“Bring the company back from the dead so we can go to Court!”
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P approached the Court to seek the reinstatement of a deregistered Co: [1]
In 2010 the Co was incorporated. Shortly afterwards P and D1 - who were siblings - were the 2 Dirs and 2 equal shareholders: [4], [5]
P said that at about this time P and D1 agreed the Co would purchase some property, each funding 50% of the purchase, each owning a 50% share, and each entitled to 50% of the rent. The property was tenanted by D1: [7]
Shortly after this, the Co became the registered proprietor of the property: [8]
In 2012 (leaving aside the parties’ confusion as to whether the Co was a trustee) forms were lodged with ASIC recording P’s retirement as director. (P could not recall consenting or not.) From this time D1 managed the property for the Co: [9], [10]
In 2021 terse emails were exchanged between P and D1. P sought information. D threatened to “transfer out” some of the Co’s assets: [11]
In 2022 the Co transferred the property to OtherCo with nil consideration recorded on the transfer. OtherCo’s directors and shareholders were D1 and their spouse: [12], [13]
Shortly after, in 2022, D1 paid to P half the purported net proceeds of a sale of the property which D1 said was sold for $1.7m: [14], [15]
Some evidence showed that in August 2021 D1 had emailed P a valuation for the property at ~$2.4m and then attempted to recall that email; re-sending it with a valuation of $1.7m to $2.0m: [16]
In August 2022 D1 caused the de-registration of the Co, with P alleging P had no knowledge of D1 doing so: [17], [18]
P alleged the Co ought to have received around $1.6m in rental income over the period the Co owned the property. P said P had seen only $91K of this: [19]
All Ds consented to the Co’s reinstatement pursuant to s601AH: [20], [21]
The Court considered the relevant principles relating to an application brought by a “person aggrieved” by reregistration: [23], [24]
Where reinstatement is sought to bring legal proceedings, the Court need not forensically scrutinise the claim. There must be “some level of arguability” by the threshold is “very low”: [26]
P said they met this threshold as the Co’s deregistration prevented both an oppression claim and a derivative suit against D1 in the name of the Co: [28]
The Court agreed: [29]
In the normal course, D1 would be Dir upon reinstatement. D1 agreed to immediately retire on reinstatement: [31]
The parties consented to P and P’s nephew being appointed Dirs on reinstatement: [33] - [35]
The Co was reinstated, P and nephew were appointed Dirs, and the costs of the application were reserved to the contemplated oppression and / or derivative action proceedings: [39]
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