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Re DJG Equities Pty Ltd

Re DJG Equities Pty Ltd

Case [2014] NSWSC 194 20 February 2014

Corporate Records

Rectification

Voidable Transactions

Corporate Law & Governance

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Supreme Court

New South Wales

Medium Neutral Citation: In the matter of DJG Equities Pty Ltd [2014] NSWSC 194
Hearing dates: 20 February 2014
Decision date: 20 February 2014
Jurisdiction: Equity Division - Corporations List
Before: Black J
Decision:
Order made for rectification of records maintained by the Australian Securities and Investment Commission in respect of the shareholding of the first defendant

Catchwords: CORPORATIONS -application for rectification of records maintained by ASIC - where judgment had been made that transfer of shares was a voidable transaction - whether records maintained by ASIC are capable of rectification - whether the Court has power to rectify records where content of notification required to be given to ASIC was incorrect.
Legislation Cited: - Corporations Act 2001 (Cth) ss 588FE, 588FF, 1274, 1274A, 1322(4)(b)
- Corporations Regulations 2001 (Cth) regs 9.1.01, 9.1.02(a)
Cases Cited: - Demetriou v Gusdote Pty Ltd [2010] FCA 581; (2010) 78 ACSR 566
- In the matter of DJG Equities Pty Ltd [2014] NSWSC 36
- Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd [2008] NSWCA 38; (2008) 71 NSWLR 262; 65 ASCR 545
- Re Botanical Water Holdings Pty Ltd; Agao Nominees Pty Ltd v AJ Phoenix Pty Ltd [2013] VSC 96
- Re MIG Property Services Pty Ltd (No 2) [2012] VSC 606; (2012) 92 ACSR 234
Category: Interlocutory applications
Parties: Antony Resnick and Brian Raymond Silvia in their capacity as liquidators of DJG Securities Pty Ltd (in liquidation) (First Plaintiff)
Antony Resnick and Brian Raymond Silvia in their capacity as receivers of the assets of the D&T Family Discretionary Trust (Second Plaintiff)
DJG Equities Pty Ltd (First Defendant)
Stephen Craig Hitchings (Second Defendant)
Argyle Investments & Securities Pty Ltd (Third Defendant)
Autohaus Wholesalers Pty Ltd (Fourth Defendant)
Representation: Counsel:
T Sperber (Plaintiffs)
D Raftesath (Defendants)
Solicitors:
Swaab Attorneys (Plaintiffs)
Meridian Lawyers (Defendants)

File Number(s): 2013/356731

Judgment - ex tempore

By Originating Process filed 26 November 2013, the Plaintiffs, Messrs Resnick and Silvia, as liquidators ("Liquidators") of DJG Securities Pty Ltd ("Securities") sought a declaration that the transfer of 1,000 shares in the first defendant, DJG Equities Pty Ltd ("Equities") by Securities to the second defendant, Mr Hitchings, on or about 14 May 2013 was voidable under s 588FE of the Corporations Act 2001 (Cth) and an order under s 588FF of the Corporations Act that the transfer was void as at and after the date it was made. By short minutes of order proposed at the hearing of that Originating Process, the Plaintiffs also sought an order that the register maintained by the Australian Securities and Investments Commission ("ASIC") in relation to the shareholding in Equities be rectified to record Securities as the holder of the 1,000 shares in Equities, the position prior to the challenged transfer.

In my judgment delivered on 7 February 2014 ([2014] NSWSC 36), I made the first and second orders sought in the Originating Process, declaring the relevant transfer to be void, but did not…

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 DJG Equities Pty Ltd

Details

AGLC: Re DJG Equities Pty Ltd [2014] NSWSC 194
Case: [2014] NSWSC 194
Decision Date: 20 February 2014

CaseChat Overview and Summary

In the case of Re DJG Equities Pty Ltd, the application before the court concerned the rectification of records held by the Australian Securities and Investments Commission (ASIC). The applicants sought to rectify the records to reflect that a transfer of shares was void rather than voidable. The dispute arose from a situation where the applicants argued that the records maintained by ASIC were incorrect, as they did not reflect the true nature of the transaction.

The legal issues before the court were twofold. Firstly, whether the records maintained by ASIC were capable of rectification in circumstances where a judgment had already been made that the transfer of shares was a voidable transaction. Secondly, the court had to determine whether it had the power to rectify the records held by ASIC when the content of the notification required to be given to ASIC was incorrect.

In addressing these issues, the court considered the relevant statutory framework and the nature of the records held by ASIC. It was held that the records maintained by ASIC were indeed capable of rectification, even after a judgment had been made. The court also found that it had the power to rectify the records where the content of the notification provided to ASIC was incorrect. This decision was based on the court's inherent jurisdiction to correct errors in its records and the need to ensure that the records reflect the true legal position.

Consequently, the court ordered the rectification of the records to accurately reflect that the transfer of shares was void rather than voidable. This decision underscores the importance of ensuring that ASIC's records are correct and reflect the true legal status of transactions, particularly in the context of corporate law and share transfers.

Orders