FEDERAL COURT OF AUSTRALIA

Arnold v Poltane Pty Ltd [2005] FCA 1418

CORPORATIONS — application for reinstatement of a company — personal injury claim against company — company insured — potential claim by plaintiff against insurer under s 601AG — whether it is just to reinstate the company

Corporations Act 2001 (Cth), ss 601AG, 601AH

JOHN ARNOLD v POLTANE PTY LTD (TRADING AS ‘WESTERNPORT CAR CARE CENTRE’)

VID 925 OF 2005

MERKEL J

7 OCTOBER 2005

MELBOURNE

THE COURT ORDERS THAT:

1.                              The Australian Securities and Investments Commission be added as a respondent to this proceeding.

2.                              The Australian Securities and Investments Commission reinstate the registration of Poltane Pty Ltd (ACN 066 877 941) (‘the Company’).

3.                              The plaintiff pay the reasonable costs and disbursements of the Company’s liquidator, Peter Vince, incurred or to be incurred as a result of the reinstatement of the registration of the Company.

4.                              Leave be granted to the plaintiff pursuant to s 471B of the Corporations Act 2001 (Cth) to commence a proceeding against the Company in relation to the injuries described in County Court proceeding no CI-03-08264.

5.                              The plaintiff pay GIO General Ltd’s costs of the day of 6 September 2005.

6.                              The plaintiff serve an authenticated copy of this order on the liquidator by posting it by ordinary prepaid post to his address.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     The plaintiff has applied under s 601AH of the Corporations Act 2001 (Cth) (‘the Act’) for the reinstatement of Poltane Pty Ltd (trading as ‘Westernport Car Care Centre’) (‘Poltane’).

2                     The relevant facts may be summarised as follows. The plaintiff claims that he suffered personal injury as a result of the negligence of Poltane. The date of the injury is unclear but it appears to have been suffered on or before 24 May 1999. The plaintiff instituted a proceeding in the County Court of Victoria against Poltane in respect of his claim (County Court proceeding number CI-03-8264) (‘the County Court proceeding’). It is common ground that on 30 September 2002, prior to the commencement of the County Court proceeding, Poltane was deregistered. As a result, the County Court ordered that the proceeding be struck out as a nullity.

3                     The plaintiff now applies to the Court for the reinstatement of Poltane. The application is opposed by GIO General Ltd (‘GIO’). Under s 601AH of the Act, the Court may make an order that the Australian Securities and Investments Commission reinstate the registration of a company if an application for reinstatement is made ‘by a person aggrieved by the deregistration’ and if the Court is satisfied that it is ‘just’ that the company be reinstated.

4                     The plaintiff cannot commence a new proceeding against Poltane while it remains deregistered. The plaintiff and his wife (who was also a plaintiff in the County Court proceeding) have sworn affidavits in relation to the personal injuries the subject of the County Court proceeding. Although the affidavit material is in general terms, it establishes that the plaintiff wishes to pursue what he believes to be a genuine claim against Poltane for personal injury. Although issues will arise as to whether the claim is statute-barred, it is not argued that the claim cannot be brought, or that it must fail if it is brought, because it is clearly statute-barred. Further, although Poltane appears to have no assets, it may be insured in respect of the plaintiff’s claim by GIO or another insurer, depending upon when the plaintiff’s injury was suffered. If Poltane is reinstated, the plaintiff will be able to commence its claim against Poltane and any relevant insurer. In those circumstances, I am satisfied that the plaintiff is a person aggrieved by the deregistration of Poltane as its reinstatement is a necessary precondition to the plaintiff bringing a personal injury claim against it.

5                     GIO claimed that it was Poltane’s public liability insurer in respect of Poltane’s liability to pay damages for personal injury occurring during the period 8 May 1997 to 8 May 2000. It opposed the plaintiff’s application on two grounds. First, that there were ‘statute of limitation’ issues in relation to the plaintiff’s claim. Secondly, reinstatement was not necessary because the plaintiff could proceed against GIO or any other relevant insurer of Poltane under s 601AG of the Act. Accordingly, so it was argued, it is not just that Poltane be reinstated.

6                     On the limited evidence before me, there appears to be a reasonably strong case in support of GIO’s first ground. However, as it is not contended that the claim cannot be brought or that it must fail if it is brought because it is clearly statute-barred, it is inappropriate to determine the likelihood of the plaintiff’s claim being statute-barred on the present application. The reason for that conclusion is that it is just that the plaintiff have the opportunity of bringing his claim, notwithstanding that it might prove to be statute-barred. The situation would be otherwise if it were established that the claim was statute-barred.

7                     As to the second ground, if s 601AG of the Act applies, there may be no need to reinstate Poltane. Section 601AG of the Act provides:

‘Claims against insurers of deregistered company

A person may recover from the insurer of a company that is deregistered an amount that was payable to the company under the insurance contract if:

(a) the company had a liability to the person; and

(b) the insurance contract covered that liability immediately before deregistration.’

8                     Section 601AG appears to permit the plaintiff to bring a proceeding directly against Poltane’s insurer. If GIO conceded that s 601AG applied because the conditions in (a) and (b) had been satisfied, there would be no need to reinstate Poltane. However, although GIO contended that s 601AG would probably apply, it referred the Court to cases which raised questions of construction concerning the operation of s 601AG: see Hutchinson v Australian Securities and Investments Commission (2001) 40 ACSR 198 at 206 [22] and Krstevska v ACN 010 505 012 Pty Ltd (2001) 20 ACLC 292 at 294-295 [17]. It is unnecessary, on the present application, to determine those questions as I am satisfied that there is sufficient uncertainty as to whether the plaintiff may be able to proceed against GIO under s 601AG, to warrant the reinstatement of Poltane so that an action can be commenced against it. The reason for the uncertainty is that there is doubt as to whether Poltane was insured by GIO or any other insurer at the relevant time. Accordingly, the second ground has not been made out.

9                     In the circumstances, I am satisfied that it is just that Poltane be reinstated.

10                  I propose to order the reinstatement of Poltane and, subject to certain alterations, to make the consequential orders proposed by the plaintiff which include an order that the plaintiff have leave to commence a proceeding against Poltane and that he pay the costs to be incurred by the liquidator of Poltane as a result of Poltane’s reinstatement.

11                  The plaintiff requested that the Court also make an order that the time during which Poltane was deregistered not be counted for the purpose of any limitation period. However, I am not satisfied that a basis for making such an order has been made out. I am also not satisfied that it is appropriate to order that the plaintiff’s costs of applying for reinstatement at this late stage should be costs in the winding up. The material relied upon by the plaintiff is in the most general terms and has not explained the delay in the making of this application, 

which should have been made prior to the issue of the County Court proceeding.

Associate:

Dated: 6 October 2005