FAMILY LAW – ARBITRATION – company owned and operated by the parties deregistered – arbitrator unable to deal with company or funds owned by it while it remains deregistered – husband seeking reinstatement of registration – detailed examination of relevant principles under s 601AH of the Corporation Act.
FAMILY LAW – COMPANY LAW – reinstatement of registration of deregistered company – application granted.
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Ozer & Ozer [2021] FedCFamC1F 323
Case
[2021] FedCFamC1F 323
Decision Date
CaseChat Overview and Summary
The case of Ozer & Ozer involved a dispute regarding the reinstatement of a company's registration in the New South Wales Land Registry Services. The key parties included C Pty Ltd ("CPL") and the relevant liquidator, Mr D, who had passed away prior to the application. The primary issue was whether the husband, who had applied for the reinstatement of CPL, qualified as "a person aggrieved" under Section 601AH(2)(a)(i) of the Corporations Act. This determination was crucial as it would establish the husband's eligibility to apply for reinstatement.
The court examined the concept of "a person aggrieved" within the context of the Corporations Act. The analysis drew upon various judicial precedents which indicated that the term should not be narrowly interpreted. The court concluded that the husband met the criteria of being a person aggrieved by the deregistration of CPL, thereby satisfying the low threshold required for this determination. This interpretation was supported by the principle that a person aggrieved is one who has suffered a legal injury, not merely one who is dissatisfied with the outcome.
Having established that the husband was a person aggrieved, the court granted the application for reinstatement. The reasoning was grounded in the legislative intent behind Section 601AH of the Corporations Act, which allows for the reinstatement of a deregistered company under specific conditions. The court's decision was informed by the practical benefits of reinstating CPL, including the potential for substantial payments to the Australian Taxation Office and the resolution of outstanding corporate issues.
The final orders of the court reinstated C Pty Ltd's registration in the New South Wales Land Registry Services, correcting the erroneous entry that had previously recorded it as J Pty Ltd. This decision facilitated the resolution of property division issues between the parties, as outlined in Section 79 of the Family Law Act, and allowed for the addressing of outstanding corporate obligations such as tax returns and liabilities.
Orders
Orders of the court
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Background
Background to the litigation
The main arena of debate on the hearing of this application was proposed paragraph six of the minute. While the amendment proposal was seemingly minor, this court’s power to make the order sought was the subject of considerable controversy. As the records of the New South Wales Land Registry Services presently reveal, C Pty Ltd (“CPL”) is currently erroneously registered as J Pty Ltd. Parts of that company’s name have been inverted.[1] [1] A current and historical extract obtained from the Australian Securities and Investment Commission (“ASIC”) in respect of C Pty Ltd ACN … was exhibited to the affidavit of Garry Neville Penhall made 25 November 2021 and filed in this application. RELEVANT BACKGROUND Pursuant to a resolution of creditors passed at a meeting held on 7 June 2016, CPL was placed in voluntary liquidation and a liquidator whose name was Mr D was appointed as liquidator of CPL. The liquidator convened a meeting of creditors on 21 June 2016 attended by creditors who included the parties to this litigation as well as a representative of the Australian Taxation Office and two independent creditors from which the liquidator held a proxy. The liquidator convened a final meeting of creditors on 29 November 2016. No dividend to creditors was payable. Mr Penhall, the deponent on this application, also exhibited to his affidavit an extract form the records of New South Wales Land Registry Services conducted at 13 November 2019 at 9:06am in relation to folio … recording the registered proprietor of a particular parcel of land as being J Pty Ltd. That entry was wrong in two respects. First, the name was wrongly recorded. Second, by the date of the search CPL had been placed in voluntary liquidation. Mr Penhall[2] made a further affidavit on 30 November 2021. To that affidavit Mr Penhall exhibit additional documentation including correspondence with the Australian Securities and Investments Commission (“ASIC”) and with the liquidator’s firm. The more important aspects of that correspondence were the following –[2] Mr Penhall is a practising solicitor with over 50 years’ experience in litigation. His speed and efficiency in this application was of particular help in the administration and speedy disposition of urgent interlocutory applications in the National Arbitration List. (a)from ASIC, taken from its 29 November 2021 letter to Mr Penhall –ASIC's position regarding the applicationAs the company was in liquidation prior to deregistration, the applicant must prove the former liquidator is aware of the application and that their role will resume if the application is successful (as the company will be reinstated 'in liquidation'). We understand from your letter to us that you have advised the liquidator (now deceased) of this application and another liquidator from that some office is now assisting you.Subject to the strict understanding that no order for costs will be sought against the Australian Securities and Investments Commission (ASIC), ASIC does not oppose the Application and will not attend the hearing of the matter; and(b)from G Accountants, taken from its 30 November 2021 letter to Mr Penhall –As discussed, it is my understanding that upon reinstatement of the Company, a liquidator will need to be appointed. Unfortunately, the former liquidator Mr D passed away last year. However, I am happy to provide my consent to act should the Company be reinstated and, as requested, I have attached a Consent to Act, a schedule of hourly rates and Declaration of Independence Relevant Relationships and Indemnities.
Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
So far as the utility of the reinstatement of the registration of CPL was concerned, Mr Heazlewood submitted as follows –The parties are seeking a division of their property in accordance with s.79 of the Family Law Act. They will benefit because upon reinstatement and following action by the corporation to deal with outstanding issues such as tax returns and returning a liability for the payment of income tax and GST; it is likely that there will be a substantial payment to the ATO.SECTION 601AH OF THE CORPORATIONS ACT A deregistered company may be reinstated to the register of the companies under s 601AH of the Corporations Act by ASIC or by the Court.Relevantly to this application “the Court” includes the Family Court of Australia,[6] and since the enactment of the Federal and Family Court of Australia Act, includes the Federal Circuit and Family Court of Australia (“FCFCOA”). [6] Section 58AA of the Corporations Act. The persons entitled to apply to the Court for the reinstatement of the registration of CPL under s 601AH(2) include “a person aggrieved by the deregistration” (s 601AH(2)(a)(i)) or a former liquidator (s 601AH(2))(a)(ii)). In this case, the husband applied for the order for the reinstatement of CPL. The first issue is whether the husband is “a person aggrieved” within the contemplation of s 601AH(2)(a)(i) of the Corporations Act. In my view he is. The learning in the authorities on point is dense yet tolerably consistent. Having regard to the fact that no detailed examination of s 601AH has been given by this Court, it seemed to me to be appropriate to record the results of my research. Counsels’ submissions did not address this issue, surprisingly. The expression “a person aggrieved by the deregistration” should not be narrowly construed.[7] [7] Re Proserpine Pty Ltd & the Companies Act [1980] 1 NSWLR 745, Pacanowski v Australian Securities Commission (1995) 57 FCR 173, GIS Electrical Pty Ltd v Melsom (2002) 43 ACSR 481, Deputy Commissioner of Taxation, Re James Hardie Australia Finance Pty Ltd (deregistered) (2008) 170 FCR 545 and Ji Woo International Education Centre Pty Ltd (Deregistered), Re Yeo v Australian Securities and Investments Commission [2017] FCA 1480. The ascertainment of whether a person is an aggrieved person attracts a low threshold. It is not therefore necessary to embark upon an exhaustive analysis of the facts and law underpinning the claim in this case because the assessment must be dealt with in a summary way with a view to making a determination on whether the claim is not plainly hopeless and bound to fail.[8] [8] Re Brockweir Pty Ltd [2012] VSC 225 and Deputy Commissioner of Taxation v Australian Securities and Investments Commission; in the matter of Civic Finance Pty Limited (Deregistered) [2010] FCA 1411. A person aggrieved is not the same as a person dissatisfied with an event and must be a person damaged or insured in the legal sense.[9][9] Callegher v Australian Securities and Investments Commission (2007) 218 FCR 81 and Re Newfront Pty Ltd (deregistered) [2008] SASC 127.