JIT Sun Investments PTE Ltd vs. Australian Securities and Investments Commission - (15 Jul 2021)

Court can make an order relieving a person from civil liability for a broad range of contraventions if the person concerned acted honestly and no substantial injustice is caused to any person

Company

In facts of present case, on 13 May 2021, the Plaintiff, Jit Sun Investments Pte Ltd (Jit Sun Investments), filed an originating process seeking orders under Section 601AH and Section 1322(4)(c) of the Corporations Act, 2001 (Cth) for the reinstatement of the registration of a deregistered Company, namely Advanced Resources Australia Pty Ltd. (deregistered) (Advanced Resources), and for relief from any civil liability relating to the failure by Advanced Resources to have at least one director residing ordinarily in Australia.

Jit Sun Investments was the sole shareholder of Advanced Resources and seeks the reinstatement of Advanced Resources to enable it to recover an outstanding debt and pay the net proceeds to the Plaintiff. Jit Sun Investments also seeks relief from civil liability relating to Advanced Resources' historic failure to have at least one director ordinarily resident in Australia. This failure will be addressed immediately after reinstatement by the appointment of an Australian resident director.

Section 1322(4)(c) of Act permits the Court to make an order relieving a person from civil liability for a broad range of contraventions or failures, subject to the conditions in Section 1322(6) that the person concerned acted honestly and that no substantial injustice has been or is likely to be caused to any person. Mr. Lee's evidence is that after the resignation of Mr Schiller on about 12 April 2018, Advanced Resources made an honest mistake in failing to replace him with a director that was ordinarily resident in Australia. On being informed of the issue, Mr. Lee acted promptly to remedy the error. Counsel for the Plaintiff submitted that Advanced Resources and its directors acted honestly and that the breach of Section 201(A)(1) of the Act was caused by an honest mistake.

Pursuant to Section 601AH(5) of the Act, when a company is reinstated, it is taken to have continued in existence as if it had not been deregistered, and any person who was a director immediately before the deregistration of the company becomes a director again as from the time the company is reinstated by ASIC or by the court. This means that upon reinstatement of Advanced Resources, Advanced Resources will be in breach of Section 201A(1) of the Act in failing to have at least one director that resides ordinarily in Australia. However, the company intends to remedy this promptly by the appointment of Ms Fu-Yuen as a director.

Present Court considers it appropriate to make an order relieving Advanced Resources and its current and former directors and officers from any civil liability. The failure to have an Australian resident director of Advanced Resources was inadvertent and due to an honest mistake. This was not done in blatant disregard of its obligations under the Act. No substantial injustice is likely to be caused to any person by granting the relief sought. Finally, public policy will not be undermined by granting the Plaintiff the relief sought. Relief should be granted in the terms sought by the Plaintiff and that orders should be made to require ASIC to reinstate the registration of Advanced Resources.

Tags : DEREGISTERED COMPANY REINSTATEMENT REGISTRATION