The plaintiff was the sole shareholder in Greenlake Corporation Pty Ltd ACN 082 108 183 prior to its deregistration.
Greenlake was deregistered on 14 August 2022, in circumstances to which I refer below. At the time of its deregistration, Greenlake held all of the issued shares in As Blue Pty Ltd ACN 095 048 178.
The plaintiff was the sole director of As Blue until he was declared bankrupt on 5 August 2024, when he ceased to be a director of that company by operation of law.
As Blue in turn held all of the issued shares in The Landscapers Bag Pty Ltd ACN 617 615 675. The plaintiff was also the sole director of Landscapers Bag until he was declared bankrupt.
The sequestration order made in respect of the plaintiff has since been set aside.
By an originating process presented for filing on 27 February 2025, the plaintiff sought an order under s 601AH(2) of the Corporations Act 2001 (Cth) directing the Australian Securities and Investment Commission to reinstate the registration of Greenlake. The application was supported by an affidavit sworn by the plaintiff on 26 February 2025.
The application came before me for hearing on 28 February 2025 on an urgent basis. Initially, I adjourned the application to allow the plaintiff to file further evidence in support of it, and at the adjourned hearing late in the afternoon on 28 February 2025, I ordered that Greenlake be reinstated, with reasons to be given at a later date.
These are those reasons.
By the time of the second hearing, the plaintiff had adduced evidence to show that the Commissioner of Taxation had issued three director penalty notices to him in his capacity as a former director of Landscapers Bag, and that the Commissioner had commenced proceedings in the Federal Court of Australia to wind up that company. The winding up proceedings, which had been adjourned several times, were due to be heard at 9.30 am on the next business day following the hearing before me.
The Commissioner of Taxation had stated that he opposed any further adjournment of the winding up proceedings.
As the plaintiff was no longer a director of As Blue, As Blue could not appoint a director to Landscapers Bag, leaving Landscapers Bag unable to instruct solicitors in respect of the winding up application against it.
By the time of the adjourned hearing, the plaintiff had adduced evidence to the effect that the plaintiff had arranged funding from a third party to pay the debt due to the Commissioner of Taxation, but the proposed lender required that Landscapers Bag be a party to the loan transaction.
The position was therefore that, as Greenlake was deregistered, Greenlake was unable to appoint a director to its wholly owned subsidiary As Blue, which could not, in turn, appoint a director to its subsidiary, Landscapers Bag. The consequence was that Landscapers Bag could not take steps to satisfy the debt claimed by the Commissioner of Taxation or otherwise deal with the winding up application made against it.
In determining the application I adopted, without repeating here, Strk J's summary of the principles relevant to the determination of whether a person is a 'person aggrieved' in Perrin v Australian Securities and Investments Commission Investments.[1] I found that the plaintiff was a person aggrieved by the deregistration of Greenlake, because the consequence of its deregistration was that the plaintiff was no longer able to exercise the voting power conferred by his shareholding in Greenlake to appoint a director to As Blue, and (on the presumption that he would appoint himself director of As Blue, as he deposed he intended to do if Greenlake were reinstated) to exercise his powers as a director of As Blue to appoint a director to Landscapers Bag.
In considering whether it was 'just' to order the reinstatement of Greenlake, I proceeded on the basis to the Court's discretion under s 601AH(2) of the Corporations Act is wide one, the Court being obliged to take into account all relevant circumstances. These included the circumstances in which the company came to be deregistered, whether, if an order was made, good use could be made of it, whether any person was likely to be prejudiced by the reinstatement, and the public interest.
There was conflicting evidence as to how Greenlake came to be deregistered. The plaintiff deposed that he was under the mistaken impression that he had engaged accountants to provide accounting and taxation advice in relation to Greenlake and its related business and structure, but those accountants had informed him that their engagement did not include that company. The plaintiff also stated that there had been an administrative oversight which had led to a lapse of Greenlake's registration.
That evidence, however, had to be balanced against the results of searches of the ASIC's records in relation to Greenlake, As Blue and Landscapers Bag, all of which showed the registered office of each company to be the plaintiff's residential address, as stated in ASIC's records. Although counsel for the plaintiff pointed to the fact that the plaintiff's affidavit showed a different residential address from that shown in those records, there was no evidence as to whether the plaintiff had changed his residential address, and if so, when he had done so.
Prior to the first hearing, ASIC had advised the plaintiff's solicitors that Greenlake had been voluntarily deregistered, but it appears that was a mistake on its part. By the time of the second hearing, ASIC had advised the plaintiff's solicitors that Greenlake had been deregistered for non-payment of filing fees.
I accordingly proceeded on the basis that, although the plaintiff deposed to there having been an error on his part as to whether accountants had been engaged to act on behalf of Greenlake, that was inconsistent with the inference I drew from the results of the ASIC records that documents relating to the registration of Greenlake and its two subsidiaries had been sent to the plaintiff's residential address, but that the inconsistency was not sufficient to justify the refusal of the application.
As already indicated, ASIC was aware of the application, having been served late on 27 February 2025, the day before the matter was heard. Although it did not attend the hearing, ASIC stated that it would not oppose an order being made for reinstatement so long as no other orders were made against it, and it was provided an opportunity to apply to set any order made aside.
Other than the trouble of having to attend to reregistration, there was no apparent prejudice to ASIC arising from the making of the order sought, and nothing to suggest that any other person would be prejudiced by the grant of the application. It appeared to me that any prejudice to ASIC could be met by making the reinstatement of Greenlake conditional upon payment being made to ASIC of all administrative fees outstanding or otherwise payable in respect of the reinstatement of the company.
In view of the evidence that Landscapers Bag was likely to be in a position to obtain sufficient funds to pay the amount demanded by the Commissioner of Taxation or to otherwise defend the winding up proceedings against it, I considered that it was in the public interest that Greenlake be reinstated, so that the necessary steps could be taken to allow Landscapers Bag to do so.
I was therefore satisfied that, in all of the circumstances, there was a benefit in the reinstatement of Greenlake, such that it was just in all of the circumstances to order that be done.
For those reasons I made orders to the following effect:
[2]
Pursuant to section 601AH(2) of the Corporations Act 2001 (Cth) (Act), the Australian Securities and Investments Commission (ASIC) forthwith reinstate the registration of Greenlake Corporation Pty Ltd (ACN 082 108 183) (Company).
2. Pursuant to section 601AH(3)(d) of the Act, the plaintiff be appointed as the director of the Company.
3. Pursuant to section 601AH(3)(c) of the Act, in the event that ASIC does not reinstate the Company on or before 4 March 2025, any special resolution or other action of and relating to:
[3]
(a) the appointment of the plaintiff as the director of the Company; or
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> (b) the Company as shareholder for As Blue Pty Ltd (ACN 095 048 178) (As Blue) appointing the plaintiff as a director of As Blue,
[4]
Liberty be reserved to ASIC to apply to set aside these orders, including order 3, on or before 14 days after the making of these orders.
There be no order as to costs of the application.
[5]
I certify that the preceding paragraph(s) comprise the reasons for decision of the Supreme Court of Western Australia.
[6]
[1] Perrin v Australian Securities and Investments Commission Investments [2024] WASC 38 [21] - [24].