NAB re Trim Perfect Australia [2005] NSWSC 972

In this case a company was deregistered for failing to file annual returns. The lender argued the company was a “farmer” under the Farm Debts Mediation Act and therefore sought to reinstate registration of the company so that it could serve the requisite notices under that Act in the course of enforcing the mortgage. The court considered whether the application to reinstate the company was classed as an “enforcement action” under the Act and therefore whether the lender was required to give notice of the action. The court also had to consider whether the reinstatement would cause an injustice or prejudice because if reinstated, it would be immediately wound up as insolvent, and an insolvent company does not attract the benefit of the Farm Debts Mediation Act.

The Judge found that although there was no doubt the lender sought to reinstate the company for the purpose of exercising security rights under the mortgage, the application was not an “enforcement action” within the meaning of the Act and therefore the lender was not required to give notice under the Act. The court also considered there were no parties who would suffer prejudice or injustice if the company was reinstated, and the company suffered no injustice because would not attract the benefits of the Act either way. If reinstated, the benefits would be denied because it is an “externally administered corporation”, if reinstatement was refused the benefits would be denied because there is no “farmer” to whom the lender could give notice.

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