Westbury Holdings Kiama Pty Ltd v ASIC

CATCHWORDS : CORPORATIONS - reinstatement of deregistered company - ex parte application to court - court directed that ASIC reinstate registration - ASIC reinstated registration - persons claiming to be affected seek order setting aside court's earlier order directed to ASIC - whether such persons entitled to opportunity to be heard - whether they in fact had such opportunity - whether full information given on ex parte application - whether order setting aside order directing reinstatement would be of any utility where reinstatement complete - nature and scope of jurisdiction to direct rectification of ASIC registers discussed

Companies Act 1961 (NSW) LEGISLATION CITED : Companies Act 1961 (Qld), ss.100, 103, 106 Corporations Act 2001 (Cth), ss.118, 119, 509(5), 539,601AD(1), 601AH, 1274(7A), 1322(4)(b) Uniform Civil Procedure Rules 2005, rule 36.15(1)

Australian Securities Commission v SIB Resources NL (1991) 30 FCR 221 Bowman v Secular Society Ltd [1917] AC 406 BP Australia Ltd v Brown (2003) 58 NSWLR 322 Callegher v Australian Securities and Investments Commission [2007] FCA 482 CGU Workers Compensation (NSW) Ltd v Rockwall Interiors Pty Ltd (2006) 201 FLR 296 Commissioner for Railways (NSW) v Cavanough (1935) 53 CLR 220 Commonwealth Bank of Australia v Australian Securities Commission (1998) 29 ACSR 170 Dahozo Pty Ltd v OZ-US Film Productions Pty Ltd (1997) 24 ACSR 739 GIO General Ltd v Sabko Pty Ltd [2007] NSWSC 251 HSH The Princess of Reuss v Bos (1871) LR 5 HL 176 CASES CITED : Lavercombe v Auscott Ltd (2006) 202 FLR 390 Pagnon v Workcover Queensland [2001] 2 Qd R 492 R v Registrar of Companies; Ex parte Attorney General [1991] BCLC 476 R v Registrar of Companies; Ex parte Central Bank of India [1986] QB 1114 Re Darmo Constructions Pty Ltd [1979] ACLC 32,229 Re Great Eastern Cleaning Services Pty Ltd [1978] 2 NSWLR 278 Re Harule Pty Ltd; Ex parte Olita Super Readymixed Concrete Pty Ltd (1994) 13 ACSR 500 Re Peter Conyers Holdings Pty Ltd (1996) 14 ACLC 1,835 Re Voxson Sales Pty Ltd [1989] 1 QdR 711 Westbury Holdings Kiama Pty Ltd v Australian Securities and Investments Commission [2007] NSWSC 115 White v Baycorp Advantage Business Information Services Ltd (2006) 200 FLR 125 Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590

Westbury Holdings Kiama Pty Limited and Peter Fitzgerald - Plaintiffs/Respondents PARTIES : Australian Securities and Investments Commission - Defendant Miltonbrook Pty Limited, Miltonbrook Land Pty Limited, Embrook Pty Limited - Applicants

COUNSEL : Mr D.L. Warren/Ms N. Obrart - Plaintiffs/Respondents Mr G.J. Nell SC/Ms J.A. Soars - Applicants

SOLICITORS : Heard McEwan Legal - Plaintiffs/Respondents Russell McLelland Brown - Applicants

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

6104/06 WESTBURY HOLDINGS KIAMA PTY LTD & ANOR v AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION JUDGMENT 1 By interlocutory process filed on 14 March 2007, three applicants seek the following order: "An order that the order made in these proceedings on 5 March 2007 directing Australian Securities and Investments Commission to reinstate the registration of Churnwood Holdings Pty Limited (in liquidation) be set aside and discharged." 2 The order of 5 March 2007 was an order under s.601AH(2) of the Corporations Act 2001 (Cth). It is desirable that s.601AH be set out in full: "Reinstatement by ASIC

(1) ASIC may reinstate the registration of a company if ASIC is satisfied that the company should not have been deregistered.

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.

(3) If the Court makes an order under subsection (2), it may: (a) validate anything done between the deregistration of the company and its reinstatement; and (b) make any other order it considers appropriate. Note: For example, the Court may direct ASIC to transfer to another person property vested in ASIC under subsection 601AD(2).

(4) ASIC must give notice of a reinstatement in the Gazette . If ASIC exercises its power under subsection (1) in response to an application by a person, ASIC must also give notice of the reinstatement to the applicant.

(5) If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company. Any property of the company that is still vested in ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim."

3 The order made under s.601AH(2) on 5 March 2007 was an order directing that Australian Securities and Investments Commission ("ASIC") reinstate the registration of Churnwood Holdings Pty Ltd ("Churnwood"), a company that was incorporated in 1972 under the Companies Act 1961 (NSW) and deregistered by ASIC on 29 January 2005 pursuant to s.509(5) of the Corporations Act following completion of voluntary winding up. 4 For reasons which will become apparent, it is necessary to recount the procedural history of the s.601AH(2) application. An originating process seeking relief under that section was filed on 1 December 2006 by Westbury Holdings Kiama Pty Ltd ("Westbury"). ASIC was named as sole defendant. The matter first came before the court on 12 February 2007 when Ms Obrart of counsel appeared for the plaintiff, Westbury, and there was otherwise no appearance. On that occasion, an amended originating process was filed (adding a claim for an order terminating the winding up of Churnwood) and I heard the application. The evidence consisted principally of an affidavit of Mr Gallagher. 5 On 22 February 2007, I ordered (stating reasons) that the application stand over to 26 February 2007: see Westbury Holdings Kiama Pty Ltd v Australian Securities and Investments Commission [2007] NSWSC 115. 6 When the matter came back before the court on 26 February 2007, I granted leave for the plaintiff, Westbury, to file a further amended originating process. An additional plaintiff, Mr Fitzgerald, was, with his consent, added to the proceedings. He had been the liquidator of Churnwood immediately before its deregistration. There was also an amendment substituting a different form of order terminating the winding up. The further amended originating process was then stood over to 5 March 2007. 7 On 5 March 2007, Ms Obrart appeared for both plaintiffs. There was no other appearance. Leave was granted to file an affidavit of Mr Fitzgerald, which affidavit was read. Three orders were then made: first, the order under s.601AH(2) directing ASIC to reinstate the registration of Churnwood; second, an order that, upon the reinstatement, Mr Fitzgerald resume office as liquidator; and, third, an order that, forthwith after the reinstatement and Mr Fitzgerald's resuming office as liquidator, the winding up of Churnwood be terminated. The first and third of these orders were in due course lodged with ASIC which, on 14 March 2007, reinstated the registration of Churnwood and recorded that company as no longer in liquidation. 8 It is relevant to record that ASIC, although named as defendant in the originating process, the amended originating process and the further amended originating process, did not appear or seek to take part in the proceedings. There were, however, tendered to the court letters from ASIC making it clear that it did not oppose the reinstatement application, provided that certain conditions were met. As things stood when the orders were made, none of the conditions presented any difficulty. 9 It was against this background that the interlocutory process of 14 March 2007 was filed. The applicants named in the interlocutory process are Miltonbrook Pty Limited ("Miltonbrook"), Embrook Holdings Pty Limited ("Embrook") and Miltonbrook Land Pty Limited. I shall call those three companies "the Applicants". 10 The Applicants' interlocutory process came before the court on 2 April 2007. The Applicants were not formally joined as parties to the proceedings, but Mr Warren of counsel (with whom Ms Obrart appeared on that occasion for the plaintiffs) accepted that the Applicants should be heard and that their application should be dealt with on its merits. I then heard the interlocutory process. 11 The Applicants contend that the order under s.601AH(2) made on 5 March 2006 should be set aside because (a) material facts were not disclosed to the court when the application was made; (b) Westbury was not a person aggrieved by the deregistration of Churnwood; (c) the Applicants, as persons likely to be affected by the order, should have been given an opportunity to be heard; and (d) "in all the circumstances, it would not be just to reinstate Churnwood, in particular for the purposes of pursuing its proposed proceedings against the Applicants" (these words are taken from the outline of submissions handed up by Mr Nell SC with whom Ms Soars of counsel appeared for the Applicants). 12 It is possible to deal concisely with one of these matters, namely (b) above. It is true that, in the reasons of 22 February 2007, I expressed an opinion that Westbury was, in terms of s.601AH(2), a person aggrieved by the deregistration of Churnwood. But by the time the order directing reinstatement was made on 5 March 2007, Mr Fitzgerald had become an additional plaintiff. As Mr Warren pointed out, that meant that the application eventually disposed of at the conclusion of the further hearing on 5 March 2007 was an application made by two persons, one of whom was "a former liquidator of the company", as referred to in s.601AH(2)(a)(ii). Such a person is given standing by reason only of the former liquidator status. The fact that one of the plaintiffs was within the s.601AH(2)(a)(ii) category means that the question whether the other (Westbury) was in truth within the s.601AH(2)(a)(i) category does not really need to be pursued. I concentrate, therefore, on the other matters raised. 13 In relation to grounds (a), (c) and (d), it is necessary to refer to some factual matters. I record first findings stated in the reasons of 22 February 2007: "The evidence shows that, on 11 January 1996, Churnwood became a party to two deeds. The other parties were, in each case, Miltonbrook Pty Limited ("Miltonbrook") and Embrook Holdings Pty Limited ("Embrook"). By each of these deeds, each of Miltonbrook and Embrook granted to "Churnwood or its nominee" an option to purchase certain property. On 30 July 2004 (that is, after the commencement of the winding up but before deregistration), a director of Churnwood purported to cause Churnwood to nominate Westbury to exercise each option. Westbury later purported to exercise the options by means which included not only documents ostensibly executed by Westbury but also documents purportedly executed on 13 October 2006 by the then non-existent Churnwood.

The affidavit of Mr Gallagher, a director of Westbury, supporting Westbury's application says that, in these circumstances: 'A dispute has arisen between Miltonbrook Pty Limited, Embrook Holdings Pty Limited and Westbury Holdings Kiama Pty Limited in respect of the proper or due exercise of the options by Westbury Holdings.'" 14 Evidence now before the court is more comprehensive. It is clear that the "dispute" mentioned by Mr Gallagher was tangible, specific and well-developed. Indeed, solicitors acting for Westbury and ostensibly for Churnwood had, on 6 December 2006, forwarded to solicitors for Miltonbrook and Embrook a draft statement of claim in which Westbury and Churnwood were named as plaintiffs. The named defendants were Miltonbrook and Embrook. The draft contained claims for declaratory relief to the effect that each of the deeds of 11 January 1996 was "a valid and subsisting deed of option", that Churnwood had "validly nominated" Westbury as the company having the right to exercise each option and that Westbury had validly exercised each option. There were also claims for consequential relief by way of specific performance. The draft statement of claim contained the following passage: "Terry Gallagher was the sole shareholder and director of Churnwood Holdings Pty Limited, which company was also used for property development until that company was wound up voluntarily by order of the Supreme Court. On [INSERT DATE] the company was reinstated to the Register by order of the Supreme Court whereby Terry Gallagher continued as the sole director and shareholder of the company." 15 A statement of claim as foreshadowed by this draft was filed on 15 March 2007 - that is, the day after ASIC reinstated the registration of Churnwood. At issue in the proceedings thus commenced will be the question whether a condition said to be made essential to the exercises of each option (being a condition as to the state of indebtedness between relevant companies) was not satisfied. 16 It is now clear that the passage in Mr Gallagher's affidavit quoted in the reasons of 22 February 2007 reasons (see paragraph [13] above) gave, in reality, an incomplete description of the position. The court was not told that proceedings had been threatened and that a draft statement of claim including the non-existent Churnwood as a plaintiff had been submitted - being a draft statement of claim in which the intention to seek an order for the reinstatement of Churnwood was expressly stated by means of the "INSERT DATE" notation. That intention was expressed in what had become a context of specifically threatened litigation, with a draft pleading having been prepared and exposed to the intended defendants. This, to my mind, gave the Applicants an interest in the matter much more concrete and immediate than was suggested by the reference merely to "disputes" in Mr Gallagher's account. 17 The proposition that the order of 5 March 2007 should now be set aside is advanced on the basis of reference to rule 36.15(1) of the Uniform Civil Procedure Rules 2005: "A judgment or order of the court in any proceedings may, on sufficient cause being shown, be set aside by order of the court if the judgment was given or entered, or the order was made, irregularly, illegally or against good faith."

18 Courts have on several occasions considered the position of non-parties who may be affected by applications to resurrect defunct companies. In Re Darmo Constructions Pty Ltd [1979] ACLC 32,229, Needham J declined to proceed with a reinstatement application until persons potentially affected had been served. It appeared that certain subcontractors retained by a company later deregistered had sued the company's principal. An effect (or possible effect) of reinstatement would have been to destroy the actions the subcontractors were pursuing against the principal. It was ordered that the subcontractors be given notice of the proceedings. 19 Earlier, in Re Great Eastern Cleaning Services Pty Ltd [1978] 2 NSWLR 278, Needham J had ordered joinder as a party to the reinstatement application of a person whose claim against a third party might be defeated by the reinstatement of the company. 20 In Re Harule Pty Ltd; Ex parte Olita Super Readymixed Concrete Pty Ltd (1994) 13 ACSR 500, a reinstatement application was made so that the reinstated company might pursue an action for breach of duty against a director. The court noted the unsuccessful attempts that had been made to serve that person. 21 A question of parties again arose in Dahozo Pty Ltd v OZ-US Film Productions Pty Ltd (1997) 24 ACSR 739. Those seeking reinstatement of the company wished to see it institute proceedings against certain persons. Bryson J observed that the potential defendants in those proceedings should have notice of the application. His Honour said (at p.742): "However when it is known to the court that some person has an apparent interest in a reinstatement application, the court would ordinarily make a direction which would enable that person to resist, such as requiring service of notice of the application on a person, making the person respondent to the application or allowing the person to intervene. The absence of any provision in the rules of court dealing with this is not an indication that notice of an application is not necessary; it is to be explained rather by the court's ordinarily acting in accordance with the audi alteram partem rule." 22 In relation to ground (c) relied on by the Applicants, I am of the view that, in accordance with approaches discussed in these cases, the Applicants (or, at least, the two of them named as defendants in the draft statement of claim) were entitled to an opportunity to be heard on the plaintiffs' application for an order under s.601AH(2) in respect of Churnwood. They were persons with a clear and direct interest in the matter and therefore beneficiaries, in the particular context, of the audi alteram partem rule. Denial of an opportunity to be heard would be irregular in the sense relevant to the operation of rule 36.15(1): see also BP Australia Ltd v Brown (2003) 58 NSWLR 322. 23 There is need to consider in relation to ground (c), however, an aspect of the evidence not so far mentioned. The Applicants, through their solicitor, knew that the plaintiffs' application for an order under s.601AH(2) was to be before the court on 5 March 2007. The solicitor, while perusing the AUSTLII website on or about 26 February 2006 for an unrelated purpose, saw and read the reasons of 22 February 2007. The solicitor made some inquiries and became aware that the matter was to come before the court again on 5 March 2007. He attended on that day and was actually in court when the hearing continued to its conclusion and the orders sought by the plaintiffs were pronounced. Yet no oral application was made on that occasion for leave for the Applicants to intervene or to be heard without becoming parties, with a view to bringing under the court's notice the matters on which the Applicants based their present application. Nor was there any foreshadowing of a desire to be heard in the proceedings and, for that reason, to have the hearing further adjourned. 24 This matter works against the grant of the relief the Applicants now seek. The reality is that the Applicants had an opportunity to be heard. It is true that the opportunity had arisen through a combination of chance and self-help and was not actively provided by the plaintiffs. But it is not really possible to regard a person as having no opportunity to be heard when that person's solicitor, with knowledge in advance of what is to transpire, is in court throughout the hearing and has full opportunity to seek to be heard on his clients' behalf. 25 As to ground (a) relied on by the Applicants, I am inclined to think that there were deficiencies in the disclosure made by the plaintiffs upon their ex parte application and that, for that reason, there could be a need for the orders made on 5 March 2007 to be set aside and for the application for those orders to become the subject of a rehearing. 26 But even if there were grounds for the court to set aside the orders of 5 March 2007 in accordance with the principles underlying rule 36.15(1) and the analogous aspect of the court's inherent jurisdiction, there is an issue of overriding importance relevant to the question whether the court would actually do so - namely, whether there would be any utility in setting the orders aside and embarking upon a rehearing of the plaintiffs' application. That question is particularly pertinent in relation to the order under s.601AH(2). It is necessary to look at the nature and force of such an order and the effect of any order setting it aside. There is a need, in that connection, to go back to some of the fundamentals of the Corporations Act. 27 Section 118 empowers ASIC to register a company. Section 119 states that a company "comes into existence as a body corporate at the beginning of the day on which it is registered". (Transitional provisions cause companies originally incorporated under the Companies Act 1961 (NSW) to be taken to be registered under the present s.118). Section 601AD(1) says that a company "ceases to exist on deregistration". In the ordinary course, therefore, a body corporate brought into existence by s.119 continues in existence until its "deregistration". Provision is made for "deregistration" in various parts of the Act. For present purposes, the relevant section is s.509(5) which directs ASIC to "deregister" a company at a specified time. Once ASIC "deregisters" a particular company, it ceases to be in existence. 28 Section 601AH allows the registration of a company to be "reinstated". Reinstatement may only be effected by ASIC. If reinstatement is effected, "the company is taken to have continued in existence as if it had not been deregistered": s.601AH(5). 29 While there is room for debate about some of the consequences of reinstatement (see, for example, the recent cases of White v Baycorp Advantage Business Information Services Ltd (2006) 200 FLR 125; CGU Workers Compensation (NSW) Ltd v Rockwall Interiors Pty Ltd (2006) 201 FLR 296 and GIO General Ltd v Sabko Pty Ltd [2007] NSWSC 251), there can be no doubt that when ASIC reinstates a company's registration, the company again exists. It has, from that point, the existence as a body corporate that was initially created by s.119 by virtue of registration under s.118 - that is, the existence that, in the light of s.601AD(1), continues until deregistration. It is possible for a company's existence to be terminated and re-created more than once. The company involved in Commonwealth Bank of Australia v Australian Securities Commission (1998) 29 ACSR 170 had been subjected to what Heerey J (at p.171) described as an "unusual cycle of death and resurrection". 30 In the present case, Churnwood is now in existence. The existence derives from the action taken by ASIC on 14 March 2007 in consequence of the court's order of 5 March 2007 directing ASIC to reinstate Churnwood's registration. In the way envisaged by the statutory scheme, the court made "an order that ASIC reinstate the registration of" Churnwood: s.601AH(2). It was not the court that reinstated the registration. It was ASIC, acting in consequence of the making of the court's order and in compliance with the direction expressed in the order. The function of registration is, under the legislation, a function to be performed only by ASIC. 31 Let it be assumed that the court were now to make an order that the order made under s.601AH(2) on 5 March 2007 be set aside. What would follow? 32 In the first place, the order of 5 March 2007 would, when set aside, cease to be the source of any compulsion. It would no longer be possible to regard that order as conveying any direction. But, of course, there no longer remains anything to be done to obey or give effect to the order. Section 601AH(2) enabled the court to give a direction to ASIC. The court did so by means of its order. That order was an order of a superior court and was not a nullity. A combination of the court's direction and the functions and duties of ASIC prescribed by the legislation then required that ASIC reinstate the registration of Churnwood. ASIC did so. Churnwood thereupon came back into existence in the way described in s.601AH(5). That existence continues today. It is sourced in the statute and the effect the statute produced in the light of the act of ASIC.

33 Termination of the direction of the court that provided the statutory warrant for ASIC's act would obliterate neither that act nor its statutory consequences. The relevant principle was stated by Rich, Dixon, Evatt and McTiernan JJ in Commissioner for Railways (NSW) v Cavanough (1935) 53 CLR 220 at p.225: "Acts done according to the exigency of a judicial order afterwards reversed are protected: they are 'acts done in the execution of justice, which are compulsive' ( Dr Drury's Case [(1610 8 Co Rep at p.143a; 77 ER at p.691])." 34 Of particular relevance in the present context is the decision of the High Court in Wilde v Australian Trade Equipment Co Pty Ltd (1981) 145 CLR 590. A charge created by a company was not lodged for registration within the required time. On an ex parte application by the chargee, the court exercised the statutory jurisdiction to extend the time for registration. Lodgment was effected within the extended time. The company was later wound up and the liquidator obtained an order setting aside the order extending the time for registration. The liquidator then contended that the charge was void against him because lodgment had not been made within the unextended time. The High Court held by majority (Stephen, Murphy and Wilson JJ, Aickin J concurring, Gibbs J dissenting) that registration effected in reliance on the order extending time was valid and continued to be valid despite the setting aside of the order extending time. Dealing with the effect of the order setting aside, Stephen J, Murphy and Wilson JJ said (at p.603): "The essential question is as to the effect if any of the order setting aside the extension of time. Mr Williams argues that the discharge of the ex parte order necessarily deprives the registration that was effected in reliance on that order of its efficacy as against the liquidator. The registration is as if it had never been, it is void ab initio as against the liquidator. We pause to remark that if the argument is a good one the registration should be wholly void, not merely as against the liquidator. But in any event the consequence that will follow an order setting aside an earlier decision will vary from case to case. So long as the earlier decision stands, and no stay is operative, it is a lawful decision and the action taken in reliance upon it is lawful. It is true that from the moment it is set aside the order can no longer provide the lawful justification for further action, but whether what has been done can be undone will depend upon the availability of appropriate remedies, to bring about the appropriate relief." 35 Their Honours later said (at pp.603-604): "We are unable to escape the conclusion that the order extending time was beyond recall so soon as registration had been effected in reliance upon it, and once those steps were taken the operation of the order could not be undone retrospectively. It follows that the validity of the registration was not dependent on the continued subsistence of the order extending time, and consequently the order setting aside the extension of time could not affect the registration that had already been concluded." 36 The statute considered in that case (the Companies Act 1961 (Qld)) required, in s.100, that there be "lodged with the Commission for registration within thirty days after the creation of the charge a statement of the prescribed particulars". Section 106 empowered the court to "order that time for registration be extended". Section 103 required the Commission to "keep a register of all the charges lodged for registration under this Division" and to "enter in the register with respect to those charges" specified particulars. The Commission performed its function under s.103 in respect of the particulars lodged after the expiration of the period of thirty days referred to in s.100 but within the longer period prescribed by the order made ex parte under s.106. That function was fully performed before the order was set aside. 37 In the present case, ASIC's action in reinstating the registration of Churnwood was validly and regularly completed in compliance with the requirements that came to bear upon ASIC by the combined force of the court's order of 5 March 2007 and s.601AH(2) of the Corporations Act. ASIC, at that point, made an entry in the register of companies which renewed the existence of Churnwood. It did so according to law. After ASIC had acted, the court's order of 5 March 2007 had no further work to do. The renewal of Churnwood's existence had been completed and is ongoing. That existence in no way depends on the continued force of the court's order. It derives wholly and directly from statute and cannot again be brought to an end except by some new statutory intervention. I quote, in that connection, from the fifth edition (1891) of Sir Nathaniel Lindley's "A Treatise on the Law of Companies" (at p.610): "[A] company which is incorporated by act of Parliament can be dissolved only as therein provided, or by another act of Parliament."

(See also HSH The Princess of Reuss v Bos (1871) LR 5 HL 176.) 38 Any order the court now made setting aside the order of 5 March 2007 would not be or give rise to any new statutory intervention. Unlike an order under s.601AH(2), it would not be an order that the Corporations Act recognised as the source of either permission or compulsion for ASIC to do anything relevant to the registration and existence of Churnwood. 39 This last observation is sufficient, in my view, to deal with the submission advanced by Mr Nell SC on behalf of the Applicants that an order setting aside the order of 5 March 2007 would justify a further order directing rectification of the register of companies pursuant to s.1322(4)(b) of the Corporations Act by removal of the registration of Churnwood. Section 1322(4)(b) is in these terms: "(4) Subject to the following provisions of this section but without limiting the generality of any other provision of this Act, the Court may, on application by any interested person, make all or any of the following orders, either unconditionally or subject to such conditions as the Court imposes: …

(b) an order directing the rectification of any register kept by ASIC under this Act; …" 40 As I sought to explain in Lavercombe v Auscott Ltd (2006) 202 FLR 390, the jurisdiction to order rectification of a register kept by ASIC is exercisable where the content of the register does not conform with the law and is for that reason in need of correction. If the content already conforms with the law, there is nothing to correct. I venture to repeat what I there said at pp.399-400: " Section 1322(4)(b) does not create any general reformatory jurisdiction. It allows the court to make orders ensuring that the content of registers kept by ASIC under the Corporations Act accords with the statutory requirements with respect to such content. Every decision as to whether such an order should be made will be informed by the statutory requirements regarding register content. If the register does not contain something that the legislation requires it to contain, the jurisdiction to order rectification is enlivened. If the register contains something that the legislation says it must not contain, the jurisdiction to order rectification is also enlivened (also, perhaps, where something not required to be included is included). But if a particular thing is in the register and its presence there represents precise compliance with a requirement imposed by the statute, the jurisdiction to order rectification is not enlivened. Nor is the jurisdiction enlivened if there is absent from the register something that the legislation does not require to be there."

41 In the case now before me, an entry was regularly and validly made in the register of companies by ASIC in consequence of the making of the order of 5 March 2007. In line with the High Court's decision in Wilde v Australian Trade Equipment Co Pty Ltd (above), any order setting aside that order will not produce any statutory warrant for removal or alteration of that entry. The setting aside of the order would therefore not create any occasion for rectification of the register.

42 I am aware that this conclusion is at odds with that reached by Senior Master Mahony in Re Peter Conyers Holdings Pty Ltd (1996) 14 ACLC 1,835, a case referred to in submissions. It was there decided that grounds had been shown to set aside an order for the reinstatement of the registration of a company. The person by whom the order was obtained lacked standing. There, as here, the reinstatement was complete at the time the court considered the matter. Having decided that there were grounds to set aside the reinstatement order, Senior Master Mahony said (at p.1,857): "In these circumstances, the next question which arises is whether an order should now be made setting aside the order for reinstatement of the registration of the company. This does not necessarily follow. First, there is the question whether such an order would have any substantive effect. In other words, would such an order have the effect of resuming the company's dissolution? If it would not, and if nothing could be done to produce that effect, the order would be of no ultimate consequence and, therefore, at least as a general rule, not made. Of itself, it would not have the effect of resuming the company's deregistration. It would, however, retrospectively remove the operative effect of the order set aside. If that course were followed, without more, the position henceforth would be that the company would be on the register but the order, upon the lodgment of which its registration would be taken to have been reinstated, 141 would be of no effect. This would be incongruous; and, if unavoidable, it would warrant the court's not setting aside its previous order albeit obtained by a person without standing to seek it."

43 This implicitly recognises the result indicated by Wilde's case to which I have referred. Having reached that point and stated the position dictated by the statute (correctly, in my respectful opinion), Senior Master Mahony turned his attention to the question whether s.1322(4)(b) provided a separate and independent statutory basis for removing from the register the entry regularly and properly made in consequence of the making of the reinstatement order. He said (also at p.1,857): "I have considered this further and continue of the view that exercise of the power to order rectification of the register is appropriate in such a case as this. The alternative would be that the court could set aside an order under s 574(3) on the ground that it had been improperly obtained but could not alter the effect which that order had on its lodgment. That would be a consequence not to be accepted unless there were no alternative, because it would mean that there would be no effective redress where such an order had been obtained in circumstances rendering it liable to be set aside. The power to order rectification of the register answers the need for an alternative."

44 I regret that I find myself unable to accept that s.1322(4)(b) is capable of any such operation. That section does not allow the court to direct anything beyond the steps necessary to ensure that a register is kept in conformity with the statutory provisions applicable to it. Once it is recognised that the reinstatement of the registration of Churnwood effected by ASIC on 14 March 2007 was effected in accordance with the Corporations Act, there is nothing in need of rectification or capable of being rectified. 45 Unavailability of s.1322(4)(b) in the present case is indicated by the decision of Ryan J in Australian Securities Commission v SIB Resources NL (1991) 30 FCR 221. That case concerned a company which had been registered as a no liability company even though it did not have attributes allowing it to be so registered. The Commission, having realised the error, sought an order under s.1322(4)(b) for the rectification of the register of companies by removing from it the application for registration and the memorandum and articles lodged with that application. Ryan J declined to make such an order. After referring to Re Voxson Sales Pty Ltd [1989] 1 QdR 711 (which played a central part in the reasoning in Lavercombe v Auscott Ltd (above)) and noting the principle that a corporation created by statute can only be dissolved by statute, his Honour said (at p.233): "In my opinion and having regard to its context and legislative history, s 1322(4) does not evince an intention that the court should have a power, on the application of the Commission, retrospectively to deprive a company of the corporate existence conferred by s 123 of the Law, in addition to and distinct from the express power to make a winding-up order having prospective operation conferred by ss 460 and 461. I consider that a grant of such a power would have been at the forefront of a substantive legislative provision and not merely conferred as part of a general facility to relieve from the consequences of procedural and other irregularities." 46 That, of course, was a case in which a company had been registered even though the statutory conditions for registration had not been satisfied - in other words, in circumstances where the power to register had not become exercisable. It may be that an ability of the court to intervene in such circumstances is indicated by R v Registrar of Companies; Ex parte Attorney General, a decision of the Divisional Court of the Queens Bench Division (Ackner LJ and Skinner J) of 17 December 1980 belatedly reported at [1991] BCLC 476. The registration of a company formed to conduct a business of prostitution was held to be beyond the registration function because that function extended only to registering companies "formed for any lawful purpose" (a purpose of prostitution was regarded as unlawful). Certiorari was ordered to quash the registration, ostensibly on the basis of the decision of the House of Lords in Bowman v Secular Society Ltd [1917] AC 406. In later English cases, however, it has been emphasised that provisions making a certificate of registration conclusive evidence of satisfaction of all statutory requirements for registration (compare s.1274(7A) of the Corporations Act) generally preclude judicial review: see, for example, the decision of the Court of Appeal in R v Registrar of Companies; Ex parte Central Bank of India [1986] QB 1114. This was to the forefront of the reasoning in the SIB Resources case. 47 If, as Ryan J there held, registration which is the source of a company's existence is beyond the reach of s.1322(4)(b) in a case where the registration was effected without necessary statutory conditions having been satisfied, registration is a fortiori beyond the reach of the section where, as in this case, ASIC has effected it in the due and regular performance of the relevant statutory function. 48 It is perhaps worth noting, as an aside, that, so far as my own brief researches reveal, the origin of s.1322(4)(b) is obscure. It first appeared as s.539(4)(b) of the Companies Act 1981 (Cth) and corresponding State and Territory codes. The draft Companies Bill circulated in April 1980 contained no such provision. It was, however, included in the draft Companies Bill of August 1980. The accompanying explanatory memorandum (at paragraph 834) merely paraphrased proposed s.539 as a whole and said that it was "based on ss.215 and 366" of the uniform Companies Acts. There was no indication of thinking behind the perceived need for a provision empowering the court to direct rectification of registers kept by the Commission. 49 It is necessary next to refer briefly to an alternative legislative basis put forward by Mr Nell on behalf of the Applicants for achieving the result that I have held cannot be achieved through s.1322(4)(b). It was submitted that s.601AH(3)(b) empowers the court to make, in effect, an order that ASIC cancel or reverse a reinstatement effected by it following the making of an order under s.601AH(2). I do not accept that this is within the purpose of s.601AH(3)(b) or that the section can have any such effect. Viewed in its context, s.601AH(3)(b) is a provision allowing the court to make ancillary or supplementary provision of a facilitating kind conducive to the full and orderly attainment of the objects to be achieved by a reinstatement made as a result of s.601AH(2) order, including the deemed continuity decreed by s.601AH(5): see, for example, Pagnon v Workcover Queensland [2001] 2 Qd R 492. It would be foreign to that purpose for the court to purport to countermand or overturn that which it had ordered under s.601AH(2). 50 Finally and for the sake of completeness, I mention the recent decision in Callegher v Australian Securities and Investments Commission [2007] FCA 482 (4 April 2007). In that case, a judge of the Federal Court of Australia was called upon to review the decision of a registrar of the court to make an order under s.601AH(2). In the particular statutory context, the hearing before the judge was a hearing de novo. There was accordingly a possibility that the judge would decline to make the order that the registrar had made. In that eventuality, the result would have been the equivalent of setting aside the registrar's order. In the event, the judge decided that the registrar's decision was correct. The important distinction between that case and this is that the order made by the registrar had not been acted upon by ASIC, with the result that statutory consequences had not intervened before the review of the registrar's decision was undertaken. 51 My conclusion on the present application is that, having regard to the action taken by ASIC on 14 March 2007 and the consequences of that action under the statutory scheme with respect to the creation, existence and extinction of companies by registration under the Corporations Act, any order setting aside the order made under s.601AH(2) on 5 March 2007 would be an empty order having no meaningful effect and of no utility. For that reason, the court would not make such an order.

52 The interlocutory process filed on 14 March 2007 is dismissed with costs. **********

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