In the matter of Rocha Pty Ltd (Deregistered)

1. [1]

   Rocha Pty Ltd was dissolved pursuant to (NSW) Companies Act 1961 (“the 1961 Act”), s 308(4), on 25 June 1982. By Amended Originating Process filed on 19 May 2016, the plaintiff Romesh Amar seeks a declaration (under s 307 of the 1961 Act) that the dissolution of Rocha is void, and an order (under s 366 of the 1961 Act) enlarging the time for bringing the application. The plaintiff also seeks an order that Lot 25 in Deposited Plan 32327 – known as 10 Warrah Street, Hamilton East (“the Hamilton property”), which was owned by Rocha prior to its dissolution – revest from ASIC to Rocha.

2. [2]

   The principal issues are:

   1. (1)

      whether an order could or should be made – as contemplated by s 601AH of the (CTH) Corporations Act 2001 (“the 2001 Corporations Act”) – to the effect that ASIC reinstate Rocha;

   2. (2)

      whether the provisions of the 1961 Act can be invoked by the plaintiff;

   3. (3)

      if so, whether it is appropriate as a matter of discretion to make the orders sought by the plaintiff; and

   4. (4)

      if so, whether an order could or should be made for the revesting of the Hamilton property.

Background

1. [3]

   Rocha’s Memorandum of Association and Articles of Association were lodged with the (then) Corporate Affairs Commission on or about 1 February 1978. Rocha was the vehicle through which Mr Amar – a psychiatrist, now retired – conducted his psychiatry practice; Rocha was also the trustee of his family trust. Mr Amar held five of six issued shares, and Mr Craig (an accountant) held the sixth share – Mr Amar and Mr Craig were the directors. However, Mr Craig played no significant role in the affairs of Rocha; Mr Amar has had no contact with him since about 1978 or 1979, and inquiries have not located him. It is probable that he held his share in Rocha upon trust for Mr Amar.

2. [4]

   In or about 1979, Rocha purchased the Hamilton property, subject to a mortgage securing a loan from Westpac, which was paid out in full within a few years of the purchase. Until about 1993, Mr Amar conducted his practice from the Hamilton property.

3. [5]

   Mr Amar does not have possession of any business records of Rocha and, so far as he is aware, none exist. However, there is in the records now held by ASIC a document dated, 11 July 1980, which records:

4. [6]

   Another document held by ASIC, dated 25 June 1982, states:

5. [7]

   With a few exceptions (being tenants who occupied it for a few weeks from time to time at no rent), the Hamilton property was vacant from 1993 (when Mr Amar ceased conducting his psychiatric practice there) to about 2008. Between 2008 and 2015, it was leased to a Mr Ambler and his family, who paid rent until about June 2014 when Mr Ambler died, after which his family remained in the property rent free until about June 2015. The leases were informal and were not in writing, and Mr Amar has no records of rental payments (which he believes were made in cash, but may also have been by bank transfer). Since June 2015, the property has been vacant.

6. [8]

   On about 26 October 2015, Mr Amar received correspondence from a potential purchaser of the Hamilton property, and between November 2015 and January 2016 received correspondence from ASIC. A total of $10,712.22 (comprising water rates of $3,400 to Hunter Water, and $7,312.22 council rates to Newcastle City Council) is owed in respect of the property.

The current status of the Hamilton property

1. [9]

   Under s 310(1) of the 1961 Act, the Hamilton property became vested in the NSW Corporate Affairs Commission upon deregistration of Rocha. [1] Section 23 of the (NSW) Companies (Application of Laws) Act 1981 (“the 1981 Application of Laws Act”) provided that property held by the Corporate Affairs Commission pursuant to s 310 of the 1961 Act vested in the National Companies and Securities Commission (NCSC):

2. [10]

   The (CTH) Australian Securities and Investments Commission Act 1989 (“the 1989 ASIC Act”) provided that, following the enactment of the national scheme companies legislation in 1989 and 1990, property held by the NCSC vested in the Australian Securities Commission – later renamed the Australian Securities and Investments Commission (ASIC). Section 253 of the 1989 ASIC Act relevantly provided as follows:

3. [11]

   Section 254 of the 1989 ASIC Act provided as follows:

4. [12]

   The body corporate of ASIC, established by s 7 of the 1989 ASIC Act, continued in existence following the enactment of the (CTH) Australian Securities and Investments Commission Act 2001. [4]

5. [13]

   Accordingly, by reason of these statutory provisions:

   1. (1)

      Pursuant to s 310 of the 1961 Act, the Hamilton property vested in the NSW Corporate Affairs Commission upon the dissolution of Rocha;

   2. (2)

      Pursuant to s 23 of the 1981 Application of Laws Act, the property vested in the NCSC;

   3. (3)

      Pursuant to s 254 of the 1989 ASIC Act, the property vested in ASIC, by which it continues to be held.

ASIC’s position

1. [14]

   The Originating Process and supporting affidavit of Mr Amar were sent to ASIC on 18 April 2016. On 20 April 2016, ASIC sent a letter to the plaintiff’s solicitor, stating (emphasis in original):

2. [15]

   On 11 May 2016, Mr Amar’s solicitor sent two letters to ASIC. The first attached a proposed Amended Originating Process, and stated that the plaintiff agreed to the third and fourth conditions stated in ASIC’s letter of 20 April 2016. In respect of the first and second conditions, the letter suggested that, in light of Armitage v HXE Ltd [5] and Baird v WJT Howes Investments Pty Ltd [6] (which are referred to in greater detail below), it was not necessary for the plaintiff to seek a specific order for reinstatement. The letter also proposed that the Originating Process be amended to include an order revesting the property, as the 1961 Act contained no equivalent to s 601AH(5) of the 2001 Corporations Act, and requested that ASIC indicate whether it consented to the orders sought in the proposed Amended Originating Process. The second letter attached a proposed Amended Originating Process with a minor change to the version proposed in the first, by formally naming ASIC as a second defendant. On 16 May 2016, ASIC responded that it agreed to vary the first condition to “The order sought for is under the appropriate legislation”, thereby removing the requirement that there be an order that it reinstate the registration of the company. The letter did not explicitly refer to the Amended Originating Process, nor to the proposed new order for revesting.

3. [16]

   On 17 May 2016, the plaintiff’s solicitor sent a further letter to ASIC, indicating that it was assumed that ASIC was still considering the Amended Originating Process, and asking for an indication of when ASIC’s position would be communicated. ASIC responded by email on 18 May 2016, as follows:

Section 601AH of the 2001 Corporations Act is not applicable

1. [17]

   Section 601AH of the 2001 Corporations Act provides for the reinstatement of the registration of a “company”. “Company” is defined in s 9 of that Act as follows:

2. [18]

   Rocha was not registered under the 2001 Corporations Act, and therefore is not a “company” within the meaning of s 9.

3. [19]

   The registration of companies registered under the “old Corporations Law” (which – pursuant to the definition in s 1371 – means, generally speaking, the Corporations Law set out in Corporations Act 1989, s 82, as in force in each State or Territory), is addressed in the transitional provisions in Chapter 10 of the 2001 Corporations Act. Section 1378(1) provides as follows:

4. [20]

   As Rocha was never registered (or deemed to be registered) under the 1990 Corporations Law of NSW, s 1378 is not engaged.

5. [21]

   There were suggestions in earlier authorities that the 2001 Corporations Act could be invoked in respect of companies dissolved under pre-1989 companies legislation. [7] However, the prevailing view is that the 2001 Act – and, in particular, s 601AH – does not apply to such entities. [8] As Barrett J explained in Tan v ASIC: [9]

6. [22]

   It also follows that an order as contemplated by s 601AH(1) of the 2001 Corporations Act – that ASIC reinstate the registration of Rocha as a “company” – is inappropriate and unavailable. As White J explained in Armitage v HXE Limited [10] (bold added):

7. [23]

   Similarly, in Baird v W J T Howes Investments Pty Ltd, [11] although in relation to s 459(6) of the Companies (New South Wales) Code 1981, Barrett J said (underlining added, bold in original):

Are the reinstatement provisions of the 1961 Act available?

1. [24]

   In the past, the solution to this problem – which the plaintiff sought to invoke –has been found in reliance on the legislation under which the company was dissolved, the operation of which in some respects survived the successor legislation. This approach descends from Re Wangi Wangi Development Co Ltd, [12] in which McLelland CJ in Eq, on an application to declare void the dissolution of a company which was dissolved in 1935, held that s 307 and s 366 of the 1961 Act remained available following the enactment in 1990 of the Corporations Law (“the 1990 Law”) (at 298):

2. [25]

   Similarly, in Armitage v HXE Limited, [13] on an application to declare void a dissolution of a company dissolved in 1980, White J said (at [9]-[11]):

3. [26]

   Section 307 of the 1961 Act provided that the Court may, within two years after the date of a company’s dissolution, make an order upon such terms as the Court thinks fit to declare the dissolution void, whereupon proceedings may be taken as if the company had not been dissolved:

4. [27]

   Section 308 provided for a defunct company to be struck off the register and dissolved, and that the Court may, on application made within fifteen years after the name of the company has been struck off, order the name of the company to be restored to the register, whereupon the company shall be deemed to have continued in existence as if its name had not been struck off; and the Court may, by the order, also give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off:

5. [28]

   Section 310(1) provided for the vesting of property of a dissolved company in the Corporate Affairs Commission:

6. [29]

   Section 366(4) provided for the enlargement of time for bringing proceedings under the 1961 Act:

7. [30]

   It is pertinent to examine the terms of the transitional provisions that were relied upon in Re Wangi Wangi and in Armitage v HXE. Section 6 of the 1981 Application of Laws Act provided that the Companies Act 1981 of the Commonwealth applied as a law of New South Wales, as if amended as set out in Schedule 1, and subject to and in accordance with the (NSW) Companies and Securities (Interpretation and Miscellaneous Provisions) (Application of Laws) Act 1981. Section 18 of the 1981 Application of Laws Act, referred to in Re Wangi Wangi, provided that the 1981 co-operative scheme laws operated to the exclusion of the 1961 Act, but did not affect any right or privilege acquired or penalty or forfeiture incurred under that Act, nor did it affect any legal proceeding or remedy in respect of any such right, privilege, liability or forfeiture:

8. [31]

   Section 20 of the same Act, which was referred to in Armitage v HXE, provided that all persons, things and circumstances appointed or created by or under the 1961 Act, or existing or continuing under it immediately before the commencement of the 1981 Application of Laws Act shall, under and subject to the 1981 Application of Laws Act and the Companies (New South Wales) Code 1981 (“the 1981 Code”), continue to have the same status, operation and effect as they respectively would have had if the 1981 Application of Laws Act had not been enacted:

9. [32]

   Section 84 of the (NSW) Corporations (New South Wales) Act 1990 (“the 1990 Corporations Act”) defined “co-operative scheme laws” to include the 1981 Application of Laws Act. Section 85, which was referred to in both Re Wangi Wangi and Armitage v HXE, provided:

10. [33]

    Thus:

    1. (1)

       Section 85 of the 1990 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 the commencement of the 1990 Act 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. The relevant co-operative scheme laws included sections 18 and 20 of the 1981 Application of Laws Act;

    2. (2)

       In turn, those sections provided for the co-operative scheme laws to apply to the exclusion of the 1961 Act in relation to matters to which the co-operative scheme laws applied, but not so as to affect any right or privilege acquired or penalty or forfeiture incurred under the 1961 Act, or any legal proceeding or remedy in respect of any such right, privilege, liability or forfeiture;

    3. (3)

       An application for reinstatement of a company struck off under the 1961 Act is a matter arising out of a matter arising before the commencement of the national scheme laws (namely, the striking off of the company); and

    4. (4)

       The co-operative scheme laws made no provision for reinstatement of a company dissolved under the 1961 Act.

11. [34]

    Accordingly, at least so long as it remained in force, application for reinstatement of a company dissolved under the 1961 Act could still be made under that Act.

12. [35]

    However, the co-operative scheme laws and the national scheme laws did not repeal their predecessors, but superceded them – except in relation to certain matters – leaving the earlier legislation to operate, in respect of those matters, of its own force. The later legislation did not give any additional effect to the earlier legislation, nor contain any relevant “deeming” provision, by which their operation or effect was preserved, other than of their own force. When Re Wangi Wangi was decided, the 1961 Act was still in force, as it was when City West Water Ltd v Mr D Investments Pty Ltd [14] and Baird v WJT Howes Investments Pty Ltd were decided. However, the 1961 Act – and the 1981 Code – were repealed on 1 July 2008 by the (NSW) Statute Law (Miscellaneous Provisions) Act 2008. This was not adverted to in Armitage v HXE. So far as I can tell, neither the 1961 Act nor the 1981 Application of Laws Act has any continuing operation of their own force, and while the 1990 Act remains in force, it does not give them any additional operation beyond their own force. In Tan v ASIC, in the absence of submissions to the contrary, and in accordance with City West Water Ltd v Mr D Investments Pty Ltd, Best v Yellow Express Carriers Ltd, [15] Baird v WJT Howes Investments Pty Ltd and Armitage v HXE, Barrett J (as his Honour then was) made an order under the 1981 Code for the reinstatement of a company which had been deregistered under that Code, but added:

13. [36]

    I share his Honour’s discomfort. His Honour’s call for law reform in this respect has so far gone unanswered. Moreover, as the 1961 Act has been repealed, and the later legislation does not give it any additional effect or operation, I do not see how an order can now be made under the repealed 1961 Act. In my view, s 307 (and s 308) of the 1961 Act, having been repealed in 2008, are no longer available as a jurisdictional basis for the reinstatement of a company dissolved under that Act.

If available, should the dissolution be declared void?

1. [37]

   Although I have concluded that relief cannot be granted on jurisdictional grounds, it is appropriate in the circumstances that I address the merits of the application.

2. [38]

   Section 307(1) created a discretion to declare the dissolution void. Although the legislation speaks of a declaration, this does not involve finding that there has been any invalidity in the process that has led to the dissolution, but rather involves setting aside a dissolution notwithstanding that it has occurred entirely regularly. Standing to apply for such an order was conferred on a liquidator, or “any other person who appears to the Court to be interested”. As a director and shareholder of a dissolved company that was the owner of property, Mr Amar has a sufficient interest in seeking for the dissolution to be declared void.

3. [39]

   Section 307(1) contained a time limit of 2 years. This application is made 34 years after the dissolution. The question is whether (under s 366(4) of the 1961 Act) “the justice of the case” requires that the time for commencing this proceeding be enlarged to 12 April 2016, the date on which the Originating Process was filed. This is informed by substantially the same considerations as are relevant to the substance of the application under s 307(1), although it also invites attention to any explanation for the delay, and any prejudice that arises from it.

4. [40]

   One context in which dissolutions have not uncommonly been declared void (or, under the more recent legislation, reinstatement orders made) has been to deal with property of the company which was overlooked and became vested in ASIC or a predecessor agency. Indeed, this is almost certainly one of the reasons for which the provision was introduced, and in Re Servers of the Blind League [1960] 1 WLR 564, Pennycuick J said (at 565) that purpose of an order under (UK) Companies Act 1948, s 352 (which was in the same terms as s 307), declaring a dissolution void was generally to enable distribution to be made of an asset which had belonged to the company before dissolution but vested in the Crown upon dissolution.

5. [41]

   ASIC has stated that it does not wish to remain vested with the property, and does not oppose the declaration that the dissolution be void. There does not appear to be any risk of detriment or harm to any person if Rocha were reinstated.

6. [42]

   Although made relatively promptly after the correspondence commencing in late October 2015 concerning the Hamilton property, the application is made long outside the 2 year time frame. The only explanation offered is that Mr Amar does not recall receiving the documents pursuant to which Rocha was dissolved. This bespeaks a protracted period of disregard of the company’s existence and attendance to its affairs. However, in this context, where delay does not appear to have occasioned any prejudice to any person, nor founded any expectation or assumption, it is of reduced significance.

7. [43]

   Were jurisdiction available, there being no prejudice or detriment to any person, it would be appropriate to make an order declaring void the dissolution of the company so that the Hamilton property could be dealt with.

Would a revesting order be required?

1. [44]

   The plaintiff relied upon s 307, which was the section invoked in the earlier authorities, rather than s 308. The substantive differences were explained by Wells J in Re Kilkenny Engineering Pty Ltd. [16] Summarising the reasoning of the House of Lords in Morris v Harris, [17] his Honour said:

2. [45]

   Although the broader powers under s 308(5) were available only in relation to a company that had been struck off under s 308(4), there is no reason why the narrower power given by s 307 would not have been available in respect of all dissolved companies, regardless of whether they were dissolved following liquidation – pursuant to s 240(1) in the case of a winding-up by the Court) and s 272 (in the case of a voluntary winding-up) – or as a result of administrative striking-off under s 308(4). The earlier authorities have not addressed s 308, but they were all cases in which the dissolution was consequent upon a liquidation, and not where the company had been struck off administratively. The analysis which made s 307 of continuing application in respect of companies dissolved under the 1961 Act was equally applicable to s 308. Accordingly, had I been of the view that the provisions of the 1961 Act remained available, I would have held that although the company had been struck off under s 308(4), it was open to merely declare the dissolution void under s 307 (as the plaintiff sought), without making an order that it be restored to the register under s 308.

3. [46]

   However, the wider power in s 308(5), pursuant to which the Court can “give such directions and make such provisions as seem just for placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off”, was available only in connection with a company that had been struck off under s 308(4). Section 307, which was available where a company had been dissolved following liquidation, contained no express power to make a revesting order (or any other ancillary order). The plaintiff submitted that s 307(1) – which permits an order to be made “upon such terms as the Court thinks fit” – is sufficiently broad to order the revesting of the Hamilton property from ASIC to Rocha. However, authority indicates that such an order is neither necessary nor appropriate.

4. [47]

   In Morris v Harris, the House of Lords held by majority that the effect of an order under an equivalent section declaring void a dissolution was that the dissolution is avoided ab initio, so that the company was placed in the same position as if the dissolution never took effect. In Re C W Dixon Ltd, [18] Vaisey J held that when an order is made under the relevant section declaring the dissolution of the company void, the dissolution is avoided ab initio and all consequences which flowed from it are also avoided; accordingly, any property which on dissolution is supposed to have vested in the Crown either in fact never did so or, insofar as it must be assumed to have so vested, such vesting is avoided by the order, and no order expressly revesting such property in the company is required. [19]

5. [48]

   These decisions were analysed, explained and adopted by Wells J in the Supreme Court of South Australia in Re Kilkenny Engineering Pty Ltd in which his Honour explained that while an order under s 307 did not retrospectively revive the company’s power to participate in or become a party to legal transactions or acts-in-law of any kind that would have been unauthorised and invalid when they took place, it did revest property that had vested in the Crown in the reinstated company. After the passage cited above, his Honour continued:

6. [49]

   Accordingly, were the dissolution of the company declared void under s 307, there would be no necessity for a revesting order; upon the dissolution being declared void, the vesting of the Hamilton property in the Corporate Affairs Commission would also thereby be nullified.

Conclusion

1. [50]

   For the foregoing reasons, I have reached the following conclusions:

   1. (1)

      The 2001 Corporations Act does not provide any jurisdictional basis for the reinstatement of a company dissolved under the 1961 Companies Act.

   2. (2)

      Although the 1961 Companies Act was available in such circumstances until its repeal in 2008, it is no longer available. Therefore, sections 307 and 308 of the 1961 Act, having been repealed in 2008, are no longer available as a jurisdictional basis for the reinstatement of a company dissolved under that Act.

   3. (3)

      Were jurisdiction available, then, there being no prejudice or detriment to any person, it would have been appropriate to make an order declaring void the dissolution of the company so that the Hamilton property could be dealt with.

   4. (4)

      Were the dissolution of the company declared void under s 307, there would be no necessity for a revesting order as, upon the dissolution being declared void, the vesting of the Hamilton property in the Corporate Affairs Commission would also thereby be nullified.

2. [51]

   Because the provisions of the 1961 Act are no longer available, the proceedings must be dismissed. I reach this conclusion with regret. This case is one in which it ought to be possible to reinstate the company. It provides a good illustration of why caution should be applied to the implementation of any imperative to clear the statute books of superceded legislation. I reiterate Barrett J’s call for law reform in this area, which, as his Honour explained in Tan v ASIC, is not of merely academic interest but also has ongoing practical consequences, as the present case demonstrates. This could be addressed by an amendment of s 601AH of the 2001 Corporations Act, to extend its operation to a company which had been dissolved or deregistered under earlier companies legislation.

3. [52]

   Given that Mr Amar’s application was unopposed and is not unmeritorious, and that the issues upon which it has foundered were not fully exposed in argument, I will reserve liberty to apply for a period of a month, in case some alternative basis for relief can be formulated.

4. [53]

   The Court therefore orders that:

   1. (1)

      the proceedings be dismissed.

   2. (2)

      the plaintiff have liberty to apply to set aside this order and for other orders within 1 month of the date on which this order is made.