivery. While he was at the premises, he was, he says, struck by a forklift truck operated by an employee of the defendant and thereby suffered injury. On 14 May 2004, the plaintiff commenced an action for damages by statement of claim filed in the Common Law Division naming as defendants the present defendant and the Nominal Defendant. The plaintiff, through his solicitors, has made contact with a director of the defendant in New Zealand and has been provided with particulars of insurance carried by the defendant with the QBE Group which, on its face, appears responsive to the type of claim the plaintiff seeks to pursue in the Common Law Division.

11 The plaintiff’s expressed desire to see the defendant’s name restored to the register kept for the purposes of Division 2 of Part 5B.2 of the Corporations Act is born of an apparent opinion that, in the absence of such restoration, his ability to pursue his common law action for damages against the defendant (and thereby to access any applicable insurance) will be prejudiced. Were that so, there may well be grounds for concluding that the plaintiff is a person “aggrieved” by the striking off of the defendant’s name and that it would be “just” for the name to be restored to the register so that his action was fully and properly constituted: see, for example, Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 34 ACSR 232. It is relatively commonplace for the court to make reinstatement orders under s.601AH of the Corporations Act for the purpose of bringing deregistered Australian companies back to life so that they may be made defendants in proceedings to which they are necessary or desirable parties and in which access to insurance proceeds is sought by plaintiffs claiming to have suffered injury. A recent example will be found in the judgment of Young CJ in Eq in Best v Yellow Express Carriers Ltd [2004] NSWSC 666.

12 In the present instance, however, it is simply not the case that the plaintiff’s ability to proceed against the defendant for damages is precluded or prejudiced by the absence of the defendant’s name from the register of foreign companies kept under Division 2 of Part 5B.2 of the Corporations Act. The defendant is a “legal entity in its own right” according to the law of New Zealand. Registration of such a foreign entity in the particular register maintained for the purposes of Division 2 of Part 5B.2 of the Corporations Act is in no sense the equivalent of registration under s.118 of a “company” within the contemplation of the s.9 definition of that term. The latter type of registration causes a juristic person to come into being pursuant to s.119 and to continue in existence until deregistration: see s.601AD(1). The former type of registration, by contrast, proceeds on the footing that a juristic person already exists by virtue of the laws of some other place, at least in cases (such as the present) comprehended by paragraph (a) of the s.9 definition of “foreign company”. The separate and earlier existence of such a foreign entity is, in any event, something readily recognised by our law. Such a corporate entity may be made a defendant in our courts whether or not registered under Australian statutory provisions with respect to foreign companies. In Newby v Von Oppen and the Colt’s Patent Firearms Manufacturing Co (1872) LR 7 QB 293, the Court of Queen’s Bench (Cockburn CJ, Blackburn, Mellor and Quain JJ) referred to eighteenth century cases in which foreign corporations had been allowed to sue in English courts and then said:

“It is true that we are not aware of any reported case in which a foreign corporation has been sued in a court of law, but it seems to follow, from their being permitted to sue as plaintiffs, that they must be suable as defendants. It is, however, enough to say that we will not, on this ground, prevent the plaintiff from proceeding. The corporation may, if so advised, raise the question after appearing on the record.”

13 The ability of the plaintiff to sue the defendant in this court is in no way dependent upon the defendant’s being a “registered foreign company” by reason of its name being on the register kept for the purposes of Division 2 of Part 5B.2.

14 While a particular foreign company is a “registered foreign company”, it must have a “local agent” resident in Australia and authorised to accept service of process and notices (see ss.601CF and 601CG of the Corporations Act), as well as a “registered office” within Australia (see s.601CT). By virtue of s.601CX, a document may be served on a registered foreign company by leaving it at or sending it by post to either the address of the registered office in Australia or the nominated address of the local agent. In these respects, the essential element of service is facilitated in cases where proceedings are to be pursued in an Australian court against a registered foreign company.

15 But inability to resort to the s.601CX mode of service because the name of the foreign defendant is not on the register kept under Division 2 of Part 5B.2 (and the defendant is therefore not a “registered foreign company”) does not place the present plaintiff, in relation to his common law action, in a position that could be regarded as entailing prejudice sufficient to activate the s.601CL(10) jurisdiction. The claim the plaintiff is pursuing in the Common Law Division is in respect of an alleged tort committed in New South Wales and for damages in respect of damage suffered in New South Wales and caused by an allegedly tortious act or omission. The plaintiff’s statement of claim pleads a clear and uncomplicated case of the existence and breach of a duty of care in negligence. Part 10 rules 1A(1)(d) and (e) of the Supreme Court Rules therefore allow service of that statement of claim outside Australia. If service is effected in New Zealand and the defendant appears, the plaintiff will be in no less advantageous position, in a procedural sense, than he would have occupied if able to effect service under s.601CX. If, on the other hand, the plaintiff serves the defendant in New Zealand and the defendant does not appear, the plaintiff’s ability to proceed will be dependent upon the grant of leave to proceed under Part 10 rule 2. That, however, represents no more than a filtering process and will be by no means a significant hurdle if the plaintiff has an arguable case: see the commentary at paragraph 10.2.2 of Ritchie’s Supreme Court Procedure (NSW).

16 The specified procedures for service outside Australia apply not only in relation to actions against natural persons but also in relation to actions against corporations that can, as it were, be “found” only in a foreign country. I refer, in that connection, to the judgment of Fogarty J (with whom Nicholson CJ and Finn J agreed, as to relevant matters) in In the Marriage of VR & N Gould (1993) 17 Fam LR 156 at 191ff and, so far as the rules of this court are concerned, to the following passage in the judgment of Giles J (as his Honour then was) in Williams v Lips-Heerlen BV (unreported, NSWSC, Giles J, 1 November 1991):

“Pt10 of the Rules regulates service outside New South Wales. Originating process may be served outside Australia in the cases set out in para (a) to para (x) in Pt10 r1(1), but by Pt10 r2A must be accompanied by the notice to which I have earlier referred. Whether the plaintiffs’ claim fell within one or more of those paragraphs was in issue, and I will return to it, but the present submission addressed service of the summons rather than authorisation to serve the summons. Pursuant to Pt10 r4, subject to the Part and to any ‘convention’, the Rules apply to service outside New South Wales under Pt10 as they apply to service inside New South Wales. By Pt9 r2, originating process must be served personally, and what is meant by personal service of a document on a corporation is explained in Pt9 r3(2). Although the only evidence was that the defendant ‘received’ the documents I have mentioned, failure to serve the summons personally within the meaning of the Rules was not alleged and I take it that the documents were received by an officer of the defendant of the kind mentioned in Pt9 r3(2) in the manner described in Pt9 r3(1).”

See also Victorian Workcover Authority v Orientstar Shipping Corp [2003] VSC 311.

17 If an order were made under s.601CL(10) directing restoration of the defendant’s name to the register, the defendant would again be a “registered foreign company” subject to obligations to maintain a registered office and a local agent in Australia, as well as periodic filing obligations. If, as the unchallenged belief of ASIC grounding its action under s.601CL(5) testifies, the defendant is no longer carrying on business in Australia, it would be oppressive to subject it again to those obligations when, from the viewpoint of the plaintiff, to do so would secure for him no appreciable advantage in the pursuit of his common law claim. As I have said, the plaintiff is fully able to pursue that claim, by effecting service in New Zealand, despite the fact that the defendant no longer has the status of “registered foreign company” under the Corporations Act.

18 The plaintiff has not shown that he is relevantly “aggrieved” by the striking off of the defendant’s name or that it would be “just” for the court to compel restoration of the defendant’s name to the relevant register. The amended originating process will therefore be dismissed.

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Last Modified: 09/16/2004