Hinz, in the matter of KEAD Pty Ltd (Deregistered) v KEAD Pty Ltd (Deregistered)

• Jurisdiction: Australia Federal only
• Judgment Date: 24 March 2022
• Neutral Citation: [2022] FCA 270
• Date: 24 March 2022
• Court: Federal Court

Federal Court of Australia

Hinz, in the matter of KEAD Pty Ltd (Deregistered) v KEAD Pty Ltd (Deregistered) [2022] FCA 270

File number(s):	NSD 1229 of 2021
Judgment of:	HALLEY J
Date of judgment:	24 March 2022
Catchwords:	CORPORATIONS – application for reinstatement of registration of deregistered company and validation of acts done while company deregistered pursuant to s 601AH of the Corporations Act 2001 (Cth) – whether plaintiff an aggrieved person within the meaning of s 601AH – whether the reinstatement of the company’s registration would be just – where purpose of proposed reinstatement is to allow company to pursue litigation – where Australian Securities and Investments Commission does not object to application – application granted
Legislation:	Corporations Act 2001 (Cth) s 601AH
Cases cited:	Bell Group Ltd (ACN 008 666 993) v Australian Securities and Investments Commission (2018) 358 ALR 624; [2018] FCA 884 Boys, in the matter of 38 Akuna Pty Ltd (Deregistered) v Australian Securities and Investments Commission [2019] FCA 320 Callegher v Australian Securities and Investments Commission (2007) 218 FCR 81; [2007] FCA 482 In the matter of ERB International Pty Limited (deregistered) (2014) 98 ACSR 124; [2014] NSWSC 200 National Australia Bank Limited v Australian Securities and Investments Commission, in the matter of Mackies Industries Australasia Pty Limited (receivers and managers appointed) (deregistered) [2022] FCA 147 Owners of Strata Plan No 91349 v Australian Securities and Investments Commission (2020) 147 ACSR 456; [2020] NSWSC 685
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	40
Date of last submission/s:	18 February 2022
Date of hearing:	Determined on the papers
Counsel for the Plaintiff:	Mr MR Davis
Solicitor for the Plaintiff:	McMahons Lawyers
Counsel for the Defendants:	The Defendants did not appear

ORDERS

		NSD 1229 of 2021
IN THE MATTER OF KEAD PTY LTD (DEREGISTERED) ACN 164 085 214
BETWEEN:	ANDREW JAMES HINZ Plaintiff
AND:	KEAD PTY LTD (DEREGISTERED) ACN 164 085 214 First Defendant ; AUSTRALIAN SECURITIES AND INVESTMENT COMMISSION Second Defendant

order made by:	HALLEY J
DATE OF ORDER:	24 March 2022

THE COURT ORDERS THAT:

1. Pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) (Act), the second defendant reinstate the registration of the first defendant (the Company).

2. Pursuant to s 601AH(3) of the Act, all acts done by the Company during the period 14 October 2020 to 24 March 2022 in respect of the Company, being the period in which the Company was deregistered, be validated to the extent it is necessary to do so.

3. There be no order as to costs.

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

REASONS FOR JUDGMENT

HALLEY J:

1. By an originating process filed on 25 November 2021, the plaintiff, Mr Andrew James Hinz, seeks an order that the second defendant, the Australian Securities and Investments Commission (ASIC) reinstate the registration of the first defendant, KEAD Pty Ltd (Deregistered) (Company), pursuant to s 601AH(2) of the Corporations Act 2001 (Cth) (Act).

2. The plaintiff also seeks an order pursuant to s 601AH(3) of the Act that all acts done by the Company during the period from 14 October 2020 to the date of this judgment (deregistration period) in respect of the Company be validated to the extent it is necessary to do so.

3. In the course of a case management hearing in this proceeding on 18 February 2022, Mr Davis, counsel for the plaintiff, informed me that ASIC did not seek to be heard with respect to the application. On that occasion Mr Davis confirmed that the plaintiff would notify the respondents in proceedings numbered NSD1170/2021 (related proceedings) that ASIC did not oppose the application and would request that the respondents in the related proceedings indicate by 24 February 2022 whether they wished to be heard in respect of the plaintiff’s application in this proceeding. I further made orders that by 25 February 2022 the plaintiff was to file written submissions with respect to the application, and notify the Court of the position of the respondents in the related proceedings. I otherwise noted that in the absence of any opposition the application would be determined on the papers.

4. The plaintiff filed written submissions on 25 February 2022 and an affidavit of Mr Andrew James Clarke sworn on that date (Clarke affidavit). Mr Clarke confirmed in his affidavit that as of 25 February 2022 the respondents in the related proceedings had not replied to a letter sent by email on 18 February 2022 notifying them of ASIC’s position. Mr Clarke further confirmed that the plaintiff had not otherwise been notified of the position of Mr Johan Steyn and Attvest Investments with respect to the application.

5. On 4 March 2022, in response to a request from my chambers, Mr Davis advised that in the period since the swearing of the Clarke affidavit no response had been received from the respondents in the related proceedings.

6. The plaintiff relies on the following affidavits in support of the application:

1. his affidavit, sworn on 26 November 2021;

2. an affidavit of Mr Denis Meadows, sworn on 7 February 2022; and

3. an affidavit of Mr Clarke, sworn on 25 February 2022, and exhibit AC-1 to that affidavit.

7. I am satisfied for the reasons outlined below that it is appropriate to make the orders sought in the application requiring ASIC to reinstate the Company and to validate the acts done by the Company during the deregistration period.

Background

8. The factual matters set out below are taken from the affidavit of the plaintiff sworn on 25 November 2021.

9. The Company was registered on 3 June 2013. It was incorporated for the purpose of being the corporate vehicle through which the members of the Company invested in Attvest Finance Pty Ltd (Attvest Finance).

10. The Company’s shares in Attvest Finance were held through Wintercress Capital Pty Ltd as the trustee of the Wintercress Trust. The Company was a named beneficiary under the Wintercress Trust Deed and 19,000 of the shares in Attvest Finance were held on trust for the Company.

11. On or about 29 May 2020, the Company (together with other beneficiaries of Wintercress Trust) sold its beneficial interest in the shares in Attvest Finance (Attvest Share Sale) to a company now known as Attvest Investments Pty Ltd (Attvest Investments). The total price paid for the shares was $380,000.

12. After receiving the proceeds of the Attvest Share Sale, the Company distributed those funds by way of a dividend to its members. Shortly thereafter, as the Company was not carrying on any other business and held no other assets, an application was made to voluntarily deregister the Company pursuant to s 601AA of the Act. The deregistration occurred on 14 October 2020.

13. The plaintiff and Mr Meadows were the directors of the Company at the time of its deregistration. The plaintiff was also the secretary of the Company. Both were shareholders.

14. At the time...