Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd

CATCHWORDS: APPEAL - practice and procedure - powers of the court - remit - CORPORATIONS - winding up - order for reinstatement of a company following voluntary winding up - consequent reinstatement of the company to the register by ASIC - effect of reinstatement - power of the court to order rectification of the register to complement setting aside the order for reinstatement - Uniform Civil Procedure Rules 2005 r 36.15 - Corporations Act 2001 (Cth) s 601AH, s 1322(4) - PROCEDURE - orders of the court - power of the court to set aside an order - requirement of irregularity - Uniform Civil Procedure Rules 2005 r 36.15 - irregularity in failing to disclose to the court - Corporations Act 2001 (Cth) s 601AH(2)(b) - irregularity in denying procedural fairness to affected party - effect of presence of an observing solicitor in court proceedings - WORDS & PHRASES - "rectify", "rectification"

Companies Act 1929 (UK) Companies Act 1936 (Cth) Companies Act 1961 (Qld) LEGISLATION CITED: Companies Code 1981 Corporations Act 2001 (Cth) Corporations Regulations 2001 (Cth) Uniform Civil Procedure Rules 2005 Uniform Companies Act 1961

Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 Australian Securities Commission v SIB Resources NL (1991) 30 FCR 221 BP Australia Ltd v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322 Cameron v Cole (1944) 68 CLR 571 Lavercombe v Auscott Ltd [2006] NSWSC 867; (2006) 202 FLR 390 Onesteel Reinforcing Pty Ltd v Westpoint Constructions Pty Ltd [2005] FCA 808; (2005) 23 ACLC 1,384 Parke Davis Pty Ltd v Sanofi (No 2) (1982) 43 ALR 487 CASES CITED: Re Calmex Ltd [1989] 1 All ER 485 Re Imperial Chemical Industries Ltd [1936] 2 All ER 463 Re National Bank of Wales [1897] 1 Ch 298 Re Peter Conyers Holdings Pty Ltd (in liq) (1996) 14 ACLC 1,835 Sanofi v Parke Davis Pty Ltd (1983) 152 CLR 1 Taylor v Taylor (1979) 143 CLR 1 Westbury Holdings Kiama Pty Ltd v ASIC [2007] NSWSC 115 Westbury Holdings Kiama Pty Ltd v ASIC [2007] NSWSC 466 Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590

Miltonbrook Pty Ltd (First Applicant) Embrook Holdings Pty Ltd (Second Applicant) PARTIES: Miltonbrook Land Pty Ltd (Third Applicant) Westbury Holdings Kiama Pty Ltd (First Respondent) Peter Fitzgerald (Second Respondent)

COUNSEL: A Street SC, J A Soars (Applicants) R G Forster SC, D L Warren, N Obrart (Respondents)

SOLICITORS: Russell McLelland Brown, Lawyers (Applicants) Heard McEwan, Lawyers (Respondents)

LOWER COURT JURISDICTION: Supreme Court

LOWER COURT FILE NUMBER(S): SC 06104/2006

LOWER COURT JUDICIAL OFFICER: Justice Barrett

LOWER COURT MEDIUM NEUTRAL CITATION: Westbury Holdings Kiama Pty Ltd v ASIC [2007] NSWSC 466

• 11 - IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40364/07

SPIGELMAN CJ TOBIAS JA CAMPBELL JA

Wednesday 2 April 2008 Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd

A company ("Churnwood") entered into deeds with the first and second applicants, giving the company options to purchase property. Churnwood, while in voluntary winding up, nominated the first respondent to exercise the options. Following voluntary winding up, ASIC deregistered the company. After the deregistration, the first respondent purported to exercise the options. The first respondent applied for an order under s 601AH(2) of the Corporations Act 2001 (Cth) ("the Act") to reinstate Churnwood. Justice Barrett made the order and, accordingly, ASIC reinstated Churnwood to the register.

The applicants applied to Justice Barrett to have the reinstatement order set aside and the re-registration removed, on the basis that the first respondent did not adequately disclose the nature of the dispute between the parties, and on the basis that the applicants had been denied a reasonable opportunity to be heard.

His Honour refused to exercise this power, holding that there would be no utility in setting aside the order made on the earlier occasion as the Court's order had been carried into effect. The applicants appeal from this decision.

Effect of the order and availability of rectification

(Per Spigelman CJ, Tobias and Campbell JJA agreeing)

1 Setting aside the order for reinstatement would not reverse ASIC's action of reinstating the company to the register, which was completed in compliance with the order. [20], [102], [103] Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590 applied.

2 "Rectify" is a word capable of a range of meanings. The appropriate scope of a statutory power of rectification such as s 1322(4)(b) of the Corporations Act 2001 (Cth) must be commensurate with the full range of circumstances that call for its exercise. [45], [47], [102], [103] Lavercombe v Auscott Ltd [2006] NSWSC 867; (2006) 202 FLR 390; Australian Securities Commission v SIB Resources NL (1991) 30 FCR 221; Re Peter Conyers Holdings Pty Ltd (in liq) (1996) 14 ACLC 1,835; Onesteel Reinforcing Pty Ltd v Westpoint Constructions Pty Ltd [2005] FCA 808; (2005) 23 ACLC 1,384; Re National Bank of Wales [1897] 1 Ch 298; Re Imperial Chemical Industries Ltd [1936] 2 All ER 463 considered.

3 Both the immediate textual context and the broader context of the sub-regime of registration and reinstatement suggest a broader rather than a narrower interpretation. The power to rectify must be given an ambulatory operation which has regard to the different purposes served by the range of registers to which the section applies. [54], [57], [102], [103]

4 The power to rectify a register of companies under s 1322(4)(b) of the Corporations Act 2001 (Cth) extends to removing a company from the register where the process by which the company was placed on the register was invalid. [60], [102], [103]

Failure to disclose to the court and procedural fairness

(Per Spigelman CJ, Tobias and Campbell JJA agreeing)

5 The source of the obligation on the moving party to disclose matters that may affect the formation of the judgment of the Court is found in part in the discretion conferred on the Court by s 610AH(2) and the requirement that the Court must be positively satisfied that reinstatement is "just". [74], [102], [103]

6 The facts not disclosed to the Court below raised issues which could have affected the decision to order reinstatement. The non-disclosure failed to alert the judge to the scope and nature of the dispute. [70] [72] [73] [75] [103]

7 When a statutory power like s 601AH(2) is conferred on a court, it is axiomatic that procedural fairness will be accorded to all who may be affected by the order. [85], [102], [103]

8 The applicants were not given a reasonable opportunity to be heard. The information available to the solicitor for the applicants who happened upon the proceedings below was not sufficient to discharge the obligation. [83]-[84], [102], [103]

9 The denial of procedural fairness is a fundamental irregularity which satisfies the need for "irregularity" or "sufficient cause" to set aside an order under r 36.15 of the Uniform Civil Procedure Rules 2005. [85]-[87], [102], [103] Cameron v Cole (1944) 68 CLR 571; Taylor v Taylor (1979) 143 CLR 1 referred to.

10 In view of the combined effect of the material non-disclosure and the denial of procedural fairness, this Court should exercise the powers under r 36.15 and s 1322(4)(b).

IN THE SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL CA 40364/07

SPIGELMAN CJ TOBIAS JA CAMPBELL JA

Wednesday 2 April 2008 Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd Judgment 1 SPIGELMAN CJ: Churnwood Holdings Pty Ltd ("Churnwood") was deregistered by the Australian Securities and Investments Commission ("ASIC") on 29 January 2005, following a voluntary liquidation. On 22 February 2007, Barrett J, on the application of the first respondent ("Westbury"), indicated that he would make an order under s 601AH(2) of the Corporations Act 2001 (Cth) ("the Act"), directing ASIC to reinstate the registration of Churnwood. The order was made on 5 March 2007. 2 The first and second applicants were party to deeds granting Churnwood or its nominee options to purchase property. While in winding up, but not deregistered, Churnwood nominated Westbury for this purpose. Westbury purported to exercise the options in October 2006 by a document executed by itself and Churnwood, by then deregistered. 3 His Honour was satisfied that Westbury was a person aggrieved by the deregistration and that it had an interest in the reinstatement of Churnwood by reason of a dispute that had arisen with respect to the exercise of the options. (See the judgment of 22 February 2007, Westbury Holdings Kiama Pty Ltd v ASIC [2007] NSWSC 115.) 4 ASIC submitted to the jurisdiction of the Court and did not appear before Barrett J or in this Court. 5 Section 601AH provides: "601AH(1) ASIC may reinstate the registration of a company if ASIC is satisfied that the company should not have been deregistered. (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 the Court makes an order under subsection (2), it may: (a) validate anything done between the deregistration of the company and its reinstatement; and (b) make any other order it considers appropriate. (4) ASIC must give notice of a reinstatement in the Gazette . If ASIC exercises its power under subsection (1) in response to an application by a person, ASIC must also give notice of the reinstatement to the applicant. (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." 6 In subsequent proceedings, the applicants (to whom it is convenient to refer as "Miltonbrook") sought an order that the order directing ASIC to reinstate Churnwood should be set aside and discharged. It did so on four bases:

(a) Material facts were not disclosed to the Court when the application was made;

(b) Westbury was not a person aggrieved by the deregistration of Churnwood;

(c) Miltonbrook, and the other applicants, as persons likely to be affected by the order, should have been given an opportunity to be heard;

(d) It was not "just" to reinstate Churnwood for the purpose of pursuing the proposed proceedings against Miltonbrook. 7 His Honour refused to make the order and dismissed the interlocutory process with costs. (See the judgment of 11 May 2007, Westbury Holdings Kiama Pty Ltd v ASIC [2007] NSWSC 466.) This is an appeal from that decision. 8 The application before his Honour was based on r 36.15 of the Uniform Civil Procedure Rules 2005 which empowers the Court to set aside an order of the Court "on sufficient cause being shown, if … the order was made, irregularly, illegally or against good faith". His Honour refused to exercise this power on the basis that there would be no utility in setting aside the orders made on the earlier occasion and embarking upon a rehearing of the original application to reinstate the registration of the corporation. The Court's order had been carried into effect. His Honour was not asked to exercise the inherent jurisdiction of the Court to set aside the order by reason of failure to accord procedural fairness. (See Cameron v Cole (1944) 68 CLR 571 at 589, 590-591.) In any event, the same issues would arise on this alternative basis for setting aside the original order. 9 His Honour rejected a submission on behalf of Miltonbrook that an order under r 36.15 setting aside the earlier order, would not be futile by reason of the power the Court has to order rectification of the register of companies pursuant to s 1322(4)(b) of the Act. 10 Because of the issue of interpretation that arises it is pertinent to set out s 1322 (4), (5) and (6): "1322(4) Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposed (a) an order declaring that any act, matter or thing purporting to have been done, or any proceeding purporting to have been instituted or taken, under this Act or in relation to a corporation is not invalid by reason of any contravention of a provision of this Act or a provision of the constitution of a corporation; (b) an order directing the rectification of any register kept by ASIC under this Act; (c) an order relieving a person in whole or in part from any civil liability in respect of a contravention or failure of a kind referred to in paragraph (a); (d) an order extending the period for doing any act, matter or thing or instituting or taking any proceeding under this Act or in relation to a corporation (including an order extending a period where the period concerned ended before the application for the order was made) or abridging the period for doing such an act, matter or thing or instituting or taking such a proceeding; and may make such consequential or ancillary orders as the Court thinks fit. (5) An order may be made under paragraph (4)(a) or (c) notwithstanding that the contravention or failure referred to in the paragraph concerned resulted in the commission of an offence. (6) The Court must not make an order under this section unless it is satisfied: (a) in the case of an order referred to in paragraph (4)(a): (i) that the act, matter or thing, or the proceeding, referred to in that paragraph is essentially of a procedural nature; (ii) that the person or persons concerned in or party to the contravention or failure acted honestly; or (iii) that it is just and equitable that the order be made; and (b) in the case of an order referred to in paragraph (4)(c) - that the person subject to the civil liability concerned acted honestly; and (c) in every case - that no substantial injustice has been or is likely to be caused to any person." 11 In addition to the issue of lack of utility, Miltonbrook appeals from his Honour's conclusion that it was not denied procedural fairness in the determination of the original application. This conclusion was based to a substantial extent on the fact that, accidentally and without notice, a solicitor who appeared in these matters for the applicants had become aware of the proceedings and attended Court on 5 March 2007 when the reinstatement order was made by Justice Barrett. The applicants seek to reagitate the issue of procedural fairness on appeal or at any remitter. Unless this Court deals with this issue then, in the light of his Honour's reasons, the only issue that would arise as an "irregularity" under r 36.15, or in the exercise of the discretion under s 1322(4), is the effect of the inadequate disclosure. 12 The respondents support his Honour's analysis. Furthermore, by Notice of Contention, the respondents seek to uphold his Honour's conclusion. They assert:

(b) The applicants did not establish sufficient cause to have the order set aside;

(c) In the exercise of discretion, the order for reinstatement should not be set aside. 13 I note that neither before Barrett J nor before this Court did the applicants rely on r 36.16(2)(c) which empowers the Court to set aside an order after entry which was made in the absence of a party. The right to be heard was raised only in the context of r 36.15. 14 It is convenient to deal with the issues in this appeal in the following order. First, did his Honour err in concluding that there would be no utility in setting the orders aside on the basis of his Honour's interpretation of s 601AH(2) of the Act and s 1322(4)(b) of the Act? Secondly, did his Honour err in his analysis of the scope of inadequate disclosure? Thirdly, did his Honour err in concluding that there was no irregularity, for the purposes of r 36.15, by reason of a denial of procedural fairness? Specifically, did his Honour take into account in determining this matter adversely to the applicants an irrelevant consideration, being the fact that the solicitor was present and observed the original application. Fourthly, should this Court decide the issue or remit?

The Effect of the Order 15 His Honour's analysis of the question of lack of utility focused on the nature of the order which he had made on the first occasion. An order under s 601AH(2) is an order directed to ASIC requiring it to reinstate the company which, in the event, it did. 16 In this regard his Honour noted: "[32] … the order of 5 March 2007 would, when set aside, cease to be the source of any compulsion. It would no longer be possible to regard that order as conveying any direction. But, of course, there no longer remains anything to be done to obey or give effect to the order. … A combination of the court's direction and the functions and duties of ASIC prescribed by the legislation then required that ASIC reinstate the registration of Churnwood. ASIC did so. Churnwood thereupon came back into existence in the way described in s601AH(5). That existence continues today. It is sourced in the statute and the effect the statute produced in the light of the act of ASIC. [33] Termination of the direction of the court that provided the statutory warrant for ASIC's act would obliterate neither that act nor its statutory consequences. …" 17 His Honour relied upon the decision of the High Court in Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590 ("Wilde") and found it to be applicable to the statutory scheme under consideration. 18 His Honour went on to refer to ASIC's action in reinstating the registration of Churnwood as being "validly and regularly completed in compliance with the requirements that came to bear upon ASIC by the combined force of a court's order of 5 March 2007 and s 601AH (2) of the Corporations Act". 19 His Honour further held: "[37] … After ASIC had acted, the court's order of 5 March 2007 had no further work to do. The renewal of Churnwood's existence had been completed and is ongoing. That existence in no way depends on the continued force of the court's order. It derives wholly and directly from statute and cannot again be brought to an end except by some new statutory intervention … [38] Any order the court now made setting aside the order of 5 March 2007 would not be or give rise to any new statutory intervention." 20 I agree with Barrett J that the analysis in Wilde at 603-604 is applicable to the statutory scheme of s 601AH and, accordingly, with his Honour's conclusion in this respect. It was not suggested in the present case that the original order was made without jurisdiction and accordingly that the way that Wilde has been distinguished was applicable. (See Parke Davis Pty Ltd v Sanofi (No 2) (1982) 43 ALR 487 at 500-501. Reversed on other grounds Sanofi v Parke Davis Pty Ltd (1983) 152 CLR 1.) See also the exercise of a supervisory jurisdiction where a register contains a "nullity". (Re Calmex Ltd [1989] 1 All ER 485.) 21 As Barrett J noted, the supervisory jurisdiction exercised by Lord Hoffmann in Re Calmex Ltd was not invoked in the present case. It was not suggested that the ministerial act of ASIC in reinstating a company to the register pursuant to a court order could be quashed by reason of the denial of procedural fairness in the proceedings in the Court. The applicants did not seek to distinguish Wilde in this respect. 22 The applicants relied on the joint judgment in Wilde where it was said at 603, with respect to an order setting aside an order extending time to register a charge under the Companies Act 1961 (Qld): "It is true that from the moment it is set aside the order can no longer provide the lawful justification for further action, but whether what has been done can be undone will depend upon the availability of appropriate remedies, to bring about appropriate relief." 23 In the present case, the only such remedy suggested to be open is an order under s1322(4)(b) of the Act.

The Rectification Issue 24 Barrett J referred to his earlier judgment in Lavercombe v Auscott Ltd [2006] NSWSC 867; (2006) 202 FLR 390 ("Lavercombe"), esp at 399-400. His Honour characterised the scope of the power under s 1322(4)(b) as one which "is exercisable where the content of the register does not conform with the law and is for that reason in need of correction. If the content already conforms with the law, there is nothing to correct" [40]. 25 In support of his approach to the section, Barrett J relied on the judgment of Ryan J in Australian Securities Commission v SIB Resources NL (1991) 30 FCR 221. His Honour did not approve of the reasoning of Senior Master Mahony in Re Peter Conyers Holdings Pty Ltd (in liq) (1996) 14 ACLC 1,835. In Lavercombe his Honour had refused to follow the similar conclusion of Finkelstein J in Onesteel Reinforcing Pty Ltd v Westpoint Constructions Pty Ltd [2005] FCA 808; (2005) 23 ACLC 1,384. (See John Tarrant "Rectification of ASIC registers and databases" [2007] 25 Company and Securities Law Journal 544.) 26 His Honour concluded: "[41] In the case now before me, an entry was regularly and validly made in the register of companies by ASIC in consequence of the making of the order of 5 March 2007. In line with the High Court's decision in Wilde v Australian Trade Equipment Co Pty Ltd (above), any order setting aside that order will not produce any statutory warrant for removal or alternation of that entry. The setting aside of the order would therefore not create any occasion for rectification of the register." 27 His Honour further said: "[44] … Section 1322(4)(b) … does not allow the court to direct anything beyond the steps necessary to ensure that a register is kept in conformity with the statutory provisions applicable to it. Once it is recognised that the reinstatement of the registration of Churnwood effected by ASIC on 14 March 2007 was effected in accordance with the Corporations Act , there is nothing in need of rectification or capable of being rectified." 28 His Honour's analysis of s 1322(4)(b) quoted his own conclusions in Lavercombe, where his Honour considered the legal issue in detail. In that case his Honour had identified the range of registers "kept by ASIC under this Act" which extend to registers kept under the Corporations Regulations 2001 (Cth) (see at [24]-[25]). Although his Honour held that there was no relevant register with respect to the matter there under consideration, he went on to consider the scope of the power to rectify. He applied those obiter remarks in this case. 29 In Lavercombe, his Honour referred to the body of case law on the power to rectify the register of members that had long existed in corporations legislation and said: "[31] The concept of 'rectification', as applied to the register of members, has been the subject of extensive judicial consideration. Where rectification took the form of removing something contained in the register, it was a reflection of a decision by the court that the matter in question should never have been entered or, at least, that it should not have remained beyond some past time. The rectification process has long been regarded as one by which the court causes the register to omit things which the law does not permit to be there and to include things that the law requires to be included. The first part of the concept is explained in the following passage in the judgment of Lindley LJ in Re National Bank of Wales [1897] 1 Ch 298 concerning s 35 of the Act of 1862: 'That section only comes into operation when the company improperly puts on the register a name which ought not to be on it, or improperly refuses to put on the register a name which ought to be on it.' [32] The second part of the concept was referred to in Re Imperial Chemical Industries Ltd [1936] 2 All ER 463 where Clauson J said (at 469): 'I understand that the section means that if without sufficient cause a name stands on the register, the court has jurisdiction under this section to take it off.' [33] The relevant notions of sufficient cause and propriety look to legal rights and legal obligations. A register of members is to be kept in accordance with certain statutory provisions and legal rules. The court's power to rectify or correct is exercisable to ensure that effect is given to those provisions and rules." 30 His Honour went on to consider some English cases with respect to records kept by a regulatory authority and added: "[36] These cases emphasise that publicly available registers and records of the kind typically kept by a registrar or similar official under companies legislation are creations of statute and that the content of those registers and records is entirely a statutory matter. Provisions with respect to the rectification or correction of registers and records exist to ensure that they are kept as the statute requires them to be kept." 31 His Honour then considered a submission that the concept of rectification in s 1322(4)(b) should extend to a form of "reformation in a wider sense", based on the short reasons to that effect by Finkelstein J in Onesteel v Westpoint, and characterised the submission in the following manner: "[37] … According to that approach, the court may, in exercise of a wider reformatory jurisdiction, direct expungement of content that results from due and faithful adherence to the statutory scheme. Such expungement would, it seems, be directed according to criteria found outside that scheme." 32 His Honour then turned to consider, and to reject, the applicability of this wider approach in the context of a winding up application and said: "[38] … it would be necessary, according to the wider reformatory approach, to identify the non-statutory criteria distinguishing cases meriting expungement from those not meriting expungement. The court would, it seems, employ some general notion of fairness in drawing the distinction …" 33 His Honour went on to identify the difficulties that could arise in this respect in the context of winding up applications. However, such difficulties did not in fact arise on the basis of his Honour's previous reasoning, which appears correct to me, that there was no register of any character involved with respect to winding-up applications. His Honour then concluded, a passage which he repeated in the judgment presently under appeal: "[39] Section 1322(4)(b) does not create any general reformatory jurisdiction. It allows the court to make orders ensuring that the content of registers kept by ASIC under the Corporations Act accords with the statutory requirements with respect to such content. Every decision as to whether such an order should be made will be informed by the statutory requirements regarding register content. If the register does not contain something that the legislation requires it to contain, the jurisdiction to order rectification is enlivened. If the register contains something that the legislation says it must not contain, the jurisdiction to order rectification is also enlivened (also, perhaps, where something not required to be included is included). But if a particular thing is in the register and its presence there represents precise compliance with a requirement imposed by the statute, the jurisdiction to order rectification is not enlivened. Nor is the jurisdiction enlivened if there is absent from the register something that the legislation does not require to be there." 34 Insofar as his Honour's approach was influenced by the case law on rectification of a register of members, it must be remembered that that statutory power was usually confined to be exercised only in a specific range of circumstances. Indeed that was apparent in Wilde where a power to rectify "an omission or mis-statement of any particular" was held not to empower the court to remove a registration once effected. (at 603). In contrast, s 1322(4)(b) is not confined to "an omission or mis-statement". 35 In the 1981 Companies Code, to which I refer because that was the occasion on which the general power to rectify any register kept by the regulatory authority was first introduced into the Australian legislative scheme, the power to rectify the register of members was found in s 259. This section established clear pre-conditions for an application to rectify as follows: "259(1) If - (a) an entry is omitted from the register; (b) an entry is made in the register without sufficient cause; (c) an entry wrongly exists in the register; (d) there is an error or defect in an entry in the register; or (e) default is made or unnecessary delay takes place in entering in the register the fact of any person having ceased to be a member. …" 36 As can readily be seen these pre-conditions are more specific than the power found in s 539(4)(b) of the Companies Code of 1981, which is in the same general terms as the provision presently under consideration. 37 The statutory provision considered in Re National Bank of Wales [1897] 1 Ch 298, on which Barrett J relied in Lavercombe, was similarly engaged in specific circumstances. Section 35 of the Act of 1862 had the same structure as subsequent such provisions down to and including s 259 of the Companies Code. Relevantly it provided: "If the name of any person is, without sufficient cause, entered in or omitted from the register of members of any company or if default is made or unnecessary delay takes place in entering on the register the fact of any person having ceased to be a member … the court may … make an order for rectification of the register." 38 This is the context in which the observations of Lindley LJ in Re National Bank of Wales must be understood. His Lordship said at 308: "[Section 35] only comes into operation when the company improperly puts on the register a name which ought not to be on it, or improperly refuses to put on the register a name which ought be on it." 39 The words "ought" and "ought not be on" the register are capable of a broad interpretation. His Lordship does not confine their scope other than to indicate that the section did not extend to the facts of that case, when a liquidator had lawfully registered a share transfer pursuant to an express power to do so. The formulation of Lindley LJ does not necessarily invoke the interpretation adopted by Barrett J at [39] of Lavercombe, to repeat: whether the register does or does not "contain … something that the legislation requires it to contain … or says it must not contain". 40 Barrett J also referred to the judgment of Clauson J in Re Imperial Chemical Industries Ltd [1936] 2 All ER 463 in which the Court made an order rectifying the register of members under s 100 of the Companies Act 1929 (UK). In that case a shareholder had been induced to transfer shares in a public company on a temporary basis, for purposes which were probably illegal, an issue which the Court did not need to precisely resolve as the original shareholder was not involved. 41 Section 100 of the 1929 Act was, even by then, in longstanding form applying when "any person is, without sufficient cause, entered in or omitted from the register of members". It was almost precisely reproduced as s 83(1) of the Companies Act 1936 (Cth) and s 103(1) of the Uniform Companies Act 1961. 42 Clauson J applied the section, saying at 469: "It was rather suggested in argument … that, if I am once satisfied that a name was properly entered on to the register, I have no jurisdiction to remove that name, that I have only jurisdiction to remove it if it was improperly in the first instance, put on the register. I do not take that view. I understand that the section means that if without sufficient cause a name stands on the register, the court has jurisdiction under this section to take it off." 43 In my opinion, the facts of the Re Imperial Chemical Industries case are more consistent with a broad rather than a narrow approach to the power. The focus of the reasoning is on the phrase "without sufficient cause" rather than on the word "rectify". Nevertheless, rectification was ordered where, as a matter of proprietary right, the true legal and beneficial owner of the shares had been removed from the register. 44 As Barrett J said at [33], to repeat, "[t]he relevant notions of sufficient cause and propriety look to legal rights and obligations". However, the scope of such "rights and obligations" was not confined in Re Imperial Chemicals Industries to incidents of the registration process. It extended to underlying or originating rights and obligations. This goes beyond his Honour's conclusion at [36] to repeat: that provisions for rectification "exist to ensure that" corporations law registers "are kept as the statute requires them to be kept". 45 The line of authority on statutory provisions for rectification of a register of members reflects the general proposition that the scope of a statutory power of this character must be commensurate with the circumstances which call its exercise into existence. This, in turn, is a specific application of the overriding principle of statutory interpretation that words must be construed in their context. 46 Where the trigger for the power comprises the identification of a specific set of circumstances, which must exist before the power can be exercised, the power may well be construed to be similarly confined. Where there is no such trigger a broader interpretation may be appropriate. 47 "Rectify" is a protean word with a range of meanings: to correct, to remedy, to make right, to abolish. It should be given a scope that encompasses a response to the full range of circumstances that trigger the exercise of the power to rectify. Whether it is to be given a narrow or a wide scope requires attention to the purpose and subject matter of the legislative scheme. 48 In the present case, the word rectify must be understood in its textual context, particularly s 1322, and the broader context of the legislative scheme, including the Act and Corporations Regulations 2001. The fact, if it be such, that the word "rectify" has been given a particular meaning in case law on rectifying the register of members (the word "rectify" has been replaced by "correct" in the most recent version in s 174 of the Act) is of limited assistance. 49 Section 1322(4) is made subject to the following provisions of the Act, including s 1322(6)(c), which provides that: "[t]he court must not make an order under [s 1322(4)(b)] unless it is satisfied … that no substantial injustice has been or is likely to be caused to any person". I find this provision to be of some significance for purposes of determining the scope of the power under consideration. This requirement of positive satisfaction indicates that the Court should not make a rectification order, subject to considering all the circumstances, where fundamental purposes served by the register would be compromised. Accordingly, a broader interpretation would not have any such consequence. 50 The immediate textual context is subs (4). Paragraph (a) authorises the Court to declare anything done in any proceeding, broadly defined in s 1322(1)(a) to extend beyond legal proceedings, not to be invalid by reason of any contravention of either the Act or of the constitution of a corporation. To similar effect par (c) permits the Court to relieve a person from any civil liability in respect of a contravention of the Act or of the constitution of a corporation. 51 Of particular significance for the interpretation of par (b) is the fact that in par (c) the nature of the contravention identified is that referred to in par (a). Accordingly, immediately before and immediately after the particular paragraph that falls to be interpreted in the present proceedings there are interrelated provisions which permit the Court to remedy error in certain specific circumstances. It is at least unlikely that the provision which comes in between two such provisions was intended to have a similar, albeit implicit, restriction. 52 It has not been, and could not be in my opinion, suggested that par (b) is in some sense consequential upon an order under par (a). The express reference to par (a) found in par (c) and the absence of any such reference in par (b) would suggest otherwise. Indeed, the final words of subs (4) empower the Court to make orders consequential upon an order under any of the paragraphs. 53 The limitation of the powers in (a) and (c) to circumstances in which there has been a contravention of the Act or of the corporate constitution, is a textual indication that the power in (b) is not similarly confined. The power is broader than that suggested by Barrett J in Lavercombe at [36], ie to ensure that "registers … are kept as the statute requires them to be kept". 54 The immediate textual context is, in my opinion, more consistent with a broader than a narrower interpretation of the word 'rectify'. Nevertheless, it is necessary to consider the relevant legislative sub-regime for registration and reinstatement. 55 I repeat my observations in BP Australia Ltd v Brown [2003] NSWCA 216; (2003) 58 NSWLR 322: "[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 …" 56 The power under consideration extends in its terms to the full range of registers kept by the regulator. It may well be that the register of charges kept under s 274 of the Act is not included. This is because of a separate power found in that section to rectify on the basis of a trigger that "a particular … has been omitted or misstated in the register". This may involve the line of authority including Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia (1932) 47 CLR 1 at 7 and R v Wallis (1949) 78 CLR 529 at 550; cf BP Australia Ltd v Brown supra at [40]-[50].) 57 Subject to such considerations, it is pertinent to note that the power extends to a range of different registers which perform various functions. Some are primarily designed to give notice to persons who deal with corporations or participants in corporate life or aspects of corporation and securities conduct, sometimes reinforced by certification provisions. Others primarily serve the function of a record. The power to rectify must be given an ambulatory operation which has regard to the different purposes served by different registers. 58 It is unnecessary to identify the scope of the power to rectify in a single formulation. Like Barrett J I am not attracted to terminology such as a "general reformatory" jurisdiction. The relevant scheme of the Act is: · ASIC may register a company and issue a certificate that states the company is registered (s 118(1)); · ASIC must keep a record of the registration (s 118(2)); · A company comes into existence on the day it is registered (s 119); · Reference to a company in the Act means a registered company (s 9); · The register provides detailed information about the company (s 1364(2)(c) and Corporations Regulations 2001 9.1.02(a)); · On deregistration a company ceases to exist and its property is vested in ASIC (s 601AD). 59 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 Act. A further purpose is to provide information, specified in the regulations, to persons who deal with a company. 60 In my opinion, the power to rectify the register of companies under s 1322(4)(b) extends to removing a company from the register where the process by which the company was placed on the register was invalid. Where, as is here suggested, that process involved a denial of procedural fairness there would be a relevant invalidity. I do not find it necessary, for reasons discussed below, to treat the alleged non-disclosure as in some way constituting a separate basis to that of procedural fairness.

Failure to Disclose 61 As I have set out above his Honour indicated a view with respect to the submission that material facts were not disclosed to the Court when the original application was made for reinstatement on 12 February 2007, culminating in the judgment of 22 February 2007 subsequently carried into effect by order of 5 March 2007. Although his Honour did not make a final finding in this respect, he indicated quite clearly that there were good grounds for upholding that basis of the Miltonbrook's case. 62 In the judgment of 22 February 2007 his Honour referred to the evidence in the following way: "[3] The evidence shows that, on 11 January 1996, Churnwood became a party to two deeds. The other parties were, in each case, Miltonbrook Pty Limited ('Miltonbrook') and Embrook Holdings Pty Limited ('Embrook'). By each of these deeds, each of Miltonbrook and Embrook granted to 'Churnwood or its nominee' an option to purchase certain property. On 30 July 2004 (that is, after the commencement of the winding up but before deregistration), a director of Churnwood purported to cause Churnwood to nominate Westbury to exercise each option. Westbury later purported to exercise the options by means which included not only documents ostensibly executed by Westbury but also documents purportedly executed on 13 October 2006 by the then non-existent Churnwood. [4] The affidavit of Mr Gallagher, a director of Westbury, supporting Westbury's application says that, in these circumstances: 'A dispute has arisen between Miltonbrook Pty Limited, Embrook Holdings Pty Limited and Westbury Holdings Kiama Pty Limited in respect of the proper or due exercise of the options by Westbury Holdings.'" 63 In the judgment under appeal in these proceedings, his Honour added: "[14] Evidence now before the court is more comprehensive. It is clear that the 'dispute' mentioned by Mr Gallagher was tangible, specific and well-developed. Indeed, solicitors acting for Westbury and ostensibly for Churnwood had, on 6 December 2006, forwarded to solicitors for Miltonbrook and Embrook a draft statement of claim in which Westbury and Churnwood were named as plaintiffs. The named defendants were Miltonbrook and Embrook. The draft contained claims for declaratory relief to the effect that each of the deeds of 11 January 1996 was 'a valid and subsisting deed of option', that Churnwood had 'validly nominated' Westbury as the company having the right to exercise each option and that Westbury had validly exercised each option. There were also claims for consequential relief by way of specific performance. The draft statement of claim contained the following passage: 'Terry Gallagher was the sole shareholder and director of Churnwood Holdings Pty Limited, which company was also used for property development until that company was wound up voluntarily by order of the Supreme Court. On [INSERT DATE] the company was reinstated to the Register by order of the Supreme Court whereby Terry Gallagher continued as the sole director and shareholder of the company.' [15] A statement of claim as foreshadowed by this draft was filed on 15 March 2007 - that is, the day after ASIC reinstated the registration of Churnwood. At issue in the proceedings thus commenced will be the question whether a condition said to be made essential to the exercises of each option (being a condition as to the state of indebtedness between relevant companies) was not satisfied. [16] It is now clear that the passage in Mr Gallagher's affidavit quoted in the reasons of 22 February 2007 reasons (see paragraph [13] above) gave, in reality, an incomplete description of the position. The court was not told that proceedings had been threatened and that a draft statement of claim including the non-existent Churnwood as a plaintiff had been submitted - being a draft statement of claim in which the intention to seek an order for the reinstatement of Churnwood was expressly stated by means of the 'INSERT DATE' notation. That intention was expressed in what had become a context of specifically threatened litigation, with a draft pleading having been prepared and exposed to the intended defendants. This, to my mind, gave the Applicants an interest in the matter much more concrete and immediate than was suggested by the reference merely to 'disputes' in Mr Gallagher's account." 64 The issue that has arisen in this respect, and which remains in contention between the parties, is whether or not, contrary to the position clearly adopted for some years, there was any amount owing on the balance of account between the applicants and Churnwood. This was of importance because, in accordance with the deeds creating the option to purchase the properties, those options were exercisable, and exercisable only, if there was any amount owing to Churnwood. If payment had been made in full the options would have lapsed. This was a matter of significance for identifying the nature of the proceedings to which the Court would subject the applicants by the order for reinstatement. 65 The affidavit of Mr Gallagher, to which Barrett J referred, had made the following assertion: "6 The rights of Churnwood Holdings Pty Limited under the Deeds of Option were intended to be exercised by Westbury Holdings Pty Limited being the entity nominated by Churnwood Holdings. The Deeds of Option supported certain financial arrangements between the parties to the Deeds which arrangements were of significant benefit to Churnwood Holdings and as at the date hereof, moneys are still payable by Miltonbrook Pty Limited and Embrook Holdings Pty Limited entitling Churnwood Holdings to exercise the options to acquire shares in those entities." 66 Having expressed the position in this manner Mr Gallagher then said: "11 A dispute has arisen between Miltonbrook Pty Limited, Embrook Holdings Pty Limited and Westbury Holdings Kiama Pty Limited in respect of the proper or due exercise of the options by Westbury Holdings." [Emphasis added] 67 The impression that was given by this evidence was that the extent of the dispute was related solely to a defect in execution, by reason of the deregistration of Churnwood. The bald assertion that "monies are still payable by Miltonbrook Pty Ltd and Embrook Holdings Pty Ltd" was made without any acknowledgement that there was a substantial dispute with respect to that very matter. 68 The affidavit is dated 30 November 2006 and was relied upon in proceedings that occurred on 12 February 2007. During this period there had been correspondence between solicitors for the applicants and the respondents about the question as to whether or not any amount was owing on the debt. 69 It appears that the parties proceeded on the basis that the amount had been fully repaid for some two and a half years: · By A Declaration of Solvency under s 494(1) and (2) of the Corporations Act, Churnwood had identified its assets, which did not include any reference to the options to purchase. (AB 58) · On 1 September 2004, pursuant to s 269(1) of the Corporations Act, there was filed a notice of discharge or release of property from the charge being the very deed granting the options to purchase in issue in these proceedings. That notice stated that as and from 1 September 2004 the amount owing had been "paid or satisfied in full". (AB 45) · On 29 October 2004 there was filed a Notification of final meeting convened by the liquidator pursuant to s 509(3) and (4) of the Corporations Law which noted that the liquidator had presented final accounts to the general meeting. Those accounts indicated that "all of the assets of the company have been realised and distributed to the shareholders". (AB 61) 70 The respondents submit that this was not a material non-disclosure. However, in my opinion, it does raise issues which could have affected the decision to order reinstatement. A mere question of authority to execute a document is a simple issue. Subjecting persons to a contested factual dispute about the state of accounts raises different considerations, including the effects of delay. 71 The minutes of the general meeting of Churnwood Holdings held on 30 June 2004 reveal that a resolution to the following effect was carried: "That the books and records of the company may be destroyed following a deregistration of the company, subject to the consent of the Australian Securities and Investments Commission being obtained." 72 Mr A Street SC, who appeared for the applicants, submitted that this resolution was contrary to s 601AD(f) of the Act. On that basis it could probably be inferred that the consent of ASIC referred to in the resolution would not have been forthcoming. Nevertheless, as the matter was left on the evidence before Justice Barrett and on the evidence in this Court, it is not clear what the state of the records is. 73 The Court was informed from the bar table by Mr R Forster SC, who appeared for the respondents, that that resolution had not been carried into effect. Nevertheless, this is a matter that does require investigation as the state of the records would be of critical significance for the determination of the dispute as to the amount owing, if any. The existence of this resolution does suggest the need for further inquiry as to whether the applicants' ability to defend the proceedings has been compromised to a degree which can affect the judgment for which s 601AJ(2)(b) calls. 74 The source of the obligation to disclose is found, in part, in the discretion conferred upon the Court by s 601AH(2) and, perhaps more significantly, in the requirement the Court must be positively satisfied that reinstatement is "just" within s 601AH(2)(b). A moving party that must establish such a requirement must, in an ex parte application, disclose matters known to it that may affect the formation of that judgment by the court. There may be matters which are or ought to be known to ASIC, which is on the record. With respect to the matters in issue here, the application was ex parte. 75 Because of the reasoning process of Barrett J, the submissions in this Court have treated the non-disclosure and procedural fairness issues separately. However, they are so closely interconnected as not to be severable. In my opinion, they must be assessed together when the Court comes to exercise the discretion under r 36.15. Perhaps the most important aspect of the non-disclosure was that it failed to alert the judge to the scope and nature of the dispute and, therefore, to permit the Court in what was, in substance, an ex parte application, to require notice to be given to affected parties.

Procedural Fairness 76 It appears from his Honour's reasons that his Honour was inclined to uphold ground (a) - that material facts were not disclosed to the Court when the original application was made. However, he would not uphold ground (c) - that the applicants were denied natural justice by not having an opportunity to participate in those proceedings. 77 In this regard his Honour held: "[22] In relation to ground (c) relied on by the Applicants, I am of the view that, in accordance with approaches discussed in these cases, the Applicants (or, at least, the two of them named as defendants in the draft statement of claim) were entitled to an opportunity to be heard on the plaintiffs' application for an order under s601AH(2) in respect of Churnwood. They were persons with a clear and direct interest in the matter and therefore beneficiaries, in the particular context, of the audi alteram partem rule. Denial of an opportunity to be heard would be irregular in the sense relevant to the operation of rule 36.15(1): see also BP Australia Ltd v Brown (2003) 58 NSWLR 322. [23] There is need to consider in relation to ground (c), however, an aspect of the evidence not so far mentioned. The Applicants, through their solicitor, knew that the plaintiffs' application for an order under s601AH(2) was to be before the court on 5 March 2007. The solicitor, while perusing the AUSTLII website on or about 26 February 2006 for an unrelated purpose, saw and read the reasons of 22 February 2007. The solicitor made some inquiries and became aware that the matter was to come before the court again on 5 March 2007. He attended on that day and was actually in court when the hearing continued to its conclusion and the orders sought by the plaintiffs were pronounced. Yet no oral application was made on that occasion for leave for the Applicants to intervene or to be heard without becoming parties, with a view to bringing under the court's notice the matters on which the Applicants based their present application. Nor was there any foreshadowing of a desire to be heard in the proceedings and, for that reason, to have the hearing further adjourned. [24] This matter works against the grant of the relief the Applicants now seek. The reality is that the Applicants had an opportunity to be heard. It is true that the opportunity had arisen through a combination of chance and self-help and was not actively provided by the plaintiffs. But it is not really possible to regard a person as having no opportunity to be heard when that person's solicitor, with knowledge in advance of what is to transpire, is in court throughout the hearing and has full opportunity to seek to be heard on his clients' behalf." 78 As appears from this extract, his Honour gave determinative weight to the fact that the solicitor for the respondents attended court on 5 March 2007 at the time that the orders for reinstatement were made. The reason why the solicitor attended court is that by happenstance, in the course of research on another matter, he had become aware of the publication on the internet of the judgment of his Honour of 22 February 2007 (Westbury Holdings Kiama Pty Ltd v ASIC [2007] NSWSC 115). He said that he then became aware, for the first time of the application for reinstatement of Churnwood. After inquiries the solicitor learned of the further hearing on 5 March. 79 When he read the first judgment of Barrett J, the solicitor would have become aware of the fact that his Honour had already come to the view, for reasons set out in the judgment, that it was "just", within the meaning of s 601AH(2)(b), that the company be reinstated. He would also have become aware of the fact that the only reason why his Honour did not make the orders on that day was because, as his Honour said in the judgment, there would be no person involved in the proceedings who would be a competent applicant for an order terminating the winding-up. Furthermore, the previous liquidator had not at that stage consented to act again as liquidator. It was, therefore, necessary to appoint a person to that position and, unless that were done, his Honour said it "will leave governance of the company in doubt". His Honour added: "[14] I will therefore not make any order at this point. Rather, I propose to stand over the present application … I shall then hear from counsel how the plaintiff proposes to deal with the matters I have identified." 80 When the solicitor for Miltonbrook attended court on 5 March 2007, he said he heard counsel for Westbury tender an affidavit by the former liquidator consenting to reappointment. Otherwise he heard only a "short discussion". It was not suggested to him that anything else of substance occurred before the orders were formally made. Nothing in the materials available to him at that time had drawn to his attention the inadequate disclosure of facts, upon which basis his Honour had expressed the conclusions in the first judgment. 81 The Court has before it the transcript of the hearing on 5 March 2007. It consists only of orders made. There is no reference to the submissions or any discussion which must have occurred at that time and which the solicitor for the respondents can be taken to have heard. The solicitor's version of the events is uncontested. 82 His Honour was of the view that the solicitor for the respondents could have intervened during the course of the hearing on 5 March 2007 to indicate the interests of his clients and their wish to participate in the proceedings prior to the actual making of an order for reinstatement. In this Court, the respondents submit that his Honour was correct and that there was no denial of procedural fairness. The applicants submit that the circumstances did not discharge their entitlement to procedural fairness. 83 The respondents took no steps to inform the applicants of the process of reinstatement. The fact that such would be sought was referred to in the draft Statement of Claim that was served. However, there was no mention of the process in correspondence between the solicitors about the dispute. 84 In my opinion, Miltonbrook was not given a reasonable opportunity to be heard. The information available to the solicitor was not, in my opinion, of a character which would enable him to question the basis upon which his Honour had formed the views expressed in his first judgment. Furthermore, that judgment, and the course of conduct on 5 March 2007 was such as to suggest that the matter had been determined on the previous occasion and all that remained was the making of orders. In my opinion, the presence of the solicitor on 5 March 2007 was not such as to give Miltonbrook a reasonable opportunity to be heard. 85 It is axiomatic that when a statutory power like s 601AH(2) is conferred on a court, the legislature intends that procedural fairness will be accorded to all who may be affected by the order, unless there is a clear statement to the contrary. The denial of procedural fairness by a court is a "fundamental irregularity" which would entitle a person aggrieved to set aside an order as a matter of unconditional right. (See Cameron v Cole supra at 591; Taylor v Taylor (1979) 143 CLR 1 at 16.) The exercise of the discretion under r 36.15 must be similarly clear cut. 86 The respondents' submission that the circumstances of this case do not constitute an "irregularity" or "sufficient cause" within r 36.15 should be rejected. 87 In my opinion, the fundamental nature of the irregularity flows through to the exercise of the discretions under s 1322(4)(b) and under r 36.15. This Court must not be, nor appear to be, an instrument for procedural unfairness.

Decide or Remit 88 If the appeal is allowed Miltonbrook seeks, first, an order setting aside the original order made on 5 March 2007 and, secondly, an order rectifying the register kept by ASIC under s 118 of the Act, by vacating the reinstatement of the registration of Churnwood. Alternatively, Miltonbrook seeks an order remitting the matter for determination. 89 At the commencement of the submissions for the respondents, the Court indicated that it had formed a preliminary view that, if it were minded to allow the appeal it would remit the Miltonbrook application for further consideration. Mr R Forster SC, who appeared for the respondents, submitted that this Court should determine the matter. He made detailed oral submissions on his clients' Notice of Contention and the exercise of the discretion under s 1322(4)(b) and r 36.15. Notwithstanding the preliminary view expressed, it is open to the court to decide the matter. 90 In support of the submissions that this Court can, and should, itself determine the matter, the applicants argue that, but for his Honour's conclusion that any order he may make would be futile, his Honour did in fact determine that he would grant the relief originally sought and exercise any discretion in favour of the now applicants. It is convenient to deal with this matter in the first instance. 91 Barrett J indicated that he was inclined to accept at least one ground upon which the applicants relied, namely that the affidavit evidence before his Honour on the original application failed to disclose material facts. His Honour said in this respect: "[25] … I am inclined to think that there were deficiencies in the disclosure made by the plaintiffs upon their ex parte application and that, for that reason, there could be a need for the orders made on 5 March 2007 to be set aside …" 92 His Honour's reference to being "inclined to think", and to the fact that there "could be a need" to set aside the orders, is not consistent with a final finding or the exercise of a discretion. His Honour went on in the immediately succeeding paragraph, to commence his analysis of whether there would be any utility in setting aside the orders with the words: "[26] But even if there were grounds for the court to set aside the orders …" 93 This confirms that his Honour did not come to a final conclusion in this regard. 94 In my opinion, the Court should reject the applicants' submissions that his Honour had determined the issues of "sufficient cause" and the exercise of discretion and that, accordingly, this Court should make final orders. 95 On the materials now before the Court, there does appear to be an issue as to whether the options had been discharged. It may prove that an application for reinstatement is not the appropriate proceedings to determine that issue. However, the dispute would have been pertinent to the formulation of the judgment under s 601AH(2)(b) and the exercise of the discretion under the chapeau of that subsection. 96 Furthermore, the scope and nature of the proceedings to which the applicants were made subject by the reinstatement order is, as Barrett J observed, quite different to that of which the Court was informed. Again, a reinstatement application may not be the appropriate proceedings to determine that issue, but the Court was not put in a position to decide the matter with that in mind. 97 In the circumstances of this case, a range of issues arise in formulating the judgment of what is "just" within s 601AH(2)(b) and the exercise of the discretion in the chapeau of the subsection. That could extend to an explanation of the delay in asserting the continued existence of the options, which has not been tested in adversary proceedings. 98 I accept that a person should not be cut off from asserting a legal right without good reason. However, I reiterate my observations in BP Australia Ltd v Brown supra: "[113] … [T]here is … a public policy against the disinterring of corporate corpses. Commercial life must at some stage rule off the past and focus energy on the future. [114] The commercial and economic life of the community is sometimes better served by allowing the loss to lie where it falls, so that all concerned may proceed with a high degree of certainty as to their financial position. The passage of time, even the passage of three years, can be seen to legitimately alter the balance of conflicting interests in this regard." 99 It is not entirely clear that if this Court were to remit the matter, the further hearing of the applicants' motion would be heard together with the respondents' original application in case it were set aside. It appears to me to be best to avoid the possibility of such duplication. 100 In view of the combined effect of the material non-disclosure and the denial of procedural fairness, this Court should exercise the powers under r 31.15 and s 1322(4)(b). 101 The orders I propose are: (1) Grant leave to appeal;

(2) Upon the filing of the Further Amended Notice of Appeal:

(i) Allow the appeal; (ii) Set aside the order made by Barrett J on 5 March 2007; (iii) Direct ASIC to rectify the register kept under s 118 of the Corporations Act 2001 by vacating the reinstatement of the registration of the second respondent;

(iv) Set aside Order 1 made by Barrett J on 11 May 2007; (v) Remit the first respondent's application for reinstatement of the second respondent.

(3) The respondents to pay the appellants' costs of the proceedings on the Interlocutory Process dated 14 March 2007 in the Court below, of the application for leave to appeal and of this appeal. 102 TOBIAS JA: I agree with Spigelman CJ. 103 CAMPBELL JA: I agree with Spigelman CJ. **********

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