Thursday, March 29, 2012

Reinstatement of pre-Corporations Law (1991) companies: Part 2

In my last post I noted that s601AH of the Corporations Act 2001 (Cth) does not appear to give a Court power to reinstate a company that was registered and deregistered under pre-1991 corporations legislation.

However the authorities diverge on whether the Corporations Act is the appropriate avenue for reinstatement of a company that was either 'deregistered' or 'dissolved' under pre-1991 corporations legislation.

In terms of what companies laws have previous applied, I note that the following are some of the main acts which are the equivalent of the modern Corporations Act since the 1960's:
  • The Companies Act 1961, being uniform State Acts.
  • The Companies (Victoria) Code and the Companies (Application of Laws Act) 1981, being uniform State Acts.
  • The Corporations Act 1989 (Cth) (the Corporations Law)
  • The Corporations Act 2001 (Cth) (the Corporations Act).
In Parker v Australian Asbestos [2002] NSWSC 520, Austin J formed the view that although s601AH did not appear to apply to a company registered and deregistered under pre-1991 corporations legislation, there were other provisions in the Corporations Act which allowed s601AH to apply to such companies.

The reasoning and provisions are as follows (and contained at [11] to [14] of Parker):
  1. S610AH Corporations Act provides for the reinstatement of a 'company'. 
  2. ‘Company’ is defined under the Corporations Act as a company registered under that Act. As such, a company deregistered before the commencement of the Corporations Act is not a company for the purposes of the Corporations Act
  3. S1400 Corporations Act provides that if a right was acquired under a provision of the Corporations Law (being the Corporations Act 1989) in force before 15 July 2011 and corresponds to a provision of the Corporations Act, then that carries over. 
  4. S601AH Corporations Act has a corresponding s601AH in the Corporations Law
  5. S1362CH of the Corporations Law (which does not have a corresponding provision in the Corporations Act) extends s601AH Corporations Law to reinstatement of companies incorporated under previous laws, including state laws, such as the Companies Act 1961
  6. Because 601AH is a carried over provision, and because the carried over provision extends to earlier acts such as the Companies Act 1961, the company can be reinstated under s601AH of the Corporations Act.
For that reason, Austin J held that a company that was registered and deregistered under the Companies Act 1961 could be reinstated under s601AH of the Corporations Act.

For clarity, s1362CH Corporations Law provides the following:
ASIC's powers under section 601AH extend to the reinstatement of the registration of a body corporate that: 
(a)was at some time before commencement incorporated or taken to be incorporated under a previous law of this jurisdiction corresponding to Chapter 2 of the old law; and
(b)was deregistered before commencement.
In City West Water Ltd v Mr D Investments Pty Ltd [2002] VSC 553, Senior Master Mahony (now Associate Justice Mahony) disputed the correctness of the reasoning of Austin J. Associate Justice Mahony noted that s1362 of the Corporations Law only applied to ASIC's powers, and not the Court's powers. The criticism of the reasoning is set out at [26]:
With respect, as has been seen, the subject of s 1362CH was limited to `ASIC's powers' and the section did not have such a general operation with respect to the whole of s 601AH as Austin, J suggests in the passage quoted in [25]. In particular, it had no application to the jurisdiction of the Court under s 601AH (2).
For that reason, Associate Justice Mahony was 'compelled to conclude that, the company having been deregistered under the Code, the Court's jurisdiction to make the order for reinstatement of its registration is still to be found in s 459 (6) of the Code' (at [28]).

This decision has been followed an applied in Armitage v HXE Limited [2010] NSWSC 1109 to reinstate a company under the Companies Act 1961.

Armitage and City West Water are authorities in strong support of the proposition that if a company is deregistered/dissolved under pre-1991 corporations legislation, particularly the Companies Act 1961 and the Companies (Victoria) Code, then it is to be reinstated under those past Acts.

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