ACN 009 009 072 PTY LTD (IN LIQUIDATION) -v- AUSTRALIAN SECURITIES & INVESTMENTS COMMISSION [2022] WASC 221 (1 July 2022)

1. Pindan's claim against Infra Tech arises in relation to the construction of the Rosewood aged care facility in Leederville. On 10 March 2014, Pindan entered into a contract with Infra Tech for the installation of an impermeable barrier. Pindan alleges that between April and July 2014, Infra Tech breached its contract and duty of care in performing works under the contract and that these defects became known in about September 2014. The second defendant (the Chaucer syndicate) was Infra Tech's insurer at the time of the alleged breaches.
2. Pursuant to s 13 of the Limitation Act 2005 (WA) (Limitation Act), any action against Infra Tech was required to be commenced within six years of the cause of action accruing. Both parties have conducted themselves on the basis that the plaintiff could commence proceedings against Infra Tech up until September 2020.
3. The plaintiff issued a notice of breach in November 2014, a notice of demand in February 2015, and a notice of dispute in April 2015.
4. In March 2016, the solicitors for the plaintiff wrote to the solicitors for Infra Tech asking whether they had instructions to accept service of any proceedings and asking them to identify Infra Tech's insurer. In April 2016, the solicitors for Infra Tech advised they had instructions to accept service and that they were not instructed to disclose the identity of the insurer.
5. On 19 August 2018, Infra Tech was deregistered. Prior to this, proceedings had not been commenced against Infra Tech.
6. In October 2018, Pindan, through its solicitors, became aware that Infra Tech had been deregistered. They wrote to the solicitors for Infra Tech asking for confirmation of the identity of its insurer and raised the question of a claim under s 601AG of the Act.
7. On 31 October 2018, the solicitors acting for Infra Tech and its insurer confirmed indemnity had been granted to Infra Tech by its professional indemnity insurer. However, the solicitors did not identify the name of the relevant insurer.
8. In December 2018, the solicitors for Infra Tech confirmed they acted on instructions of the insurer but advised they were not instructed to disclose the identity of the insurer.
9. In May 2019, the plaintiff instructed senior counsel in relation to the proposed s 601AG proceedings and in August 2019 retained junior counsel. In November 2019, the plaintiff's solicitors again wrote to the solicitors for Infra Tech requesting that they disclose the name of Infra Tech's insurers.
10. On 3 December 2019, orders were made for the winding up of Pindan and Mr Kitay was appointed as liquidator.[1]
11. On 10 February 2020, the solicitors for Infra Tech informed the plaintiff's solicitors that they were not instructed to provide the information requested regarding the identity of Infra Tech's insurer.
12. As a consequence of the refusal to identify the name of Infra Tech's insurer, on 23 March 2020 the plaintiff filed an originating summons against Infra Tech's insurance broker seeking pre-action discovery to identify the name of the insurer. On 31 March 2020, the solicitors for the insurance broker informed the plaintiff's solicitors of the name of Infra Tech's insurer.
13. On 17 April 2020, the liquidator of Pindan commenced proceedings in this court against the second defendant pursuant to s 601AG of the Act, being proceedings CIV 1498 of 2020. The statement of claim was filed on 7 October 2020. On 20 October 2020, the present solicitors for the second defendant advised they had instructions to accept service of the proceedings and the writ, together with the statement of claim, was served on 21 October 2020.
14. In December 2020, CIV 1498 of 2020 was entered into the commercial and managed cases list and managed by Archer J.
15. On 14 January 2021, the solicitors for the Chaucer syndicate informed the plaintiff they considered Mr Kitay, as the liquidator of Pindan, was not the proper plaintiff in those proceedings.
16. On 19 March 2021, Mr Kitay filed a summons seeking leave to amend the writ of summons to amend the name of the plaintiff.
17. On 16 August 2021, a preliminary issue came on for hearing before Archer J. On 16 December 2021, Archer J delivered reasons for her decision.[2] Her Honour found that Pindan's claim was time barred and there was no power to extend the time within which to bring the action. She also refused leave to amend the writ of summons. On this basis, her Honour made orders dismissing the action.
18. On 25 January 2022, the plaintiff commenced these proceedings seeking relief under s 601AH of the Act.

1. Section 601AD of the Act provides that upon deregistration, a company ceases to exist and all property that the company held on trust immediately before deregistration vests in the Commonwealth and other property vests in ASIC.
2. Pursuant to s 601AH(2) of the Act, where a company has been deregistered, the court may make an order that the Australian Investments and Securities Commission (ASIC) reinstate the company if the conditions required by the Act are met. These conditions are first, the application is made by a 'person aggrieved by the deregistration' or a former liquidator; and second, the court is satisfied it is 'just' for the company's registration to be reinstated.
3. Where the court orders the reinstatement of a company, pursuant to s 601AH(3) of the Act, the court may:

(i) beginning when the company was deregistered; and

(ii) ending when the company's registration was reinstated; and

1. Pursuant to s 601AH(5) of the Act, if a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered.
2. The term 'person aggrieved' is not expressly defined in the Act and should not be construed narrowly.[3] In determining whether the plaintiff is a person aggrieved by the deregistration of the company, the court must consider whether the plaintiff has shown that deregistration has deprived them of something, or injured or damaged them in a legal sense, or that they became entitled in a legal sense to regard the deregistration as the cause of dissatisfaction.[4]
3. There is no temporal restriction in the section. What is required is a causal link between the grievance and the deregistration of the company.[5] As a result, a person can become aggrieved from events which occur after the time of the deregistration. This must be determined at the date of the hearing.[6]
4. Before the court can make an order for reinstatement, the court must be 'satisfied that it is just that the company's registration be reinstated'. This confers a broad discretion on the court. In exercising its discretion, relevant factors that the court will take into account include:[7]

(a) the circumstances in which the company came to be deregistered;

(b) the future activities of the company, if an order for reinstatement is made;

(c) whether any particular person is likely to be prejudiced by the reinstatement; and

(d) the public interest generally.

1. The court has a very wide jurisdiction under section 601AH(3)(d) of the Act including the power to order that any limitation period be suspended in whole or in part. In considering whether to exercise its discretion to suspend the limitation period, courts have considered a number of factors. These include:

(a) whether during the entire period, the party had an intention of suing the deregistered company and whether time should only run for such period as there was such an intention until the company was reinstated to the register;[8]

(b) the practical effect of deregistration on any decision to commence proceedings before the expiry of the limitation period;[9] and

(c) whether the deregistered company is the plaintiff or a prospective defendant.[10]

1. In Re Regional Planners Development Co Pty Ltd, Brereton J expressed the view that the question for the court was 'whether the deregistration of the company practically precluded the plaintiff from instituting proceedings'.[11]

1. ASIC is named as the first defendant in these proceedings. ASIC has indicated it does not oppose the application and did not appear at the hearing.[12]

1. The plaintiff contended it was a person aggrieved by the deregistration of Infra Tech for two reasons. First, because 'it has a valuable right in the form of a cause of action which it is unable to pursue against Infra Tech whilst Infra Tech is deregistered'.[13] Second, because it is unable to pursue a cause of action directly against the second defendant because the six year limitation period has expired. Counsel for the plaintiff accepted that its inability to pursue the second defendant directly was because the previous application had not been made by the correct plaintiff. It was contended this error should not determine the outcome of this application.
2. In this regard, the plaintiff said that the interests of the second defendant are not materially prejudiced by any order. This is because insurers of reinstated companies are generally adversely affected by an order for reinstatement which enables a claim to be pursued against them. Given that Infra Tech was insured for the plaintiff's claim and liability under the insurance policy had been admitted by the second defendant, it was submitted that it was just in all of the circumstances of this case that the orders sought by the plaintiff be made.
3. Senior counsel for the plaintiff accepted that in considering whether the limitation period should be suspended during the period of deregistration, it was relevant to consider whether there was any unexplained delay by the plaintiff. However, in the plaintiff's submission, the relevant period for consideration was from September 2020 when the limitation period expired and not before this.
4. The second defendant denies that either of these alleged grievances have been caused by the deregistration of Infra Tech. While the second defendant accepted that a party can become aggrieved by the deregistration of a company after the event, it emphasised it was necessary for there to be a causal link between the grievance and the deregistration. The second defendant disputed any such link existed in this case and contended any grievance arose because the plaintiff did not commence proceedings under s 601AG of the Act until after the expiration of the limitation period.
5. Counsel for the second defendant submitted that while the court has a broad discretion in assessing whether it is just to grant the orders sought by the plaintiff, in exercising its discretion, the court will consider whether there has been any delay on the part of the party in pursuing its rights. If there is no utility in making the orders sought, the court will generally decline to make an order reinstating the company.
6. In this case, the second defendant drew attention to the almost two year period between 31 October 2018 (the date the plaintiff was advised of the grant of indemnity) and September 2020 (when the claim became statute barred) when the plaintiff could have pursued its claim against the second defendant but did not. Counsel for the second defendant submitted that the chronology of the matter showed there had been significant delay by the plaintiff in pursuing any claim, which had not been explained or, at least, adequately explained.
7. The second defendant submitted the primary issue for determination was whether the court considered it was appropriate to make orders under s 601AH(3)(d) of the Act suspending the operation of the Limitation Act during part or all of the period of deregistration. Unless the court was prepared to make such an order (which would enable the plaintiff to commence proceedings), any order for reinstatement would be futile and should not be made.

1. As set out above, two main issues arise for consideration on an application under s 601AH of the Act. First, whether the applicant is a 'person aggrieved' by the deregistration of the company, and second, whether the court is satisfied that it is 'just' to order the reinstatement of the company. A third issue arises for consideration in this case which is whether the court should make any order suspending the limitation period during the period Infra Tech was deregistered.
2. In relation to the first question, I accept that a party who has a cause of action against a deregistered company is a person aggrieved by the deregistration of that company subject to any ability of the party to bring an action directly against the company's insurers.
3. As has previously been held, where s 601AG of the Act applies, an application for reinstatement under s 601AH of the Act is unnecessary because it cannot be said that the plaintiff is 'aggrieved by the deregistration'.[14] These sections need to be read together. On its face, s 601AH is the wider remedy. Section 601AG is narrower and 'obviates the need to use s 601AH to the extent of its operation'.[15] There is nothing in the text of either s 601AG or s 601AH of the Act that suggests a party who brings an unsuccessful application under s 601AG of the Act is prevented from bringing a subsequent application under s 601AH of the Act.
4. It is clear that the legislative purpose of s 601AG is to shortcut the need to reinstate a deregistered company and to enable a party to sue the insurer directly.[16] This requires a party to be able to identify and name the relevant insurer as a defendant to any proceedings. However, notwithstanding the existence of s 601AG of the Act, as was stated by Beech J in Del Borrello v Australian Securities and Investments Commission:[17]

Special circumstances may exist which satisfy the Court that notwithstanding that s 601AG applies to enable a plaintiff to proceed directly against the deregistered company's insurer, the plaintiff is nevertheless aggrieved by the deregistration and that it is just to order the company's reinstatement.

1. In this case, the plaintiff had a cause of action against Infra Tech, the limitation period for this cause of action has expired and Mr Kitay, as liquidator of the plaintiff, brought an unsuccessful application under s 601AG of the Act to proceed directly against Infra Tech's insurer.
2. I accept and find that, at present, the plaintiff is a 'person aggrieved' by the deregistration of Infra Tech. Had Infra Tech not been deregistered, on the evidence before me, I accept that the plaintiff would have commenced proceedings against Infra Tech and has been unable to do so because of its deregistration.
3. In considering whether it is 'just' to order the reinstatement of Infra Tech, the court's discretion under s 601AH of the Act is wide and the court must take into account all relevant circumstances. These include the circumstances in which the company came to be deregistered, whether, if an order is made, good use can be made of it, and whether any person is likely to be prejudiced by the reinstatement.[18]
4. In this case, there is no evidence before the court as to the circumstances in which Infra Tech came to be deregistered. The company search of Infra Tech obtained from ASIC discloses the reason for the deregistration as s 601AB of the Act.[19] This section gives ASIC the power to initiate deregistration of a company, including in circumstances where the company has failed to lodge documents or pay fees.
5. In relation to the remaining matters, I consider that each of these matters depends on whether the court would be prepared to make an order under s 601AH(3)(d) of the Act to suspend the limitation period and if so, the extent of any such order. This is because the purpose of the proposed reinstatement of Infra Tech is to enable the plaintiff to bring a claim against this company, the limitation period of which has expired.
6. In Re Austral Bronze Pty Ltd [No 2],[20] Rees J reviewed the cases which have considered this section (and similar provisions) and considered that four themes emerge. First, orders may be made to suspend the limitation period in respect of claims against the company but perhaps not to avoid limitation periods of claims which could be brought by the company. Second, ancillary orders should not be made where it would cause prejudice to the reinstated company on account of its failure to do something which it could not have done while it was deregistered. Third, ancillary orders are likely not to be made where the orders sought would require the court to determine contentious issues. Fourth, in considering whether to make ancillary orders, the court considers whether the orders are futile or sought in aid of an unmeritorious claim.
7. In this case, the orders sought by the plaintiff are to suspend the limitation period for a claim against the deregistered company, there is no evidence that the deregistered company has been prevented from doing anything during its period of deregistration, no contentious issues are required to be determined and it cannot be said the claim by the plaintiff is unmeritorious.
8. However, this does not mean that the plaintiff is entitled to the orders it seeks, particularly in relation to the order that the limitation period be suspended from the date of deregistration of Infra Tech until 28 days after it is reinstated. It is necessary to consider the practical effect of the deregistration of Infra Tech and whether Infra Tech (or the second defendant) are responsible for the delay over this entire period or whether the plaintiff has caused or contributed to any of this delay. In this regard, I do not accept the submission of the plaintiff that the only relevant period for consideration is that period after the limitation period has expired. In considering what orders to make ancillary to an order reinstating a deregistered company, as set out above at [31], the relevant period that must be considered is the period from de‑registration of the company.
9. The evidence before the court is that, prior to the deregistration of Infra Tech, the plaintiff had issued a notice of demand in relation to its claim and entered into correspondence with the solicitors for Infra Tech about this claim. In the correspondence, the solicitors agreed that it would be 'sensible to delay the commencement of any proceedings until after avenues have been explored to try to resolve this dispute'.[21] In April 2017, the solicitors for Infra Tech requested the plaintiff provide them with significant numbers of documents. Documents were provided in July 2018 under cover of a letter from the plaintiff's solicitors. This letter stated that the plaintiff's solicitors hoped this would assist the progression of the matter in a constructive way which would avoid the commencement of proceedings.[22]
10. On 12 October 2018, the plaintiff's solicitors wrote to Infra Tech's solicitors having been made aware of the deregistration of Infra Tech in August 2018. This letter requested confirmation that a claim had been submitted to Infra Tech's insurer and the position in respect of the claim for the purposes of s 601AG of the Act.[23] From that date onwards, the focus of the solicitors for the plaintiff was on bringing an application under s 601AG of the Act until after the expiration of the limitation period. Importantly, at the time of the deregistration of Infra Tech, the plaintiff's claim was not statute barred.[24]
11. As was observed by Archer J, the original solicitors for Infra Tech refused to provide the name of the second defendant which was likely to impede or delay the commencement of any action against the insurer. Her Honour considered this to be improper conduct.[25] However, her Honour held that this did not cause the entirety of the delay in those proceedings, nor the failure to commence the action within time.[26]
12. I find that at the time of the deregistration of Infra Tech in August 2018, the plaintiff intended to bring a claim against that company, although it was hopeful that a commercial settlement could be reached to avoid this. In or about October 2018, the plaintiff became aware that Infra Tech had been deregistered. From that time, the plaintiff was prevented from commencing proceedings against Infra Tech because of its deregistration. In October 2018, the plaintiff made enquiries of Infra Tech's solicitors to enable it to determine whether to bring an application under s 601AG of the Act. It was delayed in commencing these proceedings because of the failure of the second defendant to provide instructions for the disclosure of its identity. By December 2018, it was clear the second defendant would not provide this information voluntarily. The evidence of the plaintiff's solicitors is that there were three causes of the delay in commencing any proceedings until April 2020. First, the name of the insurer of Infra Tech was not known and had not been disclosed, second that there were unresolved claims under a separate policy (a Works Policy) and third, there was an ongoing assessment being undertaken of the plaintiff's claim.[27] It is only the first of these explanations that can be said to have been caused by the second defendant. I consider that if the plaintiff had acted promptly at that stage, it could have obtained this information by April 2019 and commenced proceedings pursuant to s 601AG of the Act in May 2019. I do not accept that the failure to commence these proceedings between May 2019 and April 2020 and the commencement of these proceedings in the name of wrong plaintiff were caused or contributed to by the second defendant. These were matters solely within the control of the plaintiff and its solicitors.
13. On 19 March 2021, the plaintiff sought to amend the name of the plaintiff in CIV 1498 of 2020. I accept that from 19 March 2021 until 16 December 2021, the plaintiff was prevented from commencing proceedings against Infra Tech while those proceedings were being heard and resolved. I also accept that from 25 January 2022, the date of the commencement of these proceedings, until any reinstatement of Infra Tech the plaintiff has been unable to commence proceedings against Infra Tech because of its deregistration.
14. As a consequence, I find that there is a period of 24 months (eight months between October 2018 and May 2019; nine months between March 2021 and December 2021 and seven months from the commencement of these proceedings until the likely reinstatement of Infra Tech) in which the plaintiff has been prevented from commencing proceedings against Infra Tech.
15. In exercising my discretion to order the reinstatement of Infra Tech, I take into account the fact that the plaintiff's claim it wishes to bring is, prima facie, covered by insurance. This is a factor the court has considered weighs in favour of granting the application.[28] I also take into account that there is no evidence before the court that the defendant would be specifically prejudiced by an order for reinstatement. While I accept that significant delay between the occurrence of an event and the likely trial of any action will cause some prejudice, any prejudice is likely to relatively minimal in this case given the claim was raised at an early stage and Infra Tech and its insurer have been on notice of the plaintiff's intention to pursue a claim since 2015.
16. In my view, it would be appropriate to make an order that 24 months of the period of deregistration not be counted for the purposes of the Limitation Act. The effect of this would mean that any proceedings would be required to be commenced by the plaintiff by September 2022.
17. Given this finding, I am satisfied that not only is the plaintiff a person aggrieved by the deregistration of Infra Tech, but also that it would be just to order its reinstatement.

1. It is the usual position that when a company is reinstated, it is reinstated in the form in which it existed prior to its deregistration. However, it is open to the court to make orders for the winding up of the company on reinstatement, if there is a basis for such an order to be made.
2. It is apparent from the company search of Infra Tech that the sole director and company secretary ceased to be a director and secretary on 24 July 2017. There is no evidence before me to suggest that any person will act as director and company secretary of Infra Tech in the event the company is reinstated.
3. In this case, the plaintiff relied on s 461(1)(k) of the Act, that 'the Court is of an opinion that it is just and equitable that the company be wound up'. It is well-established that the court can make a winding up order on the just and equitable ground by reason of mismanagement, misconduct or lack of confidence in the conduct and management of the company's affairs.
4. Given the factual background referred to above at [63], it is not in dispute that if reinstatement is ordered, there are no directors of the company or any likelihood that any will be appointed. In these circumstances, given the purpose for which the company is to be reinstated, I am satisfied that it is just and equitable for the company to be wound up on reinstatement.
5. For this reason, I consider it is appropriate to make an order winding up the company and to appoint the liquidator who has consented to act.

Application for leave to pursue proceedings under s 471B of Act

1. Given the remainder of my findings, I also consider it is appropriate for leave to be granted to the plaintiff to pursue the proceedings against Infra Tech pursuant to s 471B of the Act.

1. For these reasons, I consider that the plaintiff's application should be granted in part. I will hear from the parties as to the form of the orders and as to the costs of the application.

I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.

[1] Affidavit of Belinda Merle Randall filed 25 January 2022 [7], 'BMR2'.

[2] Mervyn Jonathan Kitay as liquidator of ACN 009 009 072 Pty Ltd v Chaucer Syndicates Ltd (CRN 184915) as managing agents for Chaucer Syndicate 1084 [2021] WASC 450.

[3] The Bell Group Ltd v Australian Securities and Investments Commission [2018] FCA 884; (2018) 358 ALR 624 [47].

[4] Hugall v Australian Securities and Investments Commission [2009] WASC 185 [13]; Callegher v Australian Securities and Investments Commission [2007] FCA 482; (2007) 218 FCR 81 [50].

[5] The Bell Group Ltd v Australian Securities and Investments Commission [49].

[6] Pilarinos v Australian Securities and Investments Commission [2006] VSC 301 [49].

[7] The Bell Group Ltd v Australian Securities and Investments Commission [72]; Re ERB International Pty Ltd (deregistered) [2014] NSWSC 200; (2014) 98 ACSR 124 [5].

[8] Re West, unreported decision, High Court (Napier), Ronald Young J, 15 May 2002; cited with approval in Re Regional Planners Developments Co Pty Ltd [2015] NSWSC 1996; (2015) 110 ACSR 457 [18].

[9] Skeates v Bruce [2008] NZCCLR 27; cited with approval in Re Regional Planners Developments Co Pty Ltd [19].

[10] Harule Pty Ltd; Ex parte Olita Super Readymixed Concrete Pty Ltd (in liq) (1994) 13 ACSR 500; cited with approval in Re Regional Planners Developments Co Pty Ltd [21].

[11] Re Regional Planners Development Co Pty Ltd [29]. See also Price, in the matter of Advanced Polymer Recycling Pty Ltd v Australian Securities and Investments Commission [2022] FCA 20 [18] (Moshinsky J).

[12] Affidavit of Belinda Merle Randall filed 4 February 2022 'BMR1'.

[13] Plaintiff's submissions filed 4 February 2022 [8].

[14] Hutchinson v Australian Securities and Investments Commission [2001] VSC 465; (2001) 167 FLR 90 [37]; Del Borrello v Australian Securities and Investments Commission [2008] WASC 48 [14].

[15] Sciacca v Vero Insurance Ltd [2013] NSWSC 1285; (2013) 282 FLR 370 [51].

[16] Pagnon v WorkCover Queensland [2000] QCA 421; [2001] 2 Qd R 492 [17] (McPherson JA).

[17] Del Borrello v Australian Securities and Investments Commission [2008] WASC 48 [15].

[18] Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316; (2000) 174 ALR 688 [27]; Price, in the matter of Advanced Polymer Recycling Pty Ltd v Australian Securities and Investments Commission [56].

[19] Affidavit of Belinda Merle Randall filed 25 January 2022 'BMR-1'.

[20] Re Austral Bronze Pty Ltd [No 2] [2020] NSWSC 1633; (2020) 149 ACSR 221 [77] - [85].

[21] Affidavit of Belinda Merle Randall filed 25 May 2021 (CIV 1498 of 2020) 'BMR10'.

[22] Affidavit of Belinda Merle Randall filed 25 May 2021 (CIV 1498 of 2020) 'BMR18'.

[23] Affidavit of Belinda Merle Randall filed 25 May 2021 (CIV 1498 of 2020) 'BMR20'.

[24] cf FF (R&D) Pty Ltd v Australian Securities and Investments Commission [2017] VSC 482 [43].

[26] Kitay v Chaucer [251] - [253].

[27] Affidavit of Belinda Merle Randall filed 25 May 2021 (CIV 1498 of 2020) [47].

[28] FF (R&D) Pty Ltd v Australian Securities and Investments Commission [70].