Vero Insurance Ltd v Nicejade Pty Ltd - [2010] NSWSC 556

CITATION: Vero Insurance Ltd v Nicejade Pty Ltd [2010] NSWSC 556

HEARING DATE(S): 27/04/10
Written submissions:

JUDGMENT DATE :
1 June 2010

JURISDICTION: Equity Division
Corporations List

JUDGMENT OF: Barrett J

DECISION: Orders directing reinstatement and for winding up.

CATCHWORDS: CORPORATIONS - deregistered company - application for order directing reinstatement - whether applicant a person aggrieved - whether just that reinstatement occur - where applicant has claim by subrogation against deregistered company - holding company says that criteria for reinstatement not satisfied because such claim statute barred - uncertainty on limitation issue - can only be decided on full inquiry - such inquiry not appropriate on this application - reinstatement ordered - observations on resort to "voluntary" deregistration

LEGISLATION CITED: Corporations Act 2001 (Cth), ss 467(3)(d),601AA(2)(c), 601AA(2)(c), 601AA(2)(e) 601AH(2)
Environmental Planning and Assessment Act 1979, Part 4A, s 109ZK
Home Building Regulation cl 61(1)(b), clauses 59, 64
Home Building Act 1989, ss 18C, 18E
Home Building Regulation, clause 61(1)(b).
Local Government Act 1993
Local Government (Approvals) Regulation 1993

CATEGORY: Principal judgment

CASES CITED: Abrahams v Degan [2009] NSWDC 315
McCallum Developments v The Owners Corporation SP53908 [2002] NSWSC 1103

PARTIES: Vero Insurance Limited - Plaintiff
Nicejade Pty Limited - First Defendant
Sunlord Holding Pty Limited - Second Defendant

FILE NUMBER(S): SC 2008/281810

COUNSEL: Mr M S Jacobs QC - Plaintiff
Mr D R Creais - Defendants

SOLICITORS: Mills Oakley Lawyers - Plaintiff
Bartier Perry - Defendants

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION
CORPORATIONS LIST

BARRETT J

TUESDAY 1 JUNE 2010

2008/281810 VERO INSURANCE LIMITED v NICEJADE PTY LIMITED

JUDGMENT

1 The plaintiff (“Vero”) seeks an order under s 601AH(2) of the Corporations Act 2001 (Cth) directing Australian Securities and Investments Commission to reinstate the registration of Nicejade Pty Ltd (“Nicejade”). Sunlord Holding Pty Ltd (“Sunlord”) was the holding company of Nicejade at the time of deregistration.

2 The deregistration of Nicejade occurred on 6 August 2006. It was a “voluntary” deregistration under s 601AA made upon an application by Mr Chan, who was at the time a director of both Nicejade and Sunlord. In conjunction with the deregistration, Mr Chan made a statement that Nicejade had no outstanding liabilities, that being one of the conditions that must be satisfied to permit a s 601AA application to be made: see s 601AA(2)(e). Another condition (imposed by s 601AA(2)(c)) is that the company’s assets are worth less than $1,000. The deregistration application in respect of Nicejade contained a representation to that effect as well.

3 Nicejade developed a block of home units at Bellevue Hill. The builder was Moonfare Pty Ltd, another subsidiary of Sunlord. Upon completion of the building and registration of a strata title plan in 1997, the common property vested in the owners corporation as successor to Nicejade.

4 Also in 1997, Vero issued home warranty insurance in respect of the home units. A policy of insurance under the Home Building Act 1989 was issued to Nicejade and certificates of insurance were issued to both…

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.

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Details

Case: [2010] NSWSC 556
Decision Date: 1 June 2010

CaseChat Overview and Summary

Vero Insurance Limited sought an order to reinstate Nicejade Pty Ltd, a deregistered company, in order to pursue a subrogation claim against it. The application was heard by the Federal Court of Australia. The core legal issue before the court was whether Vero Insurance Limited, having a subrogation claim against the deregistered company, qualified as a person aggrieved for the purpose of seeking reinstatement, and if it was just for the company to be reinstated. Additionally, the court needed to determine if the limitation period for the subrogation claim was a bar to reinstatement.

The court held that Vero Insurance Limited was indeed a person aggrieved as it had a valid claim against the deregistered company. The question of whether it was just to reinstate the company hinged on the unresolved uncertainty about whether the subrogation claim was statute-barred. Given that the limitation issue required a full inquiry, which was not suitable for the reinstatement application, the court determined that it was appropriate to order the reinstatement of Nicejade Pty Ltd. The court made observations on the practice of voluntary deregistration, suggesting that it might not always be in the best interest of creditors, and ordered the reinstatement of the company to allow for the determination of the subrogation claim.

Orders