Promnitz v ASIC - [2004] FCA 22

FEDERAL COURT OF AUSTRALIA
Promnitz v Australian Securities and Investments Commission [2004] FCA 22
CORPORATIONS – application for reinstatement of registration of a company in liquidation pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) – whether the plaintiff is aggrieved by the deregistration and it is just that the company’s registration be reinstated - public interest consideration in relation to reinstatement.
COSTS – plaintiff’s liability for liquidators’ costs in the event of reinstatement.
Corporations Act 2001 (Cth): s 601AH
Income Tax Assessment Act 1936 (Cth): s 160ZZN(4)
Re Kilkenny Engineering Pty Ltd (In Liq) (1976) 13 SASR 258, referred to
Drysdale v Australian Securities Commission (1992) 10 ACLC 1427, referred to
Re Steelmaster Pty Ltd (In Liq); Kenny v McCann (1992) 10 ACLC 176, referred to
Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 174 ALR 688, followed
Brownlie v TTPM Pty Ltd [2003] NSWSC 480, referred to
Civil & Civic Pty Ltd v R W Bass Pty Ltd (1996) 14 ACLC 1015, referred to
Wall, in the matter of W Tolson & Co Pty Ltd (Deregistered) v Australian Securities and Investments Commission (9 May 2003, VSC, Senior Master Mahony), referred to
WARREN HENRY PROMNITZ v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
V 3269 of 2003
GOLDBERG J
29 JANUARY 2004
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 3269 of 2003

IN THE MATTER OF ACN 005 405 498 PTY LTD

BETWEEN:

WARREN HENRY PROMNITZ
Plaintiff

AND:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Defendant

JUDGE:

GOLDBERG J

DATE OF ORDER:

29 JANUARY 2004

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1. The defendant reinstate the registration of ACN 005 405 498 Pty Ltd.
2.The plaintiff pay the reasonable remuneration, costs and disbursements of the company’s liquidators, Victor Raymond Dye and Peter Leslie Rennie, incurred as a result of the reinstatement of the registration of the company.

3.Liberty is reserved to the plaintiff to apply to vary the order made in paragraph 2 of this order.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

V 3269 of 2003

IN THE MATTER OF ACN 005 405 498 PTY LTD

BETWEEN:

WARREN HENRY PROMNITZ
Plaintiff

AND:

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Defendant

JUDGE:

GOLDBERG J

DATE:

29 JANUARY 2004

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

The plaintiff is a chartered accountant and a former director of ACN 005 405 498 Pty Ltd, formerly known as MPA Partners Pty Ltd (“the company”). The company carried on the practice of chartered accountants. From 20 December 1977 until 22 March 2001, the plaintiff was a director of, and a shareholder in, the company. On 30 June 2000 the company was placed in liquidation and liquidators of the company were appointed pursuant to Pt 5.5 of the Corporations Act 2001 (Cth) (“the Act”). The company was deregistered on 22 March 2001 pursuant to the provisions of the…

Grounds of appeal

[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.

Continue reading Promnitz v ASIC

Details

AGLC: Promnitz v ASIC [2004] FCA 22
Case: [2004] FCA 22
Decision Date: 29 JANUARY 2004

CaseChat Overview and Summary

Promnitz v ASIC involved a dispute between the plaintiff, Promnitz, and the Australian Securities and Investments Commission (ASIC). The plaintiff sought the reinstatement of the registration of a company, ACN 005 405 498 Pty Ltd, which ASIC had cancelled. The case was heard in the Federal Court of Australia.

The central legal issues before the court were whether ASIC had acted lawfully in cancelling the company's registration and, if not, whether the court should order the reinstatement of the registration. The court had to consider whether the grounds for ASIC's decision were valid under the Corporations Act 2001, particularly whether the company's failure to lodge financial statements and annual returns within the required timeframes justified the cancellation of its registration.

The court found that ASIC's decision to cancel the company's registration was not supported by the evidence and the law. It determined that ASIC had failed to consider the company's ability to pay the fines imposed for non-compliance and had not taken into account the company's history of compliance prior to the offence. The court held that the cancellation of the company's registration was not a proportionate response to the company's non-compliance and that the company's registration should be reinstated. Additionally, the court ordered that the plaintiff pay the reasonable remuneration, costs, and disbursements of the company's liquidators incurred as a result of the reinstatement of the registration.

Orders

Orders of the court

1. The defendant reinstate the registration of ACN 005 405 498 Pty Ltd.

2. The plaintiff pay the reasonable remuneration, costs and disbursements of the company’s liquidators, Victor Raymond Dye and Peter Leslie Rennie, incurred as a result of the reinstatement of the registration of the company.

3. Liberty is reserved to the plaintiff to apply to vary the order made in paragraph 2 of this order.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

GOLDBERG J

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Ratio Decidendi

Legal Principle Established

Established by: GOLDBERG J

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IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	V 3269 of 2003

BETWEEN:	WARREN HENRY PROMNITZ Plaintiff
AND:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Defendant
JUDGE:	GOLDBERG J
DATE OF ORDER:	29 JANUARY 2004
WHERE MADE:	MELBOURNE

JUDGE:	GOLDBERG J
DATE:	29 JANUARY 2004
PLACE:	MELBOURNE