(4) ASIC has all the powers of an owner over property vested in it under subsection (2)."
10 By its letter of 10 September 2009 in response to the request whether it wished to participate in these proceedings, ASIC says that s 601AD(2) does not vest the cross-claim in these proceedings in ASIC. ASIC says that the cross-claim abates as a result of de-registration and that only the cause of action pursued in the cross-claim but not the cross-claim is vested in it: Total Eden Pty Limited v Pipeline Properties Pty Limited (1990) 8 ACLC 1075.
11 Mr Harris for Amcus points out that the Total Eden Case refers to statutory provisions that preceded s 601AD that are expressed in materially different terms to s 601AD itself. Nevertheless, he submits ASIC's contention is correct that it is only the cause of action and not the cross-claim that vest in ASIC. Mr Harris points out in his written submission that the mechanism by which this occurs is the following:
"3. Section 601AD(2) provides that, on deregistration, all of the company's property vests in ASIC.
"Property" is defined in section 9 [ Corporations Act ] as including "a thing in action".
Any cause of action (such as is asserted in the Cross-claim) is a chose in action - a "thing in action" - and thus part of the first defendants "property", which has now vested in ASIC."
12 Mr Harris submits that upon deregistration there must have been an automatic abatement of all proceedings both by and against Hurst Rentals because Hurst Rentals has ceased to exist. He says the appropriate course is now for the proceedings to be stood over generally. He refers the Court to passages in Total Eden Pty Ltd v Pipeline Properties Pty Ltd (1990) 8 ACLC 1075, where Master Bredmeyer, followed Astaire Pty Ltd v Cavanagh and Coope, (Supreme Court of Western Australia, Master Seaman QC, unreported, 23 February 1987, Library No 6601), which had found that proceedings "abated" upon dissolution of a plaintiff, in the sense of the proceedings being extinguished or annulled. In Total Eden, the learned Master said:
"I consider that I should follow Astaire's case . I am unable to distinguish it. I consider that upon the dissolution of the Company, ie, as from 16 January 1990, the action abated and cannot be continued. The cause of action, ie, the right to sue, arose before that date, in 1987-88, and it remains good. S 461(1) of the Companies Code does not vest the legal proceedings in the Corporate Affairs Commission, it vests the cause of action in it. Thus, if there was no assignment to UWL, or if that assignment was ineffective, the Commission could sue for the debt. There is no period of limitation problems. If the assignment to UWL is good, then it can sue in its name. I propose to follow Astaire's case and say that these proceedings have abated on the dissolution of the plaintiff Company and cannot now be cured by substitution of another plaintiff."
13 I agree with the analysis in Mr Harris' submission. Something like option one is appropriate. But for the reasons that follow the proper course is for the Court to make no further order.
Discussion
14 The course of authority establishes that proceedings by a plaintiff company abate, in the sense of being extinguished or annulled, upon its dissolution. If in the course of an action the Court becomes aware that the plaintiff is incapable of giving any retainer at all it ought not to allow the action to proceed: Daimler Company Ltd v Continental Tyre & Rubber Company (Great Britain) Ltd [1916] 2 AC 307 at 377. This applies a fortiori when it appears that the supposed party is non-existent: Lazard Bros & Co v Midland Bank Ltd [1933] AC 289 at 296-7. In an appeal in which it appeared that there was no appellant before the Court because the appellant company had been dissolved, Jordan CJ concluded that the Court could do nothing except refrain from proceeding any further on the appeal which was a nullity: United Service Insurance Co Ltd (in liquidation) v Lang (1935) 35 SR (NSW) 487, see also Morris v Harris (1927) AC 252 at 259.
15 The principle extends to the abatement of proceedings in which a dissolved corporation is a defendant. Because the company ceases to be a legal person upon dissolution it cannot commence legal proceedings and proceedings instituted by it or on its behalf or against it before the dissolution cannot be continued: Re Morton; Ex parte Mitchell Products Pty Ltd; Morton v Vouris (1996) 21 ACSR 497, at 515.
16 The approach to the abatement of proceedings by a dissolved company that is taken in cases such as Total Eden Pty Limited v Pipeline Properties Proprietary Limited is consistent with Jordan CJ's instructive statement of applicable principle in United Service Insurance Co Ltd (in liquidation) v Lang (1935) 35 SR (NSW) 487 at 497. In the United Service Insurance Case a liquidator had brought an action in the name of a company against a defendant to recover money claimed to be due upon the allotment of shares and for calls upon those shares. At the hearing in the District Court a certificate showing that the company had been dissolved in Victoria in 1929 was put in evidence. The learned District Court Judge held that the plaintiff company had ceased to exist and returned a verdict for the defendant with costs. The company appealed on the basis that the Victorian dissolution should not be recognised in New South Wales and that it could still maintain the proceedings. The Full Court found that a company incorporated in Victoria and dissolved in Victoria must be treated as dissolved everywhere and thereafter can have no existence as a corporation in New South Wales. Jordan CJ's statements about the consequences of the dissolution for the proceedings before the full Court are relevant for present purposes. The learned Chief Justice said on that subject (at 497),
"It having been ascertained that there is no appellant before us, we can do nothing except refrain from proceeding any further. The verdict for the defendant and the order for costs given by the learned District Court Judge are, of course, nullities, but in the absence of a plaintiff we have no more power to deal with them in the appeal than he had to make them in the action."