Clancy v Australian Securities and Investments Commission [2025] FCA 220

Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175

Arnold v Poltane Pty Ltd [2005] FCA 1418

Arnold World Trading Pty Ltd v ACN 133 427 335 Pty Ltd [2010] NSWSC 1369; (2010) 80 ACSR 670

Australian Securities and Investments Commission v Edwards [2005] NSWSC 831; (2005) 220 ALR 148

Boys, in the matter of 38 Akuna Pty Ltd (Deregistered) v Australian Securities and Investments Commission [2019] FCA 320

Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282

Canstruct Pty Ltd v Project Sea Dragon Pty Ltd (Subject to a Deed of Co Arrangement) (No 4) [2024] FCA 112

Caparo Industries Plc v Dickman [1990] UKHL 2; [1990] 2 AC 605

CIP Group Pty Ltd & ors v So & ors [2022] FCA 1490; (2022) 164 ACSR 566

CIP Group Pty Ltd v Watters in his capacity as Recs and Mngr of GGPG Pty Ltd [2023] FCA 329

CIP Group Pty Ltd v Watters in his capacity as Recs and Mngr of GGPG Pty Ltd (2024) 301 FCR 60

Daniels v Anderson (1995) 37 NSWLR 438

Denis v McMahon (1989) 7 ACLC 283

Ealing Corporation v Jones [1959] 1 QB 384

Edgington v Fitzmaurice [1885] UKLawRpCh 83; (1885) 29 Ch D 459

Endless Solar Corporation Ltd v Australian Securities and Investments Commission, Re Speedpanel Australia Ltd (2023) 168 ACSR 467

Finance Facilities Pty Ltd v Commissioner of Taxation [1971] HCA 12; (1971) 127 CLR 106

Foxman v Credex National Australian Trade Exchange Pty Ltd (in liq) (2007) 215 FLR 39

Friend v Brooker [2009] HCA 21; (2009) 239 CLR 129

Gartside v Inland Revenue Commissioners [1968] 2 AC 553

GIO General Ltd v Sabko Pty Ltd [2007] NSWSC 251; (2007) 70 NSWLR 743

Hinz, Re Kead Pty Ltd (Deregistered) v Kead Pty Ltd (Deregistered) [2022] FCA 270; (2022) 158 ACSR 444

Lavin v Toppi (2015) 254 CLR 459

Liberty International Underwriters v Australian Securities and Investments Commission, in the matter of Moore Murphy Holdings Pty [2021] FCA 103

Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1

Melchior v Cattanach [2001] QCA 246; (2001) 217 ALR 640

NRFX v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 187; (2023) 300 FCR 582

Owners of Strata Plan No 91,349 v Australian Securities and Investment Commission [2020] NSWSC 685; (2020) 147 ACSR 456

Partners v Sampson [2002] NSWSC 383

Perre v Apand [1999] HCA 36; (1999) 198 CLR 180

Re Austral Bronze Pty Ltd (No 2) [2020] NSWSC 1633; (2020) 149 ACSR 221

Re ERB International Pty Ltd (deregistered) [2014] NSWSC 200; (2014) 98 ACSR 124

Re European Metal Recyclers Pty Ltd (In Liq) (deregistered) [2018] NSWSC 946

Re Great Eastern Cleaning Services Pty Ltd (No 2) (1978) 3 ACLR 886

Re J J Weeks Constructions Pty Ltd (1982) 31 SASR 96

Re LCW Property Holdings Pty Ltd (deregistered) [2020] NSWSC 71

Re Mamae Pty Ltd [2024] NSWSC 1032

Re Richards Contracting Co Management Pty Ltd [2021] NSWCA 34; (2021) 104 NSWLR 385

Rushcutters Bay Smash Repairs Pty Ltd v H McKenna Netmakers Pty Ltd [2003] NSWSC 670

Sullivan v Moody (2001) 207 CLR 562

Target Holdings Ltd v Redferns (a firm) [1995] UKHL 10; [1996] AC 421

Western Australia v Australian Securities and Investments Commission [2020] FCA 810

White v Baycorp Advantage Business Information Services Ltd [2006] NSWSC 441; (2006) 200 FLR 125

Yeo v Australian Securities and Investments Commission, Re Ji Woo International Education Centre Pty Ltd (deregistered) [2017] FCA 1480

AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION

1. Subject to the plaintiff paying $325,000 to Mr Marcus Jon Watters in his capacity as Receiver and Manager of GGPG Pty Ltd ACN 609 675 505 (Receiver & Manager Appointed) and the second to eleventh respondents in proceedings QUD222/2022 and QUD188/2023 (or at his direction) by 26 March 2025:

(a) pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), the defendant reinstate the registration of CIP Group Pty Ltd; and

(b) pursuant to s 601AH(3) of the Corporations Act 2001 (Cth), the proceedings commenced by CIP Group Pty Ltd in the Federal Court of Australia being:

(i) matter QUD93/2022;

(ii) matter QUD222/2022; and

(iii) matter QUD188/2023,

are deemed by this order to be reinstated and any action of CIP Group Pty Ltd taken in those proceedings during the period of deregistration is validated.

1. For the purposes of satisfying itself that the plaintiff has paid the sum of $325,000 to Mr Marcus Jon Watters as provided for in Order 1 hereof, the defendant is entitled to act upon notification of such payment contained in a letter under the hand of, or apparently under the hand of, Mr Joseph Basson, solicitor of the firm Thynne + Macartney.
2. There be no order as to costs.
3. The parties have liberty to apply.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

1. At first blush, the application before the Court appears relatively straightforward. The plaintiff, Mr Clancy, seeks orders under s 601AH of the Corporations Act 2001 (Cth) (the Corporations Act) for the (a) reinstatement of the registration of CIP Group Pty Ltd (CIP); and (b) validation of certain steps taken by it during the period of deregistration. The relative simplicity of that request, however, disguises a complex substratum of fact and law that demands close attention.
2. Unless otherwise indicated, all references to legislative provisions throughout the remainder of these reasons are to be taken as references to the Corporations Act.

1. CIP was incorporated on 1 February 2016. For many years, it has, as trustee of the CIP Group Trust (the Trust), held 50% of the share capital in Park Ridge 96 and 98 Pty Ltd, Park Ridge 132 Pty Ltd, 168 Park Ridge Pty Ltd, Park Ridge 180 Pty Ltd, Rochedale Holdings No. 1 Pty Ltd, Rochedale Holdings Pty Ltd and Park Ridge Development Management Pty Ltd (together, the Entities). CIP did not otherwise conduct business, nor has it held a bank account in its own name or been required to lodge company tax returns.
2. Mr Clancy was appointed as the sole director and secretary of CIP on 1 February 2016. He has since held half of its issued share capital and is said to have been wholly responsible for meeting its financial obligations. He is also a beneficiary of the Trust, which is a discretionary trust.

1. The Entities form part of a broader collective of companies (together, GGPG), through which Mr Clancy and a Mr Shan Ngai So undertook the development of the "Carver's Reach Estate": CIP Group Pty Ltd & ors v So & ors [2022] FCA 1490; (2022) 164 ACSR 566, 569 - 570 [6] - [13] (CIP v So). From the commencement of the development, Mr So is said to have assumed responsibility for (a) the "financial aspects and record-keeping" of GGPG; and (b) arranging payment of all ASIC fees owed by CIP (such that he had control of CIP's corporate key and ASIC credentials).

1. To say that there has been some falling out between Messrs So and Clancy vis-à-vis that project is somewhat of an understatement. For present purposes, it is relevant only that CIP was, prior to its deregistration, the first applicant in proceedings against Mr So and his corporate interests (henceforth, the "So interests"), and has been granted derivative leave to bring proceedings on behalf of the Entities (hereinafter, the Proceeding): see CIP v So.
2. In his affidavit of 28 February 2025, Mr Clancy deposes to having paid, or cause to be paid, some $1.6 million on behalf of CIP (and the other applicants) in furtherance of the Proceeding, which was commenced in March 2022 and is set down for a four-week trial in early June 2025.

1. Since 2022, CIP has also been involved in proceedings against a Mr Watters, in his capacity as receiver and manager of the companies in GGPG: see, eg, CIP Group Pty Ltd v Watters in his capacity as Recs and Mngr of GGPG Pty Ltd [2023] FCA 329; CIP Group Pty Ltd v Watters in his capacity as Recs and Mngr of GGPG Pty Ltd (2024) 301 FCR 60. It suffices to observe that CIP, alongside two other companies and Mr Clancy himself, was ordered to pay the costs of Mr Watters in both matters, such costs being fixed in the amount of $325,000 by Registrar Schmidt on 24 February 2025 (Debt). Execution or enforcement of the Registrar's orders was stayed until 26 March 2025. Mr Clancy is unaware of any other debt due and payable by CIP.

1. CIP was deregistered on 4 January 2025. Absent any clarification by the defendant (ASIC), it appears, at least prima facie, that the company's deregistration flowed from its failure to pay a "review fee" within 12 months of the due date for payment: s 601AB(1A); see also s 1351.
2. The consequences of deregistration are far from trivial. The relevant company, here CIP, will cease to "exist": s 601AD(1): such that it cannot commence legal proceedings and proceedings instituted by it, on its behalf or against it prior to deregistration -- such as the Proceeding -- cannot be continued: see Amcus Pty Ltd v Hurst Rentals Pty Ltd (No 2) [2010] NSWSC 239; (2010) 77 ACSR 550, 553 - 554 [15]; Partners v Sampson [2002] NSWSC 383, [2] - [3] (Sampson). Any property that the company held on trust immediately before deregistration -- here, shares in the Entities -- will vest in the Commonwealth: s 601AD(1A): who assumes all the powers of ownership, subject to its obligations as trustee: s 601AD(3A): and any existing security, interest or claim in the trust property: s 601AD(3). All other company property, including that which is vested in a liquidator prior to deregistration, will vest in ASIC: s 601AD(2); see also s 601AD(4).
3. Mr Clancy now seeks to reinstate the registration of CIP pursuant to s 601AH(2). To date, that application has not been opposed by ASIC or any other interested party.

1. Section 601AH relevantly provides as follows:

(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.

(3) If:

(a) ASIC reinstates the registration of a company under subsection (1) or (1A); or

(b) the Court makes an order under subsection (2);

the Court may:

(c) validate anything done during the period:

(i) beginning when the company was deregistered; and

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

(d) make any other order it considers appropriate.

Note: For example, the Court may direct ASIC to transfer to another person property vested in ASIC under subsection 601AD(2).

...

Effect of reinstatement

(5) If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company. Any property of the company that is still vested in the Commonwealth or ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim.

1. The principles that bear on the exercise of the power contained within s 601AH(2) are said to be well-settled. As Gleeson J explained in Re LCW Property Holdings Pty Ltd (deregistered) [2020] NSWSC 71 at [15]:

... Three matters need to be considered. First, whether the application is made by "a person aggrieved by the deregistration". Second, the Court must be "satisfied that it is just that the company's registration be reinstated". Third, the Court has a residual discretion whether to make an order.

(Citations omitted).

Is Mr Clancy a "person aggrieved" by the deregistration of CIP?

1. The expression "person aggrieved" is not defined by the Corporations Act. It is, however, of wide import and to be construed liberally: see Owners of Strata Plan No 91,349 v Australian Securities and Investment Commission [2020] NSWSC 685; (2020) 147 ACSR 456, 471 - 472 [61] - [62]: and has been held to refer to those persons who, by reason of the deregistration of a company, have had some right of some or potential value extinguished (including a right to bring a claim against a company and, potentially, a claim by the company against a third party): Hinz, Re Kead Pty Ltd (Deregistered) v Kead Pty Ltd (Deregistered) [2022] FCA 270; (2022) 158 ACSR 444, 447 [19]; see also Re Mamae Pty Ltd [2024] NSWSC 1032, [25].
2. Needless to say, the relevant inquiry is concerned with legal rights and interests: Arnold World Trading Pty Ltd v ACN 133 427 335 Pty Ltd [2010] NSWSC 1369; (2010) 80 ACSR 670, 678 - 679 [43]; Re European Metal Recyclers Pty Ltd (In Liq) (deregistered) [2018] NSWSC 946, [18]. As Gleeson J noted in Yeo v Australian Securities and Investments Commission, Re Ji Woo International Education Centre Pty Ltd (deregistered) [2017] FCA 1480 at [17] (Yeo), a "person aggrieved" is a person who has been damaged or injured in a legal sense, not someone merely dissatisfied by an event.
3. The extent to which a person need suffer such damage or injury so as to distinguish them from an "officious bystander or mere busybody" is a matter to be judged in context: Sampson, [8]. That does not call for any detailed or exhaustive analysis of the facts and law underpinning the proposed claim by the person alleging a grievance. In this sense, the observations of O'Bryan J in Endless Solar Corporation Ltd v Australian Securities and Investments Commission, Re Speedpanel Australia Ltd (2023) 168 ACSR 467 at 476 [48] (Endless Solar) are of assistance:

... The threshold for a plaintiff to establish that they are an aggrieved person is low and can be dealt with in a summary way. Provided that the claims advanced by the person alleging a grievance are not hopeless or bound to fail, that person will be an aggrieved person for the purpose of s 601AH(2)(a). Any further analysis is unnecessary. ...

1. It is not controversial that loss of the opportunity to pursue a claim, by or against a deregistered company, is a sufficient "grievance" for the purposes of s 601AH(2): Arnold v Poltane Pty Ltd [2005] FCA 1418, [4]; Western Australia v Australian Securities and Investments Commission [2020] FCA 810, [16]; Re J J Weeks Constructions Pty Ltd (1982) 31 SASR 96, 98 - 99. The plaintiff's written outline of argument appears to grapple with the two sides of that proposition.
2. First, it is said that Mr Clancy is "aggrieved" in the relevant sense because "[a]s a result of the deregistration, the Proceeding insofar as it concerns [CIP]'s claims is a nullity, and Mr Clancy has been deprived of the opportunity to vindicate his claims through that entity ..." (emphasis added). But the plaintiff has no such "claims". They are instead of CIP, being the entity that (a) claims to have suffered actionable harm at the hands of the So interests; (b) commenced the Proceeding upon that basis; and (c) is deprived, by reason of its deregistration, of the right to continue to pursue those claims. Indeed, in the absence of evidence to the contrary, the success of CIP in the Proceeding is of no moment to Mr Clancy qua shareholder, director or secretary because the company is a mere corporate trustee (that holds no assets of its own).
3. The same can be said for Mr Clancy in his capacity as beneficiary of the Trust. Absent evidence that the trustee (either CIP or the Commonwealth: s 601AD(1A)) has exercised their power of distribution in his favour or is otherwise effectively controlled by him, Mr Clancy will not hold any legal or beneficial interest in the trust property that is susceptible of extinguishment by the deregistration of CIP: Gartside v Inland Revenue Commissioners [1968] 2 AC 553. Whilst he certainly has a right to see that the Trust is duly administered in accordance with the provisions of the trust instrument: see, eg, Target Holdings Ltd v Redferns (a firm) [1995] UKHL 10; [1996] AC 421, 434: that right exists regardless of whether CIP is the trustee or some other entity assumes its place.
4. Second, it is said that Mr Clancy is "aggrieved" as he "has been deprived of the opportunity to vindicate his claims through [CIP], while having paid significant sums of money to support those claims" (emphasis added). If, in so doing, Mr Clancy has assumed the role of a contingent creditor of CIP, then deregistration of the company would extinguish his right to seek to recover the relevant debts (should it have successfully prosecuted its claims as against the So interests). In the abstract, that circumstance would seem to rise to the threshold to render one "aggrieved".
5. However, in the present context, no evidence was led that identified the terms on which monies were advanced by Mr Clancy for the benefit of CIP and the rights, if any, he may have derived from those transactions (that could suffer some tangible form of harm by CIP's present inability to pursue the Proceeding). Whilst it may readily be assumed that the amounts advanced were repayable by CIP to Mr Clancy on demand: see, eg, Canstruct Pty Ltd v Project Sea Dragon Pty Ltd (Subject to a Deed of Co Arrangement) (No 4) [2024] FCA 112, [161] (Project Sea Dragon): all that can be said with certainty is that the plaintiff has, at best, a right to feel dissatisfied by the dissolution of CIP; of course, that is not a legal right nor grievance: Ealing Corporation v Jones [1959] 1 QB 384, 392: and does not satisfy the terms of s 601AH(2)(a)(i).
6. As agitated at the hearing, perhaps the strongest argument in support of the submission that Mr Clancy is a "person aggrieved" lies not in the status of the Proceeding, but instead in the status of the Debt. The Debt is the product of a series of judicial orders, namely those that were made (a) pre-deregistration of CIP, which imposed liability upon Mr Clancy, as well as CIP and two other corporate entities (together, the Defendants), for certain costs incurred by Mr Watters in his capacity as receiver and manager of GGPG; and (b) post-deregistration of CIP, which fixed that liability at $325,000. Putting to one side the post-deregistration order and the question of whether it can bind a deregistered company (see s 601AD(1); note s 601AH(5)), the joint and several nature of the liability imposed on the Defendants: Rushcutters Bay Smash Repairs Pty Ltd v H McKenna Netmakers Pty Ltd [2003] NSWSC 670, [2]: is of some moment, particularly in light of equity's concern to ensure the burden of a common liability is borne equally: Albion Insurance Co Ltd v Government Insurance Office (NSW) [1969] HCA 55; (1969) 121 CLR 342, 350 - 351.
7. From the moment orders were made imposing liability on the Defendants, they each fell under a common obligation to pay the costs that had been incurred by Mr Watters. As entities jointly or severally liable in respect of the same debt, each of them was bound, among themselves, to contribute equally to the discharge of that liability: see Friend v Brooker [2009] HCA 21; (2009) 239 CLR 129, 148 [38] - [40]; Burke v LFOT Pty Ltd [2002] HCA 17; (2002) 209 CLR 282, 292 - 293 [14] - [16]. In other words, each of the Defendants held a common interest and common burden in the Debt. That fine equilibrium was, however, upset upon the deregistration of CIP in early 2025.
8. Robbed of legal personality, CIP bears no duty to do anything. Nor does it possess the capacity or ability to do anything. That includes paying its "fair share" of the Debt. In practical terms, CIP has been unjustly enriched: Lavin v Toppi (2015) 254 CLR 459, 472 [41]: to the detriment of the three other Defendants who have, necessarily, forfeited their right of contribution vis-à-vis CIP. Noting the role of that company in the Proceeding, that right was not of trivial value. It is in this sense that Mr Clancy can be said to have suffered a "grievance" by the deregistration of CIP that is sufficient to overcome the (admittedly low) bar imposed by s 601AH(2)(a)(i).

Is it "just" to reinstate the registration of CIP?

1. Section 601AH(2)(b) is set out above and need not be repeated. However, it is apt to observe that the subsection is concerned with proof of a subjective jurisdictional fact -- namely, that the Court is satisfied that it is "just" for a deregistered company to be reinstated. Whether the Court is so satisfied is, to adapt the colourful language of Lord Bowen of Colwood, as much a fact as the state of his digestion: Edgington v Fitzmaurice [1885] UKLawRpCh 83; (1885) 29 Ch D 459, 483; see, eg, Ali v Minister for Home Affairs [2020] FCAFC 109; (2020) 278 FCR 627, 642 [41]. With respect, that is quite apart from the conferral of a broad discretion upon the decision-maker: cf Endless Solar, 476 - 477 [49]. That discretion is instead conveyed, at least in theory, by use of the word "may" in the chapeau of s 601AH(2): Acts Interpretation Act 1901 (Cth), s 33(2A): and is enlivened if the objective and subjective jurisdictional facts in subparas (a) and (b), respectively, are satisfied.
2. In this respect, the drafting of s 601AH bears homogeny with that of certain provisions of the Migration Act 1958 (Cth): see NRFX v Minister for Immigration, Citizenship and Multicultural Affairs [2023] FCAFC 187; (2023) 300 FCR 582, 606 - 607 [108] - [109] citing ss 501A(2), 501BA(2), 501CA(4).

The importance of clarity in legislative drafting

1. The drafting of s 601AH is no stranger to criticism. In Foxman v Credex National Australian Trade Exchange Pty Ltd (in liq) [2007] NSWSC 1422; (2007) 65 ACSR 476 (Foxman), White J noted (at 491 - 492 [65]) the tension between the underlying purpose of s 601AH(1) (to avoid the cost of a court application for reinstatement where a company had been inadvertently deregistered despite still carrying on business: Second Corporate Law Simplification Bill, Exposure Draft, Vol 2 (June 1995)) and the inability of ASIC to validate the acts of a company taken during deregistration.
2. Here, some comment should be made as to the language of s 601AH(2)(b) viz the requirement that a Court, before restoring a company's name to the register, need be satisfied that it is "just" to do so. The term "just" is nebulous; indeed, there is arguably no more imprecise word in the legal lexicon. It assumes the role of a lodestar, yet is not susceptible of objective definition. It imposes no limit upon the range of relevant considerations and, thereby, invites the decision-maker to formulate policy rather than search for principle: Sullivan v Moody (2001) 207 CLR 562, 579 [49]; see also Perre v Apand [1999] HCA 36; (1999) 198 CLR 180, 301 - 302 [331] - [332] (Perre). In so doing, it subtly undermines both judicial independence and legislative responsibility and leaves its subjects -- the deregistered company and those who stand behind it -- none the wiser as to the circumstances in which registration will be reinstated and those in which it will not.
3. McHugh J warned of as much in Perre (at 211 - 212 [80]) when he critiqued the "fair, just and reasonable" standard that had been developed by Lord Bridge of Harwich in Caparo Industries Plc v Dickman [1990] UKHL 2; [1990] 2 AC 605 some nine years earlier:

[A]ttractive as concepts of fairness and justice may be in appellate courts, in law reform commissions, in the academy and among legislators, in many cases they are of little use, if they are of any use at all, to the practitioners and trial judges who must apply the law to concrete facts arising from real life activities. While the training and background of judges may lead them to agree as to what is fair or just in many cases, there are just as many cases where using such concepts ... would mean that "each judge would have a distinct tribunal in his own breast, the decisions of which would be as irregular and uncertain and various as the minds and tempers of mankind". Lord Devlin was surely right when he said:

"For a judge to decide fairly and convincingly every case that comes before him in the light only of his own sense of justice, he would have to be a superman. I doubt if there have ever been more than a handful of men on the Bench who could do it, though doubtless there are slightly more who think that they could."

1. That notions of justice and morality emanating from the personal perception of judges is, in our pluralist society, an unsteady foundation upon which to erect and apply legal principle is neatly illustrated by Davies JA in Melchior v Cattanach [2001] QCA 246; (2001) 217 ALR 640 (at 661 [90] - [91]):

[In McFarlane v Tayside Health Board [1999] UKHL 50; [2000] 2 AC 59,] Lord Steyn applied [at 82] what he said was the notion of distributive justice by concluding that commuters on the underground would answer the question:

Should the parents of an unwanted but healthy child be able to sue the doctor or hospital for compensation equivalent to the cost of bringing up the child for the years of his or her minority, ie until about 18 years?

with an emphatic "No".

Perhaps his Lordship is right. But would that be a fair question? Should they not also know, before they answer, that the parents had chosen not to have another child; that they had engaged the doctor who had undertaken to exercise reasonable care to secure that end permanently by sterilisation; and that his negligence had resulted in the conception of that child? I am inclined to think that, if those facts were added, the answer would be "Yes". That is because they would accept the moral justifiability of the choice of the parents to limit the size of their family; they would think that those parents were reasonably entitled to rely on the care and skill of the doctor to secure that result; and they would think that his negligent failure to secure that result should result in his bearing the cost which they unexpectedly have to bear.

1. It is true, of course, that the aim which s 601AH(2)(b) strives towards -- attainment of a "just" result -- cannot be achieved by the prescription of a single, all-embracing rule that overlooks the infinitely various nature of human behaviour and circumstance. That problem is, however, not solved by deferring it. It is not solved by telling the decision-maker "do whatever you think is just". If the legislature adopts such a discretionary rule and overlooks, forgets or otherwise fails to afford the decision-maker sufficient guidance as to what is meant by "just", all that has been done is to defer the problem from the (elected) rule-maker to (unelected) decision-maker. The inevitable consequence of such legislative deference is, inter alia, to burden the judiciary with litigation designed to articulate the principles that the decision-maker should bring to bear when assessing what is "just" in context. The Court's resources are thereby compromised: see, eg, Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; (2009) 239 CLR 175.
2. In a similar vein, the fashioning of legal criterion by reference to terms of indeterminate import necessarily extends the range of evidentiary materials that are admissible. Naturally, cases then take longer, are more expensive to try, and settlement is rather more difficult to achieve because practitioners will often hold widely divergent views as to the result of cases if they were to be litigated: Perre, 212 [81]; Mann v Carnell [1999] HCA 66; (1999) 201 CLR 1, 41 - 42 [131]. This inefficiency and uncertainty could easily be overcome, one would think, by provision of a robust objective standard or, at the very least, some objective criteria that could guide both the decision-maker and layperson in the application of normative standards to different classes of case. Without that instruction, terms such as "just" merely offer a qualitative description of the result that the legislature desires from any and every application of the law; that is not of much help.
3. It should also not be overlooked that the unfettered evaluative inquiry thrust upon the Court by s 601AH(2)(b) leaves little room, if any, for the discretion that is notionally conferred by the chapeau to that section. In the abstract, it is difficult to envisage how such a discretion could be properly exercised once one is satisfied that it is "just" to order reinstatement: Re Richards Contracting Co Management Pty Ltd [2021] NSWCA 34; (2021) 104 NSWLR 385, 415 [107]. In practice, it may be that the residual discretion is redundant in circumstances where the jurisdictional facts in s 601AH(2) are made out: see, eg, Finance Facilities Pty Ltd v Commissioner of Taxation [1971] HCA 12; (1971) 127 CLR 106, 134 - 135. Although it is not necessary to decide that question at present, if that was the intention of the legislature, it could (and should) have been borne out in clearer terms.
4. Turning then to the question of whether it is just to order the reinstatement of CIP, Ms Tay for the plaintiff submitted, by reference to the comments of O'Bryan J in Endless Solar at 476 - 477 [49], that the following considerations were of some relevance.

1. It is said that the deregistration of CIP was "accidental" and "inadvertent". To that end, and on the assumption that the company's contravention of s 601AB(1A) was directly causative of its deregistration, Ms Tay suggested in her written outline of argument that:
   1. The review fee was not paid because Mr Clancy had not received any electronic or hard copy correspondence notifying him of the review fee. Since the appointment of the Receiver on 16 December 2021, he has not had access to the email address to which reminders to pay the annual review fee had historically been sent. While Mr Clancy had omitted to change the registered office of [CIP] after vacating those premises, he had instructed an employee to regularly check that office for hard copy mail. Despite this, Mr Clancy did not receive any correspondence from ASIC regarding the review fee.
   2. Mr Clancy otherwise does not have [CIP's] corporate key and online ASIC credentials.

1. Far from substantiating Ms Tay's submission, that evidence throws into question the extent to which Mr Clancy, as director and secretary of CIP, upheld those duties imposed upon him by the Corporations Act and common law. Those duties included, amongst other things, to notify ASIC of changes to the address of CIP's registered office: ss 142 and 188(1)(a): and to remain appraised of the activities and financial status of the company in order to guide and monitor its management: s 180(1); see Daniels v Anderson (1995) 37 NSWLR 438, 501 - 505. The second of those duties would seem to have required Mr Clancy to maintain access to any email address by which CIP purported to interact with third-parties that held an interest in the business of the company, including ASIC. The appointment of Mr Watters as the manager and receiver of the companies in GGPG, one of which being CIP, did not relieve him of either of those obligations.
2. It is unnecessary to venture any further conclusion, aside from noting that, in light of the above, the suggestion that deregistration of CIP was a mere accident, while perhaps true in a technical sense, does nothing to satisfy one that it is "just" to order its reinstatement. If anything, all that is left is the unfortunate impression that Mr Clancy did not do all that was required of him.
3. Relevantly, Ms Tay elaborated upon the submission at the hearing:

MS TAY: What I was seeking to explain was that Mr So had historically paid the fees for all of - including Mr Clancy's companies. So he held the corporate keys, he held the credentials.

HIS HONOUR: Okay.

MS TAY: He was the person - prior to the joint venture falling apart the person who had paid the ASIC review fees on behalf of [CIP].

1. That arrangement, as odd as it may be, does not advance the plaintiff's case. The obligation to pay the relevant review fee to ASIC was one of CIP, and therefore Mr Clancy, and the fact that a third party who was neither director, shareholder nor secretary of the company did not fulfil that obligation as he had done previously (in circumstances where there existed a considerable degree of acrimony between him and Mr Clancy) does not render Mr Clancy's inaction some innocent "mistake". What can be said in favour of the plaintiff is that, upon learning of CIP's deregistration on or about 25 February 2025, he promptly paid all amounts outstanding to ASIC in full and instructed the filing of this application. But that is not, in and of itself, sufficient to satisfy the Court that it is "just" to reinstate CIP in any sense of that amorphous term.

1. Mr Clancy seeks the reinstatement of CIP so that it can continue to prosecute its claims against the So interests (as it has done for the past three years). It is self-evident that those proceedings disclose a suite of arguable causes of action: see generally Boys, in the matter of 38 Akuna Pty Ltd (Deregistered) v Australian Securities and Investments Commission [2019] FCA 320, [28]: and, in that sense, CIP's rationale for reinstatement is perfectly legitimate and reasonable.

1. As advanced by Ms Tay, the only persons who may suffer some degree of prejudice by the act of reinstating CIP are the So interests -- at present, the case against them, insofar as it concerns claims brought by CIP, is a nullity. That is correct. However, for the reasons noted by Brereton J in Re ERB International Pty Ltd (deregistered) [2014] NSWSC 200; (2014) 98 ACSR 124 (at 128 [13]), loss of the ability to preclude the institution or resumption of legal proceedings in limine is to be afforded negligible, if any, degree of significance:

It will be a very rare case that merely reinstating a company will be prejudicial to a potential defendant. That potential defendant still has available all the remedies of summary dismissal and stay in the substantive proceedings, if they are instituted. All he or she is deprived of is the opportunity to prevent the proceedings even being instituted - an issue on which a defendant usually has no say. In my view, a court should not, on a reinstatement application, conclude that reinstatement would be unjust on account of considerations analogous to abuse of process or want of prosecution unless affirmatively satisfied that a fair trial could not be had, or that the proposed proceedings were doomed to fail. ...

(Emphasis added).

1. In other words, the only prejudice that may befall the So interests by reason of reinstatement is the loss of a benefit to which they hold no legal right. Indeed, whatever little weight is ascribed to that "prejudice" is only eroded further by the fact that, in the present context, the Proceeding concerns two other applicants whose claims remain on foot (such that it cannot be said that the Proceeding was ever annulled in toto) -- reinstatement of CIP would not entail the institution of fresh proceedings, but merely the (re-)addition of the lead applicant to an existing, and well-advanced, case.

1. It is at this stage of the analysis that counsel for the interested party, Mr Watters, made a series of submissions as to why the reinstatement of CIP was not entirely smooth sailing. Mr Watters, it will be recalled, is the receiver and manager of the companies in GGPG. His submissions reflected a general concern as to the solvency of CIP and its overall ability to satisfy the Debt.
2. In general, Courts are reluctant to reinstate a company that would be "hopelessly insolvent". That being so, reinstatement of such a company may be appropriate in "special circumstances": Re Great Eastern Cleaning Services Pty Ltd (No 2) (1978) 3 ACLR 886, 887 (Great Eastern).
3. Two questions arise. Is CIP "hopelessly insolvent"? If so, do "special circumstances" pertain?
4. With respect to the former question, it was not controversial that (a) CIP was deregistered on 4 January 2025; (b) on 24 February 2025, orders were made fixing the liability of CIP to Mr Watters in the amount of the Debt; (c) CIP itself has no means to pay the Debt; (d) CIP has not yet paid the Debt; and (e) Mr Clancy has historically been responsible for meeting all of CIP's financial obligations. In that context, Ms Tay made the following submission:
   1. There is a real question as to whether [CIP] would in fact be insolvent upon reinstatement. Accepting the proposition that a stay of execution does not affect the character of an order (like the costs orders) as a debt that is due and payable, because of the matters in paragraphs 17, 18 and 22 above, there is real doubt as to whether the costs orders could bind CIP Group - at the time it purported to consent to the entry of the orders it did not exist, and orders cannot bind a company which does not exist.
5. That submission is plainly correct. At the time the matter came before the Registrar, CIP did not "exist": s 601AD(1): and cannot possibly have been bound to do, or refrain from doing, anything. However, that conclusion only goes so far. It is temporally limited, by reason of the retrospective validity conferred by s 601AH(5), to the period in which CIP was deregistered.
6. Section 601AH(5) is set out above, but repeated here for convenience:

(5) If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company. Any property of the company that is still vested in the Commonwealth or ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim.

1. For the moment, it suffices to observe that, were CIP to be reinstated, it will be deemed to have continued in existence as if it had not been deregistered. That fiction does not validate "acts" taken by a company during the period of deregistration: White v Baycorp Advantage Business Information Services Ltd [2006] NSWSC 441; (2006) 200 FLR 125, 152 [115] (Baycorp). It does, however, operate to bind CIP to orders made by the Court following deregistration: see, eg, GIO General Ltd v Sabko Pty Ltd [2007] NSWSC 251; (2007) 70 NSWLR 743, 747 [13] - [14]: such that, upon reinstatement, the Debt will necessarily be thrust on the company. Prima facie, that reality may seem to condemn CIP, a company wholly reliant on external financing, to the doldrums of insolvency. Such was the case in Great Eastern, wherein a deregistered company adduced no evidence that it could repay a plethora of debts that it had incurred prior to deregistration (such that, upon reinstatement, its creditors could immediately have it wound up). Predictably, reinstatement was denied: 887.
2. But that is not the case here. Whilst CIP might reasonably be regarded as cash flow insolvent were it to be reinstated, in that it would not have capacity to satisfy its financial obligations as and when they fall due, it would also be possessed of a suite of well-advanced causes of actions -- contingent assets -- that could foreseeably result in the realisation of substantial recoveries in the not-so-distant future. That is certainly not to say CIP will realise all or any of those assets, but simply that it may very well be replenished to a state of solvency in the forthcoming months. That possibility undercuts any suggestion CIP is "hopelessly insolvent" as that phrase has been understood: see Great Eastern, 887; Denis v McMahon (1989) 7 ACLC 283, 284.
3. In his affidavit of 5 March 2025, Mr Clancy undertakes to pay the Debt on behalf of CIP by 26 March 2025. It is well accepted that substitution of some existing debt to a third-party creditor with a debt to a corporate director does not, thereby, magically relieve the company from the grips of insolvency (unless the loan terms exclude the loan liability from being considered in its own right as part of the debts that are due or near due): Project Sea Dragon, [162] - [163], citing Australian Securities and Investments Commission v Edwards [2005] NSWSC 831; (2005) 220 ALR 148, 176 [99]. In the absence of any such loan arrangement, Mr Clancy's undertaking is of no moment.
4. Having regard to the factors canvassed above, there are several considerations that tend toward a conclusion that it is "just" to reinstate CIP, and perhaps an equal measure that militate against it. Whilst s 601AH(2)(b) has been drafted in such a manner that it could, in theory, be resolved with the toss of a coin, I am satisfied that it is just that CIP's registration be reinstated noting that to do so would further a legitimate purpose, occasion no readily identifiable prejudice to any relevant party and not directly conflict with the public interest.

1. The conclusions reached above favour, but do not compel, reinstatement of CIP: Yeo, [9]. That is at least what is conveyed by the chapeau of s 601AH(2), which grants the Court a discretion to reinstate a deregistered company even if satisfied of the factors required by 601AH(2). Here, having reached a state of satisfaction that it is just to reinstate the registration of CIP, I cannot conjure any reason that would warrant the exercise of the discretion to deny such an outcome.

1. The effect of reinstating a corporation is provided by s 601AH(5). That section was considered at length by Campbell J in Baycorp (at 152 [115]) whose observations I gratefully adopt:

... the effect of s 601AH(5) is that, now, the statute requires everyone to treat Capital Corporate as though it had never been deregistered. However, that does not mean that anything which purported to be done on behalf of Capital Corporate during the period of its deregistration is thereby regarded as valid. If a director had purported to act on behalf of a deregistered company during the period of deregistration, mere reinstatement would not validate his action, because s 601AH(5) provides only a limited measure of retrospectivity, so that the director regains his office only from the time of reinstatement. Similarly, s 601AH(5) provides only a limited measure of retrospectivity concerning title to the property of the company, so that the property revests in it only from the time of reinstatement. Thus, notwithstanding the reinstatement, any contractual power which Capital Corporate had prior to the deregistration is still regarded, even after the deregistration, as having been vested in ASIC during the period of deregistration. If the contractual power was vested in ASIC, Capital Finance could not have had authority to exercise that contractual power.

1. So construed, the "limited measure of retrospectivity" afforded by s 601AH(5) will not validate acts purported to be done on behalf of a deregistered company, or active steps taken in relation to it, automatically on reinstatement. The mere retrospective effect of a reinstatement, without more, does not supply the additional facts necessary to make for a positive answer as to whether particular acts are to be attributed to the deregistered company as at a time during the period of deregistration: Re Austral Bronze Pty Ltd (No 2) [2020] NSWSC 1633; (2020) 149 ACSR 221, 239 - 241 [63] - [68] (Austral Bronze); Foxman, 401 - 402 [42] - [44]; see also Ford, Austin & Ramsay's Principles of Corporations Law (at July 2024, LexisNexis Butterworths), [27.770.3].
2. In the present context, it is not necessary to go beyond observing that reinstatement of CIP will not, in and of itself, validate the acts taken by the company during the period of deregistration. That is not to say such acts are valueless. As noted in Foxman (at 408 [65]), the circumscribed retrospective validity conferred by s 601AH(5) may be "cured" (at least in part) by the making of ancillary orders under s 601AH(3). That is what the plaintiff now asks the Court to do.

The power under s 601AH(3)

1. CIP should be reinstated. But should those acts it purported to take during the period of its deregistration vis-à-vis the Proceeding and litigation involving Mr Watters (QUD222/2022 and QUD188/2023) be validated nunc pro tunc by the Court? The plaintiff thinks so. So too does Mr Watters, at least insofar as those acts concern his interest as manager and receiver of GGPG.
2. The power afforded to the Court under s 601AH(3) is cast in broad terms. Section 601AH(3)(c) clearly states that "the Court may validate anything done during the period beginning when the company was deregistered and ending when the company's registration was reinstated" (emphasis added). That language squarely extends to validation of "acts" taken by a company in existing legal proceedings at a time when it was deregistered: see Austral Bronze, 247 [92].
3. To do so in the present case would be to afford legal force to a state of affairs that neither the So interests, Mr Watters nor any other party involved in each of the relevant proceedings take any objection to; indeed, if one were to decline to do so, such parties would suffer prejudice relative to the extent that they purported to rely upon the "acts" taken by CIP post-4 January 2025. In this context, I am satisfied that orders validating the acts of CIP in the Proceeding, as well as in QUD188/2023 (CIP Group Pty Ltd v Marcus Jon Watters in his capacity as Receiver and Manager of GGPG Pty Ltd (Receiver and Manager appointed)) and QUD222/2022 (CIP Group Pty Ltd v Marcus Jon Watters in his capacity as Receiver and Manager of GGPG Pty Ltd (Receiver and Manager Appointed)) after its deregistration would do justice to all affected parties and should be made: Liberty International Underwriters v Australian Securities and Investments Commission, in the matter of Moore Murphy Holdings Pty [2021] FCA 103, [15].

1. An issue emerged during the hearing as to the appropriate form of relief, were the Court minded to make an order reinstating the registration of CIP. It arose from Mr Clancy's suggestion that the making of such orders should be subject to his paying $325,000 to Mr Watters to discharge the Debt. On one view, that would appear to have the appropriate effect that Mr Clancy would be unable to secure the reinstatement of CIP without discharging the cost order notionally made against it (and the Defendants) in late February 2025. However, when Ms Tay was questioned as to why he had not yet discharged the Debt, given he had indicated his preparedness to do so, no reasonable response was elicited. That produced the unflattering alternative appearance that Mr Clancy was only willing to discharge the Debt if the Court reinstated the registration of CIP and not otherwise. Ultimately, it need not be determined whether Mr Clancy, in so doing, was attempting to "bargain with the Court". Nevertheless, given the way the application proceeded, it is appropriate that he do that which he has indicated he will do, prior to CIP's reinstatement. The preferable manner in which that might occur is to make the relevant reinstatement subject to his payment of costs, as the draft order proposed by Ms Tay suggested.
2. In a letter sent on 13 March 2025, ASIC indicated that it would be unable to give effect to any such order by reason of it being conditional. To that end, it is appropriate to make an additional ancillary order that entitles ASIC to act upon receipt of a letter sent by Mr Basson, the solicitor for Mr Watters, confirming the Debt had been paid in full. Mr Basson is a solicitor well known to the Court, and it is undoubted that once the Debt is discharged, he will promptly prepare and send a letter to the appropriately identified ASIC officer recording as much, who will then be entitled to rely upon it for the purposes of complying with the orders of the Court.

I certify that the preceding sixty-one (61) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Derrington.