Mediterranean Shipping Company (Aust) Pty Ltd v Australian Securities and Investments Commission
[2018] WASC 255
•22 AUGUST 2018
| JURISDICTION | : | SUPREME COURT OF WESTERN AUSTRALIA |
| IN CHAMBERS | ||
| CITATION | : | MEDITERRANEAN SHIPPING COMPANY (AUST) PTY LTD -v- AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION [2018] WASC 255 |
| CORAM | : MASTER SANDERSON | ||
| HEARD | : 1 AUGUST 2018 | ||
| DELIVERED | : 1 AUGUST 2018 | ||
| PUBLISHED | : 22 AUGUST 2018 | ||
| FILE NO/S |
| ||
| BETWEEN |
|
First Plaintiff
CC CONTAINERS PTY LTD
Second Plaintiff
AND
AUSTRALIAN SECURITIES AND INVESTMENTS
COMMISSION
Defendant
SARISKA NEALE
Third Party
[2018] WASC 255
Catchwords:
Corporation Law - Application to re-instate de-registered company - Turns on own facts
Legislation:
Corporations Act 2001 (Cth)
Result:
Company reinstated
Liquidators appointed
Leave to proceed against company granted
Category: B
Representation:
Counsel:
First Plaintiff : Mr J M Brereton Second Plaintiff : Mr J M Brereton
| Defendant | : No appearance | ||
| Third Party |
|
Solicitors:
First Plaintiff : Colin Biggers & Paisley (Sydney) Second Plaintiff : Colin Biggers & Paisley (Sydney)
| Defendant | : No appearance | ||
| Third Party |
|
Case(s) referred to in decision(s):
Brockweir Ltd [2012] VSC 22
[2018] WASC 255
MASTER SANDERSON
MASTER SANDERSON:
This was the plaintiffs' application to reinstate the registration of Dawn Trading Pty Ltd and certain ancillary orders. At the conclusion of the hearing, I indicated to the parties that I would make the orders sought by the plaintiffs. I said I would publish reasons for my decision. These are those reasons.
In support of their application, the plaintiffs relied on two affidavits of Stephen John Thompson. The first sworn 10 May 2018 and the second sworn 10 July 2018. Ms Sariska Neale was given leave by Justice Archer on 5 June 2018 to appear on the application. Further programming orders were made 8 June 2018 for the filing of affidavit material and written submissions. Ms Neale filed an affidavit sworn 25 June 2018. She opposed the making of the orders sought by the plaintiffs.
Section 601AH(2) of the Corporations Act 2001 (Cth) empowers the court to make an order reinstating a company to the register if an application is made by a person who is aggrieved by the de-registration and the court is satisfied that it is just that the company's registration be reinstated. There was no dispute between the parties as to the applicable principles. Both parties were content to adopt what was said by Sifris J in re Brockweir Ltd [2012] VSC 22 [22]:
In order to assess whether the plaintiffs are aggrieved parties, it is not necessary to embark upon a detailed and exhaustive analysis of the facts and the law underpinning the claim. The threshold is low. The assessment needs to be dealt with in a summary way. As long as the claim is not plainly hopeless and bound to fail, it should, subject to other relevant matters, proceed.
The relevant facts can be shortly stated. What follows is drawn mainly from the plaintiffs' outline of submissions filed in support of the application. The plaintiffs were the victims of large scale frauds that were conducted at the Port of Melbourne and are now engaged in the task enforcing the judgment of the Supreme Court of Victoria in respect of those frauds. One of a number of enforcement steps the plaintiffs have taken occurred in February 2016 when the recovery proceedings were commenced. Among other things, it is alleged in the recovery proceedings that the company is indebted to the plaintiffs by reason of the findings that were made by the Supreme Court of Victoria.
[2018] WASC 255
MASTER SANDERSON
On 20 August 2017 (when the recovery proceedings had been on foot for about 18 months) Australian Securities and Investment Commission (ASIC) removed the company from the register as part of an administrative process that is applied for failure to lodge documents. The plaintiffs claim they are aggrieved by the de-registration as it impedes their orderly prosecution of the recovery proceedings. The plaintiffs claimed they were further aggrieved in circumstances where their case against the company is strong. The plaintiffs support their claim as to the relative strength of their case by reference to a judgment delivered by Judd J of the Supreme Court of Victoria in 2018.[1] This judgment was given following an application by the plaintiffs for release from the implied undertaking in respect of certain documents the plaintiffs intend to rely upon at trial of the recovery proceedings. His Honour noted at [7]:
[7] Mr Neale was found to have participated in, and profited from, the fraudulent use of [shipping container] repair invoices. He was the sole director and shareholder of [the company], which had issued the fraudulent invoices, and was the direct beneficiary of the fraud. The trial judge found that there was no relevant distinction between the conduct of [the company] and
Mr Neale and, thus their liability …
[15] There is no basis to conclude that the [recovery] proceeding is an abuse of process or would be amenable to an estoppel. Had such a contention been made on the material before me, I would have rejected it. The formality of joining [the company] in this proceeding was apparently considered unnecessary by the trial judge, who concluded that the company, owned and controlled by Mr Neale, and Mr Neale were one and the same for the purpose of liability. Receipts by [the company] of the proceeds
of the fraud were treated as receipts by Mr Neale …
[22] … The purpose of the [recovery] proceedings is to pursue the
fruits of a judgment against Mr Neale, and recover against property alienated by [the company], and the proceeds of the fraud in the hands of his children. Thus the [recovery] proceeding in West Australia is properly characterised as an
extension of this proceeding …
[1] Judd J's ex tempore oral judgment was not assigned a medium neutral citation.In the light of these comments there can be no doubt that the plaintiffs in this matter are aggrieved by the de-registration. Nor can there be any doubt that reinstatement of the company is justified. To hold otherwise might thwart the plaintiffs' attempts to enforce a
[2018] WASC 255
MASTER SANDERSON
judgment which is based upon actual fraud. The court could never
countenance such a course of action.
In her affidavit, Ms Neale notes she was appointed sole director and secretary of Dawn Trading Pty Ltd on 20 August 2015. She says that she had little knowledge of the affairs of the company and only took on the role at the urging of her father, Mr Christopher Neale, following his bankruptcy. She resigned as a director on 22 December 2015. She says that during the period in which she held office, Dawn Trading did not conduct any business, had no assets or liabilities of which she was aware and she did not sign any company resolutions. Properly considered, she says that she was a 'dummy' director.
Ms Neale also says that she is in poor health. While that doubtless engenders sympathy, it does not provide a reason for refusing reinstatement of the company.
In his written submissions, counsel for Ms Neale argued that no good use could be made of the orders sought. In par 30(c) of those submissions, counsel said the reinstatement would be futile 'since whatever funds were handled during the now time-barred period of financial activity are long since disbursed and not shown to be the liability or concern of the Trust, whether to the benefit of the Trust or not'. During his oral submissions, counsel retreated somewhat from that position. He acknowledged that there was a question as to whether or not any time-bar applied in this case. He further conceded that question could only be determined at trial. That concession properly made undermined the basis upon which the opposition of Ms Neale was founded.
There was one other submission made by counsel for Ms Neale which requires comment. By par 30(j) of his submissions, counsel suggested there was no public interest in the reinstatement of the company. With respect, that seems to me to be wrong. The Supreme Court of Victoria has found Mr Neale and the company engaged in actual fraud. That being so, there is a real public interest in recovering proceeds of a fraud. Whatever steps might be necessary to further those recovery proceedings are, in my view, very much in the public interest.
Having determined that the company should be reinstated, the plaintiffs sought an order appointing liquidators to the company. That order is clearly appropriate. The plaintiffs are creditors of the company and there is no evidence to suggest the company could pay its
[2018] WASC 255
MASTER SANDERSON
outstanding debts. On that basis a winding up order should be made. The further ancillary order sought was that the plaintiffs have leave to proceed against the company in liquidation. Without repeating what I have said above, it is clear it is in the interest of justice that such leave be given.
Accordingly I made orders sought by the plaintiffs in their originating process. I also ordered that the costs of the application be paid by Ms Neale. On behalf of Ms Neale it was submitted that irrespective of her opposition to the application, it would have been necessary for the plaintiffs to apply to the court for the orders that were eventually made. While that is so, the circumstances of this case were such that, absent the opposition of Ms Neale, orders could have been made either on the papers or certainly on the first return date. But once Ms Neale indicated she intended to oppose the application, it was necessary to hold a hearing and for the plaintiffs to instruct counsel and put their case. In the circumstances, Ms Neale should be liable for the
plaintiffs' costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
DG
ASSOCIATE TO MASTER SANDERSON
22 AUGUST 2018
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