Federal Court of Australia

Li v Clear Environmental Pty Limited (deregistered) [2026] FCA 230

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application dated 20 March 2025 be dismissed.

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

REASONS FOR JUDGMENT

PERRAM J:

Introduction

1    This case concerns the affairs of a company, Clear Environmental Pty Ltd (‘Clear Environmental’). Clear Environmental was incorporated on 16 November 2000. It was deregistered on 7 April 2012 for failing to pay the annual fee due to the regulator, the Australian Securities and Investments Commission (‘ASIC’). The present litigation concerns the efforts of Mr Qiang Li to restore Clear Environmental to the register. His initial application was heard by a registrar, who refused it. He now seeks a review of that decision by a judge.

Power

2    The relevant powers are as follows. First, s 601AH(2) of the Corporations Act 2001 (Cth) (‘the Act’) confers power on courts exercising jurisdiction under the Act to order ASIC to reinstate the registration of a deregistered company on the application of an aggrieved person if it is just that the registration should be reinstated.

3    Secondly, this power is accompanied by an ancillary power in s 601AH(3) to validate anything done during the period the company was deregistered and to make any other order it considers appropriate. Under this power, Mr Li seeks an order that, on the reinstatement of Clear Environmental, ASIC be directed to record Mr Li as its director and secretary.

4    Thirdly, jurisdiction in civil matters arising under the Act is conferred on this Court by s 1337B of the Act. This grant includes both original and appellate jurisdiction.

5    Fourthly, subject to presently immaterial exceptions, the original jurisdiction of the Court is exercised by a single judge: Federal Court of Australia Act 1976 (Cth) (‘FCA Act’) s 20.

6    Fifthly, if a power of the Court is prescribed by Rules of Court, then it may be exercised by a registrar of the Court if the Court or a judge so directs: FCA Act s 35A(1)(h).

7    Sixthly, by r 16.1(1)(a) of the Federal Court (Corporations) Rules 2000 (Cth) and items 102 and 103 of Schedule 2 to those rules, the powers in s 601AH(2) and (3) of the Act are powers which may be exercised by a registrar. It was by this path that the registrar in this case had jurisdiction to determine Mr Li’s application for reinstatement.

8    Seventhly, the power to review an exercise of power by a registrar is conferred on the Court by s 35A(6) of the FCA Act. It is that power which Mr Li now invokes on the present application.

Principles

9    The relevant principles are as follows. First, as to the nature of the review, Chapter III of the Constitution permits the exercise of the judicial power of the Commonwealth by a registrar who is not a judge under Chapter III of the Constitution only if there is available a review before such a judge on both questions of fact and law: Harris v Caladine [1991] HCA 9; 172 CLR 84 at 95 per Mason CJ and Deane J and 164 per McHugh J. This kind of hearing is sometimes referred to as a hearing de novo and involves a rerunning of the original application heard by the registrar but this time before a judge. Because the case is rerun in this way, the question of whether the registrar made an error is not a relevant informing concept and the jurisdiction involved is not appellate but original. The evidence on the rehearing may include the evidence before the registrar but may also include evidence led only before the judge.

10    Secondly, as to the substantive principles concerning reinstatement, these appear from s‍ 601AH(2) of the Act:

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.

11    In short, an order for reinstatement will be made if the Court is satisfied that it would be just to do so.

The formal application

12    In his amended originating application Mr Li seeks orders for reinstatement under s 601AH(2) as well as ancillary orders under s 601AH(3). The orders sought are:

1.    An order that the First Defendant be reinstated under the Corporations Act 2001 (Cth) pursuant to s 601AH(2).

1A.    An order pursuant to s 601AH(3)(d) of the Corporations Act 2001 (Cth), that on reinstatement of the registration of Clear Environmental Pty Limited, the Second Defendant record Mr Qiang Li as the director and secretary of Clear Environmental Pty Limited.

2.    An order that the costs of this Originating Process be paid out of the assets of the First Defendant; and

3.    Such further orders as this honourable Court deems fit.

13    This application was refused by a registrar on 27 February 2025. By an interlocutory application dated 20 March 2025, Mr Li seeks a review of the registrar’s decision under s‍ 35A(5) of the FCA Act.

The evidence

14    On the review application Mr Li relied upon the following affidavits:

(a)    the affidavit of Mr Qiang Li dated 18 July 2024;

(b)    the affidavit of Mr Qiang Li dated 25 February 2025;

(c)    the affidavit of Mr Qiang Li dated 20 March 2025;

(d)    the affidavit of Mr Qiang Li dated 9 July 2025; and

(e)    the affidavit of Ms Gang Yi Wang dated 15 July 2025.

15    On the review application, a third party, Suzhou Gaoyi Venture Capital Management Co., Ltd (‘Gaoyi’) sought to be heard and to oppose the reinstatement application (as it had done before the registrar). It relied on an affidavit of Mr Yingqi Gao dated 3 December 2024. As will be seen, Gaoyi is a company associated with Mr Li’s antagonist, Ms Xuefang Ma.

16    For the reasons which follow, the review application should be refused.

Facts

17    At all material times, Mr Li’s family business company was Clear Industry Pty Ltd (‘Clear Industry’) of which he was both a shareholder and a director. In or around September 1999, Mr Terry Zhou became an employee of Clear Industry.

18    Another company, Clear Environmental, was incorporated on 16 November 2000. Mr Li says that he ‘caused’ the registration of Clear Environmental on an understanding that Mr Zhou would be his business partner in the company and that they would each own 50% of the shares with equal management duties and powers.

19    The choice of the word ‘caused’ is apt since the Form 201 which was lodged and resulted in the incorporation of Clear Environmental was prepared by Mr Zhou and not by Mr Li although both signed the form. It shows that both men intended that each would be issued 50,000 shares at $1 each with 300 unpaid shares. Mr Li says that Mr Zhou paid $50,000 for this interest but this was the only money he ever advanced towards the affairs of Clear Environmental. Mr Li says that he advanced all of the other funds in Clear Environmental. The Form 201 also suggests that it was Mr Zhou alone who was to be a director of the company.

20    That last aspect of the Form 201 is contrary to Mr Li’s evidence that from the commencement of the company’s business, Mr Li and Mr Zhou participated equally in its management. He says that the two men had daily phone calls to discuss the company’s affairs including a joint venture business in China that the company intended to invest in. He says that they also communicated by facsimile.

21    A company search for Clear Environmental does not record Mr Li either as a shareholder or a director. However, Mr Li submits that his evidence justifies the conclusion that he was both a shareholder and a director.

22    Since the incorporation of Clear Environmental, Mr Li says that he paid the annual ASIC fees and subsequent transaction costs.

23    Mr Li says that around the time Clear Environmental was incorporated (i.e. November 2000), his family business company, Clear Industry, was negotiating with Harbin Air Conditioning Co., Ltd (‘Harbin’) to establish an incorporated joint venture in China.

24    On 26 March 2001, a joint venture company was registered known as Suzhou Clear Environmental Technology Co., Ltd (‘CETC’). It was owned as to 51% by Harbin and as to 49% by Mr Li’s company, Clear Industry. Both Mr Zhou and Mr Li were directors of CETC.

25    By 30 January 2002, Mr Li says that he decided to separate his business in Australia from his business in China. On that day, Clear Industry (Mr Li’s company) entered into a share transfer agreement with Clear Environmental. Under this agreement, Clear Industry agreed to transfer its shares in CETC to Clear Environmental. The terms of this agreement are in these terms:

Article 1: Party A: CLEAR INDUSTRY PTY LTD

Legal Address: Unit 1, 4 Whitehead Court, Glendinning NSW 2761, Australia

Director: Qiang LI

Party B: CLEAR ENVIRONMENTAL PTY LTD

Legal Address: Unit 1, 4 Whitehead Court, Glendinning NSW 2761, Australia

Director: Liejun ZHOU

Article 2: Both parties agree that Party A will transfer all its shares in Suzhou Clear Environmental Technology Co., Ltd (amounts to 49% of the total equity of the company, including a cash contribution of USD 300,000 and technical equity of USD‍ 790,000. Amount converted: US $157208.24, amount unconverted: US‍ $142791.76. The technical equity is yet to be verified in value) to Party B.

Article 3: All shares are transferred at their original price.

26    Although art 2 contemplates a transfer of Clear Industry’s shares in CETC to Clear Environmental, the balance of the clause is incomprehensible. Mr Li says that the shares in CETC were transferred by Clear Industry to Clear Environmental on or about 17 January 2003. It is not possible to determine what the cost base for Clear Environmental was for the shares in CETC acquired from Clear Industry.

27    On 21 July 2005, Clear Environmental and Harbin entered into a share transfer agreement. Under the agreement, Harbin was to transfer all of its shares in CETC for CNY 4,236,000. This was the 51% interest in CETC that Harbin had owned. Mr Li says that Mr Zhou was meant to, but did not, pay half of this transfer price. Under the share transfer agreement the price was to be paid in instalments and by 28 February 2006. As I note below, the final instalment was not paid until around December 2013 and the transfer actually seems to have occurred then.

28    Mr Li says that during his life, Mr Zhou recognised Mr Li’s 50% interest in Clear Environmental. He points to an email that Mr Zhou sent to him on 27 February 2006. The original email is in Chinese but an English translation of part of the email reads as follows:

After the share transfer with Harbin Air Conditioning Co., Ltd, you will own about 75% of the company’s total assets, while I will own about 25%. As the main technical expert and operator of the company, my equity share will drop from equal ownership to one-quarter, which is a significant loss (especially since that portion of the investment cannot generate corresponding profits). Unfortunately, I do not have the funds for restructuring to regain equity ownership in the company. Therefore, I propose to take over the company’s assets and business activities, excluding the factory building, through a contracting agreement.

29    The last page of this email is missing. I accept that the company being discussed in this email is probably CETC. The date of the email of 27 February 2006 is the day before the final instalment was due to be paid under the Harbin share transfer agreement, 28 February 2006.

30    The email is obscure, but I agree with Mr Li that whatever else the email of 27 February 2006 means it does appear to take as its point of departure that both Mr Li and Mr Zhou had a 50% interest in Clear Environmental.

31    On 4 April 2006 Mr Zhou died. He did so without paying his half of the funds used to secure the transfer to Clear Environmental of Harbin’s shareholding in CETC. Consequently, Mr Li says that he had to pay that share himself. Mr Li says that he paid the transfer price to Harbin in instalments.

32    After Mr Zhou’s death, Mr Li was approached by Mr Zhou’s widow, Ms Gang Yi Wang, his son, Mr Scott Zhou, Mr Zhou’s parents and another son from an earlier marriage. Mr Li says that an agreement was reached for Mr Li to purchase Mr Zhou’s interest in CETC through his shareholding in Clear Environmental. These agreements do not appear to be documented but Mr Li says that Mr Zhou’s family agreed that Mr Li would receive Mr Zhou’s shares in Clear Environmental. This was to be in exchange for CNY 1,151,888.

33    By October 2009, Mr Li says that he paid these agreed amounts to the members of Mr Zhou’s family. He says that after that he became the sole shareholder in Clear Environmental.

34    Mr Zhou’s widow, Ms Gang Yi Wang, also gave evidence by affidavit and more or less confirms Mr Li’s version of events. She says that she knew Mr Li and knew that her late husband had worked with him. She also confirmed Mr Li’s evidence that he and Mr Zhou each owned 50% of Clear Environmental.

35    Ms Wang was not aware of whether her late husband had left a will and she did not apply for letters of administration. From this one may infer, and I do, that Mr Zhou’s deceased estate has never been administered. Even so, Ms Wang says that she reached an agreement with Mr‍ Li to transfer all of her and her son’s interest in the late Mr Zhou’s shares in Clear Environmental to Mr Li in return for an unspecified payment which Mr Li had made. This corroborates Mr Li’s version of events.

36    Returning to the events after Mr Zhou’s death, up until 21 January 2009 Mr Li paid the annual fees for Clear Environmental to ASIC. In 2009, he stopped receiving invoices from ASIC and therefore did not pay the annual fees. It is not clear why the invoices stopped being sent. On 7 April 2012, Clear Environmental was deregistered. Mr Li says that he was not notified that this had occurred either.

37    On 3 December 2013, Harbin confirmed in writing that the transfer price had been fully paid. At around the same time, the shares in CETC were transferred from Harbin to Clear Environmental. Since Clear Environmental was at this time deregistered and did not exist, a question arises as to what legal effect this transaction had. As I discuss later, the effect of s‍ 601AH(5) is such that if a reinstatement order is made then Clear Environmental will be deemed to have existed at this time.

38    Mr Li says he only became aware that Clear Environmental had been deregistered on around 15 December 2023. In his first affidavit, he gave his initial explanation of the circumstances in which he became aware of the deregistration. The version in the first affidavit transpires to be incorrect in material aspects and Mr Li corrected it in a subsequent affidavit.

39    The version in the second affidavit involved Mr Li commencing a proceeding in China against a Ms Xuefang Ma and CETC in around 2023. Mr Li’s evidence in his first affidavit, which is not varied in his second affidavit, is that he was unaware that Clear Environmental had been deregistered at the time this proceeding was commenced. The effect of his evidence is also that he believed he owned all of the shares in Clear Environmental having acquired the late Mr‍ Zhou’s 50% share from his family for good consideration.

40    In his second affidavit Mr Li then explained that he had entered into a series of agreements with Ms Ma and/or her company Gaoyi, which ‘concerned’ a transfer of shares in CETC. In fact, he goes somewhat further than this. He says that he reached a written agreement with Ms Ma in January 2014 under which he agreed to transfer Clear Environmental’s shares in CETC in the form of the 2014 Supplemental Agreement. Mr Li says that the terms of this agreement involved Ms Ma acquiring 45% of the shares in CETC from Clear Environmental in return for RMB 4.5 million; but this share acquisition would not include any interest in CETC’s heavy assets (such as factory buildings, land and fixtures) and the purchase price was to be paid directly to CETC as additional working capital.

41    Mr Li put the 2014 Supplemental Agreement in evidence. On my reading, its terms are quite different to those to which Mr Li deposes. Recital 2 records that Mr Li is the sole shareholder of Clear Environmental and that the purpose of the agreement is for Ms Ma to acquire a 45% interest in CETC from Clear Environmental. Other parts of the agreement may suggest that Mr Li was selling Ms Ma his own 45% interest in CETC. But this makes no sense as Mr Li did not own any shares in CETC.

42    Under cl 1.1, Mr Li then warranted that he had legal power on behalf of Clear Environmental to enter into the agreement. Since it had been deregistered on 7 April 2012 this was not correct. Even if the company is reinstated to the register, Mr Li will only be appointed to the office of director from the date of the reinstatement order: s 601AH(5).

43    By cl 3.1.1, it seems to have been recognised that CETC was currently a Sino-foreign joint venture. Since CETC was wholly owned by Clear Environmental, an Australian entity, this registration appears erroneous. It may be possible to infer that this statement relates back to the time at which Harbin held 51% of the shares in CETC. In any event, the parties now agreed that CETC would be changed from a Sino-foreign joint venture to a wholly foreign owned enterprise. This was to be achieved by Clear Environmental transferring 45% of the shares in CETC to Ms Ma. According to cl 3.1 this was in return for RMB 15.75 million (not RMB 4.5 million as Mr Li states). This was to be done by a scheme of arrangement and an amount of RMB 4.5 million was to be paid. On acquisition, Mr Li was then to designate Mr Bo Li to hold Environmental Clear’s 55% holding in CETC. Although earlier in the clause it was said that the purpose of this transaction was to make the enterprise a foreign-owned enterprise, a little later in the clause it seems to be accepted that the effect of the designation of Mr Bo Li was that CETC would then be a domestic enterprise. But there may be other readings too. Clauses 3.1, 3.1.1, 3.1.2, 3.1.3, 3.1.5 and 3.1.6 were in these terms:

3 Target Company and Acquisition of the Target

3.1    The registered capital of Target Company is US$ 2.23 million (equivalent to RMB 18,551,757.82), and Party B will finally acquire 45% of the equity of Target Company held by Party A by taking Australia Clear as the shareholder for a price of RMB 15.75 million (in words: fifteen million seven hundred fifty thousand yuan). Party A and Party B agree that the acquisition this time is an acquisition by scheme of arrangement, and the acquisition price this time is four million and five hundred thousand yuan. The acquisition conditions are as follows:

3.1.1    In view of the fact that Target Company is currently a Sino-foreign joint venture, if the equity is acquired through capital increase, the support policies of the state for environmental protection technology enterprises cannot be enjoyed. Party A and Party B agree that Target Company will first change the Target Company from a Sino-foreign joint venture to a wholly foreign-owned enterprise invested by Australia Clear, and then Australia Clear will transfer 45% of the equity held to Party B.

When Party B acquires, Party A will designate Bo LI to simultaneously acquire 55% of the equity of Target Company held by Australia Clear. After the acquisition is completed, Target Company will change from the current Sino-foreign joint venture to a domestic enterprise. Party A entrusts Bo LI as the controlling shareholder of the company. Party A and Bo LI do not participate in the daily operation and management activities of the company, but have the right to receive dividends according to their equity ratio. Party A has the right to fully understand all the business activities and financial status of the company. Party A undertakes that the funds obtained from the sale of equity this time will not be withdrawn from the company, but will be used for the continuous production and operation of the company. The specific financial processing method will be adjusted by Party B according to the actual financial situation of Target Company.

3.1.2    The company implements a system where the general manager is responsible under the leadership of the board of directors. The board of directors is the highest authority of the company and consists of three members. Party A appoints two members, while Party B appoints one member. The supervisor is appointed by Party B. For major matters specified in the company's articles of association that require a vote by the board of directors, they must be approved by a vote of over 80% of the board of directors. The chairman is appointed by Party A, while the executive chairman is appointed by Party B.

3.1.3    Party A and Party B agree that after Party B invests RMB 3 million in advance, if the company still needs funds for production and operation, Party B shall make up an additional RMB 1.5 million to Target Company (total: RMB 4.5 million). If the company needs to continue to increase working capital in the future, it will be funded by Party A and Party B, according to their respective equity ratios mentioned above. Alternatively, Party B may apply for a loan with the support of the government for environmental protection technology enterprises based on the company's operational situation. If necessary, Party A can provide land certificates or property certificates as collateral.

…

3.1.5    Party A and Party B agree that this acquisition target does not involve heavy asset items (plants, land, and related fixed facilities).

3.1.6    As an unavoidable element of future company restructuring, Party A and Party B agree that by the end of December 2020, Party B has the right to acquire the heavy asset portion based on a calculation base of RMB 25 million, according to the equity ratio held in Target Company. By the end of December 2020, Party B has the right of first refusal. If Party B does not intend to acquire during this period, Party A has the right to reevaluate the assets starting from January 2021 and has the right to handle the assets on its own.

44    So it seems that Ms Ma had the right to acquire the heavy assets for 25 million RMB.

45    It is difficult to understand much of the 2014 Supplemental Agreement and the version of the transaction it paints seems different although not entirely unrelated to the version given by Mr‍ Li.

46    Mr Li says that the transfer of the 45% occurred in late 2014 which resulted in Ms Ma’s company, Gaoyi, becoming a shareholder. This suggests that there was a disposal of the shares in CETC for capital gains tax purposes. At the same time, the representative of CETC changed to Mr Jianqing Gu who is Ms Ma’s brother-in-law. Mr‍ Li does not say one way or the other whether Clear Environmental’s 55% shareholding in CETC was transferred to Mr Bo Li as designate or who the representative of CETC was before it became Mr Gu or what any of this actually means.

47    In any event, Mr Gu has kept CETC’s company seal and Mr Li has not participated in the affairs of the company. By 2017, Mr Li had decided that Ms Ma had no intention of using CETC for business operations. Mr Li (or possibly Ms Ma) therefore sought to divide the assets of CETC. This was done by the 2017 Supplemental Agreement.

48    According to Mr Li, the terms of the 2017 Supplemental Agreement were that, first, a new entity Suzhou Cleartek Environmental Technology Co., Ltd (‘Cleartek’) would be set up which would be owned by Mr Li. In other parts of the evidence it is sometimes called ‘CliTech’. It would hold the factory, the overhead crane purchased in 2002, the gas facilities and the 2010 Toyota. The other assets would remain in CETC. It is not clear to me at all what these other assets were.

49    Secondly, Clear Environmental would receive RMB 2 million from CETC for the period 1 July 2014 to 30 June 2017 as Mr Li’s interest in CETC’s revenue in that period.

50    Thirdly, Cleartek would receive RMB 1 million as rental income from CETC for the period 1‍ July 2017 to 30 June 2018 and RMB 1.2 million for the period 1‍ July 2018 to 30 June 2020.

51    Fourthly, one year after the division Mr Li would cause Clear Environmental to transfer its 45% shareholding in CETC to Ms Ma and his brother, Bo Li, to transfer his 10% shareholding in CETC to Ms Ma. Apart from revealing that Mr Bo Li is Mr Li’s brother, this makes no sense. According to the 2014 Supplemental Agreement, once that acquisition was completed, Clear Environmental held 55% of CETC not 45%, Ms Ma held 45% and there was no other 10% left over that could be held by Mr Li’s brother.

52    Fifthly, according to Mr Li, the 55% in CETC would be transferred to Ms Ma for RMB‍ 5.5‍ million. Here the 55% appears to be the 55% equity in CETC that Mr Li controlled. This was Mr Li’s version of the agreement. The agreement was in evidence. Recital 1 said this:

As of 30 September 2017, Party A [Mr Li] holds 45% of Australia Clear's [Clear Environmental’s] equity in the Target Company, while 10% of Suzhou Kemo'er’s equity in the Target Company, actually owned by Party A, is held on behalf of Party‍ A by Party A's brother, Bo LI. Party B [Ms Ma] holds 45% of Gaoyi Investment's equity in the Target Company. Party A is the actual controller of Australia Clear and the sole shareholder of Suzhou Kemo'er, while Party B is the actual controller of Gaoyi Investment.

53    This tends to suggest that the earlier agreement was not carried into force in accordance with its terms. At this point, the procedural and conceptual irregularities begin to accrete at a rate which makes seeking to track the agreement through to its end largely impossible.

54    Mr Li says that he and Ms Ma have since fallen into dispute. Given the state of the contractual material, this is not especially surprising. Mr Li’s version of the dispute is that Ms Ma has not paid him for the share transfer nor paid the rent owed to the new entity Cleartek and Cleartek has not received the factory and other hard assets.

55    In any event, it is in that context that Mr Li then sued Ms Ma in the Suzhou Intermediate People’s Court in China. It was on 15 December 2023 that Ms Ma (or possibly CETC) put on a ‘supplemental evidence list’ in that proceeding averring that Clear Environmental was deregistered, that Mr‍ Li had no right to represent it and that the assets of CETC belong to CETC (and Mr Li, who was never a registered shareholder nor its legal representative, had no claim to the assets).

56    Mr Li’s immediate response to this tactic by Ms Ma was to withdraw his Chinese proceeding (so that he could seek to reinstate Clear Environmental in Australia) and then, having done that, later to sue Ms Ma in China again. He withdrew the Chinese proceeding on 20 December 2023.

57    By force of s 601AD(2) of the Act, all of Clear Environmental’s assets are presently vested in ASIC. On 20 May 2024, ASIC wrote to the late Mr Zhou and indicated that because Clear Environmental was deregistered all of its assets were vested in ASIC. It indicated that the assets included a 49.97% interest in an entity called ‘China Clear’. It informed the late Mr Zhou that unless he applied to reregister the company AISC could sell the shares.

58    ASIC came to be writing to the late Mr Zhou because he was still recorded as the only shareholder and director of the company in ASIC’s records. In due course, the letter to the late Mr Zhou made its way to Mr Li who then engaged in correspondence with ASIC. Mr Li’s efforts to persuade ASIC to reinstate the company were unsuccessful and it was after that that the present proceeding was commenced.

59    In his second affidavit Mr Li gives evidence that Ms Ma and her associates had recently been attempting to occupy the factory. He had since put a stop to it, but this had resulted in her commencing proceedings against him to obtain possession of the factory. Whilst that has been pending she has been disrupting his quiet enjoyment of the factory including by way of physical damage to the premises. The police have declined to intervene.

60    In his fourth affidavit Mr Li gave further evidence about the factory. It is located at 32 Muqiao Street, Fengqiao Town, Suzhou City, China. It has a land area of 13,000 square meters and a building area of 6,000 square metres. On 1 April 2025, it was valued at around AUD 6 million (RMB‍ 28,161,000)

61    In his third affidavit Mr Li said that Clear Environmental had no financial records because its only purpose had been to hold the shares in Clear Environmental. In that regard, he noted that it did not trade and had not received any income. I do not agree. The company was required to prepare accounts each year and an annual return. These are basic requirements.

62    On the other hand, on Mr Li’s own account, Clear Environmental agreed to dispose of a 55% interest in CETC to Ms Ma (and on one view did in fact do so). On the assumption that Clear Environmental would have been tax resident in Australia if it had existed at the time of the purported first transaction with Ms Ma, this seems likely to have given rise to a capital gains tax event of some description.

63    Mr Li accepts that this may be so and proffers an undertaking that if the company is reinstated he will undertake to the Court that he will ensure that it files tax returns. He also undertook to put his solicitors in funds to the sum of $10,000 for the purposes of instructing tax agents to file these returns. He did not, however, undertake to meet the amount of any tax assessment. Paragraphs 24 and 27-28 of this third affidavit were to this effect:

24.    If any assessment is issued which requires Clear Environmental to pay any tax, including any penalties or interest, I intend to fund Clear Environmental by way of an interest free loan so as to enable it to meet its tax obligations.

…

27.    I will also proffer an undertaking to the Court that in the event that any tax assessment is issued and my undertaking is not sufficient to meet the amount due, I will, as the sole shareholder in Clear Environmental, cause a resolution to be passed to place Clear Environmental into winding up within 30 days after any assessment is not paid by due date.

28.    I am prepared to proffer these undertakings because I regard the remaining shares held by Clear Environmental in [CETC] to be worth considerably more than any tax liability that might be imposed on the company by reason of its disposal of some of those shares to Gaoyi. At the time that I signed the 2014 Supplemental Share Agreement with Ms Ma, a 45% shareholding in [CETC], being a minority stake, was valued at RMB 4.5 million (which was roughly equivalent to AU $849,000). That transaction was also on the basis that Ms Ma would not acquire any interest through that shareholding in the heavy assets held by [CETC].

64    Paragraph 24 is not an undertaking. On the other hand, [27] and [28] assume that there is an undertaking. Having combed through Mr Li’s business dealings in some close detail, I am not persuaded that this ambiguity is necessarily accidental. In his fourth affidavit Mr Li gave evidence of a property valuation of one of his Australian properties at $3,900,000-$4,200,000 and sufficient cash in an offset account to discharge the mortgage on that property. No valuation evidence was given in relation to his other property.

Consideration

65    The power in s 601AH(2) can be exercised on the application of a person aggrieved. The consequences of exercising the power are set out in s 601AH(5) which provides:

If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company. Any property of the company that is still vested in the Commonwealth or ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim.

66    ASIC’s records do not record Mr Li as a shareholder. However, ASIC’s record is only prima facie evidence of the matter stated in it: s 1274B of the Act. As such, it may be displaced by other evidence: Hong Liu v Australian Organic Eggs Pty Ltd [2022] VSC 747 at [159] per Button J. In this case the evidence satisfies me that Mr Li is the owner of 50% of the shares in Clear Environmental. Mr Li’s evidence is to this effect and his evidence is supported by the terms of the Form 201 prepared by Mr Zhou.

67    On the other hand, the evidence does not satisfy me that Mr Li is the owner of the other 50%. As to that interest, the evidence cannot support an inference that the late Mr Zhou’s shares in Clear Environmental were transferred to Mr Li by Mr Zhou’s widow. Since Mr Zhou’s estate has not been administered, the matter is governed by s 61 of the Probate and Administration Act 1898 (NSW):

61 Property of deceased to vest in NSW Trustee

From and after the decease of any person dying testate or intestate, and until probate, or administration, or an order to collect is granted in respect of the deceased person’s estate, the real and personal estate of such deceased person shall be deemed to be vested in the NSW Trustee in the same manner and to the same extent as aforetime the personal estate and effects vested in the Ordinary in England.

68    Since Mr Zhou’s death the shares in Clear Environmental have therefore been vested in the NSW Trustee.

69    Despite that, Mr Li has conducted the business of Clear Environmental as if he owned all of the shares. He has purportedly entered into the transactions with Ms Ma which I have described above. It is impossible to get any clear view of the position of CETC or Clear Environmental. The evidence concerning both of the transactions is incoherent and frequently nonsensical.

70    The state of affairs is such that I am unable to form any kind of idea as to whether restoring Clear Environmental to the register would be just. I do not understand the position of Mr Li viz a viz the late Mr Zhou’s family, how the NSW Trustee’s ownership of Mr Zhou’s 50% interest impacts what Mr Li thereafter did, what the agreements with Ms Ma even begin to mean and how so much formal and corporate irregularity can begin to be digested. This is even before one gets to such issues as whether Mr Li was a de facto officer of Clear Environmental, how that works retrospectively and the possibility of a capital gains tax liability. Taking Mr Li’s evidence at its highest I am left in a state of confusion. I am not prepared to restore the registration of the company when I have no clear vision, or indeed any vision, on what the consequences of this will be.

71    The application is dismissed.

Associate:

Dated:    9 March 2026