In the matter of Likehart Pty Limited (deregistered) [2017] NSWSC 884

In the matter of Likehart Pty Limited (deregistered) [2017] NSWSC 884

The Court was not satisfied that Mr Galic was presently a person aggrieved or that it was just to reinstate Likehart Pty Limited because the existing proceedings against Mr Napier were inadequately formulated and unlikely to justify leave for a derivative claim, the Company appeared insolvent with no liquidator's consent or funding arrangements in place, a proposed $10,000 contribution would not restore solvency, and reinstatement without an independent insolvency practitioner would not serve the public interest and could prejudice Mr Napier.

Jurisdiction
Australia
Judgment Date
09 May 2017
Procedural Posture
Application Under Corporations Act 2001 (cth) S 601 Ah(2) for Reinstatement of a Deregistered Company / Principal Judgment on Originating Process
Outcome
Originating Process seeking reinstatement dismissed with costs, with dismissal stayed until 4pm on 4 July 2017.
Legal Topics
['deregistration and Reinstatement of Company' 'derivative Proceedings' "directors' Duties" 'corporate Insolvency' 'appointment of Liquidator']
['corporations Law' 'equity'] ['deregistration and Reinstatement of Company' 'derivative Proceedings' "directors' Duties" 'corporate Insolvency' 'appointment of Liquidator']

Case Brief

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Procedural Posture

Application Under Corporations Act 2001 (cth) S 601 Ah(2) for Reinstatement of a Deregistered Company / Principal Judgment on Originating Process

Legal Issues

  1. 1 ['Whether the Plaintiffs established that Mr Galic was a person aggrieved by the deregistration of Likehart Pty Limited for the purposes of Corporations Act 2001 (Cth) s 601AH(2).' "Whether it was just that Likehart Pty Limited's registration be reinstated." 'Whether the proceedings intended to be pursued against Mr Napier were properly formulated as derivative proceedings or had a reasonable prospect of leave being granted.' 'Whether the apparent insolvency of the Company required reinstatement only on the basis that a liquidator be appointed.' 'Whether reinstatement would prejudice Mr Napier or be contrary to the public interest.']

Ratio Decidendi

The Court was not satisfied that Mr Galic was presently a person aggrieved or that it was just to reinstate Likehart Pty Limited because the existing proceedings against Mr Napier were inadequately formulated and unlikely to justify leave for a derivative claim, the Company appeared insolvent with no liquidator's consent or funding arrangements in place, a proposed $10,000 contribution would not restore solvency, and reinstatement without an independent insolvency practitioner would not serve the public interest and could prejudice Mr Napier.

Court Disposition

Originating Process seeking reinstatement dismissed with costs, with dismissal stayed until 4pm on 4 July 2017.

Orders

  • ['The Originating Process in proceedings 2016/243306 seeking reinstatement of the Second Defendant under s 601AH of the Corporations Act be dismissed with costs.' 'Stay Order 1 until 4pm, 4 July 2017.' 'Any application by the Plaintiffs to reopen the question of reinstatement to be filed and served by 4pm 26 June...