Dang, in the matter of JMJ Cosmetic Pty Ltd v Mansfield (Liquidator) [2026] FCA 5

This case arose after a Registrar of the Federal Court ordered JMJ Cosmetic Pty Ltd to be wound up in insolvency on 28 January 2026. The company was therefore in liquidation, and its sole director, Huynh Bich Thuy Dang, wanted the company to challenge that result by asking a judge to review the Registrar's decision.

The problem was not simply whether the company had a good argument. The immediate problem was authority. Once the company was in liquidation, Ms Dang could not assume she still had the ordinary power to cause the company to start litigation. She brought an urgent application seeking approval under s 198G(3)(b) of the Corporations Act so that she could cause JMJ Cosmetic to commence and proceed with the review application.

The urgency was real. The judgment says the 21 day period for bringing the review expired on 18 February 2026, the same day the matter came before Cheeseman J. That meant the Court had to deal first with whether Ms Dang could validly set the company in motion before the review window closed.

The timeline matters because the Court's reasoning was driven by the review deadline. The Registrar's winding-up decision was made on 28 January 2026. Ms Dang filed her originating application on 17 February 2026. The urgent hearing took place, and orders were made, on 18 February 2026.

Under s 35A(5) of the Federal Court of Australia Act, the review period was 21 days unless extended. Cheeseman J recorded that the time expired on the day of the hearing. That is why the application was treated as a duty matter and heard urgently.

The Court then extended the time to institute the review by 7 days from 18 February 2026. In practical terms, the orders created a short additional window for the review application to be filed properly after approval had been granted.

The central issue was whether Ms Dang should be granted approval under s 198G(3)(b) of the Corporations Act to cause JMJ Cosmetic, a company already in liquidation, to commence and proceed with an application to review the Registrar's winding-up decision. A related issue was whether the Court should extend time under s 35A(5) of the Federal Court of Australia Act because the review period was expiring that day.

The Court also had to deal with an important background question about retrospective approval. There were conflicting authorities on whether approval of this kind can be granted after a director has already purported to act for the company, sometimes described as approval nunc pro tunc. Cheeseman J referred to the line of authority represented by Land Enviro Corp, which said approval must be sought and obtained before the relevant act is undertaken, and the different approach in Brolrik, which treated some challenges to winding-up orders as capable of later approval.

That conflict mattered because if retrospective approval were clearly available, the urgency might have been less acute. But the law was not settled, so the Court considered it appropriate to hear the matter urgently.

Cheeseman J granted the application in substance, but in a limited and conditional way. First, the Deputy Commissioner of Taxation was joined as the third defendant. Second, Ms Dang was given leave to proceed on her originating application instanter. Third, the Court extended by 7 days the time within which to institute a review of the Registrar's decision to wind up JMJ Cosmetic in insolvency.

Most importantly, the Court granted approval under s 198G(3)(b) for Ms Dang to commence and proceed with the review application on behalf of JMJ Cosmetic. But that approval came with a clear condition: Ms Dang had to indemnify JMJ Cosmetic for all costs that it might incur or be ordered to pay in respect of the review application. The judgment records that the Court confirmed with her solicitor that the condition would extend not only to adverse costs orders, but also to costs incurred by the company in bringing the review.

The Court otherwise dismissed the originating application with no order as to costs, subject to any costs application being made within 2 days. The Court also required Ms Dang to notify the defendants, including the Deputy Commissioner of Taxation, of the orders forthwith.

A notable feature of the judgment is the Court's discussion of conflicting authority on retrospective approval. Cheeseman J explained that some cases have treated the absence of prior approval as fatal, meaning the director must obtain approval before exercising the relevant function or power. Other cases, especially in the context of challenging the winding-up order itself, suggest the Court may be able to grant approval later.

The judge did not finally decide that conflict because it was unnecessary on the facts. Ms Dang had framed her application carefully. She had not yet purported to cause JMJ Cosmetic to bring the review application before obtaining approval. Instead, she sought approval first.

Even so, the judgment gives a useful indication of the Court's thinking. Cheeseman J said that, had it been necessary to decide the point, her Honour would have been inclined to adopt the approach in Brolrik as instructive for s 198G(3)(b), because that construction better fitted the broader statutory context and the interaction between the Corporations Act and the Federal Court review provisions.

For directors, the practical message is still conservative. Even though the Court expressed an inclination on the issue, it did not finally resolve the conflict. The safer course remains to seek approval before causing the company to file the challenge.

Ms Dang also sought interim relief that included a stay of the Registrar's orders, but she did not press that part of the application for determination at the urgent hearing. Cheeseman J said she intended to file evidence to support any stay application.

The Court made two practical points that matter to businesses. First, any stay application should be brought on notice and supported by cogent evidence. Second, the evidence before the Court suggested that the assertion that the company was in fact solvent would likely be contested.

That means a director cannot expect a stay merely by asserting that the company is solvent or that the winding-up order was wrong. If a business wants urgent relief after a winding-up order, it should be prepared with proper evidence and should expect affected parties, such as the liquidator and the Deputy Commissioner of Taxation, to be heard.

This case is a practical warning that insolvency procedure can decide what happens next before the Court ever reaches the underlying commercial dispute. Directors often focus on whether the company can pay its debts, whether the creditor is being unfair, or whether the winding-up order should be challenged. But once liquidation starts, the first question may be who is legally allowed to act for the company.

The decision also shows that the Court may be willing to preserve a short opportunity to challenge a winding-up order, but it will usually protect the company and other parties while doing so. Here, the Court granted only a 7 day extension and required a full costs indemnity in favour of the company. That is a strong reminder that if a director wants the company to litigate after liquidation, the Court may insist that the director personally carry the financial risk.

For business owners and directors, the practical steps are straightforward. Work out whether the order was made by a Registrar. Identify the review deadline immediately. Check whether the company is already in liquidation and whether there is any stay. If director powers are restricted, seek approval before causing the company to act. If you also want a stay or want to argue solvency, prepare evidence early and expect the issue to be contested.

This page is based on the Federal Court of Australia judgment in Dang, in the matter of JMJ Cosmetic Pty Ltd v Mansfield (Liquidator) [2026] FCA 5, delivered by Cheeseman J on 18 February 2026. The judgment records the orders made and the ex tempore reasons as revised from transcript.

The decision is most useful as a procedural guide on approval under s 198G(3)(b), extension of time for a review under s 35A(5), and the Court's treatment of urgency, costs protection and evidence for any later stay application. It does not provide the full background to the original winding-up proceeding or the later fate of any substantive review.