JUDGE:	FERGUSON J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 June 2012
DATE OF JUDGMENT:	4 July 2012
CASE MAY BE CITED AS:	Re Velissaris
MEDIUM NEUTRAL CITATION:	[2012] VSC 293

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CORPORATIONS – Application to reinstate company following deregistration – Company in liquidation immediately prior to deregistration – Purpose of reinstatement said to enable claims to be prosecuted by company – Applications to stay or terminate winding up prior to deregistration refused previously – No evidence of solvency or capacity to fund litigation following reinstatement - Corporations Act 2001 (Cth), s 601AH(2)

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APPEARANCES:	Counsel	Solicitors
For the Applicant	In person

HER HONOUR:

Mr George Velissaris sought leave to file an application for reinstatement of a deregistered company, Maryvell Investments Pty Ltd, which had been the trustee of the Maryvell Family Trust. Mr Velissaris and members of his family are beneficiaries of the trust. Immediately prior to its deregistration, Maryvell Investments was in liquidation. Essentially, Mr Velissaris wants the company’s registration reinstated so that it may prosecute certain claims which Mr Velissaris believes ought be pursued for the benefit of his family.

Mr Velissaris exhibited to his affidavit in support of the application for leave, the form of proposed Originating Process that he wished to file seeking the company’s reinstatement and an affidavit in support of that proposed process. Having had the opportunity to consider that material, and given the nature of the substantive application, I determined that it would be more expeditious and preferable to deal with the application for reinstatement on its merits, rather than to consider separately the issue of leave.[1]
[1]In two separate proceedings, orders were made by Robson J and Sifris J requiring leave to be sought before Mr Velissaris be entitled to file certain proceedings or process: Re Maryvell Investments Pty Ltd (in liquidation) [2009] VSC 61 (Robson J) and Velissaris v Dynami Pty Ltd & Zervas [2010] VSC 587 (Sifris J).

The application for reinstatement is made under s 601AH(2) of the Corporations Act 2001 (Cth) which provides:

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.

For the purposes of this application, I have assumed (without deciding) that Mr Velissaris is a person aggrieved by the deregistration. That leaves for determination the issue of whether it is just that Maryvell Investments’ registration be reinstated.

In Australian Competition and Consumer Commission v Australian Securities and Investments Commission,[2] Austin J observed:

The wording of the section is very broad, and the cases confirm that it gives the court a wide discretion. The court…

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 Velissaris

Details

AGLC: Re Velissaris [2012] VSC 293
Case: [2012] VSC 293
Decision Date: 4 July 2012

CaseChat Overview and Summary

The case of Re Velissaris involved the application for the reinstatement of a company that had been deregistered under the Corporations Act 2001 (Cth). The company had been in liquidation immediately prior to its deregistration. The primary purpose of the application for reinstatement was to enable the company to prosecute certain claims. Previously, applications to stay or terminate the winding up of the company prior to deregistration had been refused. The court had to consider whether there was evidence that the company could pay its debts and fund litigation following reinstatement.

The central legal issue before the court was whether the company met the criteria for reinstatement under s 601AH(2) of the Corporations Act 2001 (Cth). This section stipulates that the court may order the reinstatement of a company if it is satisfied that the company is able to pay its debts and that reinstatement is in the interests of creditors and other persons affected by the company's deregistration. The court had to determine whether the applicant had provided sufficient evidence to demonstrate that the company could pay its debts and fund litigation, and whether such reinstatement would be in the interests of those affected.

The court found that there was no evidence to support the claim that the company could pay its debts or fund litigation following reinstatement. The applicant had failed to provide any financial information or evidence of solvency. The court concluded that the application for reinstatement did not meet the criteria set out in s 601AH(2) of the Corporations Act 2001 (Cth). The court dismissed the application for reinstatement, emphasising the importance of demonstrating financial viability and the ability to fund litigation as part of the reinstatement process.

No orders were made for the reinstatement of the company, and the deregistration was upheld. The court's decision highlights the stringent requirements for reinstatement under the Corporations Act 2001 (Cth) and the necessity for applicants to provide robust evidence of financial stability and the capacity to fund litigation.

Orders