Boys, in the matter of 38 Akuna Pty Ltd (Deregistered) v Australian Securities and Investments Commission

• Jurisdiction: Australia Federal only
• Judge: LEE J
• Judgment Date: 15 February 2019
• Neutral Citation: [2019] FCA 320
• Date: 15 February 2019
• Court: Federal Court

FEDERAL COURT OF AUSTRALIA

Boys, in the matter of 38 Akuna Pty Ltd (Deregistered) v Australian Securities and Investments Commission [2019] FCA 320

File number:	NSD 1719 of 2018
Judge:	LEE J
Date of judgment:	15 February 2019
Catchwords:	CORPORATIONS – deregistered corporation – application for reinstatement of registration – person aggrieved – whether reinstatement is just – relevance of delay – existence of an arguable cause of action – appointment of new liquidators
Legislation:	Civil Dispute Resolution Act 2011 (Cth) Corporations Act 2001 (Cth) s 601AH
Cases cited:	Deputy Commissioner of Taxation v Australian Securities and Investments Commission; in the matter of Civic Finance Pty Limited (Deregistered) [2010] FCA 1411; (2010) 81 ATR 456 Deputy Commissioner of Taxation; in the matter of James Hardie Australia Finance Pty Ltd (Deregistered) [2008] FCA 1181; (2008) 170 FCR 545 Emergen-X Pty Limited (in liquidation), in the matter of Emergen-X Pty Limited (in liquidation) [2010] FCA 487 ; Belconnen Lakeview Pty Ltd v Maya Krishna Goundar [2016] ACTMC 10 du Boulay v Worrell [2008] QSC 174 du Boulay v Worell [2009] QCA 63 In the matter of ERB International Pty Limited (deregistered) [2014] NSWSC 200; (2014) 283 FLR 223 In the matter of European Metal Recyclers Pty Ltd (in liq) (deregistered) [2018] NSWSC 946 In the matter of Likehart Pty Limited (deregistered) [2017] NSWSC 884 Partners v Sampson [2002] NSWSC 383 Re Brockweir Pty Ltd [2012] VSC 225
Date of hearing:	15 February 2019
Registry:	New South Wales
Division:	General Division
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Category:	Catchwords
Number of paragraphs:	52
Counsel for the Plaintiff:	Mr C Colquhoun with Mr C McMeniman
Solicitor for the Plaintiff:	Corrs Chambers Westgarth
Counsel for the Defendant and Interested Person:	Mr J C Hewitt
Solicitor for the Interested Person:	K & L Gates

ORDERS

		NSD 1719 of 2018
IN THE MATTER OF 38 AKUNA PTY LTD ACN 122 192 492 (DEREGISTERED)
BETWEEN:	ANTHONY WILLIAM BOYS Plaintiff
AND:	AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Defendant
	GRAHAM GERARD POTTS Intervener

JUDGE:	LEE J
DATE OF ORDER:	15 FEBRUARY 2019

THE COURT ORDERS THAT:

1. The defendant reinstate the registration of 38 Akuna Pty Ltd ACN 122 192 492 (Deregistered) (Company).

2. Upon reinstatement of the Company, Mr Barry Kogan and Ms Katherine Sozou be appointed as liquidators of the Company.

3. The matter be listed for a case management hearing at 10.15am on 12 April 2019.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

(Revised from the Transcript)

LEE J:

A Introduction

1. The plaintiff in these proceedings, Mr Boys, contends he has a claim against 38 Akuna Pty Ltd (38 Akuna), for the refund of goods and services tax (GST) paid by him to 38 Akuna when he purchased a residential apartment from 38 Akuna in an “off-the-plan” development in the Australian Capital Territory, known as “Manhattan on the Park”. This was a development comprising 330 individual apartments in the central business district of Canberra. The complication is that 38 Akuna was deregistered on 22 December 2016. Accordingly, an application is made by Mr Boys for orders that 38 Akuna be reinstated and that liquidators be appointed. This application is opposed.

B Relevant Legislative Provisions

2. Mr Boys relies upon s 601AH(2) of the Corporations Act 2001 (Cth) (Act). This section relevantly provides:

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:

(a) ASIC reinstates the registration of a company under subsection (1) or (1A); or

(b) the Court makes an order under subsection (2);

the Court may:

(c) validate anything done during the period:

(i) beginning when the company was deregistered; and

(ii) ending when the company's registration was reinstated; and

(d) 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).

…

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.

C Relevant background

3. 38 Akuna was registered in October 2006. On 1 April 2011, a contract was exchanged between Mr Boys and 38 Akuna in respect of a unit in the development, and that contract was completed in September 2013.

4. The relevant contract contained provisions which Mr Boys alleges represented that the sale was a taxable supply and the purchase price included GST. Mr Boys will further allege that he believed at the time of exchange of contracts and the completion of the sale that: (a) the sale of the apartment constituted a taxable supply; (b) the purchase price included a component of GST; (c) 38 Akuna would calculate the component of GST using the margin scheme; and (d) 38 Akuna would remit the GST component of the purchase price to the Commissioner of Taxation (Commissioner).

5. Mr Boys seeks to advance a case similar to two cases currently in my docket, being Part IVA representative proceedings, which seek the recovery of money which was retained instead of being remitted to the Commissioner. In the existing class actions, those claims have been advanced as being for monies had and received, breach of contract and statutory compensation for the contravention of misleading or deceptive conduct and unconscionable conduct norms in relevant consumer protection legislation.

6. Returning to the chronological narrative, in December 2015, a resolution was passed that 38 Akuna be wound up voluntarily pursuant to s 491(1) of the Act and that Mr Henry Kazar and Mr Aaron Torline be appointed as liquidators of 38 Akuna. In August 2016, a conversation took place during which the liquidators first became aware that there may be a party who purported to be a creditor of the company. This was referred to in a letter dated 16 August 2016 from Mr Kazar to Mr Bede Webster (a solicitor with an organisation called “Just Dispute Resolution”), during which reference was made to a conversation where Mr...