CONSIDERATION
9 Ms Johnstone appeared in person. She is not legally qualified. I am conscious of the difficulties faced by litigants in person and I have endeavoured to do my best to address the substance of the arguments Ms Johnstone advanced within the relevant legal framework.
10 As I followed her submissions, Ms Johnstone sought, in AGJ's name to challenge the winding up of AGJ under s 482 of the Corporations Act. Secondly, by bringing an application in AGJ's name seeking to set aside the Registrar's orders either under the general power available under r 39.04 of the Federal Court Rules 2011 (Cth) (the FCR) on the basis that the orders had not been entered or under the power in r 39.05(a) on the basis that the orders were made in the absence of AGJ. Thirdly, by, in AGJ's name, seeking review of the Registrar's orders under s 35A(5) of the Federal Court of Australia Act 1976 (Cth) (the FCA Act) and r 3.11 of the FCR.
11 Ms Johnstone is precluded from performing or exercising a function or power as a director while AGJ is under the control of the liquidator unless she obtains written approval to do so from the liquidator or the Court: s 198G(1), (3)(b).
12 As mentioned, the liquidator does not consent to Ms Johnstone bringing this Application in the name of AGJ.
13 I now turn to consider Ms Johnstone's application under s 198G(3)(b). In considering whether Ms Johnstone should be given leave to proceed in the company's name under s 198G(3)(b) it is relevant to consider:
(1) the strength or viability of the case sought to be advanced in the company's name; and
(2) the protection of the assets of the company and the minimisation of the prejudice to the company and its creditors if leave is granted.
14 In relation to the application under s 482 of the Corporations Act, Ms Johnstone's attempt to bring the Application is misconceived. The company does not have standing under s 482(1A) to apply for relief under s 482(1). Even if this were not so, Ms Johnstone has been frank in her evidence in acknowledging that AGJ is not in a position to pay its tax debt which is not disputed and which was the subject of the statutory demand. She is seeking additional time and a payment arrangement to facilitate payment by future instalments. However, despite a discussion in September 2023 between Ms Johnstone and an officer of the ATO, a payment agreement has not been reached. In these circumstances I was not satisfied Ms Johnstone should be given leave to pursue relief in the name of AGJ under s 482 of the Corporations Act. Given my conclusion, it is not necessary to address whether it would be appropriate for AGJ to be relieved of the obligation to proceed in the Court by a lawyer: r 4.01(2) of the FCR.
15 Ms Johnstone also seeks leave to apply in AGJ's name to set aside the Registrar's orders relying on r 39.04 and/or r 39.05. She does not seek to bring an application of this kind in her own name as an interest person, being the director and shareholder of AGJ.
16 It is common ground that the Registrar's order was made in the absence of AGJ. It is also common ground that Ms Johnstone attempted to connect to the hearing but experienced technical difficulty in doing so. When she did manage to connect, orders had already been made.
17 Ms Johnstone filed the Application promptly. If the Application is read as an application under r 39.04, then it was filed before the Registrar's orders were entered: see Kitoko v Registrar of the Federal Court of Australia [2024] FCAFC 14 at [26] to [40] (Thawley, Cheeseman and Shariff JJ).
18 The Application did not refer to r 39.04. Instead, it referred only to s 482 of the Corporations Act. For that reason it may be that the application to set aside under the Rules was made after the Registrar's orders were entered. If so, it may be more appropriate to treat this application as an application under r 39.05(a) of the FCR. In my view notwithstanding that r 39.04 confers a general power, whereas r 39.05 is constrained by reference to the subparagraphs of that rule, the distinction is not meaningfully engaged in the present context. Ms Johnstone relies on the fact that the order was made in the absence of AGJ and she has explained why that was so. I was satisfied that Ms Johnstone had adequately explained why AGJ did not appear and that she took steps to bring the Application promptly thereafter. However, that is not the end of the matter. The exercise of the discretion to set aside an order of the Court under r 39.04 or r 39.05(a) must be approached with caution, cognisant of the importance of the public interest in the finality of litigation. In the circumstances of this Application, where it is acknowledged that AGJ cannot presently pay its undisputed debt which is due and in respect of which a payment arrangement has not been agreed, I was not satisfied it would be just to set aside the Registrar's orders.
19 Finally, insofar as Ms Johnstone purports to bring an application for review of the Registrar's decision under s 35A(5) of the FCA Act and r 3.11 of the FCR, it is necessary for her to bring that application in the company's name because an application for review can only be brought by a party. I have had regard to all of the evidence including the additional evidence that Ms Johnstone relied upon before me in order to consider the strength or viability of a review de novo of the Registrar's decision. But as I have already mentioned, the evidence that Ms Johnstone relies on, and the submissions that she has made, confirm that AGJ does not dispute the tax debt and whilst desirous of being given more time to continue to trade and thereby seek to pay the debt over time, acknowledges that AGJ cannot at this time pay the debt that is presently due. In these circumstances, there would be no utility in granting leave to Ms Johnstone to bring a review application in AGJ's name.
20 For these reasons, I dismissed the Application. The plaintiff sought his costs of the hearing, submitting that costs should follow the event and also pressed an application for the costs to be borne by Ms Johnstone personally.
21 I was not persuaded that there is a basis for varying the usual order that costs should follow the event. I will so order.
22 The evidence before me demonstrated that Ms Johnstone had sought to act promptly and to frame the Application as best she could, given her lack of legal assistance. She maintained she was impecunious and that was not challenged. In her evidence and submissions, she gave a cogent explanation of the external forces beyond her control which had adversely impacted AGJ's business. She has endeavoured to reach a payment agreement in respect of AGJ's tax debt but has been unable to do so. She was clear in her position that she only sought to bring the Application in the name of AGJ and not personally. I was not satisfied that a personal costs order against Ms Johnstone ought be made.
23 For these reasons, I made orders at the conclusion of the hearing dismissing the Application with costs.
I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Cheeseman.