Herbert v Nozala Pty Ltd

The case of Herbert v Nozala Pty Ltd involved the plaintiff, Herbert, and Nozala Pty Ltd, the first defendant, as well as the second defendant, who had acquired the first defendant. Herbert and the second defendant had entered into a joint venture through the acquisition of the first defendant. However, a dispute arose between Herbert and the second defendant, leading to Herbert's removal as a director of the first defendant. The second defendant continued to conduct the business of the first defendant without Herbert's assistance for over a decade. Despite the second defendant's assumption that Herbert was no longer a shareholder, Herbert remained a shareholder of the first defendant. The second defendant then sought to deregister the first defendant. Herbert did not object to the deregistration, and the first defendant was subsequently deregistered. Herbert later sought an order from the court that the Australian Securities and Investments Commission (ASIC) reinstate the registration of the first defendant. Herbert's application for reinstatement was brought in order to prosecute proceedings on behalf of the first defendant against the second defendant. However, the foreshadowed proceedings had no reasonable prospects for success. Additionally, Herbert's application for reinstatement was brought in circumstances of serious delay.

The primary legal issues before the court were whether Herbert was a "person aggrieved" by the deregistration of the first defendant and whether it was just for the first defendant to be reinstated. The court considered section 601AH(2) of the Corporations Act 2001 (Cth) in its reasoning. The court determined that Herbert was not a "person aggrieved" by the deregistration of the first defendant because he had not objected to the deregistration and had not been a director for over a decade. The court also found that it was not just to reinstate the first defendant due to the serious delay in Herbert's application and the lack of reasonable prospects for success in the foreshadowed proceedings. Consequently, the court dismissed Herbert's application for reinstatement.

The court's final orders were that Herbert's application for the reinstatement of the first defendant's registration was dismissed. The court did not grant Herbert's request to prosecute proceedings on behalf of the first defendant against the second defendant, as the circumstances of the case did not support such an outcome. The court's decision underscored the importance of timely action and reasonable prospects for success in applications for the reinstatement of a deregistered company.