Veolia Water Australia Pty Ltd v Australian Securities and Investments Commission, in the matter of Springvale SK Kores Pty Limited

A. Introduction 1 By an originating process filed on 6 November 2023, the plaintiff Veolia Water Australia Pty Ltd (VWA) seeks an order pursuant to s 601AH of the Corporations Act 2001 (Cth) (Act) that the defendant, the Australian Securities and Investments Commission (ASIC) reinstate the registration of Springvale SK Kores Pty Limited (Deregistered) (SK Kores). 2 SK Kores was deregistered on the application of its director by an ASIC form 6010, lodged on 29 March 2023. The application is now made in circumstances in which VWA intends imminently to commence proceedings against, among other parties, SK Kores (foreshadowed proceedings). 3 The application is supported by: (a) an affidavit of Jane Emily Sarah Sandilands, the Chief Legal Officer of Veolia Australia New Zealand, sworn on 6 November 2023; and (b) two affidavits of Tayler Scott Wright dated 6 November 2023 and 9 November 2023, the solicitor for the plaintiff, addressing or proving service of the application and the supporting affidavit of Ms Sandilands on ASIC and the former directors of SK Kores. 4 Mr G. Sirtes of senior counsel appears today with Mr M. Rose. Their written and oral submissions have been of considerable assistance in addressing the application today. 5 ASIC has not appeared today but by letter dated 8 November 2023 to the plaintiff's solicitors, ASIC confirmed that it did not oppose the reinstatement of SK Kores.

B. Background 6 The relevant factual background to the application is set out in the affidavit of Ms Sandilands. 7 For present purposes, it is sufficient to note that VWA is a company that specialises in water treatment and designs and the delivery of drinking water and wastewater treatment plants, across Australia. 8 On 6 May 2016, Springvale Coal Pty Limited (Springvale) on behalf of the participants to a joint venture between SK Kores and Centennial Springvale Pty Limited (Centennial) (Springvale Joint Venture) via its representative, GHD Pty Ltd, called for expressions of interest for the design and construction of a water treatment facility to treat water from two mines that are slightly north of Lithgow, being the Springvale Mine and the Argus Place Mine (Mines). Centennial and Boulder Mining Pty Limited (Boulder) own and operate the Mines. 9 VWA proposes to commence the foreshadowed proceedings against, amongst others, SK Kores, in the Technology and Construction List of the Supreme Court of New South Wales. Those proceedings concern alleged misleading and deceptive conduct arising from representations VWA alleges SK Kores and others made in providing information to VWA about the composition of a raw mine water. The representations are alleged to have been made prior to VWA entering into contracts with a third party for the design, construction and subsequent provision of services in relation to a water treatment facility adjacent to the Springvale Mount Piper Power Station (Treatment Facility). The Treatment Facility is owned and operated by EnergyAustralia NSW Pty Ltd (EnergyAustralia). 10 The allegations proposed to be advanced in the foreshadowed proceedings are set forth in some detail in the draft Technology and Construction List statement that was exhibited to the affidavit of Ms Sandilands. It is unnecessary for present purposes to say anything further about the specific nature of those allegations. 11 For present purposes, VWA alleges that had it known that the quality of the actual mine water that the facility would receive and be required to treat, was materially different to that set out in data provided to it by EnergyAustralia, Centennial and SK Kores pursuant to a request for information, VWA would either have entered into the design and construction contract (D&C Contract) and the services provider agreement (SPA) on different terms, including a different design for the facility, or proposed different terms to the D&C Contract and the SPA, including an increased price and additional time for construction. 12 The foreshadowed proceeding must be filed by 13 November 2023, by reason of the effect of s 236(2) of the Australian Consumer Law, being Sch 2 to the Competition and Consumer Act 2010 (Cth) (CCA), which requires the claim to be commenced by that date.

C. Relevant principles 13 Section 601AH(2) of the Act relevantly 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. 14 The relevant principles are well established. 15 The Court must be satisfied that: (a) the application is made by a person aggrieved by the deregistration; and (b) it is just that the company's registration be reinstated. 16 As I have previously stated in Hinz v in the matter of KEAD Pty Ltd (Deregistered) v KEAD Pty Ltd (Deregistered) (2022) 158 ACSR 444; [2022] FCA 270 at [19] (see also In the matter of Likehart Pty Limited (deregistered) [2017] NSWSC 884 at [18] (Black J)): The expression "person aggrieved" is not defined in the Act. The expression has been held to be of wide import, and should be construed liberally. It includes a person who has been deprived of something, or injured or damaged in the legal sense; a person who has some right of some or potential value that has been extinguished (including a right to bring a claim against a company, and potentially a claim by a company against a third party). (Citations omitted.) 17 It is often not appropriate in an application for reinstatement to go into factual matters which may be the subject of dispute: In the matter of LCW Property Holdings Pty Ltd (deregistered) [2020] NSWSC 71 at [20] (Gleeson J). Ultimately, the Court is concerned with the justice of reinstating the company, not the justice of any proceedings which it may be proposed that the reinstated company might institute or resume: LCW Property Holdings at [24]. 18 The effect of reinstatement is that the former directors and secretary automatically resume office as directors and secretary of the company by reason of the operation of s 601AH(5) of the Act: LCW Property Holdings at [27], citing Mitzev v Foxman [2007] NSWCA 273 at [25] (Basten JA, Tobias and McColl JJA agreeing). 19 The Court has a residual discretion whether to make an order: LCW Property Holdings at [15]. 20 The relevant considerations that a Court can take into account in exercising the discretion to reinstate a company include, the circumstances in which the company was deregistered, the purpose in seeking reinstatement, whether any person is likely to be prejudiced by reinstatement and the public interest generally: LCW Property Holdings at [16], citing Re ERB International Pty Ltd (deregistered) [2014] NSWSC 200 at [5] (Brereton J). 21 It has been said, with respect to the Court's residual discretion, that if the first two requirements are met, namely, that the Court is satisfied that the application is made by a person who is aggrieved by the deregistration and that it is just that the company's registration be reinstated, then, in the ordinary course, an order for reinstatement will be made: BSA Limited v Australia Securities and Investments Commission [2020] FCA 1823 at [14] (Bromberg J), citing Re Newfront Pty Ltd (deregistered) [2008] SASC 127 at [9] (Gray J), unless there are "special considerations" which might indicate otherwise: Re James Hardie Australia Finance Pty Ltd (Deregistered) (2008) 170 FCR 545; [2008] FCA 1181 at [88] (Lindgren J).

D. Consideration 22 I am satisfied that the plaintiff has established that it is a person aggrieved by the deregistration and that it is just that SK Kores' registration be reinstated. I am also satisfied that there are no special considerations which might indicate otherwise. I am satisfied of those matters by reason of the following matters that are relied upon by the plaintiff. 23 First, by reason of its deregistration, VWA has a right of some potential value that has been extinguished, including a right to bring a claim against SK Kores. 24 Second, I am satisfied that the purpose of the litigation is not futile, where the claims are arguable on the evidence before me, and the claims are articulated in the draft Technology and Construction List statement. The claims could not be characterised as "plainly hopeless" or "bound to fail": The Owners of Strata Plan No 91349 v Australian Securities Investments Commission (2020) 147 ACSR 456; [2020] NSWSC 685 at [66] (Bell P). 25 Third, if VWA succeeds in the proposed proceedings, liability may be apportioned between the proposed defendants pursuant to s 87CD of the CCA, such that a portion of liability for VWA's loss would be attributable to SK Kores' conduct. In those circumstances, I am satisfied that SK Kores is, plainly, a necessary party to those proceedings. VWA would not otherwise be able to recover the loss attributable to SK Kores' conduct from the other proposed defendants by reason of s 87CF of the CCA. 26 Fourth, of less immediate relevance but nevertheless material, is that if SK Kores is not reinstated, VWA may not be able to obtain documents from SK Kores relevant to the issues in dispute. 27 Finally, I note that, given the absence of any contradictor or appearance by the directors or ASIC, Mr Sirtes has properly drawn to my attention the following matters: (a) VWA does not know what specific role SK Kores had in the Springvale Joint Venture which might otherwise inform the extent of its role in the making of any one or more of the representations, the subject of the draft Technology and Construction List statement; (b) VWA does not know what assets, if any, SK Kores has to satisfy any judgment which might be made against it, including whether any insurance policy would respond to the claim; (c) while VWA has attempted to notify the former directors of SK Kores of the present application, two of the directors are in Korea and VWA has not been able to obtain any confirmation that its correspondence notifying them of this application has been received. Further, VWA does not know if the addresses to which the letters were issued, being those recorded by ASIC, remain current; and (d) VWA acknowledges the present application was made on an expedited basis on the basis of a looming limitation bar but concedes that if SK Kores is reinstated (albeit not now, but later), there may be the potential for any limitation period to be extended pursuant to s 601AH(3)(d) of the Act: see ACN 009 009 072 Pty Ltd (in Liquidation) v Australian Securities & Investments Commission [2022] WASC 221 at [50] (Hill J). 28 None of these matters cause me to conclude that it would not be appropriate for an order to be made to reinstate SK Kores for the purpose of pursing the foreshadowed proceedings. The lack of knowledge of the precise role played by SK Kores, or the extent of any recovery that might ultimately be available, are not matters that would render the commencement of the foreshadowed proceedings futile. Further, I am satisfied that the evidence establishes that the plaintiff has taken reasonable steps to notify the directors of the reinstatement application and limitation issues should be addressed as and when they might arise, rather than relying on the potential for subsequent extensions to limitation periods pursuant to s 601AH(3)(d) of the Act.

E. Disposition 29 For the foregoing reasons, it is appropriate that orders be made substantially in the terms sought by the plaintiff in the originating process. I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Halley.