Bond Media Ltd v John Fairfax Group Pty Ltd

Judgment 1By Interlocutory Process dated 29 April 2013, the Plaintiffs, Ozem Kassem and Bruno Secatore as Liquidators of ACN 092 138 442 Pty Limited (in liq) ("Company") and the Company sought an order for leave under s 471B of the Corporations Act 2001 (Cth) to proceed with a claim against the First Defendant, Bristrol Custodians Limited ("Bristrol") in these proceedings. Bristrol is a company incorporated in New Zealand and is being wound up in that jurisdiction and did not appear. The Third Defendant, Mr Geoffrey Buckfield, opposed the grant of leave on the basis that, first, Bristrol had not been served, or sufficiently served, with the application and, second, the Court did not have the jurisdiction to grant the leave sought. 2Before turning to the substance of the matters in dispute, it should first be noted that the Plaintiffs' original application for leave was brought under s 471B of the Corporations Act. That section was not applicable because Bristrol is not subject to a Court-ordered winding up, either in Australia or in New Zealand, its jurisdiction of incorporation. If leave to proceed against Bristrol is required, then that requirement would arise under s 500(2) of the Corporations Act which provides that, after the passage of a resolution for voluntary winding up, no civil proceeding is to be proceeded with or commenced against a company except by leave of the Court and subject to such terms as the Court imposes. The Plaintiffs ultimately put their application for leave under s 500(2) of the Corporations Act. Although Ms Nolan, who appears for Mr Buckfield, raised a concern as to the change of approach, I can see no prejudice to Mr Buckfield arising from it. It seems to me that the determination of the substance of the application, treated as an application under s 500(2) of the Corporations Act, is consistent with the just, quick and cheap resolution of the real issues in dispute, as contemplated by s 56 of the Civil Procedure Act 2005 (NSW). 3The Plaintiffs also drew attention to s 587(2) of the Corporations Act which provides that, where an order has been made for winding up of a Part 5.7 body (including, relevantly, a registrable foreign company), no action or civil proceeding is to be commenced against, relevantly, that body without leave of the Court. The Plaintiffs point out that that provision is directed to a winding up of a Part 5.7 body under s 583 of the Corporations Act, which does not permit a voluntary winding up of such a body. Mr Buckfield does not contend to the contrary and I accept that submission. Bristrol is not subject to winding up under s 583 and s 587(2) is not presently applicable. Service of the Interlocutory Process 4Mr Buckfield contended that Bristrol, or its liquidator, had not been served with the Interlocutory Process. He contended, correctly, that Bristrol is a "foreign company" as defined in s 9 of the Corporations Act as, relevantly, a body corporate incorporated outside Australia. Section 601CD of the Corporations Act requires registration under Pt 5B.2 Div 2 of a foreign company that carries on business in the jurisdiction, and s 601CE provides for ASIC to register that foreign company when it lodges an application for registration in the prescribed form and accompanied by the specified documents. Section 601CF prevents registration of a foreign company unless it has appointed a local agent. Section 601CX in turn provides that a document may be served, relevantly, on a registered foreign company by leaving it at an address of the local agent notified under s 601CG or s 601CV or, where a liquidator has been appointed, by leaving it at or by sending it by post to the last address of the liquidator, notice of which has been lodged. 5Mr Buckfield initially contended that, although Bristrol had been registered as a foreign company until 25 January 2013, it was no longer recorded as registered. That contention was ultimately not established. On 1 February 2013, the Australian Securities and Investments Commission ("ASIC") was notified by the New Zealand Companies Office of the commencement of a winding up in respect of Bristrol. On 7 February 2013, a notice was lodged with ASIC by Mr Buckfield that Bristrol had ceased to carry on business. The question of Mr Buckfield's authority to lodge such a notice, when Bristrol was in liquidation, was not explored in submissions. On 17 May 2013, the New Zealand Companies Office advised the Plaintiffs' solicitors that, unless an order of the New Zealand High Court preventing Bristrol's removal from the register was served by 4 June 2013, it would be removed from the register on 5 June 2013. An ASIC search obtained on 20 May 2013 indicated that Bristrol remained registered as a foreign company on that date. It follows that service can be effected on it in the manner provided in Pt 5B.2 of the Act. 6On 29 April 2013, the Plaintiffs sought to serve the Interlocutory Process on Bristrol by sending it to the solicitors who had been identified in the liquidator's first report as a contact point for creditors. Those solicitors did not accept service of the Interlocutory Process. The Plaintiffs' solicitors subsequently sent a further copy of the Interlocutory Process to the liquidator by email and sent copies of the supporting affidavit to the liquidator and his solicitors by email. On 16 May 2013, a copy of the Interlocutory Process and supporting affidavit was sent to Bristrol's liquidator, by registered post at his address in New South Wales, which is also recorded as Bristrol's registered office since 12 February 2013. On 14 May 2013, a process server also left those documents at the front door of the liquidator's premises, not having been able to obtain access. This seems to me to be sufficient to satisfy the requirements for service under both s 601CX(1)(a) and s 601CX(4) of the Corporations Act. 7I should note that it was submitted, for Mr Buckfield, that the address recorded for Bristrol's registered office is incorrect and not connected with its liquidator. There was no evidence to support that submission, which faces the immediate difficulty that an ASIC Personal Extract for Bristrol's liquidator records that address in respect of his current role in two other entities. In any event, I would treat service on Bristrol's registered office as notified to ASIC as effective in accordance with the terms of s 601CX of the Act, particularly where the liquidator has been placed on notice of the application by, inter alia, the communications by email to him and to his solicitors. I also do not accept Mr Buckfield's submission that the fact that Bristrol has not appeared raises any question as to service upon it, since parties served with proceedings do not always choose to appear in them. For these reasons, I am satisfied that service of the Interlocutory Process upon the Company has been established. Whether leave to commence the proceedings against Bristrol is required 8A second, and more complex, question is whether the Plaintiffs require leave to continue the proceedings against Bristrol. Mr Condon and Mr Wallis, who appear for the Plaintiffs, indicate that such leave was sought against the contingency that it was required, in order to avoid the risk that the proceedings would be disrupted if that point were taken by the Defendants at a later stage. Ms Nolan, who appeared for Mr Buckland, submitted that the Court did not have jurisdiction to grant that leave, but also accepted that the necessary consequence of the basis on which that submission was put was that leave would also not be required. It was, of course, not obvious what useful purpose would be served by Mr Buckfield establishing that the Court did not have jurisdiction to grant leave that the Plaintiffs did not require where, if such leave was required, the Court would have jurisdiction to grant it. 9The substance of Mr Buckfield's submission (initially directed to s 471B of the Corporations Act, given the nature of the Plaintiffs' initial application, but equally applicable to s 500) was that Bristrol was not a company to which s 471B of the Corporations Act (or, by extension, s 500) applied. The Plaintiffs did not actively contend to the contrary, although they suggested the issue was in doubt and should be determined by the Court. As Ms Nolan pointed out, the term "company" is defined in s9 as "a company registered under this Act" and that definition is extended, but only for the purposes of Parts 5.7B and 5.8, to include a Part 5.7 body, including a registrable foreign company that is registered under Part 5B.2 Div 2 or carries on business in Australia. The requirement for leave to bring proceedings against a company in voluntary winding up under s 500 appears in Part 5.5 of the Act, not in those parts to which the extended definition applies. It would follow that, if Bristrol is not a "company" for the purposes of s 9, leave is not required to bring proceedings against it and the Court does not have jurisdiction to grant it. 10Several earlier decisions indicate that leave was not required, under predecessors to the Corporations Act, to bring proceedings in this jurisdiction against a company which was being wound up in another jurisdiction: Primary Producers Bank of Australia Ltd v Hughes (1931) 32 SR (NSW) 14; Hart Holdings Pty Ltd v Westcorp Pty Ltd (1983) 1 ACLC 1366; Bond Media Ltd v John Fairfax Group Pty Ltd (1988) 14 ACLR 701 at 704-705. The Plaintiffs raised the possibility that the position under the Corporations Act may differ and drew attention to the discussion of s 565 of that Act in Westpac Banking Corporation v Bell Group Ltd (in liq) (No 3) [2012] WASCA 157; (2003) 89 ACSR 1 at [523]. I do not consider that aspect of that decision is relevant in this context, since it appears to turn on the time limit in that section. 11However, I accept that there is room for doubt as to the position under s 9 of the Corporations Act, because the phrase "a company registered under this Act" could, on one view, include a foreign company registered as such under Part 5B.2 Div 2 of the Act. I do not, however, consider that the definition of "company", other than as extended for the purposes of Part 5.7B and 5.8, includes a foreign company registered under Part 5B.2 Div 2 of the Act, for several reasons. First, it seems to me that the phrase "registered under this Act" in s 9 should properly be read, in its context, as referring to the act of registration of a company under s 118 of the Corporations Act which brings the company into existence as a body corporate under s 119 of the Act. As Barrett J noted in Feng v GMS Fulfilment Services Ltd [2004] NSWSC 527; (2004) 50 ACSR 527 at [12], registration of a foreign company under Pt 5B.2 Div 2 is "in no sense the equivalent of registration under s 118 of a 'company' within the contemplation of the s 9 definition of the term" since registration of a foreign company is directed to an entity that already exists under the law of another place, whereas registration of a company under s 118 "causes a juristic person to come into being pursuant to s 119". 12Second, the provisions in the Act directed to, for example, the basic features of a "company" are plainly not intended to have effect in respect of a foreign company. For example, s 119A specifies the jurisdiction of a company's incorporation as a relevant State or Territory and could have no sensible application to a company incorporated outside Australia. Section 201A specifies the age of a person who can be a director of a company and might well conflict with provisions of the jurisdiction in which a foreign company incorporated. Section 601CK dealing with the balance sheet and other documents to be lodged by a registered foreign company would not be necessary if such a company was subject to the requirements of Part 2M.2 in respect of companies. 13Third, the extension in paragraph (c) of the definition of "company" in s 9 would be unnecessary if that term included registered foreign companies for all purposes. 14For these reasons, I consider that the position recognised in the earlier case law to which I have referred above continues in respect of the Corporations Act; leave was not required for the Plaintiffs to bring and is not required for the Plaintiffs to continue proceedings against Bristrol under s 500 of the Corporations Act. There is therefore no need to consider whether, had such leave been required, the basis for giving it had been established. 15The position of the proceedings against Bristrol may need to be reconsidered if that entity is deregistered in New Zealand since, prima facie, that would deprive it of its legal existence and thereby prevent the continuance of the proceedings against it. However, it is not necessary or appropriate for me to express any final view as to that question unless and until that event occurs. 16My preliminary view is that costs of this application should be costs in the cause. However, I direct the parties to submit agreed Short Minutes of Order dealing with the question of costs within 7 days or, if no agreement is reached, their respective submissions as to costs. I will make orders as to costs in chambers in order to avoid the need for the parties to incur the costs of a further appearance in that regard.