We too have had a very similar problem, but this time it was a highly desireable domain 
name that had been registered by a now defunct company ie. a company deregistered 
by ASIC. We lodged an objection to the registration with the registrar and just as the 14 
day period of grace given to a registrant to regularise the situation was due to expire, 
the domain was transferred to a new registrar presumeably by someone who had 
control of the domain ie. the registry key/password. The registration was still in the 
deregistered company's name. At that point we had to start the objection procedure all 
over again with the new registrar except that in this case the fourteen day period has 
now extended to 28 days because the gaining registrar did not have systems in place to 
properly cope with an objection to an invalid regiatration.

We drew the attention of auDA to the situation which involved the acceptance by a 
(gaining) registrar of a registration/transfer of a domain in the name of an entity which 
did not exist which is both a findamental breach of auDA's own rules and the warranties 
the gaining registrar required the the person who completed the online domain transfer 
request to make. In my view both auDA and the gaining registrar had grounds to cancel 
the registration there and then or at the very least require the transfer to be reversed so 
that the 14 day period of grace started by the original registrar could expire and the 
domain .

It is important to note that during both periods of grace given to the non-existent 
registrant under the auDA rules we had conversations with both the original and gaining 
registrar. Both advised me that they had to refer to auDA for directions on how to apply 
policy. It appeared that decisions and rulings given by auDA to the registrars were on an 
ad hoc basis and were not in writing. When I asked auDA for details and reasons for 
their rulings I was refused and told that they had to be "fair" and give the registrant a 
chance to regularise the situation. This was notwithstanding that the ASIC records which 
are available to everyone and which I had obtained clearly showed that the original 
registrant company had been wound up and any remaining assets not otherwise 
disposed of (eg the domain licence) had passed to ASIC or to put it other way this was 
one Lazarus who was not going to rise from the dead no matter how long we waited.

Arising from the above I would make the following points:
a) Why doesn't auDA policy prevent the transfer of domains during the 14 days that the 
the registrant is given to try to regularise the situation. 
b) Why aren't registrars required to check registrations properly?  
c) Why are there no sanctions applied to registrars who make fundamental mistakes 
and who do not have appropriate systems in place to deal with clearly foreseeable 
situations? 
d) Why has auDA apparently not conducted even the most basic compliance checks on 
registrars' procedures prior to them being allowed to start business.
e) Why are there no sanctions applied to registrars who do not post a complaints policy 
as required by auDA rules?
f) Why when there is no clear association between a registrant and domain name is a 
registrar under no obligation to provide any person with a clear statement detailing the 
justification provided by the registrant at the time of registration? A small fee could be 
charged for this service to cover the registrars costs related to this (say $20).

In relation to the arbitration procedure required to dispute a domain that has been 
registered in bad faith, at $1500 this is far too expensive for most Australian SMEs to 
contemplate given that the respondent can, so far as I can see, ignore the process.

cb