Vero Insurance Ltd v Nicejade Pty Ltd

CATCHWORDS : CORPORATIONS - deregistered company - orders previously made in contested proceedings directing ASIC to reinstate company's registration - application now made by unsuccessful defendant with consent of successful plaintiff for order setting aside previous orders and dismissing the proceedings - where order directing reinstatement by ASIC not served on ASIC - where company accordingly remains deregistered despite court's order directing reinstatement - power of court to set aside order by consent of parties - where ASIC itself not party but takes the attitude that it will implement the order directed to it if and when served with the order - no reason why original orders should not be set aside as parties wish - observations on the policy question whether it should be within the power of private litigants to decide whether the court's directive to ASIC reaches ASIC

LEGISLATION CITED : Corporations Act 2001 (Cth) s 601AH(2) Uniform Civil Procedure Rules 2005, rules 36.15(2), 36.16

CASES CITED : Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd [2008] NSWCA 38; (2008) 71 NSWLR 262 Vero Insurance Ltd v Nicejade Pty Ltd [2010] NSWSC 556

Vero Insurance Limited - Plaintiff PARTIES : Nicejade Pty Limited - First Defendant Sunlord Holding Pty Limited - Second Defendant

SOLICITORS : Mills Oakley Lawyers - Plaintiff Bartier Perry - Second Defendant

IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION CORPORATIONS LIST

2008/281810 VERO INSURANCE LIMITED v NICEJADE PTY LIMITED & ANOR JUDGMENT 1 On 1 June 2010, I delivered a reserved judgment in these proceedings (Vero Insurance Ltd v Nicejade Pty Ltd [2010] NSWSC 556) and made orders as follows: "1. Order pursuant to s 601AH of the Corporations Act 2001 (Cth) that Australian Securities and Investments Commission reinstate the registration of Nicejade Pty Ltd ACN 059 658 310. 2. Order pursuant to s 467(3)(d) that all notification and advertising requirements in respect of an application for a winding up order in respect of the said Nicejade Pty Ltd be dispensed with. 3. Order that, immediately upon reinstatement of the registration, the said Nicejade Pty Ltd be wound up. 4. Order that, immediately upon reinstatement of the registration, Brent Kijurina of Hall Chadwick Chartered Accountants of Level 29, St Martins Tower, 31 Market Street, an official liquidator, be appointed liquidator of the said Nicejade Pty Ltd." 2 These orders were made on the application of Vero Insurance Ltd ("Vero") and against strenuous opposition by Sunlord Holding Pty Ltd ("Sunlord") which was the holding company of Nicejade at the time of its deregistration in 2006. 3 On 25 June 2010, I made an order that each of the orders of 1 June 2010 be stayed pending the determination of an appeal by Sunlord. That company later filed an application in the Court of Appeal. 4 Now before me for determination is an interlocutory process filed on 2 December 2010 by which Sunlord applies for the following orders: "1. The orders made by Barrett J on 1 June 2010 be set aside. 2. The proceedings be dismissed. 3. All costs orders made prior to the entry of this order are vacated 4. Each party is to bear its own costs of these proceedings. 5. The applicant is to notify Brent Kijurina of Hall Chadwick Chartered Accountants of Level 29 St Martins Tower 31 Market Street and Australian Securities and Investments Commission of these orders." 5 Vero consents to the making of the orders thus sought by Sunlord. 6 The evidence makes it clear that Vero and Sunlord have settled all disputes between them and that neither any longer wishes to see the registration of Nicejade reinstated by ASIC or a revived Nicejade placed in liquidation. 7 When the request eventually embodied in the interlocutory process of 2 December 2010 first came before me, I expressed reservations about proceeding on the basis of the consent of Vero and Nicejade. This was because the principal order of 1 June 2010 was directed to a non-party, namely, Australian Securities and Investments Commission ("ASIC"). 8 The evidence now before me establishes that ASIC was not served with or made aware of the orders of 1 June 2010 until after a stay of those orders had been ordered on 25 June 2010. Indeed, it appears that, on 22 June 2010, Sunlord's solicitors furnished a copy of their client's stay application to ASIC and were informed in reply that ASIC had not received a copy of the reinstatement order of 1 June 2010 to which the stay application related. Vero, as the party which had succeeded in obtaining the reinstatement order, might have been expected to give ASIC prompt notification of the order and thereby to secure the full fruits of its success on the opposed application. For reasons that do not appear from the evidence, that apparently did not happen. 9 For present purposes, the important facts are that ASIC, having had no notice of the reinstatement order, has not reinstated the registration of Nicejade; that Nicejade therefore does not exist and, in that respect, is in the state of non-being that prevailed before the orders of 1 June 2010 were made; and that Vero and Sunlord, being the parties who were recognised as having an interest in the question of Nicejade's reinstatement, both desire to see the orders of 1 June 2010 set aside (and the application for a reinstatement order dismissed) so that there is no longer any basis for the reinstatement of Nicejade's registration by ASIC. In addition and as correspondence in evidence makes clear, ASIC has not at any time desired to be heard or to express an opinion on the question whether an order for reinstatement should be made and adopts the position that it will simply implement whatever order of the court is served on it. 10 The circumstances of this case therefore do not give rise to the question addressed in Miltonbrook Pty Ltd v Westbury Holdings Kiama Pty Ltd [2008] NSWCA 38; (2008) 71 NSWLR 262 regarding the effect of an order setting aside an order directing reinstatement by ASIC where ASIC has already complied with the court's direction to reinstate (indeed, whether an order setting aside the reinstatement order should be made after ASIC has so acted and as to the effect of setting aside in those circumstances). 11 It is necessary to mention also the position of Mr Kijurina, the official liquidator mentioned in order 4 of the orders of 1 June 2010. Orders 3 and 4 were both expressed to have effect immediately upon reinstatement of the registration of Nicejade. As that reinstatement has not occurred, nothing at this point flows from either of those orders. In addition, the nature of the orders is such that Mr Kijurina has no interest of his own in the question whether they ever come into effect. 12 In the light of the matters I have mentioned, the present application can be approached on the footing that the only persons having an interest in the question whether the orders of 1 June 2010 are set aside are the parties to the proceedings in which those orders were made, namely Vero and Sunlord (Nicejade was named as a defendant in the originating process but, because non-existent, was obviously not a party). Since each of Vero and Sunlord positively desires that the orders be set aside and consents to the making of the order to that effect now sought, the matter is within rule 36.15(2) of the Uniform Civil Procedure Rules 2005: "A judgment or order of the court in any proceedings may be set aside by order of the court if the parties to the proceedings consent." 13 This rule applies whether or not the judgment or order has been entered (compare various parts of rule 36.16). 14 Although the power under rule 36.15(2) is discretionary, the circumstances of this case indicate no reason why the order setting aside the orders of 1 June 2010 should not be made. 15 The other orders sought in the notice of motion should also be made substantially as sought. They flow logically from the decision to set aside the 1 June 2010 orders. The matter of notification of ASIC is dealt with by order 5, as sought. 16 The precise orders will be: 1. By consent, order that all orders made herein on 1 June 2010 be set aside.

2. By consent, order that the proceedings be dismissed.

3. By consent order that all costs orders made prior to the entry of orders 1 and 2 of these orders are vacated.

4. By consent order that each party is to bear its own costs of these proceedings.

5. By consent order that the the applicant Sunlord Holding Pty Ltd do within seven days give written notice of these orders to Brent Kijurina of Hall Chadwick Chartered Accountants of Level 29 St Martins Tower 31 Market Street and Australian Securities and Investments Commission. 17 I cannot leave this matter without noting the apparent absence of any requirement under the Corporations Act, the Corporations Regulations 2001 (Cth) and the Supreme Court (Corporations) Rules 1999 that a party obtaining an order under s 601AH(2) directing reinstatement by ASIC serve ASIC with an office copy of that order. ASIC's own Regulatory Guide 83 "Reinstatement of companies" makes it clear that ASIC has no expectation of being made a party to proceedings as distinct from being given advance notice and an opportunity to intervene or seek to be heard; also (at paragraph 83.25) that ASIC can only reinstate in compliance with a s 601AH(2) order if and when a copy is served on it. 18 There is, in my view, a question of public policy as to whether the carrying into effect of the court's decision that it is "just" that a particular company's registration be reinstated (and effectuation of the resultant direction that ASIC reinstate) should, as a practical matter, be left to depend on whether other persons, acting purely according to their own interests and desires, later choose to inform ASIC of the court's decision and direction. **********

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