Consideration on the ancillary orders
131 Re Regional Planners, as noted above, was a case in which Brereton J canvassed the authorities addressing the width of the power under s 601AH(3)(d), which his Honour viewed as being even less constrained than under its predecessor, saying (at [15]):
The further and more difficult question is the application for an order that has the effect of suspending the limitation period in respect of any action that the plaintiff might have against the company. This application is founded on s 601AH(3)(d), which provides, in effect, that if the Court makes an order for reinstatement of a company, it may "make any other order it considers appropriate". I have expressed some reservations as to the power - and, if there is power, discretion - to make an order under that section, particularly where, as in this case, it would have the effect of suspending or extending a limitation period running against the company, after the limitation period has expired.
132 His Honour noted that, without reference to authorities, he would have seriously doubted s 601AH(3)(d) extended to authorise an order which would have the effect of suspending or extending a limitation. However, Brereton J went on to state (at [16]) that 'authority suggests it does'.
133 Observing the similarities in s 329(4) of the Companies Act 1993 (NZ) and s 353(6) of the Companies Act 1948 (UK) with the language of s 601AH(3)(d), Brereton J discussed a number of cases in the United Kingdom and New Zealand where reinstatement orders had been considered by the courts (at [16]-[19]) which had implications for the bringing of proceedings both on behalf and against companies. His Honour then turned his consideration to Australian case law and decisions under the predecessor provisions of s 601AH(3)(d), stating (at [20]-[22]):
[20] The reservations I have expressed, and the doubts that I would have had in the absence of authority, as to whether s 601AH(3)(d) confers any such jurisdiction at all are not unique. Such reservations were expressed by McLelland J (as the later Chief Judge in Equity then was) in Solla v Scott [1982] 2 NSWLR 832, where his Honour said (at 834-5):
It has been held that in the exercise of its powers under the equivalent of s 308(5) [the predecessor of the provision now under consideration] a court may direct that in case of creditors who were not statute barred at the date of dissolution, the period between the date of dissolution and the date of restoration to the register is not to be counted for the purpose of any statute of limitation: see Re Donald Kenyon Ltd [1956] 1 WLR 1397; [1956] 3 All ER 596, and cf Re Huntingdon Poultry Ltd [1969] 1 WLR 204; [1969] 1 All ER 328 and Re Lindsay Bowman Ltd [1969] 1 WLR 1443 at 1446; [1969] 3 All ER 601 at 603.
I have some doubt as to whether such an order could properly be made under s 308(5) notwithstanding Re Donald Kenyon Ltd, in which the order made purported to override the provisions of the statute of limitation. For the reasons I have already given no such order is required in the present case, even if it could otherwise properly be made.
[21] However, in Harule Pty Ltd; Ex parte Olita Super Readymixed Concrete Pty Ltd (in liq) (1994) 13 ACSR 500 (Harule), Santow J (as he then was) relied on Re Donald Kenyon and referring to McLelland J's reservations, observed that no reasons were given for them, although accepting that they invited caution on the part of the Court as to making such an order in circumstances where, as in Harule, it was sought for the benefit of the company as a plaintiff, rather than against the company as a prospective defendant. His Honour nonetheless made an order in that case.
[22] The jurisdiction to make such an order has also been accepted by Senior Master Mahony in Deputy Commissioner of Taxation v Action Workwear Pty Ltd (deregistered) (1996) 20 ACSR 712 (Action Workwear), and by Master Burley in Lillecrapp v State of South Australia; Golden Eggs v SA (1996)14 ACLC 1540 at 1542.
134 Brereton J then had regard to the differences in the language of s 601AH(3)(d)'s predecessors and the current terms of the provision, observing (at [23]-[24]):
[23] It seems to me that for present purposes the reservations entertained by McLelland J and by me can be set to one side, for two reasons. The first is the re-enactment of former s 308(5), in much wider terms, in current s 601AH(3)(d) of the Corporations Act; the second is and the acceptance of the jurisdiction by the Queensland Court of Appeal in Pagnon v Workcover Queensland; [2001] 2 Qd R 492 [2000] QCA 421, which I should follow unless convinced it is plainly wrong.
[24] The re-enacted section no longer contains the limitation that appeared in its predecessors to the effect that the order be made for the purpose of placing the company and all other persons in the same position as nearly as may be as if the name of the company had not been struck off. That indicates an intention to remove what was seen in some of the cases as a constraint on the types of orders that could be made [see in that respect, in particular, Re Huntington Poultry Ltd (at 330-1); Action Workwear at 722-3]. Parliament, by re-enacting the section, should be taken to have intended to confirm the way in which it had been interpreted to that point, and to reduce the constraints which had been applied to its application. Nonetheless, I do not think the earlier cases, in directing attention to remediating any disadvantage that had been occasioned by the deregistration are irrelevant; they continue to give useful guidance as to the application of the provision, though they must be interpreted having regard to the wider power that now is available.
135 His Honour concluded his analysis by stating (at [25]-[28]):
[25] As to the judgment of the Queensland Court of Appeal, the leading judgment was that of McPherson JA, a judge with unparalleled experience and standing in the field of company law and, in particular, the law of company liquidation. After referring to some of the cases that I have mentioned, his Honour said (at [13]):
In Australia, the jurisdiction to follow this practice was questioned in Solla v Scott [1982] 2 NSWLR. 832 at 835; but, as Santow J pointed out in Re Harule Pty Ltd (1994) 13 ACSR. 500, 501, the observation on that matter in Solla v Scott was obiter and no reason was given for it....
[14] The same policy is now manifest in the provisions of Part 5A of the Corporations Law, which took effect on or from 1 July 1998.
[26] His Honour then set out s 601AH, and continued:
[15] It will be seen that the Court's power to order reinstatement under s601AH(2) is predicated only on the need to be satisfied that it would be "just" to do so. That is the criterion which the courts have applied in the past in cases of this kind. Furthermore, the power conferred by s601AH(3)(b) is now very wide, and extends to making "any other order" that the Court "considers appropriate". I would have no doubt that under this provision the court could, and in a case like the present would if asked to do so, exercise the power under s601AH(3)(b) to order that the time between dissolution of the company on 11 December 1998 and the expiration of the limitation period under s11 of the Limitation of Actions Act 1974 should not be counted against the plaintiff here. There is every reason why it would be "just" to adopt that course.
[27] In Hutchinson v Australian Securities and Investments Commission (2001) 40 ACSR 198; [2001] VSC 465, Senior Master Mahony (at [28]) cited with approval paragraph [15] of McPherson JA's judgment [see also Del Borello v Australian Securities and Investments Commission [2008] WASC 48, where Beech J observed that the authorities made it clear that the power under s 601AH(3) extended to making orders to the effect that the period of deregistration will not count for the purpose of any limitations period].
[28] Accordingly, I am satisfied that there is jurisdiction under s 601AH(3)(d) to make the order sought. The question remains whether, as a matter of discretion, that order should be made.
136 In my view, there is no reason to limit the power in s 601AH(3)(d) of the Corporations Act in the manner contended for by the Commissioner. Although the parties referred to extrinsic materials, there is nothing in them which supports a suggestion that there was a legislative intention to diminish or limit the purpose of the power. The power has always existed to achieve the primary purpose of treating a company upon reinstatement as though it had continued in existence from the date of deregistration, that is to say, the 'as-you-were' position.
137 It is also necessary to address the Commissioner's contention that any of the proposed orders would be inconsistent with the limited form of retrospectivity provided for by s 601AH(5) because they seek to restore beneficial ownership of the property to the Deregistered Companies during the period of deregistration. It is true that the adjective 'limited' has been used by the courts in relation to the retrospectivity described in the first sentence of s 601AH(5), but in my view, that retrospectivity underlies the whole purpose of reinstatement. Section 601AH(5) provides for a fictional deemed continuation of the company's corporate existence during the period of deregistration. There are no other automatic retrospective legal consequences, but that is why there is the facility within the Corporations Act to make both validating provisions and any other orders considered appropriate in the circumstances in conjunction with the reinstatement. Section 601AH(3)(d) clearly permits an ancillary order which has significant, not merely incidental, retrospective consequences.
138 In White v Baycorp, Campbell J decided that the first sentence of s 601AH(5) provides for a 'limited' degree of retrospectivity and does not extend to the vesting of the property of the company from the time of deregistration. His Honour noted that the real difference between the mode of operation of s 574(4) of the Corporations Law and s 601AH(5) of the Corporations Act was that retrospectivity was given only to the date of reinstatement, rather than the date of deregistration (see [115]-[117]). But his Honour went on to note that no one had, before him, sought an order under s 601AH(3) (see [128]): '[t]hat course was not followed'. By this, I take his Honour as implicitly suggesting that had an order been sought, as it is now, it may have been a different situation. It may have been within power or, at least, not obviously beyond power and would require consideration. While his Honour does not, of course, expressly say that he would exercise a discretion to make the relevant order in the circumstances and facts of that case, he does not say that he would not and certainly does not suggest that such an order would not be within power. Of course, it was unnecessary for his Honour to deal with such a hypothetical.
139 The Commissioner also relies on Stork. I have already discussed Stork and do not need to say more.
140 There was also detailed examination by White J in Foxman, looking at the legislative history. His Honour noted that the intended effect of reinstatement under s 601AH(5) was far from clear, observing (at [42]) that the authorities show that the first sentence is qualified by the later sentences. What is of importance in his Honour's analysis is the point, with which I would respectfully concur, is that it would be a surprising result if the amended legislation that gave rise to s 601AH narrowed the position. It is not at all inconsistent with the legislative history that at least one purpose of the enactment of s 601AH(3)(d) was to permit the Court to make an order to put the company in the same position as if deregistration had not occurred, as previously provided for under s 574(5) of the Corporations Law.
141 The Commissioner emphasises the point that Barrett J had noted in CGU v Rockwell that s 601AH(3) jurisdiction should, in his opinion, be used principally to be used to remove anomalies or impediments (at [18]). This observation was not central to his Honour's reasoning in the case, but in any event, it is clear that his Honour does not say it should only be used to remove anomalies or impediments or only for small anomalies. The section itself certainly does not suggest that it be used merely to remove anomalies or impediments, nor does his Honour suggest so. Where his Honour says 'principally', I would take that to mean 'usually'. It may be common for the subsection to be used for such purpose, but there is no reason to think it is exclusively so confined.
142 The Commissioner also relies upon the observations of White J in Oates v Consolidated Capital, where his Honour commented (at [34]) that '[t]he company's property is revested in it from the time the company is reinstated'. In doing so, his Honour was referring with approval to the approach Campbell J had taken in White v Baycorp. On proper analysis, Oates v Consolidated Capital is not a decision in relation to the scope of the power under s 601AH(3)(d), but rather a case accepting the correctness of what Campbell J said about the first sentence of s 601AH(5).
143 I note that Austin J in GIO General referred to Campbell J's remarks and applied them (at [11]-[12]), but again, it was only a decision on the scope of the retrospective deeming in the first sentence of s 601AH(5). It was not a decision about the scope of the power in s 601AH(3).
144 An order under s 601AH(3)(d), which revests part of a company's property at an earlier time, even for a limited purpose, does not in any way contradict or make redundant, or nugatory, the provisions of s 601AD(4) and s 601AE(2) of the Corporations Act. Those provisions are directed to the time prior to reinstatement and the powers of ASIC, whilst vested with the property of a deregistered company. ASIC is, at that stage, prior to any reinstatement application, empowered as an owner. Once the company is reinstated, ASIC no longer needs those powers. I am unable to discern an inconsistency on the face of the statute in recognising, consistently with the first sentence of s 601AH(5), that the powers that ASIC has during the period of deregistration ceased to have relevance on reinstatement and hence no practical impact on the Court's power under s 601AH(3)(d).
145 Accordingly, I consider that the orders sought of paras 6, 7, or 8 of the Minute are within power.
146 As to discretionary considerations, I note that:
(a) the plaintiffs objectives' are on their face entirely lawful and reasonable;
(b) if the Commissioner wishes to oppose the tax consequences of the ancillary orders, there remains ample opportunity in other administrative or judicial proceedings to do so. These orders simply allow the plaintiffs to contend for such consequences. The outcome of that debate awaits another day; and
(c) making the ancillary orders is more consistent with the primary statutory objective (described above as the 'as-you-were' effect) than not making them.
147 Further, in exercise of discretion as to whether such orders should be made and, if so, which of them, in my view, it is desirable to grant no more than the minimum relief necessary to do justice and to do so solely for the stated purpose in the way described in submissions which, in this instance, is to enable possible membership of the TBGL tax consolidated group and for the specific purpose of future tax benefit, not past benefits. To that end, para 8 of the Minute is the preferable order, but it should be further qualified for clarity that it is directed to enable the relevant companies to contend for that tax consequence.
148 Nothing in these reasons addresses the availability of such consequences or the availability of arguments as to the possibility of a Pt IVA 'scheme'. They and other tax considerations will doubtless be dealt with elsewhere. Further, I have some concern about (but no fixed view), as to whether it is necessary for ASIC to have held the shares 'as nominee'. The precise legal consequence of that characterisation is not entirely clear. Submissions have not yet been directed to it. I consider the terminology used in the Minute may be preferred and may be adequate.