National Australia Bank Limited v Australian Securities and Investments Commission, in the matter of Mackies Industries Australasia Pty Limited

Background 4 The matters set out below rely on the evidence filed by NAB and the written outline of submissions. 5 Mackies Industries is primarily involved in the application of Teflon coating to commercial bakeware, ancillary items and culinary tools utilised in the hospitality industry such as in bakeries, restaurants, hotels, food processing industries and home kitchens. 6 Mackies Industries has three facilities with NAB (Facilities). The outstanding balance of the Facilities as at 16 February 2022 was $108,534.55. In support of the Facilities, Mackies Industries granted securities to NAB - namely, a fixed and floating charge dated 20 December 2011 and specific security agreements granting security over the Company's assets and registered on the Personal Property Securities Register. The Facilities have now expired and are in default. On 7 September 2021 and 2 December 2021, NAB issued demands to the Company, demanding repayment of the Facilities. 7 Mackies Industries also has liabilities to NAB pursuant to two deeds of guarantee and indemnity dated 24 July 2019 (Guarantees). The first guarantee was for any amounts owing to NAB in relation to one of the Facilities (the "Business Overdraft and Trade Finance" facility) provided to W & P Reedy Pty Ltd up to a limit of $960,000, plus interest, costs and expenses. The second guarantee was for any amounts owing at any time to NAB under another Facility (the "Business Markets Loan and Trade Finance" facility) by Mackies Asia Pacific Pty Ltd up to a limit of $1,195,000, plus interest, costs and expenses. On 9 September 2021, demands were issued to the Company, demanding repayment of amounts secured by the Guarantees. 8 On 9 January 2022, Mackies Industries was deregistered by ASIC pursuant to s 601AB of the Corporations Act. As a consequence of the deregistration, the property of Mackies Industries vested in ASIC on deregistration in accordance with s 601AD(2) of that Act. 9 On 7 February 2022, NAB appointed Sam Andrew Marsden and Jason Mark Tracy as joint and several receivers and managers of Mackies Industries (Receivers) and of two other related entities, W & P Reedy and Mackies Asia Pacific (together, the Mackies Group). 10 It is Mr Yoong's evidence that NAB did not become aware of the fact that Mackies Industries had been deregistered until about 7 February 2022, after the Receivers had been appointed. 11 On 10 February 2022, NAB's solicitors wrote to ASIC requesting that it exercise its power under s 601AH(1) of the Corporations Act to reinstate the Company. On 14 February 2022, ASIC confirmed (during the course of a telephone discussion with NAB's solicitors) that the request to reinstate the Company had been declined. 12 On 16 February 2022, Ms Johns caused Ms Erikozu to send an email to Dmitry Myndreskou. Mr Myndreskou was the director of Mackies Industries and one of two shareholders of the Company at the time of its deregistration. The email formally advised Mr Myndreskou of NAB's intention to make the application to reinstate Mackies Industries' registration. In reply, Mr Myndreskou's solicitors provided NAB's solicitors with a copy of his application to ASIC dated 31 January 2022 also seeking reinstatement of Mackies Industries' registration. 13 Ms Erikozu deposes to service of the originating process, Mr Yoong's affidavit and exhibit JY-1, and a copy of the Court's orders made on 16 February 2022 on both ASIC and Mr Myndreskou. Ms Erikozu deposes to her conversation with an officer of ASIC drawing attention to the documents served on ASIC. Service on ASIC and Mr Myndreskou was in accordance with the orders I made on 16 February 2022. 14 ASIC sent a letter to Ms Erikozu dated 22 February 2022 in which it advised that: I confirm that ASIC's Regulatory Guide 83 requirements have been satisfied by the applicant. Accordingly, subject to the strict understanding that no order for costs will be sought against the Australian Securities and Investments Commission (ASIC), ASIC does not oppose the Application and will not attend the hearing of the matter tomorrow. Should an order for costs be sought against ASIC then ASIC requests that the matter be adjourned and ASIC advised so that it may attend and be heard on the question. A copy of this letter should be provided to the Court to [scil so] it is aware of ASIC's position. 15 On the morning of 23 February 2022 (the day of the hearing), NAB's solicitors obtained and annexed to Ms Erikozu's affidavit of 23 February 2022 an updated ASIC search which confirmed that Mackies Industries remained in a deregistered status.

Consideration 16 Section 601AH(2) of the Corporations Act provides: 601AH Reinstatement … Reinstatement by Court (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.

Is NAB a "person aggrieved"? 17 The expression "person aggrieved" is of wide import. It should be construed liberally and includes a person who has been deprived of something, or injured or damaged in the legal sense: Owners of Strata Plan No 91349 v Australian Securities and Investments Commission [2020] NSWSC 685; (2020) 147 ACSR 456 at [61]-[62] (Bell P) (Strata Plan No 91349) and the cases there cited. 18 In order to assess whether the plaintiff is an aggrieved party, it is not necessary to embark on a detailed and exhaustive analysis of the facts and law underpinning the claim. The threshold is low and the assessment can be dealt with in a summary way: Strata Plan No 91349 at [65]-[67] and [88]. In Arnold World Trading Pty Ltd v ACN 133 427 335 Pty Ltd [2010] NSWSC 1369; (2010) 80 ACSR 670, Barrett J said at [43]: The question whether an applicant under s 601AH(2) is "a person aggrieved by the deregistration" is considered by reference to legal rights and legal interests. It must be seen that the applicant has a genuine grievance that the dissolution of the company affected his or her interests because, for example, a right of some value or potential value has gone out of existence: Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316; (2000) 174 ALR 688 (at [24]-[26]). Under analogous English legislation, the applicant was expected to have "an interest of a proprietary or pecuniary nature in resuscitating the company": Re Wood & Martin (Bricklaying Contractors) Ltd [1971] 1 WLR 293; and see Re GA & RJ Elliott Pty Ltd (1978) 3 ACLR 523. 19 While a creditor may have standing as a "person aggrieved", they must demonstrate a real economic interest in the company being reinstated: Wyse & Young International Pty Ltd t/as Wyse & Young Accounting & Ors v Corrado [2015] NSWSC 1863 at [43] (White J). 20 I am satisfied that NAB is a "person aggrieved" by the Company's deregistration because unless Mackies Industries' registration is reinstated, NAB will be deprived of legal rights arising under the Facilities and Guarantees. It therefore has a real economic interest in Mackies Industries' reinstatement.

Is reinstatement of the Company's registration just? 21 The fact that s 601AH(2) provides that the Court "may" order reinstatement if it is satisfied that it is "just" to do so has been said to confer a broad discretionary judgment on the Court. Relevant considerations include the circumstances in which the company was deregistered, the stated purpose for its reinstatement, whether any person is likely to be prejudiced by the reinstatement and the public interest: In the matter of ERB International Pty Limited (deregistered) [2014] NSWSC 200; (2014) 98 ACSR 124 at [5] (Brereton J). 22 I am satisfied that it is just to order reinstatement of the Company's registration because: (a) Mackies Industries appears to have been deregistered pursuant to s 601AB(1A) of the Corporations Act on the basis that it did not pay its review fee in full; (b) The Company appears to be continuing to trade. It derives monthly revenue from its business. It operates out of leased premises in Campbellfield, Victoria. The Company has 9 employees who are employed full time at the leased premises. It has employee liabilities in excess of $12,000 per week comprising wages and superannuation entitlements. It holds personal property such as motor vehicles and surface coating machinery and equipment that it uses to conduct its business over which it has granted specific security interests to NAB to secure its liabilities to NAB pursuant to the Facilities; (c) The Receivers are unable to attend to the receivership properly given that the Company has, by virtue of s 601AD(1) of the Corporations Act, ceased to exist. They are unable to deal with or realise the assets of the Company, as agent for that company, given that those assets have vested in ASIC by virtue of s 601AD(2) of the Corporations Act. In the absence of reinstatement, the employees of Mackies Industries would not be able to pursue against the Company payment of their outstanding employee entitlements including unpaid wages, entitlements and superannuation. The employees of Mackies Industries would also be unable to make claims against the Company and benefit from the Fair Entitlements Guarantee scheme in the event that Mackies Industries were to be wound up. Public policy therefore favours reinstatement of Mackies Industries to enable the Receivers to attend to the receivership properly, to enable the potential causes of action NAB has against the Company to be explored and to allow employees access to their entitlements; (d) NAB applied to ASIC for reinstatement of the Company within three days of becoming aware that the Company had been deregistered and it made the application to the Court within two days of receiving advice from ASIC that it would not reinstate the Company's registration. There has therefore been no delay in NAB seeking the Company's reinstatement; (e) There is no evidence that NAB has engaged in any conduct which has created detriment to any other interested party; (f) There is no evidence that any person is likely to be prejudiced by reinstatement. Specifically, the sole director of the Company is aware of NAB's application and has not appeared to oppose it. Further, the director applied to ASIC for the Company's reinstatement himself. That is relevant, since he will continue in the office of director after the Company's registration is reinstated; and (g) ASIC has indicated that it has no objection to the application provided there is no order as to costs made against it.

Conclusion 23 I am satisfied that the Court should order that Mackies Industries' registration be reinstated and that there be no order as to costs. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Farrell.