Federal Court of Australia

Westpac Banking Corporation v Forum Finance Pty Limited (in liq) (Reinstatement) [2025] FCA 520

ORDERS

THE COURT ORDERS THAT:

1.    The applicants forthwith serve a copy of these orders on the Australian Securities and Investments Commission (ASIC) together with a copy of the applicants’ further submissions dated 19 May 2025.

2.    The applicants have leave to rely on the further submissions for the purpose of this application.

3.    Pursuant to s 601AH(2) of the Corporations Act 2001 (Cth), ASIC forthwith reinstate the registration of 1160 Glen Huntly Road Pty Ltd (deregistered) ACN 639 447 984.

4.    Upon reinstatement, pursuant to s 461(1)(k) of the Act, 1160 Glen Huntly Road be wound up on just and equitable grounds.

5.    Jason Craig Ireland and Jason Preston of McGrathNicol, each being a registered liquidator, and having consented to act, be appointed forthwith as the joint and several liquidators of 1160 Glen Huntly Road.

6.    The costs of this application be costs in the liquidation of 1160 Glen Huntly Road.

7.    The applicants pay to ASIC all administrative fees outstanding and payable to it in respect of the registration and reinstatement of 1160 Glen Huntly Road.

8.    The applicants provide a copy of these orders to Mr Ireland and Mr Preston.

9.    These orders be entered forthwith.

THE COURT NOTES THAT:

A.    Jason Craig Ireland and Jason Preston have provided a written consent dated 19 May 2025 to them each being appointed on a joint and several basis as the liquidators of 1160 Glen Huntly Road.

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

REASONS FOR JUDGMENT

CHEESEMAN J:

INTRODUCTION

1    These reasons are addressed to the application by Westpac Banking Corporation (WBC) and Westpac New Zealand Limited (WNZL) (together Westpac) for orders directed to the Australian Securities and Investments Commission (ASIC) to effect the reinstatement of 1160 Glen Huntly Road Pty Ltd, the fourteenth respondent in this proceeding. The application is brought pursuant to s 601AH of the Corporations Act 2001 (Cth).

2    These reasons assume familiarity, and should be read together, with the liability judgment in proceedings NSD 616 of 2021, NSD 642 of 2021 and NSD 681 of 2021: Westpac Banking Corporation v Forum Finance Pty Limited (in liq) (Liability) [2024] FCA 1176 (Liability Judgment or LJ). To the extent that it is useful to do so, I adopt the defined terms used in the Liability Judgment.

3    Westpac are the only financiers that claim against 1160 Glen Huntly Road. At the time of the liability hearing, 1160 Glen Huntly Road was not in liquidation: LJ [140]. Westpac was granted leave to proceed generally against 1160 Glen Huntly Road in its absence when it did not appear at the hearing: LJ [144(1)].

4    1160 Glen Huntly Road was deregistered on 14 January 2024 under s 601AB of the Corporations Act for non-payment of fees. Westpac was not notified of the impending deregistration.

5    For present purposes it suffices to record that 1160 Glen Huntly Road is a Tesoriero Entity (as that term is used in the Liability Judgment: see LJ [160]-[161]). Relevantly, Mr Tesoriero was a director of 1160 Glen Huntly Road: LJ [164]. 1160 Glen Huntly Road benefitted from the fraud receiving $942,639.73 from Westpac: LJ [1174(12)]. Of that total, $705,943.56 was from WBC and $236,695.17 was from WNZL: LJ Annexure J.

6    The evidence adduced in the hearing on liability established that some of the Westpac funds received by 1160 Glen Huntly Road have been traced to the purchase of the property at the address from which 1160 Glen Huntly Road takes its name. The property at 1160 Glen Huntly Road, Glen Huntly, Victoria, has been sold and the residual proceeds from that sale, in the amount of $759,619, have been paid into the Supreme Court of Victoria: LJ [830]. The Supreme Court of Victoria had invested those funds in the name of 1160 Glen Huntly Road.

7    The purpose of Westpac seeking to have 1160 Glen Huntly Road reinstated is to facilitate the enforcement of their claim for relief in this proceeding against 1160 Glen Huntly Road. Westpac seek an order that ASIC reinstate 1160 Glen Huntly Road for this purpose. In the substantive Westpac proceeding, Westpac claims equitable compensation in an amount in excess of $300,000,000 against 1160 Glen Huntly Road. Westpac also seeks orders to the effect that the funds held by the Supreme Court of Victoria are held on trust for Westpac. Provided those orders are made, Westpac intends to apply to the Supreme Court of Victoria for release of those funds to Westpac.

8    Westpac’s standing to bring this application as a person aggrieved by the deregistration of 1160 Glen Huntly Road is based on its claim for relief following the finding that 1160 Glen Huntly Road is liable: LJ [1174]-[1176].

9    Westpac has given notice to ASIC of this application in accordance with rule 2.8 of the Federal Court (Corporations) Rules 2000 (Cth). On 17 April 2025, ASIC confirmed that it does not oppose the reinstatement application and will not attend the hearing of the matter subject to no order for costs being sought against ASIC. Westpac does not seek any such order against ASIC.

10    On 7 February 2025, the former solicitors for Vince Tesoriero (Aptum Legal) were served with the Proposed Orders. On 27 March 2025, Westpac gave notice of the reinstatement application to each of the former officeholders of 1160 Glen Huntly Road, being Vince Tesoriero and his father, Giovanni Tesoriero. Vince Tesoriero and Giovanni Tesoriero have not sought to be heard on the present application.

11    Westpac’s evidence is that they are not aware of any persons other than those who are party to this proceeding and who have been notified with an interest in the present application.

12    Westpac has provided two sets of submissions. On 21 February 2025, Westpac filed submissions in support of the orders sought by Westpac, in accordance with the orders made on 9 December 2024 (amended on 11 December 2024). On 19 May 2025, Westpac sought to file further submissions on relief, which specifically address the reinstatement of 1160 Glen Huntly Road in circumstances where upon reinstatement, it will in all likelihood be insolvent. I will grant leave for Westpac to rely on the further submissions.

APPLICABLE PRINCIPLES

Reinstatement of a deregistered company by the Court

13    Sections 601AH(2) and (3) of the Corporations Act provide:

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.

14    If a company is reinstated, s 601AH(5) of the Corporations Act provides that the company is taken to have continued in existence as if it had not been deregistered. A person who was a director immediately before deregistration is reinstated as such; any company property vested in the Commonwealth or ASIC revests in the company; and any security, interest or claim attached to company property remains.

15    I recently summarised legal principles applicable to an application such as this in Ligon 158 Pty Limited (in liq) v Shield Holdings Australia Pty Limited (de-registered) [2024] FCA 144. For the purpose of this application, the relevant principles are as follows.

16    The power under s 601AH is discretionary. It is enlivened by the two conditions in s 601AH(2)(a) and (b) being met. Relevantly, the applicants must demonstrate that they, or at least one of them, are “person(s) aggrieved by the deregistration”: s 601AH(2)(a)(i). Additionally, the Court must be satisfied that it is just that the company’s registration be reinstated: s 601AH(2)(b). The Court may then decide to exercise its discretion to make an order for reinstatement. The applicants bear the onus of establishing that the power in s 601AH(2) should be exercised: In the matter of ERB International Pty Ltd (deregistered) [2014] NSWSC 200; 283 FLR 223 at [10] (Brereton J).

17    The authorities in relation to the reinstatement of a deregistered company by the court were comprehensively reviewed by Gleeson J (when her Honour was on this Court) in Yeo v Australian Securities and Investments Commission [2017] FCA 1480 at [11]-[25] and also by Bell P (as his Honour then was) in The Owners of Strata Plan No 91349 v ASIC [2020] NSWSC 685; 147 ACSR 456 at [59]-[79]. Drawing on those reviews of the relevant authorities, I extract the following key principles relevant on the present application.

18    First, the expression “a person aggrieved by the deregistration” under s 601AH(2) is not defined under the Corporations Act but should not be narrowly construed: Yeo at [14]-[20] and the cases cited therein; The Owners of Strata Plan No 91349 at [61]-[62]. Where an applicant claims standing, it will generally not be appropriate for the Court to entertain in a detailed way argument as to the merits or otherwise of the claim, and the Court only need be satisfied that the claim is “not hopeless or bound to fail”: The Owners of Strata Plan No 91349 at [65]. However, the applicant must have a genuine grievance that the dissolution of the company affected his or her interests because, for example, a right of some value or potential value has gone out of existence: Yeo at [18] citing Barrett J in Arnold World Trading Pty Ltd v ACN 133 427 335 Pty Ltd [2010] NSWSC 1369; 80 ACSR 670 at [43], in turn citing Austin J in Australian Competition and Consumer Commission v Australian Securities and Investments Commission [2000] NSWSC 316; 174 ALR 688 at [24]-[26] (ACCC v ASIC). A creditor may be a “person aggrieved” but the creditor must “demonstrate a real economic interest in the company being reinstated”: 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 at [19] (Farrell J) citing Wyse & Young International Pty Limited t/as Wyse & Young Accounting v Corrado [2015] NSWSC 1863 at [43] (White J), see also Blazai Pty Limited v Gateway Development (St Marys) Pty Limited [2009] NSWSC 800 at [23] (Tamberlin AJ) requiring the interest to be “real and direct”.

19    Secondly, the provisions that provide the Court “may” order reinstatement if satisfied that it is “just” to do so confers a broad discretionary judgment on the Court. Relevant considerations in the exercise of the discretion include the circumstances in which the company was deregistered, the purpose in seeking its reinstatement, whether any person is likely to be prejudiced by reinstatement, and the public interest generally: Yeo at [23] citing ERB International at [5] in turn citing ACCC v ASIC at [27] to [28]. These considerations are not limitations on the Court’s power.

20    Thirdly, if the Court is satisfied as to the conditions in s 601AH(2)(a) and (b), then in the ordinary course an order for reinstatement will be made: Yeo at [25] and the cases cited therein.

21    Finally, a matter for consideration by the Court in the exercise of the discretion is the future stewardship of the company if and when it comes back into existence: Stone v ACN 000 337 940 Pty Ltd [2008] NSWSC 1058; 68 ACSR 242 at [23] (Barrett J).

22    The strength or merits of a foreshadowed claim is first relevant to whether the plaintiff is a person aggrieved but it is also a matter which may properly be taken into account in reaching the requisite satisfaction that reinstatement is “just”: Blazai at [22]-[24], [28]. In Blazai, although the plaintiff established that it was a “person aggrieved” (at [24]), the foreshadowed claim was assessed as being “contingent and speculative” (at [28]) which, together with delay and the likely attendant prejudice, resulted in the Court concluding that it was not just to reinstate the company.

23    The authorities illustrate the breadth of the factors that may be relevant to the Court’s assessment of whether the Court’s statutory jurisdiction conferred on it under the Corporations Act to order reinstatement should be exercised. Solvency is a relevant consideration in determining whether it is just to make orders which would result in the reinstatement of the company: In the matter of BMT & Associates Pty Ltd [2014] NSWSC 1082 at [24] (Black J). Whereas the Court has power to reinstate an insolvent company, the Court “will typically only do so where a liquidator is appointed”: BMT at [4].

Winding up

24    Section 461(1)(k) of the Corporations Act is a broad power available to the Court to order the winding up of a company where the Court is of the opinion that it is just and equitable to do so. A creditor (including a contingent or prospective creditor) of the company has standing to seek such an order: s 462(2)(b).

25    Orders may be made for the immediate winding up of a company following reinstatement: see, for example, ACN 078 272 867 Pty Ltd (in liq) v Deputy Commissioner of Taxation [2011] HCA 46; 282 ALR 607 at [38] to [40] (Heydon J), Ligon at [224] and Yeo at [140].

26    Where winding up is sought immediately upon reinstatement a prospective creditor who has established a prima facie case will have standing to seek a winding up on just and equitable ground: Legrande Enterprises Pty Limited v Australian Securities and Investments Commission [2009] FCA 718 at [32] (Besanko J). The formalities as to notifications of the winding up and steps required by the Corporations Act or the Rules are either not required or may be dispensed with pursuant to s 467(3)(b) of the Corporations Act. Shareholders are generally not prejudiced because they may seek termination of the winding up under s 482 of the Corporations Act if they consider that the company should not be wound up upon reinstatement: Shaw v Goodsmith Industries [2002] NSWSC 406 at [14] (Barrett J).

EVIDENCE

27    Westpac relies on the affidavit of Caitlin Maria Murray sworn on 2 April 2025 (Murray Affidavit 2) and Exhibit CMM-34 to that affidavit.

28    Murray Affidavit 2 and Exhibit CMM-34 are relied on in support of paragraph 107 of Westpac’s proposed orders for relief which amongst other things is directed to the reinstatement of 1160 Glen Huntly Road (Proposed Orders).

29    Westpac also relies on the following additional evidence, which was attached to Westpac’s further submissions:

(1)    a letter from ASIC dated 17 April 2025 indicating that ASIC does not oppose the Proposed Orders; and

(2)    a consent from Jason Craig Ireland and Jason Preston to act as joint and several liquidators in respect of 1160 Glen Huntly Road dated 19 May 2025. Messrs Ireland and Preston are relevantly the liquidators of other Forum Group companies.

CONSIDERATION

30    I am satisfied that Westpac is a person aggrieved by the deregistration of 1160 Glen Huntly Road and has standing to bring this application. As I have mentioned, Westpac has obtained a finding of liability against 1160 Glen Huntly Road.

31    I am further satisfied that it is just that the company’s registration be reinstated taking into account the following matters.

32    As mentioned, 1160 Glen Huntly Road was deregistered following non-payment of fees. The authorities demonstrate that there is a greater preparedness to order that a company be reinstated in circumstances where the company was the subject of an administrative deregistration and was not deregistered following the culmination of a winding up: The Bell Group Limited v Australian Securities and Investments Commission [2018] FCA 884; 358 ALR 624 at [76] (McKerracher J) citing with approval Donmastry Pty Ltd v Albarran [2004] NSWSC 632; 49 ACSR 745 at [5] (Barrett J). That there has been no examination of the affairs of the company prior to its deregistration is a significant matter weighing in favour of reinstatement in the present case because of the complexity of the arrangements involving Mr Tesoriero and the Tesoriero Entities and the fraudulent schemes in which they were involved. 

33    In order for Westpac to obtain effective and enforceable relief in this proceeding against 1160 Glen Huntly Road in conformity with the liability findings made against it, the company must be reinstated by ASIC. As a result of the relief likely to be obtained by Westpac in consequence of the liability findings against 1160 Glen Huntly Road, there is a strong likelihood that the company will, very shortly after reinstatement, become insolvent. It is appropriate in such circumstances that the company be wound up. At this time, it is appropriate that it be wound up on the just and equitable ground.

34    The company’s former office holders are on notice of this application and have not sought to be heard on this application. That is not surprising given Vince Tesoriero’s role in the fraud at the heart of the substantive proceeding. Having regard to the factual findings I have made in relation to Vince Tesoriero and the Tesoriero Entities, including 1160 Glen Huntly Road, it would not be appropriate for the former officers to resume office upon the company’s reinstatement.

35    Westpac has obtained the consent of Mr Ireland and Mr Preston to act as the joint and several liquidators of 1160 Glen Huntly Road upon its reinstatement. Having regard to the role that Mr Ireland and Mr Preston have as liquidators of many of the associated entities involved in these proceedings (and in some cases receivers of the property of those entities), the details of which are set out in Annexure A to the liquidators consent to act dated 19 May 2025, it is both efficient and appropriate that they be appointed as liquidators of 1160 Glen Huntly Road immediately upon ASIC causing the register to be updated to reflect the reinstatement of the company.

36    Finally, having regard to the fact that the company was deregistered for essentially administrative reasons, including the non-payment of fees, to avoid any prejudice I will order that Westpac pay to ASIC any fees due to it as a result of the company’s registration and reinstatement. The costs of this application will be costs in the liquidation of 1160 Glen Huntly Road.

CONCLUSION

37    For these reasons, I will make orders directing ASIC to reinstate the company forthwith. I will also make ancillary orders to give effect to these reasons.

Associate:

Dated:    20 May 2025

SCHEDULE OF PARTIES