Lee v Parker

• Jurisdiction: Australia Federal only
• Judgment Date: 08 October 2020
• Neutral Citation: [2020] FCA 1453
• Court: Federal Court
• Date: 08 October 2020

Federal Court of Australia

Lee v Parker [2020] FCA 1453

File number:	NSD 528 of 2020
Judgment of:	GRIFFITHS J
Date of judgment:	8 October 2020
Catchwords:	CORPORATIONS – application for reinstatement of two companies under s 601AH of the Corporations Act 2001 (Cth) and appointment of a new liquidator – whether the Court is satisfied that it is just that the companies’ registration be reinstated – application allowed, subject to certain conditions
Legislation:	Corporations Act 2001 (Cth), s 601AH Taxation Administration Act 1953 (Cth), s 269-45 of Sch 1
Cases cited:	Deputy Commissioner of Taxation v Australian Securities and Investments Commission; in the matter of Civic Finance Pty Limited (Deregistered) [2010] FCA 1411 In the matter of European Metal Recyclers Pty Ltd (in liq) (deregistered) [2018] NSWSC 946 Lee v Deputy Commissioner of Taxation; Silverbrook v Deputy Commissioner of Taxation [2020] NSWCA 95 Makita (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; 52 NSWLR 705 Makrypodis v Eleisawy [2014] NSWSC 1429 Perera v Australian Securities and Investments Commission, in the matter of Hodder Rook & Associates Pty Limited [2019] FCA 2015 Pilarinos v Australian Securities and Investments Commission [2006] VSC 301 Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157; 234 FCR 549 The Bell Group Limited v Australian Securities and Investments Commission [2018] FCA 884; 358 ALR 624
Division:	General Division
Registry:	New South Wales
National Practice Area:	Commercial and Corporations
Sub-area:	Corporations and Corporate Insolvency
Number of paragraphs:	39
Date of hearing:	8 October 2020
Counsel for the Plaintiffs:	Mr T Cleary
Solicitor for the Plaintiffs:	Gibson Howlin Lawyers
Counsel for the First Defendant:	Mr T Marskell
Solicitor for the First Defendant:	Wotton & Kearney Lawyers
Counsel for the Second Defendant:	The Second Defendant did not appear

ORDERS

		NSD 528 of 2020
BETWEEN:	JANETTE LEE First Plaintiff ; KIA SILVERBROOK Second Plaintiff
AND:	GREGORY JAY PARKER First Defendant ; AUSTRALIAN SECURITIES AND INVESTMENTS COMMISSION Second Defendant

order made by:	GRIFFITHS J
DATE OF ORDER:	8 october 2020

THE COURT ORDERS THAT:

1. Pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), the second defendant reinstate the registration of Serif Pty Ltd ACN 081 122 232 (Deregistered) subject to compliance with the conditions set out in the second defendant’s letter dated 29 May 2020.

2. Pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), the second defendant reinstate the registration of Worldwide Speciality Property Services Pty Ltd ACN 066 573 671 (In liq) (Deregistered) (WSPS) subject to compliance with the conditions set out in the second defendant’s letter dated 29 May 2020.

3. Upon reinstatement of WSPS, and pursuant to ss 601AH(3)(b) and (d) of the Corporations Act 2001 (Cth), Mr David Ingram be appointed as liquidator of WSPS.

4. The plaintiffs notify the second defendant within seven days of these orders.

5. The parties have liberty to apply to the docket judge for the further conduct of the substantive proceeding.

6. The costs of the plaintiffs’ applications be their costs in the cause.

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

REASONS FOR JUDGMENT

GRIFFITHS J:

1. The plaintiffs seek reinstatement of two companies (Worldwide Speciality Property Services Pty Ltd (WSPS) and Serif Pty Ltd (Serif)) under s 601AH of the Corporations Act 2001 (Cth). WSPS was deregistered on 20 June 2019. Serif was deregistered on 15 May 2016. If the companies are reinstated, the plaintiffs seek the appointment of a new liquidator to WSPS.

2. In the originating process dated on 11 May 2020, the plaintiffs seek additional relief. By orders dated 11 June 2020, the matters summarised in [1] above were allocated for a preliminary and separate determination.

3. The first defendant (Mr Gregory Parker) was the liquidator of WSPS between 16 April 2014 and 20 March 2019. If reinstated, it is proposed to commence proceedings against Mr Parker for alleged breaches of fiduciary duties and statutory duties owed by him under ss 180 and 181 of the Corporations Act as an officer of WSPS. The claims relate to what are said to be 140 United States patent or patent registration applications (Patents) in the name of WSPS which Mr Parker is alleged to have failed to preserve and realise during the liquidation of that company. Mr Parker denies the plaintiffs’ claims.

4. The second defendant is the Australian Securities and Investments Commission (ASIC). It did not object to the reinstatement of the companies as long as certain specified conditions are satisfied as set out in two letters with regard to Serif and WSPS respectively dated 29 May 2020.

5. Serif was the legal and beneficial owner of the two issued ordinary shares in WSPS. The plaintiffs were:

1. directors of WSPS between 16 September 1994 and 20 June 2019, with the first plaintiff being the secretary of that company during that time;

2. directors and secretaries of Serif from 22 December 1997 to 15 May 2016; and

3. each the legal and beneficial owner of 50% of the ordinary shares issued by Serif.

The evidence and summary of background facts

6. The plaintiffs relied upon three affidavits by the first plaintiff and an expert report by Mr Peter Haley, who provided an “indicative valuation” of the Patents. Mr Haley was cross-examined. Mr Parker relied upon two affidavits by his solicitor and an expert report by Mr Yves Hazan (primarily concerning US patent law) in response to Mr Haley’s report. Mr Parker also relied upon an expert report by Mr Grant Kepler, who responded to various questions regarding Mr Haley’s report.

7. The Australian Taxation Office (ATO) has a judgment debt in the form of director penalties against the plaintiffs in the amount of $13,961,633.90, in respect of WSPS’s unpaid taxation liabilities (see Lee v Deputy Commissioner of Taxation; Silverbrook v Deputy Commissioner of Taxation [2020] NSWCA 95). It appears that the plaintiffs have sought special leave to appeal from that decision.

8. The second plaintiff provided Mr Parker with a certified Report as to Affairs dated 29 April 2014 concerning WSPS. He estimated the value of the Patents as $18,848,613.00. The Report was accompanied by a document headed “WSPS Patent inventory 16 April 2014” which identified the Patents.

9. There is a strong dispute regarding the value of the Patents. Mr Haley has given them an “indicative valuation” of approximately $20m based on a cost-based valuation methodology or $37,297.977.00 on a market-based...