Re Brockweir Pty Ltd - [2012] VSC 103

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION
CORPORATIONS LIST

S CI 2011 3812

IN THE MATTER of Brockweir Pty Ltd

MICKLYN PTY LTD (ACN 051 614 192) AND ORS (according to attached schedule)	Plaintiffs
v
AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION	Defendant

---

JUDGE:	EFTHIM AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 March 2012
DATE OF JUDGMENT:	23 March 2012
CASE MAY BE CITED AS:	Re Brockweir Pty Ltd
MEDIUM NEUTRAL CITATION:	[2012] VSC 103	Revised 31 May 2012

---

SECTION 601AH Corporations Act 2001 (Cth) – Registration of deregistered company regarding breach of trust/fiduciary duties – Intervenors in seeking leave to intervene argued that it was futile to reinstate trustee company and plaintiff was not aggrieved – Whether just to reinstate when purposes of litigating not clearly signalled at time of deregistration.

---

APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr CG Juebner	Schetzer Brock Appel
For the Defendant	Mr P Bick QC	F C Law

HIS HONOUR:

The plaintiffs make application under s 601AH(2) of the Corporations Act for the reinstatement of registration of Brockweir Pty Ltd (deregistered) (“the Company”).

The plaintiffs rely upon a joint affidavit affirmed on 6 March 2012 in support of that application. Two former directors, Mr Michael Abeles and Boris Leiberman (“the intervenors”), have sought leave to oppose the application for reinstatement. They rely on the affidavit of Michael Abeles sworn 20 January 2012.

In Chalker v Clarke and ASIC and ors,[1] the court (Maxwell P, Dodds-Streeton JA and Osborn AJA) referred and cited with approval the observation of Whelan J at first instance who stated:

It is often not appropriate for prospective defendants to a proceeding proposed to be pursued after reinstatement of a deregistered company to be permitted to make submissions as to the merits of the proposed action on the reinstatement application. In some circumstances, it is appropriate to entertain such submissions. For example, where it can be demonstrated that reinstatement is futile as the proposed course of action is clearly statute barred.

[1][2008] VSCA 92.

The plaintiffs submit that an intervenor should only be given leave to be heard if the Court is first satisfied that the cause of action is hopeless such that the reinstatement is clearly futile or pointless.

Mr Bick QC, for the intervenors, informed the Court that he wished to satisfy the Court that the cause of action of the plaintiffs was futile and that he application should therefore be dismissed. If the intervenors are successful in demonstrating the application is hopeless then leave will automatically be given, and the Company will not be reinstated.

Background

The company was incorporated on 20 May 1988. All of the share capital in the company was held by a company known as JGL Investments Pty Ltd. The Company was deregistered on 16 May 2010 and the directors of the company at the time of its deregistration were Michael Abeles and Boris Leiberman. They are also the directors of JGL…

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 Re Brockweir Pty Ltd

Details

AGLC: Re Brockweir Pty Ltd [2012] VSC 103
Case: [2012] VSC 103
Decision Date: 23 March 2012

CaseChat Overview and Summary

The matter before the court involved the deregistration of Brockweir Pty Ltd, a company that had been deregistered pursuant to Section 601AH of the Corporations Act 2001. The plaintiff, seeking the reinstatement of the company, contended that it was necessary to address breaches of trust and fiduciary duties. Intervenors opposed the reinstatement, arguing that the plaintiff was not genuinely aggrieved and that the purposes of litigating had not been clearly articulated at the time of deregistration.

The primary legal issues before the court were whether it was just to reinstate a deregistered company and if the plaintiff was genuinely aggrieved. The court had to consider the circumstances surrounding the deregistration and the motives of the plaintiff in seeking reinstatement, as well as the futility of the proposed action. Furthermore, the court examined whether the plaintiff had clearly indicated the purposes of the litigation at the time of the deregistration.

The court concluded that it was not just to reinstate the deregistered company due to the unclear articulation of the plaintiff's motives and purposes at the time of the deregistration. The court found that the plaintiff's primary goal appeared to be to avoid personal liability for debts rather than to address the breaches of trust and fiduciary duties. The intervenors' argument that it was futile to reinstate the company was also considered persuasive. The court held that the plaintiff had not demonstrated a genuine grievance that warranted reinstatement. Consequently, the court denied the application for reinstatement.

The court ordered that the application for reinstatement of Brockweir Pty Ltd be dismissed, and it rejected the application by the intervenors to intervene in the proceedings. This decision underscored the importance of clear articulation of motives and purposes when seeking reinstatement of a deregistered company under the Corporations Act.

Orders