I remember as a young lawyer having a workers’ compensation claim during which the client’s employer went bust and was deregistered. The claim didn’t resolve at settlement negotiations, and we had to commence proceedings – but you cannot commence Court proceedings against a company that doesn’t exist! I was in a panic, what do I do, and the clock is ticking to commence proceedings within 60 days of the compulsory conference.
Since then, I have had this experience on a few occasions, including with public liability claims, but this time without the panic. Luckily, it is not a common occurrence. In this short article I provide some broad guidance on what to do if faced with a deregistered company against whom you must commence Court proceedings or file an Originating Application. Solicitors should never fear seeking guidance from colleagues or Barristers, because this doesn’t happen too frequently, so there is no shame in getting assistance.
Australian Securities Investment Commission (ASIC) administrative reinstatement
If time is not critical, an application can be made to ASIC for administrative reinstatement. This process can take some time – up to 28 days. Therefore, it should not be used where time is of the essence. The benefit of this process is the cost – it only costs $44 and the time to prepare the application.
However, the application requires a bit of work including:
- Completion of a Form 581 Application for ASIC reinstatement.
- Reasons and supporting documents about why the company should not have been deregistered.
For a personal injury claim, it could include copies of any initial notices of the claim, compliance response(s) from the insurer or their lawyers, confirmation of no prejudice given the company is indemnified against the claim via its insurer.
- ASIC prefers to see evidence that the company directors have been notified about the reinstatement and its consequences. This may not always be possible, so attempts made to do so can be accepted. Even that may not be possible, in which case reasons for not attempting notification should be given. For personal injury claims, it may be appropriate to advise ASIC that the company is indemnified via insurance and they are already aware of, and responding to, the claim.
It is to be noted that in certain circumstances ASIC cannot reinstate a company registration. For example, where the company was wound up by a liquidator, in which case an application to reinstate should be made to the Court.
In my view, it is better to apply to the Court to reinstate a company, as matters such as this can be listed pretty quickly (within days) of the filing of an application, and you have the surety of a Court order.
Applications to the Court to reinstate a company
The application is made under s.601AH(2) of the Corporations Act if the company was deregistered under the Corporations Act. The application is made to the Supreme Court. It is important to also notify the former liquidator (if any) as a successful application must seek, and will result in, the liquidator being reappointed.
Some practical tips in preparing the affidavit evidence in support:
- Provide the Court with background to the claim – i.e. timeline of keys events such as date of injury, when a workers’ compensation statutory claim was lodged, when an initial notice of claim was served, details of the insurer and/or their legal representatives.
- Explain why the reinstatement is necessary to permit the applicant to pursue their rights.
- That there is no prejudice to the company given it is indemnified by its insurer and (where applicable) represented by lawyers.
- Provide details (if available) of directors and any attempts made to notify the directors. For most personal injury claims this will not be possible or practicable, but with an insurer and lawyers often acting for the now deregistered company, it ought not be a sticking point.
The application is required to be served on ASIC and can be done via email (firstname.lastname@example.org). ASIC don’t generally object and in most cases don’t even appear on the hearing. ASIC will usually confirm this in writing, which ought to be provided to the Court at the hearing or via a further affidavit prior to the hearing (time permitting).
The order of the Court must be provided to ASIC with a Form 105. The order should also be provided to the liquidator.
Some basic tips
Keep an eye on whether a company (subject of a personal injury claim) is in liquidation, administration, wound up and/or deregistered. You can find this out several ways:
- A quick (and free) search using ABN Lookup.
- WorkCover files will usually contain some indication of this either in the header of the communications reports or payment history or buried somewhere in the communications report.
- Google of a company or the company website.
- Newspaper articles – I’ve experienced this where in reading the news I found out a company involved in a client’s claim had gone into liquidation.
- A company search (which comes with a fee).
As soon as you know that a company is in liquidation, administration, wound up and/or deregistered, develop a plan to deal with the reinstatement at the appropriate time (i.e. if and when Court proceedings or an application may be necessary).
For WorkCover claims, don’t forget s.300(2) of the Workers’ Compensation and Rehabilitation Act 2003 which provides circumstances in which proceedings can be commenced against WorkCover Queensland instead of the name of the employer. For present purposes, that includes where the employer is a corporation and has been wound up.
Further helpful information can be found on the ASIC website – HERE
Also, ASIC have prepared a handy Regulatory Guide – HERE
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