In the matter of Hinesight Development Pty Ltd (deregistered) [2017] NSWSC 448

Judgment

1. GLEESON JA: Before the Court is an application by the plaintiff, Christopher Mel Chamberlain, for an order under s 601AH of the Corporations Act 2001 (Cth) to reinstate Hinesight Development Pty Limited (deregistered) (the company).
2. The company was wound up by order of the Federal Court of Australia made on 28 August 2014 and Mr Chamberlain was appointed liquidator. The major asset of the company was a debt owing by its former director, Simon Hine, in the sum of $272,358. The liquidator formed the view that as Mr Hine was a bankrupt, the company was unlikely to receive any substantial dividend from his estate and, after completing the required tasks in the winding up, took the necessary steps to have the company deregistered.
3. The liquidator lodged a final form 524 (presentation of account and statements) with the Australian Securities and Investments Commission (ASIC) on 10 March 2015. On the same date, the liquidator lodged with ASIC a request that the company be deregistered. The company was deregistered on 17 May 2015.
4. Subsequently on or about 12 September 2016, the liquidator received a report from the trustee in bankruptcy for Mr Hine advising that Mr Hine had been bequeathed an interest in a deceased estate and, accordingly, a dividend was likely to be paid to creditors of the bankrupt estate.
5. On or around 16 November 2016, the liquidator received a cheque dated 14 November 2016 in the amount of $7,066.74 from the trustee in bankruptcy. That was the first interim dividend in the bankrupt estate. The liquidator took steps to bank that cheque in an interest bearing trust account maintained in the name of "Chamberlains SBR Chartered Accountants".
6. On or about 2 March 2017, the liquidator received a further letter from the trustee of the bankrupt estate giving notice of an intention to declare a second dividend to creditors on 14 April 2017. The amount available for distribution seems to be a sum of $150,000. The liquidator anticipates that the company will receive a second dividend in an amount of approximately $100,000. It is in these circumstances that the liquidator seeks the reinstatement of the company and that he be appointed its liquidator. The only purpose of the order to reinstate the registration of the company is for it to receive the dividends from the bankrupt estate of Mr Hine.
7. The Court has power to order ASIC who is the defendant to reinstate the registration of a company on the application, relevantly, of a former liquidator of the company and where the Court is satisfied that it is just the company's registration be reinstated. In Australian Competition and Consumer Commission v Australian Securities and Investments Commission (2000) 34 ACSR 232; [2000] NSWSC 316, the relevant criteria were stated to include the circumstances of the deregistration of the company, the fact that it would be put to good use upon reinstatement, any likely prejudice to third parties, and whether there is any public interest reason not to order reinstatement: see also Re Richmate Pty Ltd (in liq) (deregistered) [2015] NSWSC 2009 at [6].
8. Clearly, Mr Chamberlain has standing as the former liquidator of the company to bring the application. Undoubtedly, it is just that the company's registration be reinstated. This will facilitate the company receiving the two dividends from the bankrupt estate of Mr Hine and, in turn, distributing those amounts to creditors of the company. The evidence of the liquidator is that the company has two potential creditors whose claims total approximately $175,000.
9. Section 601AH(5) provides that if a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. It is well established that upon reinstatement of a company which was in liquidation at the date of deregistration the company will return to that state. That means in the present case the company will return to the state of winding up by the Court: Australian Competition and Consumer Commission v Australian Securities and Investments Commission; Re Richmate Pty Limited (in liq) (deregistered) at [8]; Stone v ACN 000 337 940 Pty Ltd [2008] NSWSC 1058.
10. The balance of authorities indicate, although there has been some different views expressed over time, that an order for reinstatement does not automatically result in the appointment of the liquidator who was in office at the time of the company's deregistration; although the Court will typically appoint the liquidator who was in office by a specific order, if he or she is prepared to accept that position: JP Morgan Portfolio Services Ltd v Deloitte Touche Tohmatsu (2008) 65 ACSR 636; [2008] FCA 433; In the matter of ERB International Pty Ltd (deregistered) (2014) 98 ACSR 124; [2014] NSWSC 200 at [40].
11. In the present case, Mr Chamberlain consents to his re-appointment as liquidator and there is obvious advantage in his re-appointment in circumstances where he has familiarity with the administration, has already received one dividend cheque, and is in contact with the trustee of the bankrupt estate of Mr Hine.
12. I am satisfied that an order for reinstatement should be made. The order should include provision reserving the opportunity to ASIC to apply to set aside the orders, if so advised, within 14 days. The need for this order arises because notice of the application has only recently been given to ASIC on 30 March 2017 and enquiries by the solicitor for Mr Chamberlain indicate that ASIC will not be in a position to state its position in relation to the application until, it is expected, 12 April 2017. It should be said that it would seem highly unlikely that any such application will be made by ASIC. Nevertheless, in view of the circumstances of urgency in which this application has been made and since ASIC has not yet had the opportunity to determine its position, it is appropriate to preserve that position in case it ultimately forms a view that it wishes to oppose the reinstatement order that I propose to make.
13. Accordingly, I make the following orders: 1. Pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), the defendant reinstate the registration of Hinesight Development Pty Limited (deregistered) (ACN 110 850 747) (the company). 2. Pursuant to s 601AH(3)(d) of the Corporations Act, that upon reinstatement of the registration of the company the plaintiff, Christopher Mel Chamberlain, be appointed liquidator of the company. 3. Order pursuant to s 601AH(3)(d) of the Corporations Act, that the costs of and incidental to this application be costs of the winding up of the company. 4. The plaintiff notify the defendant of these orders within 48 hours. 5. The defendant have liberty to apply within 14 days to set aside these orders, if so advised. 6. Direct that the plaintiff file an affidavit annexing a copy of any response by the defendant to this application. 7. Direct that these orders be entered forthwith.