ACCC v ASIC

The winding up and dissolution of PT 4 On 1 January 1996 the assets of PT and certain other companies in the ABB group were transferred to TDL as part of a corporate group restructuring. Thereafter, TDL was the operating company for the ABB group's manufacturing business for power transformers and distribution transformers. 5 In due course PT was wound up and dissolved. The winding up was a members' voluntary winding up. The directors of PT made a declaration of solvency on 11 August 1997 under s 494 of the Corporations Law. A special resolution for the winding up of PT under s 491 was passed on 15 September 1997. Mr C. J. Sanderson of Ernst & Young was appointed liquidator. He presented his accounts and statements as liquidator in March and August 1998. 6 In the course of PT's winding up, the sum of $ 9,461,759 was evidently paid to TDL on 4 December 1998. The nature and details of this transaction are not clear from the evidence, since the notes to the liquidator's accounts have not been included in the relevant exhibit. Counsel for the Officers says that the payment was a return of assets in specie and/or cash to the sole contributory of PT. That assertion is consistent with the evidence. No application had been made, up to the time of the hearing before me, to set aside the winding up or any disposition of property that occurred during the course of the winding up. 7 Once that distribution had been made, the company had no assets and liabilities and its affairs had been fully wound up. The liquidator convened a general meeting as required by s 509(1) of the Corporations Law for the purpose of presenting his final account. The meeting was held on 5 February 1999 and in accordance with ss 509(5) and 601AC(2), PT was deregistered by ASIC on 10 May 1999. Thereupon it ceased to exist: s 601AD(1). 8 At the hearing before me the ACCC did not contend that the winding up and deregistration of PT was brought about for the purpose of frustrating or avoiding either its investigation of price-fixing and market sharing within the electrical transformer industry, or the subsequent proceedings in the Federal Court.

The ACCC proceedings 9 On or about 31 March 1999 the ACCC became aware of some evidence which led it to take the view that for a period of time, there had been collusion among some manufacturers of power and distribution transformers. The evidence suggested that senior executives of the ABB group and the other companies met, from time to time, to allocate and fix the price of tenders for electrical transformers. 10 After investigations and discussions with the ABB group, the ACCC commenced proceedings in the Federal Court of Australia, alleging contraventions of the price-fixing and market sharing provisions of s 45 (and as to exclusionary provisions, s 4D) of the Trade Practices Act 1974 (Cth) by conduct over a period beginning before 1993. These proceedings concern only power transformers, but it appears that the ACCC is contemplating proceedings with respect to distribution transformers. 11 Initially the respondents were TDL, two other companies and nine senior executives, including two senior executives of TDL. An amended statement of claim filed on 1 November 1999 joined an additional respondent, Douglas Pitt, an executive director of TDL and also of PT. He is the only respondent who was on the PT board. 12 In the amended statement of claim the ACCC alleges that TDL was the parent of PT during the period from 1990 to 1995, and that on 1 January 1996 TDL acquired the assets of PT. Nevertheless the pleading alleges that the primary contraventions were committed by TDL, and of course, PT is not a party to the proceedings. 13 In correspondence in November 1999 and January 2000, the solicitors for TDL raised the problem that during the period from early 1990 until 31 December 1995, the relevant ABB operating company for power and distribution transformers was PT, and that TDL became the operating company only as from 1 January 1996. They asserted that the applicant must address the problem, and that to do so would require many amendments to the statement of claim. 14 The ACCC has sought to address the problem in two ways. First, it has made the present application for reinstatement of PT. If it succeeds, then presumably it will seek to amend the statement of claim and application in the Federal Court to join PT as a respondent. 15 Secondly, the ACCC has indicated its intention to allege, in relation to the period when PT was the relevant operating company: (a) that TDL was liable as a 'party principal' (under s 76(1)(a) of the Trade Practices Act) in respect of the contraventions because PT engaged in the conduct as partner, agent or trustee of TDL or TDL engaged in the conduct in its own right through the vehicle of PT; (b) additionally or alternatively, that TDL was knowingly concerned in the conduct of PT (and thus would be liable under s 76 (1) (e)). 16 It is important to note that the ACCC will succeed in these allegations only if it can prove facts additional to the facts that would establish contraventions by PT. As counsel for the Officers submitted, the Trade Practices Act imposes liability under Part IV on corporations and not on groups: Australian Competition & Consumer Commission v Boral Ltd & Anor (1999) 166 ALR 410, 466-7. It is one thing to show that officers employed within a corporate group have engaged in collusive conduct in the course of their employment, attributed to the operating entity which employed them. It is quite another matter to show that the parent of the employing entity was a 'party principal' or knowing accessory. That being so, invoking these heads of liability is not necessarily a solution to the problem posed by PT's dissolution. Hence the importance to the ACCC of the present application.

ASIC's attitude to the present application 17 ASIC has informed the ACCC by letter that as long as the requirements of ASIC Policy Statement 83 (in so far as they are applicable) are satisfied, ASIC would not oppose the application for reinstatement and would not appear at the hearing. The letter drew particular attention to payment of ASIC's costs, and also to the importance of ensuring that the order for reinstatement is couched in terms of s 601AH(2), requiring ASIC to reinstate the registration of the company. The letter required that a liquidator be appointed and that leave be sought to commence or continue proceedings, and that the Court's order be lodged with ASIC. 18 I shall have something to say about the need to appoint a liquidator later in these reasons for judgment. There is no application before me for leave to commence proceedings against PT, although it appears that leave will need to be sought before PT is joined as a defendant to the Federal Court proceedings, having regard to s 500(2) of the Corporations Law. I assume that, for reasons best known to it, the ACCC has decided to deal with that matter separately from the present application. But I shall grant it liberty to apply to the Corporations Judge on any Corporations List day on 48 hours' notice to ASIC and the Officers, so that any such application can be dealt with expeditiously. 19 ASIC's decision not to oppose the application is expressed to be subject to the proviso that the requirements of Policy Statement 83 are satisfied. I suggest that this is not the most helpful way for ASIC to communicate to the Court its attitude to the application. It would be better if ASIC could set out with particularity any matters upon which its consent is conditional. In the present case it has been necessary for me to look carefully at Policy Statement 83, and make inferences as to which parts of it are applicable and are intended by ASIC to be conditions of its non-opposition. 20 I take it that the present application is a 'specific purpose reinstatement' within paragraph 20 of the Policy Statement. As far as I can see, the requirements of subparagraphs 16(a), (b), (c), (d) and (g) have been satisfied. In my view the application deals sufficiently with the requirements of subparagraph 16(e) by explaining the position with respect to PT's solvency. For reasons which I shall give, it will be necessary for the ACCC to give an undertaking with respect to the payment of filing fees and the like, and also the further costs and expenses of the liquidator, thus satisfying subparagraph 16(f). The only other requirement of the Policy Statement seems to be for the applicant to provide an undertaking to the Court to advise ASIC when the litigation or other action is finished. I assume ASIC expects such an undertaking to be given in the present case, and I shall provide for it in my orders.

The statutory power to reinstate a company 21 The ACCC seeks to invoke the Court's power of reinstatement under s 601AH, which is in the following terms, as far as relevant: '(2) The Court may make an order that ASIC reinstate the registration of a company if: (a) an application for reinstatement is made to the Court by: (i) a person aggrieved by the deregistration; or (ii) a former liquidator of the company; and (b) the Court is satisfied that it is just that the company's registration be reinstated. (3) If the Court makes an order under subsection (2), it may: (a) validate anything done between the deregistration of the company and its reinstatement; and (b) make any other order it considers appropriate.

Note: For example, the Court may direct ASIC to transfer to another person property vested in ASIC under subsection 601AD(2).' 22 Section 601AH is often encountered by the judges who administer the Corporations List of this Court. The typical circumstances are, however, very different from the present case. The section is usually invoked to permit a plaintiff to recover damages by bringing proceedings against a defunct company, in circumstances where the company's risk has been covered by insurance and so the real defendant is the insurance company. 23 Section 601AH raises two main issues, namely whether the applicant is a 'person aggrieved by the deregistration', and whether the Court is satisfied that it is just that the company's registration be reinstated.

Is the ACCC 'a person aggrieved …'? 24 The ACCC contends that it fits this description because its legal rights have been affected and because it has a genuine grievance that the dissolution has affected its interests: Re ProserpinePty Ltd [1980] 1 NSWLR 745. It submits that it has a public duty to improve competition and efficiency in markets, and to foster a fair and competitive operating environment for businesses. 25 Amongst the strategies which it uses to achieve this objective is undertaking litigation in cases where there are serious breaches of the Act and significant public detriment, as well as the potential for litigation to have a worthwhile educative or deterrent effect. The Commission considers that the conduct which it alleges in this case is a most serious example of price-fixing and market sharing, contrary to the law; and that it has a duty in the public interest to reinstate and sue the perpetrator of some of that conduct. 26 The Officers have informed the Court that they accept that the ACCC has standing to apply. I find that for the reasons which it has advanced, the ACCC is a person aggrieved for the purposes of s 601AH(2).

When should the Court be 'satisfied that it is just that the company's registration be reinstated'? 27 The wording of the section is very broad, and the cases confirm that it gives the Court a wide discretion. The Court takes into account the circumstances in which the company came to be dissolved; whether, if the order were made, good use could be made of it; and whether any person is likely to be prejudiced by the reinstatement: Re Kilkenny Engineering Pty Ltd (in liq) (1976) 1 ACLR 285; Drysdale v ASC (1992) 10 ACLC 1427; Re Steelmaster Pty Ltd (in liq) (1992) 6 ACSR 494. 28 These matters are only factors to be weighed in the exercise of the Court's discretion. They are not limits on the Court's power. Here, the reinstatement is likely to lead to the company being joined in proceedings in which the ACCC will seek orders for pecuniary penalties against it. The company may therefore be prejudiced. The Court may nevertheless conclude that it is just that the company's registration be reinstated, having regard (for example) to the strong public interest which is involved. It is appropriate for the Court to take into account questions of public interest in exercising its discretion under s 601AH: Re Immunosearch Pty Ltd (1990) 2 ACSR 455.

The ACCC's public interest submissions 29 The ACCC has drawn attention to the important public interest objectives underlying the Trade Practices Act. Section 2 of the Act states that the object of the Act is to enhance the welfare of Australians through the promotion of competition and fair trading and provision for consumer protection. In Trade Practices Commission v Allied Mills Industries Pty Ltd (1981) ATPR 40-204 Sheppard J said: 'No lengthy analysis of the various provisions of the Act passed in 1974 is needed to demonstrate that Parliament intended, by the enactment of its provisions, to guard the public generally, or in some cases, sections of it, against the acts and practices which it considered contrary to the public interest.' 30 The importance of the public policy expressed in Part IV of the Act is reflected in the size of the penalties for contravention. In the Allied Mills case, Sheppard J said: 'In my opinion the fact that s 78 does not make conduct constituting a breach of Part IV criminal does not detract from the fact that the legislature intended, by empowering the Court to impose very substantial penalties, to see to it, so far as it could, that the provisions of Part IV were obeyed. The very size of the penalties which are able to be imposed indicates the seriousness of the view which the legislature took as to the conduct it was proscribing.' 31 The ACCC notes that price-fixing and market sharing conduct are deemed by the Act to have the effect of substantially lessening competition, and both these forms of conduct are subject to pecuniary penalties of up to $10 million per contravention. 32 The ACCC has applied to reinstate PT, it says, so that it can take proceedings against PT for: (a) a pecuniary penalty under s 76 of the Trade Practices Act; (b) declarations; and (c) findings of fact under s 83 of the Act. The ACCC says that each of these is an important public interest remedy.

Pecuniary penalty 33 The ACCC submits that the question whether PT can pay any penalty that may be awarded against it is ultimately a matter for the liquidator, and need not be determined at this time. Irrespective of whether PT is ultimately able to pay any penalty awarded against it, the ACCC says that the very imposition of the penalty has substantial utility, is in the public interest and is just. 34 The ACCC draws attention to the observations of Heeerey J in Australian Competition & Consumer Commission v J McPhee & Son (Australia) Pty Ltd (No.3) (1998) ATPR(Digest) 46-183. His Honour said: 'It hardly needs to be added that deterrence remains a primary element of the imposition of a penalty (even though not expressly mentioned in s 76). In 1992 Parliament increased the penalties for corporate contraventions of Part IV from a maximum of $250,000 to $10 million. Such an increase was far more than would be necessary to adjust for a decline in value of the currency since the introduction of the Act in 1974. By setting penalties at such a level Parliament clearly intended that the Court should deter conduct which is considered (perhaps more so than previously) to be very damaging to the Australian community. At the same time, as was noted in the Minister's speech, it was obvious that the previous level of penalties had proved an ineffective deterrent.

Deterrence is especially significant in relation to price-fixing. This form of contravention commonly occurs in secret between parties to seek mutual benefit. The risk of detection is often low and the potential gain to the contraveners, and damage to the community, large ... A penalty should reflect the fact that an attempt at price-fixing is seriously unlawful conduct in itself.' 35 The ACCC notes that a penalty should be such as to deter not only the particular offender ('specific deterrence') but also others who may be disposed to engage in prohibited conduct of a similar kind ('general deterrence'): Trade Practices Commission v Mobil Oil Australia Ltd (1985) ATPR 40-503 (Toohey J); Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 (French J). 36 The ACCC submits that specific deterrence against TDL and other ABB group companies will be achieved if a penalty is obtained against PT. In ICI Australia Operations Pty Ltd v Trade Practices Commission (1991) 105 ALR 115, (1992) 38 FCR 248 it was held that a relevant factor suggesting that a substantial penalty was appropriate was that another company in the same corporate group had previously been found by the Court to have engaged in similar conduct. In other words, obtaining a substantial penalty against PT may assist the ACCC to obtain substantial penalties against other ABB group companies including TDL. This is particularly so, says the ACCC, since it is likely that the senior executives who were involved in the alleged unlawful conduct on behalf of PT continued with the same conduct on behalf of TDL, after the restructuring which took effect on 1 January 1996. 37 The ACCC also says that general deterrence will be achieved if PT is reinstated and is ordered to pay a penalty, because such an order would increase public awareness of the Act and of the consequences facing those who contravene it. In the ACCC's submission, the business community is likely to be made aware of such a decision through legal advisers, and the ACCC will be able to publicise the outcome in media releases and in other appropriate ways.

Declarations 38 The ACCC submits that declarations will also assist in achieving the specific and general deterrence which is its goal: see Australian Competition & Consumer Commission v IMB Group Pty Ltd (in liq) (1999) ATPR 41-688. In that case it was argued that the continued prosecution of the proceedings was futile because the respondents had long ceased to carry out any of the activities out of which the proceedings had arisen, and had offered to give undertakings to the Commission to settle the matter. Drummond J said that if activities involve contraventions of the Trade Practices Act, there is a legitimate public interest to be vindicated by the ACCC pursuing the case to judgment, whether or not the circumstances are such as to require anything more than the making of declarations.

Findings of fact 39 In the ACCC's submission, the purpose of seeking findings of fact is to assist third parties who may have been harmed by the conduct of those who contravene the Act to obtain any damages to which they may be entitled. Section 83 of the Act enables a finding of fact made by the Court to be prima facie evidence of that fact in subsequent proceedings.

The Court's findings as to public interest 40 I accept that the enforcement of Part IV of the Trade Practices Act is an important responsibility of the ACCC to be exercised in the public interest. The severity of the penalties imposed for breach of s 45 reflects Parliament's judgment of the importance of the public interest that is involved. It is relevant for the Court to take these matters into account in making its decision under s 601AH. 41 I also agree that the Federal Court might well decide that there is a legitimate public interest to be vindicated by making a declaration that PT has contravened s 45 of the Act, even if the Court decides not to make any other order against PT. I accept the reasoning of the IMB case on that point. Counsel for the Officers submitted that a declaration as to PT's conduct would be unnecessary, since the same end could be achieved by findings that PT's officers and employees were knowingly concerned in PT's contravention. But a finding that officers and employees are liable for knowing participation requires proof of facts additional to the facts constituting contravention by the company, and I cannot assume that such a finding would be equally open to the Federal Court at the hearing. 42 It seems to me much less likely that the Federal Court would think it appropriate to order PT to pay a pecuniary penalty, if the evidence before the Court shows that PT has been reinstated simply to make it a party to the proceedings in that Court, and that the company has no assets. The financial position of the respondent to proceedings is a relevant factual matter in determining the amount of any penalty under s 76: NW Frozen Foods Pty Ltd v Australian Competition & Consumer Commission (1996) 71 FCR 285. However, it is possible that evidence might be adduced which persuades the Court that it is not futile to order PT to pay a penalty. I am in no position to guess at the evidence which may be placed before the Federal Court, and it is not my role to make a decision which is properly one for that Court to make. 43 Similarly, it seems to me unlikely that there would be any need for the Federal Court to make findings of fact under s 83 with respect to PT that could not be made with equal efficacy in the proceedings as presently constituted. As counsel for the Officers pointed out, PT ceased to be the operating company at the end of 1995 and it is likely that third party proceedings under s 82 to recover any loss or damage suffered by virtue of its conduct have become barred by the three-year limitation period. Additionally, it is unlikely that any third party would incur the cost and expense of bringing proceedings against PT for damages, since PT has no assets. Nevertheless, it is conceivable that the Federal Court may be disposed to make findings of fact under s 83 on the evidence before it at the hearing. I should not close off that possibility. 44 In summary, I am asked to make a decision that will either restrict or expand the range of possible remedial choices to be made by the Federal Court. The proper course is to reinstate PT, if there is a practicable way of doing so, in order to open up the possibility that the Federal Court may choose to grant relief against that company. In reaching this conclusion I do not accept or deny the ACCC's submission that obtaining orders against PT will make it easier to obtain orders against other ABB group companies. 45 Counsel for the Officers submits that it is unjust to reinstate a company with no assets so that it can be made the subject of punitive proceedings which it cannot afford to defend, in which a penalty is sought which cannot be paid, and which cannot be the subject of a proof of debt. I reject that submission (although it does seem that an amount payable under a pecuniary penalty order made under s 76 of the Trade Practices Act is not admissible to proof against an insolvent company under s 553B(1) of the Corporations Law, since it is not a 'pecuniary penalty order' as defined in the Proceeds of Crime Act 1987 (Cth)). In my opinion the question whether it is just to join a newly reinstated company which has no assets as a party to proceedings, is a question for the Court in which the proceedings have been brought. There is nothing inherently unjust about my making an order for reinstatement so as to permit questions about the proper constitution of the Federal Court proceedings to be aired.

Accessory liability 46 The ACCC says that it intends to seek relief in the Federal Court against former employees and directors of PT in the form of pecuniary penalties, injunctions and declarations. These persons are likely to include Mr Pitt, the former managing director of PT and the current managing director of TDL. The ACCC submits that if PT is not reinstated and joined as a party to the Federal Court proceedings, it may have difficulty in succeeding against the officers and employees. 47 Apart from a possible difficulty about discovery, which I shall deal with later, the submission does not explain why the absence of PT in the Federal Court proceedings would prevent the ACCC from obtaining orders against PT's officers and employees. It is not necessary to join the company in order to obtain relief against its officers by way of pecuniary penalty, injunction or declaration (see s 76 (1) (b) - (f) of the Trade Practices Act), since an independent cause of action arises in relation to each person who was relevantly involved in the contravention.

The effect of the contravention 48 Section 601AH(5) provides as follows: 'If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstate the company. Any property of the company that is still vested in ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim.' 49 A company may be deregistered in various circumstances set out in Chapter 5A of the Corporations Law. The deregistration may follow a winding up (s 601AC(1)(c)), but it may occur in cases where no process of liquidation is on foot. Reinstatement puts the company back into the position in which it stood immediately before the deregistration occurred. If the company was under the control of its directors, reinstatement returns the company into their hands. If it was under the administration of a liquidator, reinstatement returns the company to the liquidator. The liquidator's continuation in office is then governed by Part 5.5 of the Corporations Law. 50 If the liquidator has presented the final account required by s 509, the Court's order necessarily has the effect of countermanding ASIC's statutory duty under s 509(5) to deregister the company at the end of three months. The purpose of the reinstatement will inevitably be to permit the company to do something or have something done to it. That being so, the reinstatement must imply that the affairs of the reinstated company have not been fully wound up, even though the liquidator fully discharged the duties of winding up before the company was deregistered. Therefore when the company is reinstated, the liquidator is required to attend to statutory duties such as the duty to convene general meetings and present accounts (s 508). If the company is reinstated for a limited purpose, the liquidator must repeat the processes required by s 509(1), (2) and (3) when that purpose has been achieved: Re Steelmaster Pty Ltd (in liq ). It is unnecessary for me to decide in this case whether the broad power conferred by s 601AH(3)(b) would enable the Court to override or qualify those statutory duties in a particular case (compare Steelmaster at 496 with Drysdale at 1430, noting that the latter was a case on the 1961 legislation). 51 Counsel for the Officers submitted that if the affairs of a company have been fully wound up in a members' voluntary winding up, the liquidator is functus officio at the end of that process, and the liquidation is at an end before the company is deregistered: Re London and Caledonian Marine Insurance Company (1879) 11 ChD 140, 144. In my opinion the effect of that case is overridden by s 601AH(5). As I have said, the reinstatement puts the company in the position of a company in liquidation whose affairs have not yet been fully wound up, and will not be wound up until the purposes of the reinstatement have been satisfied. 52 Counsel for the Officers also submitted that, once a company has been wound up and deregistered as a result of a members' voluntary winding up, it cannot then be wound up in insolvency ( Re Williams United Mines Pty Ltd (1992) 29 NSWLR 88, 628), and yet insolvency would be the inevitable outcome of the reinstatement. But the reinstatement of PT does not lead to a new process of winding up; rather, it restores the winding up which had previously been in process, as Owen J explained in the Steelmaster case. 53 In the case of a company which was deregistered after a members' voluntary winding up, although the directors resume office under s 601AH(5), they have no power to manage the affairs of the company: s 495(2). It follows that, being deprived of their power to take part in the management of the company, the directors have a good defence to liability for insolvent trading under s 588H(4). Counsel for the Officers submitted that if PT is reinstated, its directors may be exposed to liability for insolvent trading, since it will have no assets and will inevitably incur debts (and possibly penalties) in the course of the Federal Court proceedings and in order to comply with the administrative requirements of the Corporations Law. I disagree, because under s 495(2) the liquidator will supplant the directors, who will not be able to take part in the management of the company 'for other good reason' within s 588H(4).

Practical considerations 54 The reported cases say that the Court should consider whether good use can be made of the reinstatement. The Court will not make an order which is futile, and an order could well be futile if the reinstated company is left in liquidation without the funding necessary to permit the liquidator to do any work. In the Steelmaster case the Court addressed that problem by making an order for the applicant to pay the costs and disbursements of the liquidator incurred as a result of the reinstatement, including the cost of any further dissolution proceedings under s 509 of the Corporations Law. The order may have been made with the applicant's consent, but would in any case have been justified by s 601AH(3)(b). 55 The present case is not so simple. I can deal with the cost of administration of the revived company and its ultimate deregistration by requiring the ACCC to undertake to meet those costs as a condition of obtaining the reinstatement order. But what should this Court do about the costs of the Federal Court litigation and the burden of any penalty that PT may be ordered to pay? 56 In my view is not necessary for the Court to make any orders with respect to the cost of PT's legal representation in the Federal Court proceedings, on the application for reinstatement. It is likely that the interests of PT in the Federal Court proceedings will closely correspond with the interests of TDL and Mr Pitt. It will be open to the liquidator of PT to make an application under s 511 of the Corporations Law for a determination, if he takes the view that no separate representation for PT is needed. It is possible that if PT is joined in the Federal Court proceedings, TDL will decide to fund the cost of legal representation for PT. These are all matters for investigation after the reinstatement occurs, and perhaps after the Federal Court has considered an application for amendment to the pleadings to join PT as a respondent. 57 I have already said that it is not up to this Court to deal with the question whether a pecuniary penalty should be imposed on PT. That is a matter for the Federal Court. The question of whether any such penalty can be paid by or on behalf of PT is not a matter to be determined prematurely, on the application for reinstatement. It is not impossible that other companies in the ABB group might decide that it is in their commercial interests to pay the penalty; nor that the liquidator of PT might seek to recover assets in the course of his resumption of the winding up of that company (although it may not be permissible for the liquidator to admit a proof of debt in respect of the pecuniary penalty, having regard to the terms of s 553B). 58 Counsel for the Officers submits that the Court ought not to reinstate a company which, upon reinstatement, will be hopelessly insolvent: Denis v McMahon (1989) 7 ACLC 283, 284. But in the present case PT will not necessarily be insolvent upon reinstatement, provided that proper arrangements are put in place for the payment of necessary filing fees and the administration costs. Further, the reinstatement of an insolvent company may be appropriate in special circumstances: Re Great Eastern Cleaning Company Pty Ltd (1978) 3 ACLR 886, 887. 59 Submissions have been made from the bar table on the question whether the reinstatement of PT is necessary in order to permit discovery of all relevant documents to be made by the ACCC. Counsel for the Officers submitted that PT's corporate records are available and accessible, and so reinstatement is not necessary. Counsel for the ACCC submitted that if PT is not reinstated and joined as a party to the Federal Court proceedings, it may face difficulty in proving contraventions by PT, as it would not have access to 'ordinary court processes such as discovery against PT'. Regrettably no evidence was adduced on this point by either side, although the evidence does indicate that on 15 September 1997 PT's member resolved to direct the liquidator to dispose of the books and records of the company and of the liquidator six months after the company was dissolved, after ASIC approved the disposal under s 542(4) of the Corporations Law. Given the state of the evidence, I do not base my decision on this ground. However, I note that the apprehended difficulty about discovery will be removed if PT is reinstated and joined in the Federal Court proceedings.

Conclusions 60 I have decided to make an order under s 601AH(2) that ASIC reinstate the registration of PT. As a condition of the order for reinstatement, I shall order the ACCC to pay the costs and disbursements of the liquidator properly incurred as a result of the reinstatement, including the costs of any further dissolution proceedings under s 509 of the Corporations Law. 61 The application seeks an order for the appointment of Mr John Gibbons as liquidator. As I have said, the effect of reinstatement is that Mr Sanderson resumes that office. If he wishes to be replaced he should resign, whereupon Mr Gibbons (if he consents) can be appointed in his place. I shall grant liberty to the ACCC to apply to the Corporations judge on any Corporations List day, on 48 hours' notice to ASIC and the Officers, for an order for the appointment of a new liquidator. That liberty will also extend to any application by the ACC under s 500(2) for leave to commence proceedings against PT. 62 To satisfy ASIC's requirement in Policy Statement 83, I shall direct the ACCC to notify ASIC of the outcome of its application to the Federal Court to join PT as a party to those proceedings, and if the application is successful, to notify ASIC when those proceedings have been concluded or PT ceases to be a party to them. 63 I shall direct the ACCC to prepare short minutes of orders to reflect these reasons for judgment, and I shall hear any submissions as to the costs of this application. I am inclined to make no order for costs. Although the Officers have been unsuccessful in their opposition to the application, the application would have been necessary in any event, whether opposed or not. Moreover, the application raised a novel and important point, and the Court was greatly assisted by the submissions of counsel for both sides. * * * * * * * * * *

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