Supreme Court New South Wales

• Medium Neutral Citation: Commonwealth Bank of Australia v Susan Hannaford Pty Ltd [2013] NSWSC 342
• Hearing dates: 12 April 2013
• Decision date: 12 April 2013
• Jurisdiction: Common Law
• Before: Davies J

Decision

1. Order that the Australian Securities & Investments Commission reinstate the registration of the First Defendant pursuant to s 601AH(2) of the Corporations Act 2001 (Cth).

2. Immediately upon reinstatement, the First Defendant be wound up pursuant to s 461(1)(k) of the Corporations Act and that Katherine Elizabeth Barnet and Hugh Armenis be appointed as liquidators.

• Catchwords: CORPORATIONS - deregistration - reinstatement - former director fails to give appropriate undertakings - winding-up on reinstatement - just and equitable ground.
• Legislation Cited: Corporations Act 2001 (Cth)
• Cases Cited: ACN 078 272 867 Pty Limited (In Liquidation) v The Deputy Commissioner of Taxation [2011] HCA 46; (2011) 86 ALJR 4; Loch v John Blackwood Limited [1924] AC 783; Stapp v Surge Holdings Pty Limited [1999] FCA 545
• Category: Interlocutory applications
• Parties: Commonwealth Bank of Australia (Plaintiff); Susan Hannaford Pty Ltd (First Defendant); Marquessa Hannaford (Second Defendant); Susan Louise Hannaford (Third Defendant)
• Representation: Counsel: M Collins (Plaintiffs); Z Mandoh (Defendants); Solicitors: Gadens Lawyers (Plaintiffs); Mandoh & Associates (Defendants)
• File Number(s): 2010/4800

Judgment

1 This is an application by the Plaintiff to have the First Defendant in these proceedings, Susan Hannaford Pty Limited, reinstated. The company was deregistered on 17 March 2012. It appears from the documents obtained in relation to the company from ASIC that annual returns in respect of the company have not been filed since at least 1995, and other fees required to be paid have not been paid.

2 The Plaintiff brought these proceedings against that company and two other persons seeking possession of land and claiming a debt arising out of a loan agreement entered into on 29 April 2004.

3 Summary judgment was applied for in relation to the claim for possession of land and that was heard by Hidden J who, on 24 August 2012, gave possession of the property at Beatty Street, Balgowlah Heights to the Plaintiff. The proceedings against the Second Defendant have resolved. The proceedings remain on foot, at least to a limited extent, in relation to the Third Defendant.

4 The Plaintiff now wishes to pursue what it believes will be a shortfall on the sale of the land from, inter alia, the First Defendant. It is for that reason that it seeks the reinstatement of the First Defendant.

5 At the time of deregistration of the company, there was only one director, one Rachel Wentworth. I am satisfied that Ms Wentworth has been served with the present application for reinstatement. Although the documents were returned when served on an address in Bond Street, Sydney (the address of Ms Wentworth at the time of de-registration according to the ASIC records), the documents forwarded to the last registered office of the company, at unit 145/97 Longueville Road, Lane Cove, have not been returned.

6 In addition, notice was given to a Mr Zac Mandoh of Mandoh & Associates Lawyers in Kogarah. Mr Mandoh had, hitherto, appeared for each of the three Defendants in the proceedings. Mr Mandoh has appeared today and has sought leave to appear on behalf of Ms Wentworth to make submissions in relation to the matter. I granted him the leave to do so. Ms Wentworth does not oppose the reinstatement of the company.

7 I am satisfied that appropriate notice has been given to ASIC in the matter. Although, at one stage, ASIC considered it appropriate it should be joined as a Defendant in the proceedings, it has modified its view in that regard. ASIC will now not oppose the application for reinstatement provided that the conditions which it has stipulated are made known to the court and are taken into account by the court before any order for reinstatement is made.

8 One of the conditions was that Ms Wentworth be notified - and that has happened. The other principal condition was that the company should upon reinstatement immediately be wound up unless Ms Wentworth agrees to resume her role as sole director of the company and lodges all the necessary documents with ASIC and payment of all fees. The remaining conditions were simply procedural.

9 The power to make an immediate order for the winding up of the company upon its reinstatement has been made clear by the judgment of Heydon J in ACN 078 272 867 Pty Limited (In Liquidation) v The Deputy Commissioner of Taxation [2011] HCA 46; (2011) 86 ALJR 4 at [38]. Although that judgment did not identify the particular basis within s 461 Corporations Act 2001 (Cth) for the winding up of a company in these circumstances, a winding up order may be made on the just and equitable ground: Stapp v Surge Holdings Pty Limited [1999] FCA 545 at [49], and the judgment of the Privy Council in Loch v John Blackwood Limited [1924] AC 783 at 788, referred to therein.

10 Ms Wentworth opposes the appointment of a liquidator to the company on the basis, Mr Mandoh says, that she is prepared to pay the necessary fees to satisfy ASIC. However, the condition that ASIC stipulated for agreeing to the reinstatement without insisting on the liquidation of the company, was that the former officeholder, that is Ms Wentworth, agree to resume her role as director, attend to the lodgement of all outstanding documents and pay all outstanding fees and penalties upon reinstatement.

11 I have been provided with a letter said to be on the letterhead of Susan Hannaford Pty Limited from Ms Wentworth. The letter says in its entirety:

SUSAN HANNAFORD PTY LTD

49 Manuka Circle, Cherrybrook, NSW 2126

[e-mail]

Mandoh and Associates Lawyers

Attention: Zac Mandoh

Suite 5A/18 Montgomery Street,

Kogarah NSW 2217

April 11, 2013

Re: Re-registration of Susan Hannaford Pty Ltd

Dear Mr. Mandoh,

We write with regard to the company's de-registration for non-payment of annual fees pursuant to s 601AB (1 A) of the Act. This letter is to confirm the company's instruction that the company is willing to consent to the re-registration of the company within a time frame that is reasonable for re-registration,

I have spoken with ASIC and have obtained the necessary reinstatement estimate for the outstanding fees in order to reinstate the company. The current fees as of April 8, 2013 are $1,423.50. Please note that I have been advised by ASIC that upon payment of the relevant fees the company will he re-registered within (6) weeks. This time frame was confirmed with Gemma who is the Manager of the ASIC Call Centre and once again re-confirmed with the Registry Services and Licensing department.

If you have any questions regarding the re-registration process ASIC can be reached directly on 1300-300-630.

Sincerely,

Rachel Wentworth

12 Nowhere in that letter is there any undertaking even to pay the fees, let alone to attend to the lodgement of necessary documents, nor to any acceptance of a resumption of her role and duties as a director of the company. The letter is nothing more than an historical narrative of Ms Wentworth's discussions with ASIC and the provision of consent by a company that does not presently exist for its reinstatement.

13 I am not satisfied that Ms Wentworth has given any undertaking to do the things that ASIC requires her to do, nor even to pay the fees referred to in the letter. When the matter was last before the Court on 7 March Mr Mandoh undertook to obtain such an undertaking in writing when I raised the matter with him. All that has been produced is the letter of 11 April, 2013.

14 As I mentioned earlier, the company was deregistered 13 months ago and nothing has been done in the meantime by Ms Wentworth. The present application has been on foot since 28 February 2013 and, despite service of the notice of the application on that date, nothing has been done by Ms Wentworth apart from making some enquiries with ASIC and writing this letter and other emails to Mr Mandoh and to the Third Defendant.

15 In the circumstances, I consider that it is appropriate that upon the reinstatement of the company, it ought immediately be placed into liquidation and a liquidator appointed. Katherine Elizabeth Barnet and Hugh Armenis have consented to act as liquidators in the matter.

16 The orders I make, therefore, are:

1. Order that the Australian Securities & Investments Commission reinstate the registration of the First Defendant pursuant to s 601AH(2) of the Corporations Act 2001 (Cth).

2. Immediately upon reinstatement, the First Defendant be wound up pursuant to s 461(1)(k) of the Corporations Act and that Katherine Elizabeth Barnet and Hugh Armenis be appointed as liquidators.

17 The orders should be taken out forthwith.

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Decision last updated: 17 April 2013