In brief
In a rare occurrence, a court has ordered that a company be reinstated, some 84 years after it was deregistered, to enable a family to obtain its inheritance.
What you need to know
- Time is not prohibitive to the reinstatement of a company.
- Current and historic legislation is evaluated, as well as any opposition to the application.
- The Court will also consider a number of factors including the likelihood of prejudice and the ‘just’ nature of the reinstatement.
In the unusual case of Hall and Gardiner v ASIC [2015] VSC 362, the Supreme Court of Victoria (the Court) held that a company be reinstated after it was deregistered in 1931. The case involved land previously owned by the company prior to deregistration. The descendants of the original shareholders of the company wanted to claim their inheritance in order to sell the land to a developer.
Background
In 1931 Glen Ora Pty Ltd (Glen Ora) was struck off the register of companies. In examining the circumstances of the case, the Court looked in detail at the current and historic legislation and concluded that there was no time limit to bring these proceedings.
The land owned by Glen Ora at the time of its deregistration was transferred to the Register General. The descendants of the shareholders sought to reinstate Glen Ora in order to sell the land to a developer. Neither ASIC nor the Register General opposed the application, although ASIC noted that there was a company registered with the same name, so the original Glen Ora would need to change its name.
The Decision
In exercising its discretion, the Court followed previous authorities and considered the following factors to be relevant in this type of application:
- the circumstances in which the company was dissolved;
- whether good use could be made of the order if granted;
- whether any person was likely to be prejudiced by the reinstatement;
- the public interest; and
- what is “just” including the future stewardship of the company and the impact on the company’s officers and third party rights.
The Court held that it would be totally unjust if the heirs of the members of the company were denied their inheritance. It therefore ordered, amongst other matters, that the company be reinstated.
This case demonstrates that the Court is willing to consider reinstatement of companies on a case by case basis, even if they were deregistered some time ago, provided that the reinstatement is deemed to be fair and equitable.
