John Francis Hall v Australian Securities and Investments Commission
[2015] VSC 362
•30 July 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2015 00282
| IN THE MATTER OF GLEN ORA PTY LTD (ACN 004 118 674) | |
| BETWEEN | |
| JOHN FRANCIS HALL and HELENA GARDINER | Applicants |
| and | |
| AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION and GLEN ORA PTY LTD (ACN 004 118 674) formerly Glen Ora Estate Pty Ltd | Respondents |
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JUDGE: | SIFRIS J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 21 July 2015 |
DATE OF JUDGMENT: | 30 July 2015 |
CASE MAY BE CITED AS: | John Francis Hall & Anor v ASIC & Anor |
MEDIUM NEUTRAL CITATION: | [2015] VSC 362 |
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CORPORATIONS – Registration of company – Reinstatement of registration – Whether conditions for reinstatement satisfied – Whether reinstatement just – Companies Act 1928 (Vic), s 230.
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APPEARANCES: | Counsel | Solicitors |
| For the First Applicant | Mr D B Bongiorno | R D Silverstein |
| For the Second Applicant | Mr P Gardiner | P Gardiner |
HIS HONOUR:
A Introduction
The plaintiffs seek an order pursuant to s 230 of the Companies Act 1928 (Vic) (1928 Act) that Glen Ora Proprietary Limited (‘Glen Ora’) be restored to the register of companies. The plaintiffs seek this order because Glen Ora’s deregistration is preventing a multi-lot property development in Sunshine.
Glen Ora was incorporated on 17 July 1925 pursuant to the Companies Act 1915 (Vic).
On 11 September 1931, Glen Ora was struck off the register of companies pursuant to s 230(5) of the 1928 Act. It is understood that the company was deregistered due to a lack of activity.
Prior to its deregistration, Glen Ora owned the road on a subdivided lot in Sunshine known as Solomon Heights. These roads remain undeveloped private roads. A property developer, Glen Ora Developments Pty Ltd, is seeking to redevelop the lot and create over 200 homes. These roads are now required to properly service the surrounding 255 lots with sewerage, electricity, water and roads. Upon Glen Ora’s reregistration, they will be developed as roadways to the council’s specifications. The council will not assume responsibility for these roads until these compliance matters occur.
Upon deregistration of the company, the land transferred to the Registrar General as the legal and beneficial owner pursuant to s 232 of the 1928 Act. Notwithstanding having owned this land for nearly 84 years, the Registrar General has not sought to deal with the land as mandated under s 233 of the 1928 Act.
A land title search reveals that the company, Glen Ora, is still the legal title holder. There has been no caveat placed on the title by the Registrar General, nor is there any reference to the Registrar General on the title.
As far as investigations can reveal, Glen Ora will not, upon its restoration, owe money to any parties. This has been revealed by searches of the Office of State Revenue, Brimbank Council, and the Australian Taxation Office.
If the company is re-registered under the 1928 Act, the plaintiffs would seek to apply, pursuant to s 601BA Corporations Act 2001 (Cth), to have the company brought within the strictures of the current Corporations legislation.
Subject to the Court’s ruling, there is an agreement between the two plaintiffs and the developer with respect to the land.
ASIC’s position
In a letter from ASIC to the Plaintiffs dated 29 January 2015, ASIC stated that it would not oppose the application for reinstatement of the company if the following conditions were satisfied:
(a) The order sought for reinstatement is under the appropriate legislation, requiring ASIC to reinstate the registration of the company;
(b) The company (if ordered to be reinstated) be placed in liquidation and a Liquidator be appointed;
(c) The Court Order is lodged with ASIC so that the company may be reinstated;
(d) An undertaking to the Court that the Liquidator will lodge with ASIC within 7 days of the company being reinstated a Form 157 to change the company’s name. This is due to another company being registered with the name ‘Glen Ora Pty Ltd.
ASIC did not make an appearance in this proceeding. However, by further letter dated 20 July 2015 ASIC advised that it did not oppose the orders sought and in fact made a number of helpful suggestions.
Registrar General’s position
On 13 February 2015, the Court ordered that all materials to this proceeding be filed and served with the Registrar General and the Registrar of Titles. The Registrar General was also granted liberty to apply should he wish to be joined to the proceeding.
Although there has been no appearance by the Registrar General or the Registrar of Titles, the Registrar of Titles in a letter dated 12 June 2015 indicated that he did not intend to join in or appear at the hearing. The Registrar did not oppose the orders and like ASIC made many helpful suggestions.
B The Law
Relevant Considerations
In the leading case of Australian Competition & Consumer Commission v Australian Securities & Investments Commission,[1] the court held that in deciding whether to reinstate a deregistered company, the following considerations are relevant:
·The circumstances in which the company came to be dissolved;[2]
·Whether good use could be made of the order if granted;[3]
·Whether any person was likely to be prejudiced by the reinstatement;[4] and
·The public interest.[5]
[1](2000) 174 ALR 688.
[2]Australian Competition & Consumer Commission v Australian Securities & Investments Commission (2000) 174 ALR 688 [27] (Austin J).
[3]Ibid.
[4]Ibid.
[5]Ibid 28.
The power to order reinstatement is purely discretionary and this includes a residual discretion to refuse the order even where the elements are satisfied: AMP General Insurance Ltd v WorkCover Authority (Vic).[6]
[6](2006) 15 VR 175.
In Stone v ACN 000337940 Pty Ltd,[7] Barrett J said: ‘One aspect of the inquiry into what is “just” concerns the future stewardship of the company, if and when it comes back into existence.’[8]
[7](2008) 68 ACSR 242.
[8] Stone v ACN 000337940 Pty Ltd (2008) 68ACSR 242 [23] (Barrett J).
The nature of whether reinstatement would be “just” was discussed in AMP General Insurance Ltd v WorkCover Authority (Vic):[9]
In our view, the decision to order reinstatement is properly characterised as a discretionary decision of the kind described in Norbis v Norbis (1986) 161 CLR 513. The decision has all of the features there referred to. The decision depends on the application of a very general standard – what is “just”. The standard is so general, indeed, that it might be thought to do no more than make explicit the duty implicitly imposed on every decision-maker – to consider and weigh, fairly and rationally, all the relevant considerations. What is “just” is a value judgement, and there is room for reasonable differences of opinion, no particular opinion being uniquely right.[10]
[9](2006) 15 VR 175.
[10]AMP General Insurance Ltd v WorkCover Authority (Vic) (2006) 15 VR 175 [27] (Maxwell P and Neave JA).
In Westbury Holdings Kiama Pty Ltd v Australian Securities & Investments Commission,[11] Barrett J held relevant considerations to include the impact of the reinstatement on the company’s officers (who would regain control of the company), the views of ASIC and the previous liquidator and the impact of the reinstatement on third party rights.
[11][2007] NSWSC 115.
In Stergiou v Citibank Savings Ltd,[12] the Court refused a reinstatement application on the basis, inter alia, that the reinstatement order was sought ‘not for the purpose of asserting any rights of or against it, but merely as a technical device’ at [29] per Crispin P.
[12][2005] ACTCA 15.
In Newham v Australian Securities & Investments Commission,[13] Higgins J noted that the court should be reluctant to reinstate deregistered companies:
The discretion is in terms unfettered but, as with any like conferral of power, it must be exercised judicially and in conformity with the purposes of the relevant legislation. Two considerations should make a court reluctant to revive a defunct company. The first is that to do so revives obligations and liabilities previously considered to be ended thus prejudicing the right and legitimate expectations of the members and officers of the defunct company. The second is that it must create public confusion to have a company blinking out of and into existence. Reinstatement should be permitted only if an unjust result, not remediable otherwise, would follow.[14]
[13](2000) 35 ACSR 147.
[14]Newham v Australian Securities & Investments Commission (2000) 35 ACSR 147 [42] (Higgins J).
The effect of reinstatement
The effect of reinstatement under the current legislation, s 601AH(5) Corporations Act 2001, so far as it may be relevant is that the company is taken to have continued in existence as if it had not been deregistered.
Statutory History: Tracing through the relevant legislation
Glen Ora was deregistered pursuant to section 230(5) of the 1928 Act on 11 September 1931. At that time, section 230(6) allowed “a company or any member or creditor thereof” to apply for the company to be restored to the register. The Court could do so, among other things, when it considered the restoration was “just”. (None of the other grounds for restoration apply in this case).
On or about 30 December 1931, the Victorian Act No 4005 (An Act to amend the Companies Act 1928) (the 1931 Amending Act) came into operation, amending section 230(6) of the 1928 Act. Following that amendment, section 230(6) empowered the Supreme Court to order, in certain circumstances, that the name of the company be restored to the register, “only at any time within two years after the name of the company has been so struck off.”[15]
[15]Victorian Act No 4005 (An Act to amend the Companies Act 1928) s 230(6).
The Companies Act 1938 (Vic) (the 1938 Act), which was assented to on the 12 December 1938 and came into operation on 1 May 1939, repealed the 1928 Act. It did so, however, subject to certain caveats: Section 2(2)(ii) of 1938 Act provides that the repeal of the 1928 Act does not affect “any right acquired” under former companies legislation. The very same thing was, in any event, achieved by section 6(2) of the Acts Interpretation Act 1928 (Vic) providing that the repeal of legislation will not “affect any right privilege, obligation or liability acquired, accrued or incurred under” that repealed legislation.[16]
[16]See now s 14, Interpretation of Legislation Act 1984 (Vic); see also s 2(2), Companies Act 1958 (Vic), to the same effect as s 2(2), Companies Act 1938 (Vic).
C Consideration and analysis
The Court’s Jurisdiction — Does any time limit apply?
It is uncontroversial that, when Glen Ora was deregistered in 11 September 1931, the Court had jurisdiction under s 230(6) of the 1928 Act to allow ‘a company or any member or creditor thereof’ to apply for the company to be restored to the register on the basis it was “just”. This is the very jurisdiction the applicants invoke.
Importantly, the Court does not enjoy jurisdiction under the Corporations Act 2001 (Cth) (the 2001 Act) to re-register the company. While the 2001 Act has extensive transitional provisions in a similar vein to section 2 of the 1938 Act,[17] these only go so far as to maintain rights that have existed since the Corporations (Victoria) Act 1990 (Vic) (the 1990 Act).
[17]Chapter 10, Corporations Act 2001 (Cth).
Further, as Senior Master Mahony held in City West Water v Mr D Investments,[18] the 1990 Act did not provide for the reinvigoration of the companies deregistered prior to its enactments.[19] Rather, in that case, the relevant jurisdiction was found in the legislation under which the company had been deregistered.[20] The case of In Re Camera Illustrators Pty Ltd,[21] a case concerning the interaction between the 1928 Act and the 1938 Act, indicates that this is the approach to be followed here.
[18][2002] VSC 553.
[19]Ibid [4].
[20]Ibid [28].
[21][1945] VLR 195.
Although the 1931 Amending Act, from December 1931, imposed a two year limitation on applications under s 230(6) of the 1928 Act, this time limitation did not apply to deregistrations occurring prior to the Amending Act, including Glen Ora’s deregistration in September 1931.
The Supreme Court of Victoria has already determined the status of the legislation under consideration in this regard. With respect to section 230 of the 1928 Act (as amended by the 1931 amending Act) as well as the 1938 Act, O’Bryan J in In re camera Illustrators Pty Ltd[22] observed:
The limitation of time contained in the relevant sections of both Acts is not a mere procedural provision but is a condition attached to the right to apply for restoration. It is a matter, therefore, of substantive law and not of mere adjectival law.[23] (Emphasis added)
[22]Ibid.
[23]Ibid 197.
Accordingly, the time limitation, being substantive, applied prospectively only from December 1931; that is, not to Glen Ora’s registration in September 1931. Consequently, the application although many decades after deregistration is not out of time and is specifically permitted and reserved.
Finally, the Court’s jurisdiction also survived the repeal of the 1928 Act by the 1938 Act. As already referred to, this is by virtue of:
(a) Section 2(2)(ii) of the 1938 Act; and
(b) Section 6(2) of the Acts Interpretation Act 1928 (Vic);
Does the Applicant have Standing as a ‘member’ of the company pursuant to s 230(6) Companies Act 1928?
By virtue of his role under the Administration and Probate Act 1958 (Vic), the first plaintiff has standing to bring this application under the 1928 Act. This is because:
(a) Section 230 of the 1928 Act gave standing to a “member” to apply for restoration of the company to the register.
(b) Until his death in May 1954, John Charles Hall was Glen Ora’s member. Until her death in January 1960, Mary Hall was also Glen Ora’s member.
(c) At his death in March 2007, Murray Hall was, under section 17(2) of the Administration and Probate Act 1958 (Vic), the “last surviving proving executor” of both John Charles Hall and Mary Hall.
(d) In June 2007, probate of Murray Hall’s estate was granted to the applicant, John Sinclair Hall. As such, under section 17(2) of the Administration and Probate Act (Vic), he is also the executor of Glen Ora’s members, John Charles Hall and Mary Hall.
(e) The applicant is therefore entitled to bring proceedings in that capacity.[24]
[24]Union Bank of Australia v Harrison (1910) 11 CLR 492, 515; see also s 29, Administration and Probate Act 1958 (Vic) regarding the transfer of causes of action.
Further, upon re-registration of this company, Mr Hall would be a majority shareholder and the second plaintiff, Helena Vicki Gardiner, a minority shareholder in the company. Together they control and are entitled to all of the shares.[25]
[25]The entitlement of the Applicants by devolution to the entire shareholding in Glen Ora, in their respective proportions is set out in paragraphs 29–72 of the affidavit of John Hall sworn 16 January 2015.
Is it just that the company be restored to the register?
In my opinion it is just that the company be restored to the Register. There is no opposition. The Registrar General has not taken any steps in relation to the land. There are no debts. The future stewardship of the company is not an issue as the land has been sold. Finally there is no reason why the heirs of the members at at the time of re-registration should not inherit property of their ancestors. It would in my opinion be a totally unjust result if they were denied their proper and legitimate inheritance.
Disposition
For these reasons I made orders on 21 July 2015 as follows —
1.Glen Ora Proprietary Ltd be restored to the register of companies pursuant to section 230 of the Companies Act 1928 (Vic).
2.The name of Glen Ora Proprietary Ltd be changed to “Company ACN 004 118 674 Pty Ltd”.
3.The applicants, John Francis Hall and Helena Vicki Gardiner, are hereby made directors of Company ACN 004 118 674 Pty Ltd.
4.Company ACN 004 118 674 Pty Ltd is hereby authorised to apply pursuant to sections 601BA and 601BC of the Corporations Act 2001 (Cth) for registration under that Act.
5.The Registrar of Titles amend the Register for land described at paragraph 77 of the affidavit of John Francis Hall sworn 16 January 2015 (Volume 05137 Folio 304) to show Company ACN 004 118 674 Pty Ltd as the Sole Registered Proprietor.
6. Liberty to apply.
Order 2 was necessary because there is a company currently on the register with the name Glen Ora Pty Ltd. This order (and order 3) is also properly made as an ancillary order under s 230 of the 1928 Act.
Orders 4 and 5 were suggestions with respect properly made by ASIC and the Registrar of Titles.
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