Jessup v Gracie Mining International Corp Ltd
[2009] QCA 161
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- Unreported Judgment
- Appeal Determined (QCA)
- Jessup v Gracie Mining International Corp Ltd[2009] QCA 161
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Jessup v Gracie Mining International Corp Ltd[2009] QCA 161
Jessup v Gracie Mining International Corp Ltd[2009] QCA 161
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | SC No 136 of 2007 |
Court of Appeal | |
PROCEEDING: | Application for Extension of Time/General Civil Appeal |
ORIGINATING COURT: | |
DELIVERED ON: | 12 June 2009 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 4 June 2009 |
JUDGES: | Keane and Fraser JJA and Cullinane J Separate reasons for judgment of each member of the Court, each concurring as to the orders made |
ORDERS: |
|
CATCHWORDS: | CORPORATIONS – WINDING UP – CONDUCT AND INCIDENTS OF WINDING UP – DISSOLUTION – RESTORATION OF DEFUNCT COMPANY TO REGISTER – IN WHAT CIRCUMSTANCES ORDER MADE – GENERALLY – where applicant a director of a deregistered company – where respondent commenced proceedings against deregistered company for sums of money recoverable as a result of transactions voided pursuant to s 588FE of the Corporations Act 2001 (Cth) – where company purported to defend proceedings despite deregistration – where respondent sought reinstatement of company to continue proceedings against applicant – where maintenance of proceedings dependent upon assertions made by respondent not reflected on the evidence – whether discretion to reinstate company to pursue proceedings miscarried Corporations Act 2001 (Cth), s 461, s 588FE, s 588FF, s 601AH du Boulay v Worrell & Ors [2009] QCA 63, cited |
COUNSEL: | C J Ryall for the applicant D P Morzone for the respondent |
SOLICITORS: | Murray Lyons for the applicant Miller Harris Lawyers for the respondent |
[1] KEANE JA: The respondent to the proceedings in this Court is the liquidator of Drury Management Pty Ltd (in liquidation) ("the Company"). On 27 March 2007 the respondent commenced proceedings against a company formerly known as Gracie Mining International Pty Ltd ("Gracie") and others, seeking an order that the defendants pay to the respondent as liquidator of the Company sums of money recoverable as a result of transactions which were voided pursuant to s 588FE(3) or s 588FE(4) of the Corporations Act 2001 (Cth) ("the Act").[1]
[2] Gracie filed a defence to the respondent's claim on 24 April 2007. An amended statement of claim was filed on 14 June 2007, and Gracie filed an amended defence on 1 April 2008.
[3] Even though Gracie took steps to defend the claim by the respondent, it became apparent that Gracie had been deregistered on 13 January 2008 by the Australian Securities and Investments Commission ("ASIC") pursuant to s 601AB of the Act. The deregistration occurred by reason of the failure on the part of those in control of the Company to lodge annual returns for several years.
The decision below
[4] The respondent applied to the learned primary judge under s 601AH(2) of the Act for an order reinstating Gracie to the register so as to enable his action to proceed.[2] Mr Baxter, who had been a director of Gracie at all material times, opposed that course on a number of grounds. His principal contention was that the time for the making of a claim by the liquidator of the Company expired, by virtue of s 588FF(3)(a) of the Act, on 24 September 2005, being the date three years after the date of the making of the application for the winding up of the Company, ie 24 September 2002.
[5] The learned primary judge proceeded to exercise his discretion under s 601AH(2) of the Act on the footing that there was "an unresolved issue of fact as to whether the relevant application for winding up was made early in 2004". On that basis, his Honour rejected Mr Baxter's contention that the claim could not succeed, and ordered that ASIC reinstate the registration of Gracie. His Honour ordered further, pursuant to s 461(1)(c) of the Act, that Gracie be immediately wound up upon the reinstatement of registration and that Mr Meir and Mr Jonsson be appointed liquidators for the purpose of that winding up.
An extension of time is necessary
[6] Mr Baxter wished to appeal against these orders and instructed his solicitor accordingly. The time for commencing any appeal expired on 8 January 2009, but Mr Baxter's notice of appeal was not filed until 9 January 2009. It seems that the delay in filing Mr Baxter's notice of appeal occurred because of a misunderstanding between Mr Baxter and his solicitors.
[7] On Mr Baxter's behalf, an application seeking an extension of time within which to appeal was filed on 21 January 2009. No prejudice is said to have enured to the respondent as a result of the short delay. The only basis on which the respondent opposes the grant of an extension of time is that the appeal does not have sufficient prospects of success to warrant the grant of an extension of time. Whether or not that is so depends upon a consideration of whether the basis on which his Honour proceeded to exercise his discretion to reinstate Gracie to the register of companies. I turn then to consider that issue.
The issue in this Court
[8] The only basis on which it was sought to restore Gracie to the register was to enable the Company's claims for recovery of moneys paid under transactions voidable under s 588FE(3) and (4) of the Act to be pursued. If Mr Baxter's contention that the application for the winding up of the Company was made on 24 September 2002 is correct then those claims cannot succeed. If the claims in question cannot succeed on this ground then, there being no other reason to reinstate Gracie's registration, the court could not be satisfied for the purposes of s 601AH(2)(b) of the Act that it is just that Gracie's registration be reinstated. It would not be just to reinstate Gracie in order to facilitate the pursuit of litigation which must fail.[3]
[9] As I have mentioned, the learned primary judge upheld the application by the respondent on the basis that there was an "unresolved issue of fact" as to whether the application for winding up was made early in 2004. On this view, the action to be pursued by the Company was not necessarily bound to fail. The evidentiary basis for this view taken by his Honour is not apparent from the record.
[10] In the records of the Court there is an application for the winding up of the Company which was filed on 24 September 2002. There is nothing in the record to suggest that this application was discontinued or abandoned. The Company's statement of claim asserts that on 24 March 2004, ASIC filed an application to wind up the Company. No such application appears in the records of the Court.
[11] It is most undesirable, of course, that there should be room for argument about a fact which should, in the nature of things, be a matter of record. Be that as it may, if an application was filed or made in March 2004, that fact might be proved by evidence other than the records of the Court. If there is evidence, apart from the formal records of the Court, which might bear upon this issue then the respondent has had ample opportunity to adduce that evidence. Prior to the hearing of the application before the learned primary judge, the solicitors for Mr Baxter had put the liquidator of the Company on notice that he intended to take the point that the winding up of the Company commenced on 24 September 2002. Nevertheless, the material before the learned primary judge and before this Court does not show how the learned primary judge could have perceived an evidentiary basis for the view that there was any issue of fact as to whether the application for the winding up of the Company was not filed until some time in 2004. The only evidence on the point was all one way.
[12] In my respectful opinion, the learned primary judge erred in failing to proceed on that footing; and, accordingly, the exercise of his Honour's discretion proceeded upon a factual error.
[13] In this Court it was sought to sustain the decision below on the basis (not put to the learned primary judge) that the respondent has foreshadowed an intention to pursue a claim against Gracie at common law for moneys had and received. The pleading in which that claim is foreshadowed is less than a model of the pleader's art, but putting that objection to one side, Mr Ryall of Counsel who appeared for Mr Baxter made it clear that his client would rely upon the expiration of the limitation period for such a claim under the Limitation of Actions Act 1974 (Qld). On that basis the foreshadowed claim would also fail.
[14] It was argued on the respondent's behalf that Gracie should be reinstated to allow an investigation to proceed into whether the limitation defence might be defeated, for example, by an acknowledgement of the debt. There are two answers to this argument which may be stated shortly. First, reinstatement is not necessary to allow an investigation into the dealings between the Company and Gracie: the respondent has access to the Company's records of those dealings and further is able to exercise the powers of investigation available to him as a liquidator. Second, the respondent has had ample time to unearth any evidence which might found an argument that the foreshadowed claim is viable and is not able to point to any such evidence.
Conclusion and orders
[15] The learned primary judge's discretion miscarried. The decision below cannot be maintained on the alternative basis advanced in this Court. I would, therefore, grant the extension of time sought by the applicant.
[16] The appeal must be allowed and the orders made below set aside.
[17] I consider that the respondent should pay the applicant's costs of the appeal and of the originating application. I also consider that there should be no order as to the costs of the application for an extension of time.
[18] FRASER JA: I agree with the reasons of Keane JA and with the orders proposed by his Honour.
[19] CULLINANE J: I have read the reasons of Keane JA in this matter and agree with those reasons and the orders he proposes.
Footnotes
[1] Section 588FE(3)-(4) of the Corporations Act 2001 (Cth) provides:
"(3)The transaction is voidable if:
(a) it is an insolvent transaction, and also an uncommercial transaction, of the company; and
(b) it was entered into, or an act was done for the purpose of giving effect to it, during the 2 years ending on the relation-back day.
(4)The transaction is voidable if:
(a) it is an insolvent transaction of the company; and
(b) a related entity of the company is a party to it; and
(c) it was entered into, or an act was done for the purpose of giving effect to it, during the 4 years ending on the relation-back day."
(d)
[2] Section 601AH of the Corporations Act 2001 (Cth) provides relevantly:
"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.
(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.
…
Effect of reinstatement
(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 the Commonwealth or 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] du Boulay v Worrell & Ors [2009] QCA 63 at [13].