Whilst courts have often held that they have the power to make an order, when reinstating a company, to the effect that a limitation period does not run while the company was deregistered, what is the position when the limitation period in question is a jurisdictional time limit contained in another provision of the Corporations Act 2001 (the Act), specifically section 588FF(3)?

Facts

In DCT v Runcity Pty Limited [2025] FCAFC 152, the Full Court of the Federal Court was asked to consider the validity of an order to the following effect that had been made with the consent of the parties on an application commenced by a liquidator for reinstatement of deregistered companies before the court:

Pursuant to section 601AH(3)(d) of the Corporations Act when calculating the period ending three years after the relation back day…the period between the date of deregistration of the relevant company and the date of (the order reinstating the Company) shall be disregarded (order 3).

After a somewhat chequered history, proceedings were commenced by a liquidator of several companies seeking their reinstatement for the purpose of, amongst other things, seeking orders for compensation pursuant to section 588FF of the Act. However, the three-year time period to commence such proceedings, after the relation back day had expired. The parties agreed to consent orders reinstating the companies and including order 3.

Section 601AH(3)(d), relied upon for such order to be made, provides that if a court makes an order reinstating a company it may ‘make any other order it considers appropriate’.

The court also ordered that any company against whom proceedings commenced relying on the above order had the liberty to apply to vary or discharge that order.

A number of companies exercised that liberty and brought proceedings seeking to discharge order 3. The primary judge found that there was no power to make order 3 and discharged it.

The DCT and some other parties sought leave to appeal from the primary judge’s order.

The Full Court decision

The Full Court noted that there was no appellate authority on the issue, and it was of wider significance, and granted leave to appeal.

The Court considered the legislative provisions relating to the deregistration and reinstatement of companies found in Chapter 5A of the Act and noted in particular that the issue of whether a court has power to make an order in terms of order 3 involved a consideration of the interaction between section 601AH(3)(d) and the provisions of section 588FF(3), the latter of which provides that any proceedings must, unless extended by the court during the period, be commenced during the period beginning on the relation back day and ending three years after the relation back day or 12 months from the first appointment of a liquidator.
The issue therefore was whether section 588FF(3) was intended to ‘cover the field’ for calculation of time orders to the exclusion of section 601AH in the case of reinstated companies.

The Court noted that the issue was one of statutory construction. It referred to the High Court decision in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265, which illustrates that the task of statutory construction must be undertaken using the usual methods, paying close attention to the architecture and operation of the legislative scheme and the legislative policy it implements.

The Full Court stated:

Whatever the outer limits of s 601AH(3)(d) may be where the orders being contemplated do not impinge on a jurisdictional time limit provision such as s 588FF(3)(a), in our view, parliament did not intend the power in s 601AH(3)(d) to enable the Court to extend the jurisdictional time limit in s 588FF(3)(a) where a company has been reinstated to the register after a period of being deregistered. In our view, s 588FF(3)(b) is the only power by which the period of time specified in s 588FF(3)(a) may be extended, and the power in s 601AH(3)(d) must be confined accordingly.

Conclusion

Where a company has been deregistered and reinstated, the time period in which a liquidator may bring proceedings against such a company under section 588FF(3) is set and cannot be extended by a more general provision, such as that found in section 601AH(3), allowing a Court to make ‘any other order it considers appropriate’ on reinstatement of the company.

Liquidators must act promptly to ascertain potential claims, including those against deregistered companies, to either commence proceedings, or seek an extension of time to do so, prior to the expiration of the section 588FF(3) time period.