Zero Alpha v Accurate Instrument Servicing Pty Ltd

Zero Alpha Pty Ltd and Accurate Instrument Servicing Pty Ltd were the subject of a winding-up application by the Commissioner of Taxation, which was ultimately granted by Jagot J. Mr Gary Binetter, a director of both companies, sought to set aside the orders for winding up and the appointment of the liquidator. He argued that he had standing as a director of the companies, which was reinstated upon their reinstatement on 11 March 2011. Binetter's application was made under section 471A of the Corporations Act 2001 (Cth) and section 23 of the Federal Court of Australia Act 1976 (Cth), which together require a director to have the leave of the Court (or the liquidator) to exercise a function or power as an officer of the company.

The primary legal issue before the court was whether Mr Binetter had standing to appeal the winding-up orders and the appointment of the liquidator. The court had to consider the principles relevant to the exercise of discretion to grant approval under section 471A(1A)(d) of the Corporations Act, as well as whether the companies were necessary parties to any winding up order made in relation to them and whether a winding up order could take effect at the same time as an order for the reinstatement of a deregistered company.

The court held that Mr Binetter did not have standing to appeal the winding-up orders and the appointment of the liquidator. Perram J had previously dismissed Binetter's application for leave to appeal on the basis that he did not have standing. The court held that a director may pursue an appeal against a winding up order in the name of a company if they first obtain leave under section 471A(1A)(d). However, Binetter was not seeking leave under that subsection. Instead, he brought the application for leave to appeal as a third party affected by the orders. The court held that Binetter's status as a director was irrelevant to his standing to appeal, as he was not a party to the proceeding before Jagot J. The court further held that Binetter's potential involvement in a liquidator's investigation and its downstream consequences did not suffice for standing purposes. The court held that the potential for a winding up order to be exposed to a broad range of putative appellants would pose a risk to the orderly conduct of the winding up.

The court dismissed Binetter's application for leave to appeal the winding-up orders and the appointment of the liquidator. The court held that Binetter did not have standing to appeal the orders and that the principles relevant to the exercise of discretion to grant approval under section 471A(1A)(d) of the Corporations Act did not apply in this case. The court also held that the companies were not necessary parties to any winding up order made in relation to them and that a winding up order could not take effect at the same time as an order for the reinstatement of a deregistered company.