Taylor v Australian Securities and Investments Commission, in the matter of Eco Solar System

Pursuant to s 601AH(2) of the Corporations Act (2001) (Cth), the Australian Securities and Investments Commission reinstate the registration of Eco Solar System (Australia) Pty Ltd and Hosun Energy (Aust) Pty Ltd. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

WHITE J: 1 This is an application under s 601AH of the Corporations Act (2001) (Cth) for the reinstatement of the registration of two companies: Eco Solar System (Australia) Proprietary Limited (Eco Solar) and Hosun Energy (Aust) Pty Ltd (Hosun Energy). 2 Eco Solar was deregistered by ASIC, pursuant to s 601AB of the Corporations Act on 2 August 2015. Hosun Energy, which was the sole shareholder of Eco Solar, was deregistered by ASIC on 19 July 2015, also pursuant to s 601AB. The parent company of Hosun Energy is Jiangsu Hosun Solar Power Co (Jiangsu Hosun), a company incorporated in China. 3 The plaintiffs are Unleash Solar Pty Ltd (in liquidation) and its liquidators. Administrators had been appointed to Unleash Solar on 27 February 2013, and the liquidators were appointed on 12 April 2013. 4 While Unleash Solar traded, it purchased solar panels through Eco Solar. In the six month relationship back period before 27 February 2013, Unleash Solar had made payments to Eco Solar totalling $155,025.39. The plaintiffs seek the reinstatement of the registration of Eco Solar so as to be able to commence proceedings against it pursuant to s 588FF of the Corporations Act. They seek the reinstatement of the registration of Hosun Energy so as to avoid the circumstance that Eco Solar, when reinstated, would have as its sole shareholder a deregistered company. 5 ASIC is the sole defendant to the application. It has been served with the proceedings, but did appear at the hearing. In a letter to the plaintiffs' solicitors of 29 January 2016, ASIC said that it did not oppose the application subject to the satisfaction of two conditions. 6 Jiangsu Hosun and Wei Jiang, who was the sole director of both Eco Solar and Hosun Energy at the time of their respective deregistrations, have been served with the proceedings, but have not appeared. 7 By s 601AH(2) of the Corporations Act, the Court may order that ASIC reinstate the registration of a company on the application of "a person aggrieved by the deregistration" if it is satisfied that it is "just" to do so. 8 I am satisfied that Unleash Solar is a person aggrieved by the deregistrations, as it is an entity which may have a claim against Eco Solar: Arnold v Poltane Pty Ltd [2005] FCA 1418 at [4] and Donmastry Pty Ltd v Albarran [2004] NSWSC 632; (2004) 49 ACSR 745 at [4]. 9 There is an indication in the affidavits that Eco Solar may have had some form of insurance in respect of the unpaid liabilities of Unleash Solar but there is, at least to date, no suggestion that that insurance would respond to the plaintiffs' claim under s 588FF. 10 The principles on which the Court acts in determining whether the reinstatement of the registration of a company is "just" are settled, and it is not necessary to refer to the authorities in any detail. The principal matters to which the Court has regard include the circumstances in which the company came to be deregistered, the possible prejudice to any person if reinstatement is ordered, and the future activities of the company. 11 As noted, Eco Solar and Hosun Energy were deregistered pursuant to s 601AB of the Corporations Act. The evidence does not indicate the precise ground under s 601AB on which ASIC proceeded in respect of each deregistration. However, the ASIC current and historical company extracts for each company indicate that in the period of three years and five months after its incorporation, Eco Solar had not lodged any documents with ASIC. In the case of Hosun Energy, it had not lodged any documents with ASIC in the period of three years and five months before its deregistration. It is reasonable to infer, therefore, that ASIC proceeded in each case, under s 601AB(1)(b). 12 No prejudice, other than the prospect that Eco Solar may face the plaintiffs' claim under s 588FF, has been identified. 13 I am satisfied that Wei Jiang and Jiangsu Hosun had notice of the proceedings and of today's hearing. Neither has appeared before the Court. Neither has responded to correspondence from the plaintiffs' solicitors advising them of the present application and of the proposed claim of Unleash Solar. Nor have they sought to deny any of the matters identified in the solicitors' correspondence as the basis for the proposed claim under s 588FF. 14 The reinstatement of the two companies will, of course, be a reinstatement for all purposes. There is however, no suggestion that such reinstatements will prejudice any other matters relating to the companies. 15 The plaintiffs' evidence indicates that there is a serious issue to be tried concerning the claim under s 588FF. 16 There is no indication that the plaintiffs have delayed inappropriately the bringing of the present application. 17 In all these circumstances, I am satisfied that the reinstatement of the registration of each of Eco Solar and Hosun Energy is just, and there will be orders accordingly. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.