Event and Time
Event Description
SMAC Developments Pty Ltd (SMAC) was incorporated on July 1, 2004, and deregistered on November 27, 2016, due to failure to pay fees. The deregistration occurred while SMAC owned real property in Mittagong, which had not been developed since mid-2006. The plaintiffs, Mr. and Mrs. Smith, sought the reinstatement of SMAC's registration to pursue a breach of deed claim after a prior deed entered in 2009 regarding development progress was not fulfilled.
Application and Claims
- The plaintiffs sought:
- An order for ASIC to reinstate SMAC's registration under s 601AH(2) of the Corporations Act 2001 (Cth). - An order declaring Mr. Smith as a director of SMAC upon reinstatement. - An order to suspend the limitation period for claims against SMAC during the period of deregistration.
- The plaintiffs argued that restoring SMAC would allow the company to realize its asset (Mittagong land) to pay off their claim.
Judicial Decisions
The case was heard with key dates including a final hearing on April 23, 2021, and a resumed hearing on May 24, 2021. The court aimed to assess:
- Whether SMAC was solvent upon reinstatement.
- The appropriate course of action given the prior deregistration and failures to provide evidence of solvency by the plaintiffs.
Dispute Points and Legal Basis
Dispute Points
Plaintiffs’ Claims and Arguments:
- Claims: They wanted to pursue a breach of deed claim against SMAC.
- Arguments: Asserted that SMAC would be solvent based on a kerbside valuation and the belief shared by Mr. Smith about the financial status of the company, despite lack of solid evidence.
- Assumed Financial position: Claimed liabilities were manageable and thus SMAC could operate and engage in real estate sales post-reinstatement.