In the matter of Jury & Spiers Proprietary Limited

1. [1]

   The plaintiff Francis Lawrence Daniels wishes to bring proceedings in the Dust Diseases Tribunal against his former employer the first defendant company Jury & Spiers Proprietary Limited, which was incorporated in South Australia in 1950, and deregistered in 1983. By originating process filed on 23 March 2016 and amended on 9 May 2016, Mr Daniels seeks, in this Court’s cross-vested jurisdiction, an order pursuant to s 459(6) of the Companies (South Australia) Code (“the 1981 SA Code”) [1] for the reinstatement of the registration of the company, and an extension of time under s 539(4)(d) in which to make that application; an order that upon reinstatement a liquidator be appointed; and leave to commence proceedings in the Dust Diseases Tribunal against the company in liquidation.

2. [2]

   The evidence – which is sparse, as the company search available contains limited detail – appears to establish the following. The company was incorporated in South Australia on 29 June 1950. Mr Daniels was employed by the company between 13 April 1959 and 31 May 1963, in the wholesale plumbers’ hardware department. [2] During that period, he says that he was exposed to asbestos dust. The company was wound up on 28 July 1982 when A T Payne of 15-19 Bent Street, Sydney, was appointed liquidator; the winding up was a members’ voluntary winding up. [3] The liquidator ceased to act on 15 March 1983, [4] and the company was deregistered on 15 June 1983. [5] Mr Daniels has recently been diagnosed with an interstitial lung disease which, in his consultant physician’s opinion, is probably associated with exposure to asbestos. [6]

3. [3]

   In Baird v WJT Howes Investments Pty Ltd, [7] Barrett J (as he then was) observed:

4. [4]

   However, in the present case, it is known that there was a liquidation, and that the liquidator ceased to act precisely three months before the date of deregistration. Section 411 of the Code, which applied to a voluntary winding up, is relevantly in the following terms:

5. [5]

   The circumstances that (a) there was a winding up, and (b) the date of deregistration appears to coincide with three months after the cessation of the appointment of the liquidator, supports an inference that in this case, the company was dissolved under s 411(5), not deregistered under s 459. As will appear, this has consequences for the proper basis of the present application.

6. [6]

   Section 459 of the 1981 SA Code provided for the cancellation of the registration of defunct companies. Subsection (6) is in the following terms:

7. [7]

   As the company was dissolved pursuant to s 411(5), and did not have its registration cancelled under s 459(4), reinstatement under s 459(6) is not available: it is available only in respect of a cancellation of registration under s 459. [8]

8. [8]

   However, in s 458, the Code also contains provision for the avoidance of the dissolution of company which has been dissolved pursuant to s 382(6) or, relevantly, s 411(5):

9. [9]

   Unlike its predecessor (s 307 of the (SA) Companies Act 1961), and unlike s 459(6), s 458 contains no time limit for making an application.

10. [10]

    Although there were suggestions in earlier authorities that the (CTH) Corporations Act 2001 (“the 2001 Corporations Act”) could be invoked in respect of companies dissolved under pre-1989 companies legislation, [9] the prevailing view is that the 2001 Corporations Act – and in particular s 601AH – does not apply to such entities. [10] As Barrett J explained in Tan v ASIC: [11]

11. [11]

    However, such dissolved companies could be reinstated under the legislation under which they were dissolved, the operation of which in some respects survived the successor legislation. Section 6 of the (SA) Companies (Application of Laws) Act 1982 (“the 1981 SA Application Act”) – which, as an aspect of the then co-operative scheme, was identical to the corresponding (NSW) Companies (Application of Laws) Act 1981 – provided that the Companies Act 1981 of the Commonwealth applied as a law of South Australia, as if amended as set out in Schedule 1, and subject to and in accordance with the (SA) Companies and Securities (Interpretation and Miscellaneous Provisions) (Application of Laws) Act 1981; so applied, it was the 1981 SA Code; similar provision was made in each other Australian jurisdiction.

12. [12]

    Division 2 (Co-operative scheme laws) of the (SA) Corporations (South Australia) Act 1990 (“the 1990 SA Corporations Act”) – which gave effect to the national companies scheme commencing on 1 January 1991 – defined “co-operative scheme laws” in terms which included the 1981 SA Application Act and the 1981 SA Code: [12]

13. [13]

    Section 85 provided for the national scheme laws to supercede the co-operative scheme laws, which would continue to operate of their own force only in relation to matters arising before the commencement of the national scheme laws (which commenced on 1 January 1991), or matters arising out of such matters insofar as the national scheme laws did not deal with them:

14. [14]

    Section 87 provides for the deemed repeal of the co-operative scheme laws to the extent that they are superceded by the national scheme laws as a result of s 85, but not otherwise:

15. [15]

    Thus:

    1. (1)

       Section 85 of the 1990 SA Corporations Act (which remains in force) provides for the national scheme laws to supersede the co-operative scheme laws, except in relation to matters arising before 1 January 1991 and matters arising directly or indirectly out of such matters – in respect of which the co-operative scheme laws continued to operate of their own force;

    2. (2)

       The relevant co-operative scheme laws included the 1981 SA Code;

    3. (3)

       The deregistration of a company in 1983 is a matter arising before 1 January 1991, and the reinstatement of such a company is a matter arising out of it;

    4. (4)

       The national scheme laws do not deal with an application for reinstatement of a company dissolved under the 1981 SA Code;

    5. (5)

       For those reasons, s 458 and s 459(6) of the 1981 SA Code did not cease to operate, in respect of matters arising out of the deregistration of a company before 1 January 1991, because of s 85;

    6. (6)

       Therefore, pursuant to s 87, it is not to that extent taken to be repealed.

16. [16]

    Accordingly, at least so long as the 1981 SA Code remains in force, a company dissolved or deregistered under the 1981 SA Code could still be reinstated by an order made under s 458 or s 459(6) respectively of the 1981 SA Code.

17. [17]

    It was upon this basis that Senior Master Mahoney held in City West Water Ltd v Mr D Investments Pty Ltd [13] that the matter of reinstatement of the registration of a company that had existed under and been deregistered pursuant to the 1981 Companies (Victoria) Code was a matter that remained subject exclusively to the continuing provisions of that Code, notwithstanding provisions concerning transition from that Code to the 1990 Corporations Law of Victoria and subsequent transition to the 2001 Corporations Act. This was followed in this Court by Barrett J in Baird v WJT Howes, [14] a case which bears many similarities to the present. Baird had commenced proceedings against Howes in the Dust Diseases Tribunal; upon discovering that Howes had been deregistered on 9 July 1990 – when the 1981 NSW Code was the applicable companies legislation in New South Wales – he applied to have it reinstated. His Honour accepted (at [8]-[9]) that the reasoning in City West Water was correct and prevailed over his own earlier decision in Shaw v Goodsmith Industries Pty Ltd [15] and that of Austin J in Parker v Australian Asbestos Pty Ltd, [16] and was also consistent with National Australia Bank Ltd v Australian Securities Commission. [17] Deregistration of a company pursuant to the 1981 Code before 1 January 1991 was a “matter arising before” that date for the purposes of s 85 of the 1990 Corporations Act.

18. [18]

    In Armitage v HXE Limited, [18] on an application to declare void a dissolution of a company dissolved in 1980 (before the commencement of the 1981 Code, when the 1961 Companies Act was still applicable), [19] White J said (at [9]):

19. [19]

    The continued application of this approach in New South Wales is now problematic – the Companies (New South Wales) Code is no longer in force as a consequence of the repeal of the 1981 NSW Application Act (which established the Code as law) by the (NSW) Statute Law (Miscellaneous Provisions) Act 2008. In Tan v ASIC, [20] in the absence of submissions to the contrary, and in accordance with City West Water, Best v Yellow Express Carriers Ltd, [21] Baird v WJT Howes and Armitage v HXE, Barrett J made an order under the 1981 Code for the reinstatement of a company which had been deregistered under that Code, but with the following expressed reservations:

20. [20]

    In In the matter of Rocha Pty Ltd, [22] sharing his Honour’s discomfort, I concluded that as the 1961 NSW Act (which was also repealed by the (NSW) Statute Law (Miscellaneous Provisions) Act 2008) had been repealed, and the later legislation gave it no additional effect or operation, it was no longer possible for an order to be made under the repealed 1961 NSW Act:

21. [21]

    The same reasoning would lead to the conclusion that, having also been repealed in 2008, the provisions of the 1981 NSW Code are no longer available as a jurisdictional basis for the reinstatement of a company dissolved under that Code.

22. [22]

    However, in the present case, the dissolution took place under the South Australian – not the New South Wales – Code, which applied pursuant to the 1981 SA Application Act. So far as I can ascertain, the position in South Australia does not suffer from the same difficulties as now obtain in New South Wales; unlike the 1981 NSW Code, the 1981 SA Code has not been repealed. Although the legislation website maintained by Parliamentary Counsel for South Australia indicates that the 1981 SA Code and the 1981 Application Act have “ceased”, that is said to be so because they have been “superceded” by the 1990 national scheme legislation. However, as has been demonstrated above, such supercession is not complete: the 1981 co-operative scheme legislation was left to have effect of its own force in respect of matters arising before the commencement of the national scheme legislation. As the 1981 SA Code – unlike the corresponding NSW Code – has not been repealed, to that extent it continues to have effect “of its own force” in respect of matters arising before 1 January 1991, and matters arising from them, in respect of which the national scheme legislation did not make provision.

23. [23]

    It would therefore be open to the plaintiff to apply to the Supreme Court of South Australia – being “the Court” referred to in s 458 of the 1981 SA Code – for an order declaring void the dissolution of the company, and that Court would have jurisdiction to make such an order. Section 4 of the (SA) Jurisdiction of Courts (Cross-Vesting) Act 1987 (“the Cross-Vesting Act”) vests in this Court the jurisdiction of the Supreme Court of South Australia in respect of State matters. While the Cross-Vesting Act does not apply to the jurisdiction of courts which Part 9.6A, Div 1, of the 2001 Corporations Act deals with, that Division deals only with the jurisdiction of courts in respect of civil matters arising under “the Corporations legislation”, which is relevantly defined as the 2001 Corporations Act and the relevant rules of court; it does not include the co-operative scheme legislation. An application under s 458 of the 1981 SA Code does not fall within that definition, but is a “State matter” within the meaning of the Cross-Vesting Act. Accordingly, this Court has and may exercise the jurisdiction of the Supreme Court of South Australia under the 1981 SA Code.

24. [24]

    The plaintiff has an asbestos-induced disease which he contends was contracted in the course of his employment with the company.

25. [25]

    The available evidence does not enable the directors or shareholders at the time of dissolution to be identified. However, the company has been wound up. Moreover, the plaintiff does not propose to issue any enforcement process against the company, but only against an insurer. At least one insurer with a policy that responds to the plaintiff’s claim has been identified. Its solicitors have contended that, as it was not on risk for the entirety of the relevant period, it is inappropriate that one insurer be sued directly in place of the former employer, which should be reinstated. The interests of the directors and shareholders will be protected by an undertaking which I propose to require as a condition of relief, reflecting the plaintiff’s avowed intention not to seek to enforce any judgment against the company, other than by resorting to the proceeds of insurance.

26. [26]

    The right of direct action against the insurer, now given by the 2001 Corporations Act, s 601AG, is not available, because the company was never a “company” within the definition of s 9 of the 2001 Corporations Act, and will not become one if reinstated. [23] The earlier legislation contained no equivalent to s 601AG, which was introduced in 1998 by the (CTH) Company Law Reform Act 1998. [24] Although (NSW) Law Reform (Miscellaneous Provisions) Act 1946, s 6, gives a direct right of recourse against the insurer, and the prevailing view is that it applies to an action brought in a court in New South Wales (which would relevantly include the Dust Diseases Tribunal), [25] there is some residual doubt as to its availability where the proper law of the contract of insurance may be South Australian law. [26]

27. [27]

    Accordingly, there is some potential advantage to the plaintiff in the reinstatement of the company, and no identifiable detriment to anyone. The entity most potentially affected – the insurer – proposed reinstatement. No person interested opposes it. ASIC has indicated that it does not oppose the application, subject to the usual conditions.

28. [28]

    Section 458 confers powers enlarged from those in its predecessor (s 307 of the uniform 1961 Companies Acts), in that the Court may, under s 458, give “such directions and make such provisions (including directions and provisions relating to the re-transmission of property vested in the Commission under section 461) as seem just for placing the company and all other persons in the same position as nearly as may be as if the company had not been dissolved”. Immediately prior to its dissolution, the company had been wound up in a members' voluntary winding up.

29. [29]

    In Kenney v McCann, [27] Owen J in the Supreme Court of Western Australia held that a company which had been dissolved upon completion of a voluntary liquidation would, upon the dissolution being declared void, be reinstated as a company in voluntary liquidation. While his Honour did not find it necessary to make a fresh appointment of a liquidator, he nonetheless included in his orders directions as to what the liquidator might do. In Stone v ACN 000 337 940 Pty Ltd, [28] Barrett J said:

30. [30]

    Thus, while reinstatement does not result in the automatic resumption of office by a liquidator who was in office at the time of deregistration, nonetheless upon the reinstatement of a company that was at the time of deregistration in liquidation, it remains in liquidation unless the Court otherwise orders. [29] Under s 458 (though not under its predecessor), the Court can, when declaring a dissolution void, reappoint the former liquidator or appoint a new liquidator; alternatively, it can remove the former liquidator, [30] or fill a vacancy in the office. [31] While, all other things being equal, reappointment of the former liquidator is preferable, [32] it will not be the appropriate course where there are considerations militating against it.

31. [31]

    The plaintiff has not been able to trace the former liquidator. An official liquidator has consented to act as liquidator. In those circumstances, it is appropriate to direct under s 458 (or alternatively, by way of filling a vacancy in the office of liquidator, under Companies Code, s 404 or Corporations Act, s 502) that he be appointed liquidator.

32. [32]

    Whether one refers to the 1981 Code or to the 2001 Corporations Act, proceedings against a company are not stayed by a members’ voluntary winding up, and leave is not required to commence or maintain such proceedings. Such a restriction only applies in a court ordered winding-up [33] and a creditors’ voluntary winding up. [34]

Conclusion

1. [33]

   My conclusions may be summarised as follows:

   1. (1)

      The appropriate jurisdictional basis for relief, the company having been dissolved under s 411 of the 1981 SA Code following liquidation, is s 458 of that Code (not s 459(6));

   2. (2)

      Unlike the position in NSW where the 1981 Code has been repealed, it remains available for this purpose in South Australia;

   3. (3)

      There is no requirement for an extension of time to apply under s 458;

   4. (4)

      The SA Cross-Vesting Act gives this Court the jurisdiction of the Supreme Court of South Australia under s 458 of the 1981 SA Code;

   5. (5)

      The dissolution of the company should be declared void;

   6. (6)

      As the company is already in liquidation, there is no requirement for a winding up order, but a new liquidator should be appointed;

   7. (7)

      As the winding up is a members’ voluntary winding up, there is no requirement for leave to commence or continue proceedings against the company in liquidation.

2. [34]

   The Court therefore orders that:

   1. (1)

      Pursuant to Companies (South Australia) Code, s 458, the dissolution of the company Jury & Spiers Proprietary Limited be and is hereby declared void.

   2. (2)

      David Ian Mansfield of Deloitte Touche Tohmatsu, Level 19, 60 Station Street, Parramatta, be appointed liquidator of the company.