For reasons that will become apparent below, these proceedings were heard on an urgent basis on the afternoon of 24 May 2023. I reserved judgment overnight and made orders on the morning of 25 May 2023 pursuant to s 1322(4)(b) of the Corporations Act 2001 (Cth) directing the Australian Securities and Investments Commission (ASIC) to rectify the register of companies that it maintains under that Act by removing from that register certain information in respect of the six plaintiff companies. These are my reasons for making those orders.
[2]
Salient facts
The following summary of facts is drawn from the unchallenged evidence adduced by the plaintiffs at the hearing on 24 May 2023. The defendants adduced no evidence.
The six plaintiffs in the present proceeding are in the business of providing concrete construction services for high rise and commercial developments.
The first plaintiff, Azzurri Group Holdings Pty Ltd, is owned by Mr Mario D'Angola, 2B6 Enterprises Pty Ltd, and Sogase Pty Ltd. The directors of Azzurri Group Holdings are Mr Mario D'Angola, Mr Donato D'Angola, and Mr Peter Martino. Mr Martino and 2B6 Enterprises are the first and second defendants in these proceedings (respectively). Mr Martino is the sole director and shareholder of 2B6 Enterprises.
The second plaintiff, Azzurri Concrete Group Pty Ltd, is owned by Mr Mario D'Angola, Mr Donato D'Angola, Mr Martino, and Azzurri Group Holdings. Mr Donato D'Angola is the sole director of Azzurri Concrete Group.
The third plaintiff, Azzurri Concrete Enterprises Pty Ltd, is owned by Mr Mario D'Angola, Mr Donato D'Angola, and Mr Martino. Mr Donato D'Angola is the sole director of Azzurri Concrete Enterprises.
The fourth plaintiff, Azzurri Concrete Pty Ltd, is wholly owned by Azzurri Concrete Group. Mr Donato D'Angola is the sole director of Azzurri Concrete.
The fifth plaintiff, MPD Developments Pty Ltd, is owned by Mr Mario D'Angola, Mr Donato D'Angola, and 2B6 Enterprises. The directors of MPD Developments are Mr Mario D'Angola, Mr Donato D'Angola, and Mr Martino.
The sixth plaintiff, Balli Constructions Pty Ltd, is wholly owned by MPD Developments. Mr Mario D'Angola, Mr Donato D'Angola, and Mr Martino are the directors of Balli Constructions.
It is convenient to refer to the six plaintiffs collectively as the Azzurri Companies.
On 5 May 2023, Azzurri Concrete Group issued a notice to Mr Martino requiring him to rectify numerous alleged breaches of the Shareholders Agreement between that company and its shareholders, and stating that a transfer notice would be deemed to be issued pursuant to clause 12.1.1 of that Shareholders Agreement if all of those alleged breaches were not remedied within 30 days. The notice also stated that a number of the alleged breaches were incapable of being remedied, intimating that Azzurri Concrete Group, and Mr Donato D'Angelo and Mr Mario D'Angelo who signed the notice in their capacity as shareholders of Azzurri Concrete Group, consider that a transfer notice will be deemed to have been issued on the expiry of the 30 days. The breach notice also stated that any deemed transfer notice will have the effect of constituting the Board of Azzurri Concrete Group as Mr Martino's agent for the sale of all of his shares to the remaining shareholders at a price to be determined by a valuer.
By originating process and statement of claim filed on 11 May 2023, Mr Martino and 2B6 Enterprises commenced proceeding 2023/151182 in this Court against each of the Azzurri Companies, Sogase Pty Ltd, Mr Mario D'Angola, and Mr Donato D'Angola. In the proceeding commenced on 11 May 2023, Mr Martino and 2B6 Enterprises seek a declaration that the affairs of the Azzurri Companies are being conducted in a manner that is oppressive to, or unfairly prejudicial to, or unfairly discriminatory against Mr Martino (the oppression proceeding). Mr Martino and 2B6 Enterprises also seek an order that the breach notice is void and of no effect, and various declarations concerning the Mr Martino's employment with Azzurri Concrete Group, and the shares held by Mr Martino and 2B6 Enterprises in the Azzurri Companies.
The relief claimed in the oppression proceeding also includes:
1. an order compelling Mr Mario D'Angola and Mr Donato D'Angola to buy Mr Martino's shares in Azzurri Concrete Group at fair value, if Mr Martino so elects, or an order winding up Azzurri Concrete Group pursuant to ss 233(1)(a) and 461(1)(k) of the Corporations Act if Mr Martino does not elect in favour of a share buy-back;
2. an order compelling Mr Mario D'Angola and Sogase to buy back the shares held by 2B6 Enterprises in Azzurri Group Holdings and MPD Developments at fair value, if 2B6 Enterprises so electors, or an order winding up Azzurri Group Holdings and MPD Developments pursuant to ss 233(1)(a) and 461(1)(k) of the Corporations Act if 2B6 Enterprises does not elect in favour of a share buy-back. Curiously, the terms of this order refer to the appointment of a liquidator to Azzurri Concrete Enterprises in addition to Azzurri Group Holdings and MPD Developments, although no winding up order is sought in respect of Azzurri Concrete Enterprises.
Mr Martino and 2B6 Enterprises plead in paragraphs 61 and 62 of the statement of claim filed in the oppression proceeding that, by reason of the matters pleaded in paragraphs 35 to 51 of that statement of claim (being the matters alleged to constitute oppression), "the Court can under s 233 of the Act, and should" make orders that Mr Mario D'Angola and Mr Donato D'Angola purchase at fair value Mr Martino's shares in Azzurri Concrete Group, at fair value and that Mr Mario D'Angola and Sogase purchase at fair value the shares held by 2B6 Enterprises in Azzurri Group Holdings and MPD Developments.
It is common ground between the parties to the present proceeding that the concrete supply business operated by the Azzurri Companies is large and profitable. The plaintiffs tendered a profit and loss statement for Azzurri Concrete Group for the 2023 financial year up to the end of April 2023. That profit and loss statement records contract works revenue of approximately $97.999 million for the financial year to the end of April 2023 and $11.162 million for the month of April 2023 alone. These revenue figures do not equate to profits, as expenses are also high. However, the revenue figures convey some sense of the scale of the business of Azzurri Concrete Group, which Mr Donato D'Angelo describes as the primary trading company within the group of Azzurri Companies.
On 12 May 2023, Mr Martino and 2B6 Enterprises lodged a Form 519 with ASIC in respect of each of the Azzurri Companies stating that an application was filed on 11 May 2023 for the winding up of the company.
As discussed in more detail below, the fact of the court action in which the winding up application has been made, and the lodgement of the Form 519, in respect of each of the Azzurri Companies have been recorded by ASIC in its register of companies.
On 15 May 2019, Mr Donato D'Angola was alerted by a third party to the fact that a notice of a winding up application had been lodged in respect of Azzurri Concrete Group. Mr D'Angola was advised by the solicitors acting for him and the other defendants in the oppression proceeding that the relevant notice was not yet available to be downloaded from ASIC's website. On 17 May 2019, Mr D'Angola's solicitors obtained copies of the notices that had been lodged with ASIC from the solicitors acting for Mr Martino and 2B6 Enterprises in the oppression proceedings.
Mr Donato D'Angola has given evidence of the immediate impact of the lodgement of the notices, which is significantly hampering the ability of the Azzurri Companies to conduct business and generate revenue.
The majority of the Azzurri Companies' key contracts include a clause permitting the other party to the contract to terminate the contract or suspend the account if a winding up application is made against the relevant Azzurri company.
Mr D'Angola has been contacted by several major suppliers, builders and creditors of the Azzurri Companies asking about the notices and expressing concern about the Azzurri Companies' financial status.
Two suppliers of fuel to the Azzurri Companies' have blocked or suspended their accounts.
One supplier of concrete has expressed concern that its insurer may withdraw insurance cover for the supplier continuing to supply to the Azzurri Companies. According to an email from that supplier's managing director to Mr Donato D'Angola dated 16 May 2023, the Azzurri Companies purchase more than $1 million of supplies from that supplier each month and all balances owing to the supplier are currently within terms. Nevertheless, the managing director advised that the foreshadowed attitude of the insurer to the notice of filing of a winding up application may "jeopardise the level of credit we can provide to you".
On 17 May 2023 Mr D'Angola received an email from a specialist credit insurance broker acting for several clients with trade credit insurance covering insolvency of the insured's buyers. The email stated:
"The marketplace insurers write cover on companies such as Azzurri Concrete and they can NIL cover should they obtain adverse information such as a Wind-Up Application. In most cases the NILLING of cover on a buyer can happen quickly and for this reason I appreciate that you are prepared to discuss your position with the Insurers and your suppliers.
…
The impact of a Wind-up Notice is severe as it indicates that a business is in financial difficulty that normally heads toward an Administrator being appointed. Because it is a Public Notice it can have real adverse impact with a company's suppliers. It indicates they may have trouble collecting any outstanding monies and therefore force them to stop trading with the company.
[3]
I have many policy holders who will stop dealing with a company if they no longer have cover in place. It is more a focus now especially with what the Building and Construction industry is currently going through - too many Administrations."
Mr D'Angola's evidence establishes that several suppliers are currently in the process of assessing whether, in light of the notices, they will continue to supply the Azzurri Companies on credit. In addition, clients of the Azzurri Companies are assessing whether the notices of filing of winding up applications present a risk to projects on which Azzurri Companies have been engaged as head contractors or subcontractors. Mr D'Angola has given evidence of his concern that clients and/or head contractors may not permit the Azzurri Companies to work on projects that have been awarded to them, and that the Azzurri Companies will not be invited to tender for future projects, for so long as the notices of winding up application continue to be recorded in ASIC's register of companies for the Azzurri Companies. At least one client or supplier of the Azzurri Companies appears to have interpreted the information recorded by ASIC as a result of the lodgement of the notices of winding up application as meaning that a winding up order has been made. Mr D'Angola has deposed that:
"… the winding up notices have and are causing substantial prejudice to each of the Plaintiffs and is affecting the business' day to day operations and has and will continue to negatively impact the financial status of the Azzurri Companies."
Mr D'Angola is continuing to receive calls from suppliers and clients of the Azzurri Companies raising questions of the notices. He has given evidence that termination of contracts and suspension of accounts may ultimately result in personal guarantees given by him and by Mr Mario D'Angola being called upon.
The Azzurri Companies promptly commenced the present proceeding on 19 May 2023, seeking orders under s 1322(4)(b) of the Corporations Act directing ASIC to rectify its register by removing the notices. The terms of the orders sought have now been refined to an order for the rectification of ASIC's register of companies removing references to the notices from that register in respect of each of the Azzurri Companies. The orders sought are directed to the information recorded in the register of companies. No order is sought purporting to order ASIC to remove the notices themselves from ASIC's national database or to remove information about the notices from any other register maintained by ASIC.
[4]
Consideration and determination
Section 118(1) of the Corporations Act provides that, if an application for registration of a company is lodged with ASIC in the prescribed form and containing all of the information required by s 117, ASIC may register the company and issue a certificate that states the company's name, type, and ACN, that the company is registered as a company under the Act, the State or jurisdiction in which the company is taken to be registered, and the date of registration. Section 118(2) requires ASIC to keep a record of the registration.
Section 118 of the Act does not require ASIC to maintain a register of the records that are kept pursuant to s 118(2). However, s 1274(1) provides that ASIC must, subject to the Act, keep such registers as it considers necessary in such form as it thinks fit. As observed by Barrett J (as his Honour then was) in Lavercombe v Auscott Ltd and by Parker J in Kay v Playup Australia Pty Ltd, [1] the provisions of reg 9.1.01 of the Corporations Regulations 2001 (Cth) which identify the prescribed registers that ASIC may permit a person to search under s 1274A assume the existence of a register of the records of registration of companies. In Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd, Spigelman CJ (with whom Tobias and Campbell JJA agreed) described the statutory scheme for the registration of companies in terms that are consistent with those earlier observations of Barrett J and the subsequent observations of Parker J. [2] The Chief Justice also expressed agreement with Barrett J's conclusion in Lavercombe that neither the Act nor the regulations require ASIC to maintain a register of notices of winding up applications lodged with ASIC under ss 465A and 470 of the Act. [3] The parties did not refer me to, and I have not identified, any changes to the relevant provisions of the Act or regulations in the intervening period that would warrant a different conclusion.
It is convenient to refer to the register identified in reg 9.1.01(a) and discussed by Barrett J in Lavercombe and Parker J in Playup as the register of companies.
Regulation 9.1.02 identifies the prescribed information that may be obtained by searching a prescribed register pursuant to s 1274A of the Act. In relation to each company in the register of companies, that prescribed information is listed in paragraph (a) of reg 9.1.02:
"(i) its full name, the date of its registration and its registration number;
(ii) whether it is a public company or a proprietary company;
(iii) whether it is a company limited by shares, a company limited by guarantee, a company limited by both shares and guarantee, an unlimited company or a no liability company;
(iv) its contact address;
(iva) its principal place of business;
(v) its registered office;
(vi) its officers;
(vii) any scheme of arrangement it has entered into with its creditors, its placement under voluntary administration, a deed of company arrangement, restructuring or receivership, or its liquidation;
(viii) its paid-up and unpaid capital;
(ix) its deregistration;
(x) any charges on its property that have been lodged with ASIC or entered in the Australian Register of Company Charges"
[5]
Conclusion and orders
For all of the reasons above, I determined that orders should be made under s 1322(4)(b) of the Corporations Act substantially in the terms sought by the Azzurri Companies, subject to some minor amendments to make it clear that the rectification extended to removal of the misleading information referred to at [38] above in addition to references to the notices of winding up application in the "Document List" referred to at [39] above.
I therefore made the following orders on 25 May 2023:
1. Pursuant to s 1322(4)(b) of the Corporations Act 2001 (Cth), order that the third defendant (ASIC) rectify the register of companies that is kept by ASIC (the Companies Register):
1. so as to remove from the Companies Register with respect to Azzurri Group Holdings Pty Ltd ACN 650 941 352:
1. all information derived from document number 031823832 being a Notification of Court Action Relating to Winding-Up, Form 519 lodged by or on behalf of the first and/or second defendants on 12 May 2023; and
2. all references to that document;
1. so as to remove from the Companies Register with respect to Azzurri Concrete Group Pty Ltd ACN 132 759 650:
1. all information derived from document number 031857076 being a Notification of Court Action Relating to Winding-Up, Form 519 lodged by or on behalf of the first and/or second defendants on 12 May 2023; and
2. all references to that document;
1. so as to remove from the Companies Register with respect to Azzurri Concrete Enterprises Pty Ltd ACN 641 438 904:
1. all information derived from document number 031888234 being a Notification of Court Action Relating to Winding-Up, Form 519 lodged by or on behalf of the first and/or second defendants on 12 May 2023; and
2. all references to that document;
1. so as to remove from the Companies Register with respect to Azzurri Concrete Pty Ltd ACN 108 220 435:
1. all information derived from document number 031862611 being a Notification of Court Action Relating to Winding-Up, Form 519 lodged by or on behalf of the first and/or second defendants on 12 May 2023; and
2. all references to that document;
1. so as to remove from the Companies Register with respect to MPD Developments Pty Ltd ACN 647 337 988:
1. all information derived from document number 031820831 being a Notification of Court Action Relating to Winding-Up, Form 519 lodged by or on behalf of the first and/or second defendants on 12 May 2023; and
2. all references to that document;
1. so as to remove from the Companies Register with respect to Balli Construction Pty Ltd ACN 647 338 912:
1. all information derived from document number 031875997 being a Notification of Court Action Relating to Winding-Up, Form 519 lodged by or on behalf of the first and/or second defendants on 12 May 2023; and
2. all references to that document.
1. Order that the plaintiffs' originating process filed on 19 May 2023 otherwise be dismissed.
[6]
(3) Order that the parties' costs of this proceeding are to be their costs in proceeding 2023/151182, with the intention that the costs of
this proceeding should follow the event of proceeding 2023/151182.
[7]
Endnotes
Lavercombe v Auscott Ltd (2006) 202 FLR 390; (2006) 58 ACSR 586; (2006) 24 ACLC 1,197; [2006] NSWSC 867 (Lavercombe) at [25]; Kay v Playup Australia Pty Ltd (2018) 339 FLR 193; (2019) 131 ACSR 532; [2018] NSWSC 159 (Playup) at [47].
Miltonbrook at [55], excerpting BP Australia Ltd v Brown (2003) 58 NSWLR 322; (2003) 58 NSWLR 322; (2003) 176 FLR 301; (2003) 46 ACSR 677; (2003) 21 ACLC 1,535; [2003] NSWCA 216 at [78]-[79]; Miltonbrook at [55].
Miltonbrook at [47]-[56].
Miltonbrook at [57].
Miltonbrook at [59].
Playup at [59].
See [38] above.
And see the summary of those principles in Re MIG Property Services Pty Ltd (No. 2) (2012) 92 ACSR 234; [2012] VSC 606 at [97] (Robson J).
[8]
Amendments
29 May 2023 - Correction to solicitor's details on cover page
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: 29 May 2023
At the hearing on 24 May 2023, Mr Hyde of counsel appeared for the Azzurri Companies and Mr Folino-Gallo of counsel appeared for Mr Martino and 2B6 Enterprises. The third defendant, ASIC, had filed a submitting appearance and so did not appear at the hearing. The Azzurri Companies tendered a letter from ASIC dated 24 May 2023 which stated that ASIC neither consents to nor opposes the orders sought.
The prescribed information in reg 9.1.02(a) does not include any notice lodged with ASIC pursuant to ss 456A or 470 of the Act of the filing of an application to wind up the company, in insolvency or otherwise. Nor do the provisions of ss 465A and 470 (which require the notices to be lodged) or s 1274 (which requires ASIC to maintain such registers as it considers necessary) require ASIC to include such notices or information from such notices in any register.
To the extent that Parker J in Playup read the information prescribed by reg 9.1.02(a)(vii) as extending to information that a winding up application has been made, I respectfully disagree. Regulation 9.1.02(a)(vii) is read as a whole is in terms that refer to things that have happened or commenced in relation to the relevant company, and not to things that have merely been proposed for applied for.
Notices lodged in accordance with ss 465A and 470, together with many other notices and documents lodged with ASIC, form part of ASIC's national database referred to in s 1274B of the Act. [4] Whilst the term "national database" used in s 1274B is not defined, s 9 of the Act defines the "ASIC database" as:
"… so much of the national companies database kept by ASIC as consists of:
(a) some or all of a register kept by ASIC under this Act; or
(b) information set out in a document lodged under this Act,
but does not include ASIC's document imaging system."
Thus, registers kept by ASIC are a sub-set of the national companies database, which also includes information contained in documents lodged with ASIC under the Act irrespective of whether that information is included in a register.
The absence of a statutory obligation for ASIC to include notices lodged under ss 465A and 470 - or information contained in such notices - in its register of companies does not preclude it from doing so. A letter from ASIC to the solicitors acting for the Azzurri Companies in the present proceeding establishes that ASIC has a practice of including in its register of companies information that is contained in notices of winding up applications lodged with ASIC, albeit that the notices themselves are not included in that register. The letter states:
"ASIC maintains information in the Companies Register by reference to the documents lodged with ASIC. We receive applications and notifications relating to registered Australian companies and process these documents to update information on the Companies Register. …"
That ASIC's practice described in the letter extends to recording notices of winding up applications in the register of companies is also evident from the extracts from that register relating to each of the Azzurri Companies, that were in evidence in the present proceeding. Each of those company extracts contains the following entry:
"Petitioner Court Action
Name: 647 323 911 2B6 Enterprises Pty Ltd
Address: Suite 304 Level 3 27 Mars Road Lane Cove NSW 2066
Appointment Date: 11 May 2023
Cease Date: //
Court Details Affecting Role
Type: Supreme State: New South Wales
Application No.: 00151182 Application Year: 2023"
The "Document List" included at the end of each company extract includes the Form 519 lodged on 12 May 2023 and identifies the "Effective Date" as 11 May 2023.
In each of those company extracts, the "Petitioner Court Action" entry bears a number that corresponds with the identifying number recorded for the Form 519 in the "Document List" of that same extract. That identifying number enables one to obtain a copy of the notice from ASIC's database, but the notice itself is not included in the register of companies. I respectfully disagree with the contrary view expressed tentatively by Parker J in Playup, in circumstances where it was not necessary for his Honour to reach a final conclusion about that question. [5]
Section 1322(4)(b) of the Act provides that the Court may, on the application of any interested person, make an order directing the rectification of any register kept by ASIC under the Act.
In the present case, the rectification orders sought by the Azzurri Companies are directed to the removal from the register of companies of references to the notices of winding up application lodged by the defendants on 12 May 2023, and to the information contained in those notices. The Azzurri Companies do not seek an order directing ASIC to remove the notices themselves from its database. That distinguishes this case from Playup in an important respect, because Parker J appears to have characterised the application in that case as an application to expunge the notice of winding up application from ASIC's database. [6]
As the Azzurri Companies accept, the information recorded in the notices lodged with ASIC was correct insofar as it concerns Azzurri Group Holdings, Azzurri Concrete Group and MPD Developments. The oppression proceeding includes a claim by Mr Martino and/or 2B6 Enterprises for orders winding up those companies, albeit only in the alternative to the compulsory buy-back orders which appear from the statement of claim to the principal relief sought.
In Miltonbrook, Spigelman CJ described "rectify" as: [7]
"… a protean word with a range of meanings: to correct, to remedy, to make right, to abolish."
His Honour considered that the immediate textual context of s 1322(4)(b) was more consistent with a broader rather than a narrower interpretation of the word "rectify", but cautioned that "it is necessary to consider the relevant legislative sub-regime for registration and reinstatement". [8]
His Honour then repeated his observations in BP Australia Ltd v Brown that: [9]
"[78] Section 1322 confers a series of powers designed to mitigate the strict application of the various kinds of provisions found elsewhere in the legislative scheme of the Corporations Act. It constitutes a recognition by the legislature that, in the wide variety of unpredictable circumstances that arise in the conduct of the affairs of corporations, the precise rules for which the statute provides may operate unfairly or unjustly in some circumstances.
[79] Nevertheless, the requirements of certainty or of deterrence or of other objectives performed by particular regulatory sub-regimes within the legislative scheme may be such that the flexibility for which s 1322 makes provision is not appropriate …"
After noting that the power under s 1322(4)(b) extended to a range of different registers which perform various functions [10] , Spigelman CJ stated that the power "must be given an ambulatory operation which has regard to the different purposes served by different registers". [11]
In Miltonbrook, the relevant register was the register of companies. Spigelman CJ considered the scheme of the Act relating to the registration of companies, and the requirement for ASIC to keep a record of the registration of companies, and said (emphasis added): [12]
"The principal purpose of registration is to cause a company to exist as a legal entity and to establish that it is governed and regulated by the Corporations Act (Cth). A further purpose is to provide information specified in the regulations, to persons who deal with a company."
The register of companies is also the relevant register in the present case, as it is the only register in which ASIC records information about notices of winding up applications, notwithstanding that it has no statutory obligation to do so for the reasons that I have explained above.
Whilst the legislature may have decided that the fact of the making of a winding up application is to be notified to ASIC and recorded in ASIC's database, which may be searched by members of the public, [13] the legislature has not decided that the fact of a winding up application is to be included in the information provided in the register of companies. That decision has been made by ASIC itself, as I have explained above.
Although the defendants' notices lodged with ASIC in respect of Azzurri Group Holdings, Azzurri Concrete Group, and MPD Developments correctly recorded that a winding up application had been filed in respect of each of those three companies, that information is recorded in the register of companies in a manner that is misleading or likely to mislead. The information recorded under the "Petitioner Court Action" heading conveys that 2B6 Enterprises has been appointed to some role by some process of this Court. [14] In truth, no such appointment has been made and 2B6 Enterprises is merely an applicant for a winding up order. As I have mentioned at [25] above, there is evidence that at least one supplier or client of the Azzurri Companies may be labouring under the erroneous belief that a winding up order has been made.
Applying the principles in Miltonbrook, [15] it is my opinion that the power conferred on the Court by s 1322(4)(b) in respect of the register of companies extends to an order directing ASIC to rectify - in the broader sense referred to by Spigelman CJ - that register by removing information contained therein that is correct but which is not required by the Act or the regulations to be included in the register (being the reference to the Form 519 in the Documents List), in addition to removing information that is incorrect or misleading (being the information referred to at [38] above, in circumstances where the inclusion of that information in the register is causing substantial prejudice to the companies concerned as described in Mr D'Angola's evidence referred to above. I accept the submissions to that effect made by counsel for the Azzurri Companies.
This does not involve the Court making a judgment about the relevance or utility of the information to other persons. Rather, it involves the exercise of the statutory rectification power to mitigate the consequences described in Mr D'Angola's evidence of ASIC's inclusion of the information. Those consequences are plainly unfair and unjust in the circumstances of this case, where:
1. winding up is not the principal relief sought against the Azzurri Companies in the oppression proceeding;
2. it would be unusual for a winding up order to made in respect of profitable, solvent companies as a remedy for any oppression that may ultimately be found;
3. it is common ground that the Azzurri Companies are profitable; and
4. the evidence establishes that the information that ASIC has recorded in the register of companies is having a significant adverse effect on the Azzurri Companies' ability to operate their businesses and thereby imperilling their future profitability, and perhaps even their solvency. As counsel for the Azzurri Companies put it, this is not a case where the applicant complains that the information recorded in the register is merely a stain on its reputation. Rather, the Azzurri Companies' continuing existence is at risk. I consider that this is a fair summary of Mr D'Angola's evidence. Counsel for Mr Martino and 2B6 Enterprises made no submission to the contrary, but submitted that those drastic consequences are simply a necessary incident of the lodgement of notices of a winding up application with which the Court has no power to interfere ordering rectification under s 1322(4)(b). I reject that submission.
As the plaintiffs submitted, and the defendants now accept, the information recorded in the notices of winding up application lodged in respect of Balli Constructions and Azzurri Concrete is incorrect. Mr Martino and 2B6 Enterprises have not sought any order for the winding up of those companies in the oppression proceeding. I find that the information in the notice relating to Azzurri Concrete Enterprises is also incorrect. That is a further reason why the Court's power under s 1322(4)(b) extends to making the rectification orders sought in relation to the register of companies in respect of Balli Constructions, Azzurri Concrete, and Azzurri Concrete Enterprises.
Having regard to all of the circumstances referred to above, and particularly to the concession made as to the profitability of the Azzurri Companies, I am satisfied that no substantial prejudice has been or is likely to be caused to any person if the Court makes the rectification orders sought. I also note that counsel for Mr Martino and 2B6 Enterprises expressly drew the Court's attention to the fact that they do not contend that there has been or is likely to be any such prejudice.
The Azzurri Companies sought an order that their costs of this proceeding be paid by Mr Martino and 2B6 Enterprises. The Azzurri Companies submit that ss 465A and 470 of the Corporations Act did not require Mr Martino and 2B6 Enterprises to lodge notices of the filing of winding up applications with ASIC because the applications were not made on the basis of insolvency. Mr Martino and 2B6 Enterprises maintain that s 470 did require them to lodge the notices. I do not find it necessary to reach a conclusive view about that matter, save to say that I consider that it is at least reasonably arguable that ss 465A and 470 did require the notices to be lodged, and Mr Martino and 2B6 Enterprises did not act unreasonably in doing so. The unfairness to the Azzurri Companies that gave rise to the present proceeding flowed not from the lodgement of the notices per se, but from the information that ASIC recorded in the register of companies, and the misleading manner in which that information was recorded. That was beyond the control of Mr Martino and 2B6 Enterprises. The evidence suggests that the consequences primarily affected the principal trading company, Azzurri Concrete Group. In those circumstances, I considered that this proceeding was, in substance, an incident of the oppression proceeding and that the appropriate exercise of the costs discretion was to order that the parties' costs of this proceeding are to be the parties' costs in the oppression proceeding, with the intention that those costs should follow the event of the oppression proceeding.
I therefore made the following further order on 25 May 2023: