The plaintiff in these proceedings, Mr Charles O'Shea, passed away on 4 March 2021.
In proceedings commenced in the Dust Diseases Tribunal of New South Wales on 14 December 2020 against Lysaght Civil Products Pty Ltd (ACN 004 188 916) (the Company) and various other defendants, Mr O'Shea claims damages for malignant pleural mesothelioma contracted as a consequence of his exposure to asbestos. As against the Company, Mr O'Shea claims that he was exposed to asbestos in the course of his employment with the Company during the period from late 1972 to late 1975. It is convenient to refer to Mr O'Shea's proceedings in the Dust Diseases Tribunal as the Tribunal proceedings.
The Company had several name changes during its corporate life. During the period from late 1972 to late 1975 the name of the Company was Armco (Australia) Pty Ltd.
A liquidator was appointed to the Company on 27 May 1994 and it was deregistered on 31 August 1996 pursuant to s 509 of the Corporations Law set out in s 82 of the Corporations Act 1989 (Cth). As at that date, s 509 of the Corporations Law provided:
"509 Final meeting and dissolution
(1) As soon as the affairs of the company are fully wound up, the liquidator shall make up an account showing how the winding up has been conducted and the property of the company has been disposed of and, when the account is so made up, he or she shall convene a general meeting of the company, or, in the case of a creditors' voluntary winding up, a meeting of the creditors and members of the company, for the purpose of laying before it the account and giving any explanation of the account.
(2) The meeting shall be convened by an advertisement published in the Gazette at least 1 month before the meeting specifying the date, time, place and purpose of the meeting.
(3) The liquidator shall, within 7 days after the meeting, lodge a return of the holding of the meeting and of its date with a copy of the account attached to the return.
(4) At a meeting of the company, 2 members constitute a quorum and, at a meeting of the creditors and members of the company, 2 creditors and 2 members constitute a quorum and, if a quorum is not present at the meeting, the liquidator shall, in place of the return mentioned in subsection (3), lodge a return (with account attached) stating that the meeting was duly convened and that no quorum was present and, upon such a return being lodged, the provisions of that subsection as to the lodging of the return shall be deemed to have been complied with.
(5) Subject to subsection (6), at the end of the period of 3 months after the lodging of the return the company is dissolved.
(6) On the application of the liquidator or of any other party who appears to the Court to be interested, the Court may, before the end of the period of 3 months referred to in subsection (5), by order, declare that subsection (5) is not to apply in relation to the company and specify the date on which the company is to be dissolved and, where the Court makes such an order, the company is dissolved on the date specified in the order.
(7) The person on whose application an order of the Court under this section is made shall, within 14 days after the making of the order, lodge an office copy of the order."
Mr O'Shea commenced the present proceedings in this Court by originating process filed on 2 March 2021, seeking orders under s 601AH of the Corporations Act 2001 (Cth) that the Australian Securities and Investments Commission (ASIC) reinstate the registration of the Company, an order that the Company be wound up upon reinstatement, an order granting leave to Mr O'Shea nunc pro tunc to commence the Tribunal proceedings and an order that no step be taken by Mr O'Shea to enforce any judgment or verdict obtained in the Tribunal proceedings except by resort to the indemnity provided by the Insurers' Guarantee Fund (the IGF) established under s 227 of the Workers Compensation Act 1987 (NSW). The Company was named as the first defendant and ASIC was named as the second defendant.
Subject to the operation of s 12B(2) of the Dust Diseases Tribunal Act 1989 (NSW) (the DDT Act), Mr O'Shea's estate has no entitlement to pursue his claim for damages for non-economic loss by reason of s 2(2)(d) of the Law Reform (Miscellaneous Provisions) Act 1944 (NSW) (the Law Reform Act).
Section 2 of the Law Reform Act relevantly provides:
"(1) Subject to the provisions of this section, on the death of any person after the commencement of this Act all causes of action subsisting against or vested in the person shall survive against, or, as the case may be, for the benefit of, the person's estate
...
(2) Where a cause of action survives as aforesaid for the benefit of the estate of a deceased person, the damages recoverable for the benefit of the estate of that person:
…
(d) where the death of that person has been caused by the act or omission which gives rise to the cause of action, shall not include any damages for the pain or suffering of that person or for any bodily or mental harm suffered by the person or for the curtailment of the person's expectation of life.
…
(7) This section has effect subject to section 12B of the Dust Diseases Tribunal Act 1989."
Section 12B of the DDT Act provides (emphasis added):
"12B Damages for non-economic loss after death of plaintiff
(1) The purpose of this section is to enable the estate of a person whose death has been caused by a dust-related condition to recover damages for the person's pain or suffering, or for any bodily or mental harm suffered by the person, or for curtailment of the person's expectation of life, provided proceedings commenced by the person were pending before the Tribunal at the person's death.
(2) Section 2(2)(d) of the Law Reform (Miscellaneous Provisions) Act 1944 does not apply in relation to proceedings commenced by a person before his or her death and pending before the Tribunal at his or her death, where the cause of action is for damages in respect of a dust-related condition."
In Re Austral Bronze Pty Ltd; In the matter of John Darlington Pty Limited; In the matter of John Darlington Pty Limited (No. 2) [2020] NSWSC 1633 (Austral Bronze), two former employees of two deregistered companies had commenced proceedings in the Tribunal against those deregistered companies. The former employees died and the legal personal representatives of their deceased estates commenced proceedings in this Court seeking orders under s 601AH(2) of the Corporations Act that ASIC reinstate the registration of the two companies together with ancillary orders to validate the commencement of the Tribunal proceedings nunc pro tunc.
One of the companies had been dissolved in 1997 pursuant to s 509 of the Corporations Law, which was then in the same terms as it was when the Company in the present proceedings was dissolved pursuant to that section on 31 August 1996. Rees J undertook a detailed analysis of the history of the Court's statutory power to reinstate a deregistered company from 1997 to date and concluded that the Court has power under s 601AH(2) of the Corporations Act as it applies today to reinstate the registration of a company that was dissolved or deregistered under the former s 509 of the Corporations Law: Austral Bronze at [19]-[49]. I respectfully agree with and adopt her Honour's analysis and conclusion, the correctness of which was not challenged on appeal: Allianz Australia Insurance Ltd v Viksne [2021] NSWCA 268 (Allianz v Viksne) at [15].
By reason of s 601AH(5) of the Corporations Act, a company that is reinstated pursuant to s 601AH(2) is taken to have continued in existence as if it had not been deregistered. Thus, legal proceedings that were a nullity at the time they were commenced against the deregistered company because the defendant did not exist are taken to have been validly commenced: Allianz v Viksne at [20]-[42], [58]-[59], [61].
The orders sought in the amended originating process filed in these proceedings on 23 March 2021 are:
"1. An Order pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission is to re-instate the registration of Lysaght Civil Products Pty Ltd (ACN 004 188 916).
2. An Order that upon reinstatement of the registration, Lysaght Civil Products Pty Ltd (ACN 004 188 916) be wound up and Andrew Scott of PriceWaterhouseCoopers, One International Towers, Sydney, Watermans Quay, Barangaroo, in the State of New South Wales 2000, be appointed Liquidator.
…
4. An Order that no step to enforce any Judgment or verdict obtained in the Dust Diseases Tribunal of New South Wales in proceedings numbered 2020/353618 shall be taken by the Plaintiff against Lysaght Civil Products Pty Ltd (ACN 004 188 916), otherwise than by resort to indemnity provided by the Insurers' Guarantee Fund established under section 227 of the Workers Compensation Act, without further leave of the Court.
5. An Order that the costs of this application and these proceedings be costs in the proceedings in the Dust Diseases Tribunal of New South Wales at Sydney numbered 2020/353618.
6. An order pursuant to s 601AH(3)(c) and (d) of the Corporations Act 2001 (Cth) that the Dust Diseases Tribunal Proceedings numbered 2020/353618 were validly commenced and pending as against Lysaght Civil Products Pty Ltd (ACN 004 188 916) as at the Late Charles O'Shea's death on 4 March 2021."
On 10 May 2021, I made orders pursuant to r 7.10 of the Uniform Civil Procedure Rules 2005 (NSW) appointing Julie Maria O'Shea (Mrs O'Shea) to represent the estate of Mr O'Shea and amending the title of the proceedings so that the plaintiff is noted as "Julie Maria O'Shea appointed by order dated 10 May 2021 to represent the estate of the late Charles John O'Shea". Mrs O'Shea is the widow of Mr O'Shea and the executrix of his estate. Mrs O'Shea swore an affidavit on 16 April 2021 consenting to her appointment and confirming that she is aware that she will be responsible for instructing the plaintiff's solicitors in these proceedings.
After these orders were made, I heard the plaintiff's application for the relief sought in the amended originating process. Mr Robinson of counsel appeared for the plaintiff. There was no appearance for any defendant.
The plaintiff read two affidavits of Gerard Anthony McMahon, a partner of Turner Freeman Lawyers (the plaintiff's solicitors), sworn on 26 February 2021 and 20 April 2021.
The affidavits establish that:
1. the Company went into liquidation on 27 May 1994 and was deregistered on 31 August 1996, as I have already noted above;
2. Mr John Raymond Gibbons of Ernst & Young was the liquidator appointed to the Company on 27 May 1994;
3. Mr O'Shea was diagnosed with mesothelioma in September 2020 and instructed Mr McMahon in relation to his claim against his former employers on about 26 November 2020;
4. during the period between 27 November and 14 December 2020, Mr McMahon sought reports from O'Shea's treating doctors and also took steps to identify Mr O'Shea's employers and their workers compensation insurers, as a result of which he ascertained that the Company had been deregistered;
5. the Tribunal proceedings were commenced on 14 December 2020. Mr McMahon was still in the process of confirming the identity of the Company's workers compensation insurer, but Mr O'Shea's oncologist had advised that his life expectancy was less than 18 months and Mr McMahon commenced the proceedings with a view to Mr O'Shea's estate having the benefit of s 12B of the DDT Act;
6. further reports received from Mr O'Shea's treating oncologist and from Professor Sonja Klebe, Associate Professor of Pathology, confirmed Mr O'Shea's diagnosis of malignant mesothelioma and his oncologist documented Mr O'Shea's rapidly declining condition and revised his earlier estimate of Mr O'Shea's life expectancy;
7. Mr O'Shea passed away on 4 March 2021;
8. Mr McMahon has ascertained that the Company held a workers compensation insurance policy issued by National Employers Mutual General Insurance Association Limited (NEM) during the period 1972 to 1975, and that NEM is deregistered. That information was provided by the solicitors appointed by the State Insurance Regulatory Authority (SIRA) to provide claims management services for IGF, which was established pursuant to s 227 of the Workers Compensation Act to finance the payment of workers compensation claims when an insurer becomes insolvent;
9. a copy of the originating process in these proceedings has been provided to the former liquidator Mr Gibbons, who has notified the plaintiff's solicitors that he has no objection to the Company being reinstated for the purpose of Mr O'Shea's claim for damages for mesothelioma allegedly contracted as a consequence of exposure to asbestos during his employment with the Company;
10. Mr McMahon has sent a copy of the originating process and amended originating process in these proceedings to the solicitors appointed by SIRA to provide claims management services for IGF, and has not received any response to that correspondence;
11. a copy of the originating process and amended originating process has also been sent to ASIC;
12. ASIC has advised that it will not oppose the application for reinstatement of the Company on the understanding that no order as to costs will be sought against ASIC; and
13. the plaintiff does not seek any order for costs against ASIC in these proceedings.
Mr Andrew John Scott of PricewaterhouseCoopers, registered liquidator, signed an instrument consenting to being appointed by the Court and acting as liquidator of the Company.
SIRA and the IGF do not stand in the shoes of NEM as the insurer. It was not open to the plaintiff to simply commence the Tribunal proceedings against SIRA pursuant to s 601AG of the Corporations Act. The plaintiff's only means of prosecuting the claims in the Tribunal proceedings is to proceed against the Company and, if the Company's liability is established, make a claim against SIRA (as manager of the IGF) for payment of that liability out of the IGF pursuant to ss 231-236 of the Workers Compensation Act: Richards Contracting Co Management Pty Ltd [2021] NSWCA 34 (Richards Contracting) at [19]-[54].
Section 601AH(2) of the Corporations Act provides:
"(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."
In my opinion, Mr O'Shea's estate is a person aggrieved by the deregistration because it precluded Mr O'Shea from validly commencing the Tribunal proceedings and preserving his claims against the Company for damages for non-economic loss for the benefit of his estate in accordance with s 12B of the DDT Act: Re European Metal Recyclers Pty Ltd (in liquidation) (deregistered) [2018] NSWSC 946 at [17]-[18].
The Company came to be deregistered following a voluntary winding up. The plaintiff's purpose in seeking reinstatement is to enable Mr O'Shea's estate to pursue claims against the Company in circumstances where he was not aware of those claims until he was diagnosed with mesothelioma in September 2020, many years after the Company had been deregistered. The estate will be able to make good use of a reinstatement to pursue those claims.
There is no evidence that the Company's former directors or any other person is likely to be prejudiced by the reinstatement of registration. On the contrary:
1. the Company, having been in liquidation immediately prior to its deregistration, will continue in liquidation and a liquidator has consented to being appointed: see Re ERB International Pty Limited (deregistered) [2014] NSWSC 200 at [20]-[40] (Brereton J);
2. the plaintiff's solicitor has undertaken to the Court to meet the reasonable fees of the proposed liquidator; and
3. an order in terms of prayer 4 of the amended originating process will prevent the plaintiff from taking any steps to enforce any judgment in the Tribunal proceedings against the Company, otherwise than by resort to the indemnity provided by IGF, without further leave of this Court.
In my opinion, it is in the public interest that Mr O'Shea's estate should have an opportunity to pursue the cause of action against his former employer for allegedly exposing him to asbestos, in circumstances where the cause of action was discovered many years after deregistration of the Company and a very short time before Mr O'Shea's death, the Company's insurer is itself deregistered and the IGF has been established by the Workers Compensation Act for payment of claims, judgments or awards arising from or relating to policies of insurance issued by insolvent insurers.
For those reasons, I am satisfied that it is just that the Company's registration be reinstated: Allianz v Viksne at [46]-[53]. I accept the plaintiff's submission that there is no reason in this case to exercise the residual discretion to decline to make the order: Richards Contracting at [107].
The order sought in prayer 2 of the amended originating process that the Company be wound up is not necessary, as the Company will continue in liquidation upon reinstatement. However, I will make orders under s 601AH(3) appointing Mr Scott as liquidator in addition to the ancillary orders in terms of prayer 4. Although re‑appointment of the former liquidator is generally preferable, there would be little advantage in doing so in this case where 25 years have passed since the former liquidator ceased to hold office and the former liquidator has raised no objection to the orders sought in these proceedings, including the order for the appointment of Mr Scott. I am satisfied that the costs order sought in prayer 5 is appropriate. The order sought in prayer 6 is not necessary given the operation of s 601AH(5) to which I have referred above: Allianz v Viksne at [20]-[42], [58]-[59], [61].
I therefore make the following notation and orders:
1. Order pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) that the second defendant reinstate the registration of Lysaght Civil Products Pty Ltd (formerly Armco (Australia) Pty Ltd) (ACN 004 188 916).
2. Order pursuant to s 601AH(3)(d) of the Corporations Act 2001 (Cth) that Andrew John Scott, registered liquidator, of PricewaterhouseCoopers, be appointed as liquidator of Lysaght Civil Products Pty Ltd (ACN 004 188 916).
3. Note the undertaking to the Court of Gerard Anthony McMahon, solicitor, of Turner Freeman Lawyers, to pay the reasonable fees of the appointment of Andrew Scott, Registered Liquidator, as liquidator of Lysaght Civil Products Pty Ltd (ACN 004 188 916).
4. Order pursuant to s 601AH(3)(d) of the Corporations Act 2001 (Cth) that no step shall be taken to enforce any judgment or verdict obtained in the Dust Diseases Tribunal of NSW in proceedings numbered 2020/353618 by the plaintiff as against Lysaght Civil Products Pty Ltd (ACN 004 188 916), otherwise than by resort to indemnity provided by the Insurers' Guarantee Fund established under s 227 of the Workers Compensation Act 1987 (NSW), without further leave of this Court.
5. Order that the costs of these proceedings be costs in proceedings numbered 2020/353618 in the Dust Diseases Tribunal of NSW against Lysaght Civil Products Pty Ltd (ACN 004 188 916).
[2]
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 11 November 2021