Re Pt Cook Community Entertainment Facility Pty Ltd
[2017] VSC 727
•7 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
CORPORATIONS LIST
S CI 2017 02836
| IN THE MATTER OF PT COOK COMMUNITY ENTERTAINMENT FACILITY PTY LTD (ACN 123 118 187) | |
| BETWEEN | |
| PCCEF PTY LTD (ACN 130 656 147) | Applicant |
| and | |
| GEELONG FOOTBALL CLUB LTD (ACN 005 150 818) | First Respondent |
| and | |
| AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION | Second Respondent |
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JUDGE: | Sifris J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 29 November 2017 |
DATE OF JUDGMENT: | 7 December 2017 |
CASE MAY BE CITED AS: | Re Pt Cook Community Entertainment Facility Pty Ltd |
MEDIUM NEUTRAL CITATION: | [2017] VSC 727 |
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CORPORATIONS – Reinstatement – Corporations Act 2001 (Cth), s 6001AH – Appeal from Associate Judge – No error in decision of Associate Judge to reinstate company – Applicant for reinstatement qualifies as a person aggrieved – Just in the circumstances to reinstate the company.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | P. D. Corbett QC with J. C. Hooper | Strongman & Crouch |
| For the First Respondent | P. Bick QC with D. F. McAloon | B2B Lawyers |
| For the Second Respondent | No appearance |
HIS HONOUR:
Introduction
By an application heard on 13 September 2017 (Club’s application), the first respondent (the Club) obtained orders (Orders) for the reinstatement of Pt Cook Community Entertainment Facility Pty Ltd (ACN 123 118 187) (Pt Cook) pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) (Act).
The orders were made pursuant to a decision of Associate Justice Randall (the Associate Judge) delivered on 13 October 2017 (Reasons).
As set out in the Reasons, the Associate Judge identified and determined the two issues arising from the Club’s application as follows:
(a) the Club was a ‘person aggrieved by the deregistration’ of Pt Cook for the purposes of s 601AH(2) of the Act; and
(b) it was ‘just’ that Pt Cook’s registration be reinstated.
While the Associate Judge found that the applicant (PCCEF) was ‘not directly affected by an order which I may make reinstating Pt Cook’,[1] PCCEF was nevertheless granted leave to appear and intervene at the hearing of the Club’s application as an interested party.[2] PCCEF has now appealed against the Orders.[3]
[1]Reasons, [21].
[2]Reasons, [25].
[3]The introduction and background, which are not in dispute, are taken from the Club’s submissions.
Background
The circumstances giving rise to the Club’s application are set out in paragraphs [6] to [21] of the Reasons.[4] Briefly stated, after Croft J delivered judgment on 9 June 2017 in proceeding No. S ECI 2017 000030 (Proceeding 2017 000030), in which Pt Cook was named as the plaintiff and the Club was named as the defendant, it became apparent that that the designation of Pt Cook as the plaintiff in Court documents filed in that proceeding had occurred in error. This was in circumstances where:
[4]Re Geelong Football Club Ltd (ACN 005 150 818) [2017] VSC 633.
(a) Pt Cook had been deregistered since 25 August 2010;
(b) Proceeding 2017 000030 was commenced on behalf of the landlord of a facility leased by the Club;
(c) from 1 October 2009, PCCEF (not Pt Cook) was the Club’s landlord;[5] and
(d) other Court documents filed in Proceeding 2017 000030 described PCCEF (not Pt Cook) as the plaintiff.[6]
[5]The Statement of Claim filed on behalf of PCCEF in proceeding S ECI 2017 00181 alleges that PCCEF was the registered proprietor of the relevant premises from on or around 9 December 2008 (at [1(d)]) and ‘from 1 October 2009, was the landlord of the premises to the defendant [the Club] as tenant by way of lease’ (at [1(e)] and [3]).
[6]Exhibit sheets for exhibits ‘LK-1’ to ‘LK10’ to the affidavit of Mr Donaldson dated 21 February 2017 and exhibit ‘MVW-1’ to the affidavit of Mr Vickers-Willis dated 15 May 2017 (each of which describe the plaintiff as ‘PCCEF Pty Ltd ACN 130 656 157’).
As was observed in the Reasons:
It would be fair to say that the Club did not accept that the proceeding was prosecuted other than by PCCEF. The controlling mind of each of the corporations was Michael Vickers Willis from whom Grindal & Patrick received instructions and all the documentation referred to in the proceeding was between the Club and PCCEF.[7]
[7]Reasons, [17].
The orders made by Croft J in Proceeding 2017 000030 are favourable to the Club.
On 3 July 2017, Grindal & Patrick (the solicitors that had acted for the plaintiff in Proceeding 2017 000030) wrote to the Club’s solicitors and advised that Pt Cook had been deregistered on 25 August 2010.[8] Subsequently, new solicitors for PCCEF (Strongman & Crouch) wrote to the Club’s solicitors, indicating that PCCEF reserved the right to contend that Proceeding 2017 000030 was a ‘nullity’. A new proceeding was then commenced against the Club by PCCEF (but has not been served). As was observed in the Reasons:
It is clear that the new proceeding insofar as it relates to the construction of the Lease, seeks to do nothing more than raise the same issues as were agitated before and determined by Croft J. There is the added claim for rectification in the event that the construction point is once again decided adversely to PCCEF.[9]
[8]The content of the letter appears at [15] of the Reasons.
[9]Reasons, [21].
In light of the above, the Club applied to have Pt Cook reinstated to:
(a) address the contention that, so long as Pt Cook remained deregistered, Proceeding 2017 000030 was a nullity; and
(b) as a precursor to seeking orders from Croft J that will bind PCCEF to the outcome of Proceeding 2017 000030 (pursuant to the slip rule and in accordance with the overriding purpose stated in the Civil Procedure Act 2010 (Vic) (CPA)).[10]
[10]This relief will be sought via the Summons filed in Proceeding 2017 000030 on 7 July 2017 on behalf of the Club, which seeks an order that the references to the Company be substituted with references to PCCEF: Exhibit ‘RB-9’ to the Bettridge Affidavit, AB64 and 65. See for instance, Stone v Ace-I.R.M Insurance Braking Pty Ltd (2004) 1 Qd R 173, [26]; Kingston Futures Pty Ltd v Waterhouse [2012] QSC 212.
By summons filed 24 November 2017, Pt Cook filed with the Court of Appeal registry an application for an extension of time to file and serve an application for leave to appeal the judgment and orders of Croft J.
Sections 601AH(2), (3) and (5) of the Corporations Act 2001 (Cth) are in the following terms –
Reinstatement by Court
(2)The Court may make an order that ASIC reinstate the registration of a company if:
(a) an application for reinstatement is made to the Court by:
(i) a person aggrieved by the deregistration; or
(ii) a former liquidator of the company; and
(b)the Court is satisfied that it is just that the company’s registration be reinstated.
(3) If:
(a)ASIC reinstates the registration of a company under subsection (1) or (1A); or
(b)the Court makes an order under subsection (2);
the Court may:
(c)validate anything done during the period:
(i)beginning when the company was deregistered; and
(ii)ending when the company’s registration was reinstated; and
(d)make any other order it considers appropriate.
Note:For example, the Court may direct ASIC to transfer to another person property vested in ASIC under subsection 601AD(2).
…
Effect of reinstatement
(5)If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company. Any property of the company that is still vested in the Commonwealth or ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim.
The grounds of appeal
The grounds of appeal are as follows –
1. The learned Associate Judge:
(a)erred in holding that the first respondent was a ‘person aggrieved by the deregistration’ for the purposes of s 601AH(2)(a) of the Act; and
(b)should have held that there was no causal link between the deregistration of Pt Cook and the grievance of the first respondent for which reinstatement of the company was sought.
2.The learned Associate Judge erred in holding that the reinstatement of Pt Cook would be ‘just’ in the circumstances within the meaning of s 601AH(2)(b) of the Act.
3. The learned Associate Judge:
(a)erred in finding that Proceeding 2017 000030, which was commenced and maintained to judgment by a deregistered company, was not a nullity and void; and
(b)should have found that Proceeding 2017 000030 was a nullity and void ab initio and that proceeding number S ECI 2017 0181 commenced by the appellant was the proceeding in which any grievance as to costs and the enforceability of the reasons of Justice Croft delivered 9 June 2017 could be properly determined.
4.The learned Associate Judge erred in holding that the Court may, in Proceeding 2017 000030, order costs against Pt Cook and non-parties including practitioners in circumstances where:
(a)it is accepted that the proceeding was and remains a nullity without the prospect of rehabilitation; and
(b)the Court has no jurisdiction to do so.
5.The learned Associate Judge erred in holding that the application for the reinstatement of Pt Cook was not a ‘technical device’ in the sense described by Crispin P in Stergiou v Citibank Savings Ltd [2005] ACTA 15 (Stergiou).
6. The learned Associate Judge:
(a)erred in holding that Stergiou could be properly distinguished from the circumstances of this case; and
(b)should have held that Proceeding 2017 000030 was a nullity and that Pt Cook should not be reinstated to cure that fact.
7.The learned Associate Judge erred in holding that s 601AH(5) of the Act would cure any nullity or irregularity flowing from the issue and maintenance of legal proceedings by Pt Cook in the period in which it was deregistered.
8. The learned Associate Judge:
(a)erred in holding that the applicant should be liable for all of the first respondent’s costs of and incidental to the application; and
(b)should have asked for submissions from the parties on the question of costs and held that the costs of the application be either:
(i)the first respondent’s costs in Proceeding 2017 000030; or
(ii)reserved to the Trial Judge hearing any further proceeding; or
(iii)paid by the appellant but only insofar as the costs associated with and incidental to the contested hearing on 13 September 2017; or
(iv)paid by the first respondent.
The critical grounds are grounds 1 and 2. If these grounds are mot made out the appeal must fail. Grounds 3-7 (other than perhaps ground 4) of course feed into grounds 1 and 2 and in particular ground 2. Ground 8 relates to costs and it must follow that if grounds 1 and 2 fail, costs should follow the event.
Consideration
The appeal may be disposed of with these short reasons. It is unnecessary to deal with the elaborate and extravagant contentions of the parties and in particular PCCEF. They are not helpful and mask the real issues. Further, the authorities are either distinguishable or of limited assistance in deciding this appeal with its peculiar and indeed extraordinary circumstances.
In my opinion the Club is clearly ‘a person aggrieved’ substantially for the reasons given by the Associate Judge and in particular at paragraph [30]. There is, with respect, no error in his Honour’s consideration of this issue.
The grievance of the Club is real. It has been subjected to a costly proceeding in this Court only to have its success, on issues that both parties intended to and believed was litigated, imperilled and at risk by an unsuccessful plaintiff asserting that the proceeding was and is a nullity and that the case would presumably have to be re-litigated. The Club is entitled to be aggrieved both generally and in the particular sense of dealing with the alleged nullity issue and its suggested irreversible consequences. Any assistance that reinstatement can provide should be considered. This brings me to the second critical issue.
In my opinion the reinstatement is entirely just, substantially for the reasons given by the Associate Judge and in particular at paragraphs [54] and [61]-[62]. There is, with respect, no error in his Honour’s consideration of this issue.
In short, it is just to reinstate the company in order to enable Croft J, and of course the parties, to consider all options, and in particular those sought by the successful defendant, so as to avoid the need for a new trial. To this extent reinstatement, with its consequences (deemed continuous existence of the company) can only be helpful and aid the process whether or not it is ultimately successful. It is the prospect that such assistance may be valuable that makes it just to reinstate the company. The Associate Judge was in my opinion correct in his view that this vexed and complicated question did not need to be resolved in order to deal with the ‘just’ element. To suggest that it is not ‘just’ because the proceeding is a nullity is to decide a point that does not arise and is unnecessary at this stage. The nullity issue is best considered not as a critical issue in deciding whether to reinstate, as contended by PCCEF, but rather as an issue determining nullity following such reinstatement, to the extent that this may be necessary.
Finally, there is no downside to reinstating the company for the suggested limited purpose. There is only potential upside and this is what makes it ‘just’. Companies have been reinstated only to be wound up in order to take advantage of relevant insolvency legislation. Why shouldn’t Pt Cook be reinstated for another purpose which may be of assistance to the Court and the parties. The nullity point is properly and best considered by Croft J following reinstatement. This is clearly a case where practical considerations must dominate. The cases referred to by the Applicant are in any event distinguishable.[11]
[11]In Deveigne and Another v Askar [2007] NSWCA 45 the proceeding against a party who was deceased was not surprisingly a nullity. In Stergiou v Citibank Savings Ltd [2005] ACTA 15 the case turned on its own facts. The critical issue of deemed continuous existence was not relevant. It is relevant in this matter whether or not it is ultimately successful.
It follows that it is not necessary to deal with the other grounds of appeal. Other than to identify the difficulties associated with the nullity point, the Associate Judge was entirely correct not to decide the complex issue because it was, for the reasons referred to, not necessary or desirable to do so. This disposes of grounds 3, 5, 6 and 7 and it is unnecessary to deal with ground 4. Finally, ground 8 must be dismissed. PCCEF opposed the application and lost. It appealed and lost. It must bear the costs.[12]
[12]As the transcript reveals, I have been critical of the position taken by PCCEF. Although not part of the appeal, I would probably not have granted PCCEF leave to intervene. It has not been a proper contradictor. Further, I probably would have ordered indemnity costs against PCCEF. Its opposition has been unhelpful and given its position somewhat audacious.
On 29 November 2017 I dismissed the appeal with costs and indicated that reasons would follow. These are the reasons.
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