Timesright Pty Ltd Trading as R.K. Brine Master Builder v Australian Securities and Investments Commission
[2024] WASC 289
•14 AUGUST 2024
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION: TIMESRIGHT PTY LTD TRADING AS R.K. BRINE MASTER BUILDER -v- AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION [2024] WASC 289
CORAM: MASTER RUSSELL
HEARD: ON THE PAPERS
DELIVERED : 14 AUGUST 2024
FILE NO/S: COR 56 of 2024
BETWEEN: TIMESRIGHT PTY LTD TRADING AS R.K. BRINE MASTER BUILDER
Plaintiff
AND
AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION
Defendant
Catchwords:
Corporations law - Application to reinstate deregistered company - Whether plaintiff is a 'person aggrieved' - Whether it is 'just' to reinstate deregistered company - Turns on own facts
Legislation:
Corporations Act 2001 (Cth), s 601AG, s 601AH(2), s 601AH(2)(a)(i)
Supreme Court (Corporations) (WA) Rules 2004, r 2.8
Result:
Application granted
Category: B
Representation:
Counsel:
| Plaintiff | : | On the papers |
| Defendant | : | No appearance |
Solicitors:
| Plaintiff | : | Hall & Wilcox |
| Defendant | : | No appearance |
Case(s) referred to in decision(s):
Di Camillo v Australian Securities and Investments Commission [2024] WASC 288
MASTER RUSSELL:
Introduction
The plaintiff, Timesright Pty Ltd trading as R.K. Brine Master Builder (Timesright), is a building and construction company engaged in building, designing and renovating residential and commercial properties.
In September 2020, Timesright engaged Viva Stone & Tiling Pty Ltd (ACN 130 957 425) (Viva) to undertake internal and external tiling works at a three-storey residential property that Timesright was constructing in Applecross.
Timesright claims that the tiling works undertaken by Viva were defective and, despite requests, in breach of contract and consumer guarantees, Viva failed to complete required rectification works.
Viva was voluntarily deregistered on 12 November 2023 pursuant to s 601AA of the Corporations Act 2001 (Cth) (Act).
Timesright seeks orders pursuant to s 601AH(2) of the Act for the reinstatement of Viva to pursue an action against it to recover loss and damage it claims to have suffered as a result of defective works and breach of statutory guarantees under ss 54, 55, 60 and 61 of Schedule 2 of the Competition and Consumer Act 2010 (Cth).
The application is supported by an affidavit sworn on 8 April 2024 by Richard Kenneth Garry Brine, sole director and secretary of Timesright, and an affidavit sworn by Brittany-Anne Forsyth on 29 April 2024. The plaintiff has also filed and relies upon an outline of submissions.
The Australian Securities and Investments Commission (ASIC) has been served with notice of the application as required by r 2.8 of the Supreme Court (Corporations) (WA) Rules 2004. ASIC has informed Timesright's lawyers that it does not oppose the application and, on the understanding that no order for costs would be sought against it, did not intend to attend the hearing of the application.[1]
[1] Affidavit of Brittany-Anne Forsyth sworn 29 April 2024 (Forsyth Affidavit) [4] ‑ [7], 'BAFO‑1' ‑ 'BAFO‑4'.
Viva's directors at the time of its deregistration, Orlando Varrone and Bassam Taweel, were served with notice of the application by express post on 18 April 2024, with delivery confirmed on 23 April 2024.[2]
[2] Forsyth Affidavit [9] - [10], 'BAFO-6' - 'BAFO-10'.
The application was initially listed in the Master's general list on 30 April 2024. At that hearing, orders were made adjourning the matter to be determined on the papers.
On 2 May 2024, Mr Taweel and Mr Varrone filed a notice of appearance as interested non-parties. They subsequently withdrew their appearance and sought to be excused from any further appearance in the proceeding, and have taken no further part.
Having considered the affidavits and submissions filed in support of the application, for the reasons that follow, I am satisfied it is appropriate to order the reinstatement of Viva.
Factual background
The relevant background and the circumstances in which Timesright brings the application are set out in detail in Mr Brine's affidavit and the attachments to it, and summarised in the outline of submissions. It is not necessary for me to repeat all of Mr Brine's evidence. What follows is a summary.
On about 5 October 2017, Timesright entered into a contract with the registered proprietors of a property located in Applecross, Western Australia (Owners) for the construction of a three-storey residence (Contract).[3]
[3] Affidavit of Richard Kenneth Garry Brine sworn 8 April 2024 (Brine Affidavit) [8], 'RKGB-3'.
Timesright sought and obtained quotes from Viva for the supply and installation of all the internal and external tiling for the Contract (Tiling Works).[4]
[4] Brine Affidavit [9] - [10].
By a letter dated 24 September 2020, Timesright accepted Viva's quotation for, and engaged Viva as a subcontractor to complete, all internal tiling works under the Contract, subject to certain conditions regarding the quality of the tiles and the workmanship to be carried out by Viva.[5]
[5] Brine Affidavit [13] - [15], 'RKGB-5'.
Viva provided a further quote in February 2021 for the supply and installation of the external tiling works to be completed under the Contract.[6]
[6] Brine Affidavit [16], 'RKGB-6'.
Viva commenced the Tiling Works in September 2021.[7]
[7] Brine Affidavit [19].
On about 6 August 2022, the Owners raised complaints with Timesright and Viva about the quality of the Tiling Works and requested that Viva rectify certain issues raised in relation to the Tiling Works.[8]
[8] Brine Affidavit [22], 'RKGB-8'.
Between September and December 2022, Timesright sent various emails to Viva regarding rectification of the issues with the Tiling Works.[9]
[9] Brine Affidavit [23] - [26], 'RKGB-9' - 'RKGB-11'.
The Owners made a further complaint about the Tiling Works on about 19 December 2022.[10]
[10] Brine Affidavit [26], 'RKGB-11'.
Timesright claims that, in January 2023, Viva agreed to undertake certain rectification works but refused to accept responsibility for some of the issues raised.[11]
[11] Brine Affidavit [27] - [28], [31].
On 3 April 2023, the Owners sent a demand to Timesright in relation to the Tiling Works, which included an expert report in relation to alleged defective works and their likely cause, including application of a penetrative sealer and defective workmanship.[12]
[12] Brine Affidavit [35], 'RKGB-15'.
Mr Brine deposes that at a meeting between him and an employee of Timesright and the directors of Viva, Mr Varrone and Mr Taweel, on about 1 June 2023, Viva accepted that rectification works were required and proposed a plan to rectify the issues with the Tiling Works.[13]
[13] Brine Affidavit [38], 'RKGB-17'.
Following that meeting, Mr Brine sent a number of text messages to the directors of Viva asking for updates regarding rectification of the Tiling Works.[14]
[14] Brine Affidavit [40], 'RKGB-19'.
No rectification works were undertaken by Viva and, on 20 November 2023, Mr Brine received a text message from Mr Varrone stating that due to illness, he and Mr Taweel had retired and Viva was no longer in operation.[15]
[15] Brine Affidavit [41], 'RKGB-20'.
Timesright claims that the costs to rectify the defective Tiling Works undertaken by Viva are estimated at $1,123,836.65, inclusive of a builder's margin at 16% (Rectification Costs), as set out in and attached to the Brine Affidavit.[16]
[16] Brine Affidavit [50], 'RKGB-23'.
Letters of demand setting out Timesright's claim for payment of the Rectification Costs were sent to Mr Varrone and Mr Taweel on 21 December 2023 and 23 February 2024. No response was received.[17]
[17] Brine Affidavit [46] - [47], [51] - [54], 'RKGB-22' - 'RKGB-26'.
Mr Brine deposes that Timesright was not made aware of any intention by Viva's directors to deregister the company. He was unaware that Viva had ceased operating until he received Mr Varrone's text message at the end of November 2023.[18]
[18] Brine Affidavit [45].
Timesright's solicitors subsequently obtained a copy of ASIC Form 6010 'Application for Voluntary Deregistration of a Company' completed by Mr Varrone dated 7 September 2023.[19]
[19] Brine Affidavit [44], 'RKGB-21'.
It is submitted on behalf of Timesright, that despite Mr Varrone having declared in that form that, at the time of deregistering the company, it had no outstanding liabilities, the directors were aware of the outstanding rectification works and Viva had made no attempt to resolve them.
Timesright seeks orders that Viva's registration be reinstated so that it may pursue a claim against it for breach of contract and consumer guarantees to recover the Rectification Costs.
Relevant legal principles
The principles applicable to the court's power and the exercise of its discretion to make an order that ASIC reinstate the registration of a company under s 601AH(2) of the Act are well established. They have been applied in numerous decisions of this and other courts and are summarised in my recent decision in Di Camillo v Australian Securities and Investments Commission,[20] which I refer to without repeating.
[20] Di Camillo v Australian Securities and Investments Commission[2024] WASC 288 [24] - [29] and the authorities referred to.
I have applied those principles in my determination of this application and in the exercise of my discretion.
Disposition
I am satisfied on the evidence adduced that ASIC has been served with the application and supporting evidence. It does not oppose the application and has stated it does not seek to be heard.
The directors of Viva at the time it was deregistered, Mr Varrone and Mr Taweel, have also been given notice of the application and evidence in support. They have withdrawn their notice of appearance and have not sought to be heard.
Due to Viva's deregistration, Timesright is unable to commence legal proceedings against Viva for its failure to undertake the works required to rectify the alleged defects with the Tiling Works, and to recover the alleged Rectification Costs.
There is no evidence of any insurer standing behind Viva that Timesright could bring an action against under s 601AG of the Act, or any other basis upon which it could seek relief.
I make no comment on the prospects of Timesright succeeding in its potential claim against Viva. However, I am satisfied on the evidence adduced that Timesright has summarily demonstrated that it has a cause of action and a basis to bring a claim against Viva.
There has been minimal delay in Timesright bringing its application. Timesright had been engaging with Viva and its directors in relation to the issues with the Tiling Works and rectification of the alleged defects. Viva's directors were on notice of the issues with the Tiling Works. On the evidence before me, Timesright understood that Viva had accepted responsibility for certain defects and had indicated it would undertake rectification works.
Without notice to Timesright, Viva was deregistered on 6 September 2023. Timesright only became aware of Viva's deregistration late in 2023, after following up with Viva's directors for an update on the rectification works and subsequent investigations by its lawyers.
Reinstatement will enable Timesright to commence legal proceedings against Viva in relation to its claim for recovery of the Rectification Costs and any additional loss or damage suffered.
I am satisfied that Timesright, as a company who wishes to pursue litigation against Viva, is a person aggrieved by the deregistration of Viva, for the purposes of s 601AH(2)(a)(i). I am also satisfied that there is utility in making the order and that it is just, in the circumstances outlined, to do so.
While Viva may suffer prejudice if it is reinstated and Timesright successfully brings a claim against it, it is in the public interest for Timesright to have the opportunity to exercise its legal right to bring its claim.
Conclusion and orders
For these reasons, I am satisfied it is appropriate to exercise my discretion to order the reinstatement of Viva. Subject to hearing from the plaintiff as to the final form of orders, I will make orders as follows:
1.Pursuant to section 601AH(2) of the Corporations Act 2001 (Cth), the defendant, the Australian Securities and Investments Commission, is to reinstate the registration of Viva Stone & Tiling Pty Ltd (ACN 130 957 425) (Company).
2.Notice of these orders is to be given to the defendant and to the directors of the Company within seven (7) days of the date of the orders.
2.No order as to costs.
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
AM
Associate to Master Russell
14 AUGUST 2024
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