A F Scott Forestry Limited v Orion New Zealand Limited
[2025] NZCA 241
•13 June 2025 at 1 pm
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA403/2024 |
| BETWEEN | A F SCOTT FORESTRY LIMITED |
| AND | ORION NEW ZEALAND LIMITED |
| AND | LEISURE INVESTMENTS NZ LIMITED PARTNERSHIP |
| Hearing: | 7 April 2025 |
Court: | Ellis, Palmer and Hinton JJ |
Counsel: | J S Gurnick for Applicant |
Judgment: | 13 June 2025 at 1 pm |
JUDGMENT OF THE COURT
AThe application for leave to appeal is declined; leave to appeal is not required.
B The application for an extension of time is granted.
C Costs are reserved pending the outcome of the appeal.
____________________________________________________________________
REASONS OF THE COURT
(Given by Palmer J)
What happened?
On 17 November 2021, A F Scott Forestry Ltd (Scott Forestry) filed documents with Inland Revenue | Te Tari Taake confirming that it had ceased trading on 30 November 2020.[1] On 7 November 2022, Scott Forestry was removed from the Companies Register (the Register) after failing to file annual returns.[2]
[1]Grainger v Orion New Zealand Ltd [2023] NZHC 2239 [strike-out judgment] at [15].
[2]At [1].
Properties were damaged or destroyed in the Port Hills fires in 2017. In February 2023, the insurer of a number of owners of those properties, including Scott Forestry, filed High Court proceedings on their behalf against Orion New Zealand Ltd (Orion) and Leisure Investments NZ Limited Partnership (Leisure Investments).
On 10 August 2023, in the High Court at Christchurch, Associate Judge Lester directed that, unless counsel for Orion had been convinced by 11 December 2023 that all reasonable steps had been taken by Scott Forestry to restore it to the Register, he would hear an oral application by Orion to strike out Scott Forestry as a party to the proceeding.[3]
[3]At [6].
On 27 September 2023, the Registrar of Companies declined Scott Forestry’s application to be restored to the Register. The Registrar was not satisfied that Scott Forestry was carrying on business at the time it was removed from the Register, so it could not be restored under s 328(1A) of the Companies Act 1993.[4] On 6 December 2023, Scott Forestry applied to the High Court under s 329 of the Companies Act for restoration of Scott Forestry to the Register.[5]
[4]At [11]–[13].
[5]At [14].
At a teleconference in the High Court proceedings on 11 December 2023, Orion made an oral application to strike out Scott Forestry as a party to the proceedings.[6] On 18 December 2023, the Judge granted the application, saying:[7]
… technically, [Scott Forestry] has never been a party to the proceeding because it was not on the Register when this proceeding was filed, but there having [been] a failure to take reasonable steps to restore the company to the Register, it is now … formally struck out.
[6]At [7].
[7]At [23] (emphasis omitted).
In late January 2024, Scott Forestry applied to the High Court for leave to appeal to this Court.
On 30 April 2024, Associate Judge Sussock granted Scott Forestry’s application for restoration to the Register under s 329 of the Companies Act.[8]
[8]Forrester v Registrar of Companies [2024] NZHC 1001 at [30].
On 27 May 2024, Associate Judge Lester declined the application for leave to appeal against the strike-out judgment, holding:[9]
(a)while his strike-out judgment did not refer to r 4.56 of the High Court Rules 2016 (the Rules), which empowers the striking out of parties, “the basis of the strike out application was abundantly clear”; and
(b)s 330(2) of the Companies Act “does not retrospectively change the circumstances that existed when the decision sought to be appealed was made”.
[9]Grainger v Orion New Zealand Ltd [2024] NZHC 1355 [leave judgment] at [14] and [20].
A fresh application by Scott Forestry for joinder would be pointless because of limitation issues with the substantive proceedings.[10] Scott Forestry applied to this Court for leave to appeal. Orion opposed the application. The second respondent, Leisure Investments, is maintaining a watching brief.
[10]It is submitted that the limitation period in respect of the applicant’s claim expired on 12 February 2023. Joinder will generally not be permitted where it would defeat a limitation defence: see, for instance, Cridge v Studorp Ltd [2017] NZCA 376, (2017) 23 PRNZ 582 at [71].
After considering the issues on the papers and receiving further submissions, this Court convened a hearing to consider whether Scott Forestry was a party to the proceedings, and whether leave was required to bring the proposed appeal or Scott Forestry can appeal as of right.
Threshold for appealing as of right
Section 56(4)(a) of the Senior Courts Act 2016 provides:
(4)Any party to any proceedings may appeal without leave to the Court of Appeal against any order or decision of the High Court—
(a)striking out or dismissing the whole or part of a proceeding, claim, or defence; or
If s 56(4) applies, Scott Forestry can appeal as of right. The two issues with the application of s 56(4) are whether Scott Forestry falls within its terms as a “party” to the proceeding and whether the High Court order strikes out “part of” the proceeding or claim.
Issue 1: is Scott Forestry a “party” to the proceeding?
Section 56(4) is clear that any “party” to any proceedings may appeal an order or decision of the kind referred to in para (a) without leave.
Contrary to Mr Gates’ written submissions for Scott Forestry, the Judge did not recognise that it was a party prior to strike out. Scott Forestry had not been registered as a company from 7 November 2022. It was not a party to the proceedings at the time the proceedings were filed on its behalf in February 2023, or when the High Court struck it out as a party on 18 December 2023. At neither time did it have any legal existence.
Rather, the question is whether s 330(2) of the Companies Act means that Scott Forestry’s subsequent reinstatement to the Register on 30 April 2024 retrospectively conferred on it the status of a party for the purposes of s 56(4). In the decision declining leave, the High Court did not accept that s 330(2) “can undo orders of this Court made on the basis of the facts as they existed at the time of the order”.[11]
The legal effect of restoration to the Companies Register
[11]Leave judgment, above n 9, at [21].
Section 330(2) of the Companies Act provides:
(2)A company that is restored to the New Zealand register shall be deemed to have continued in existence as if it had not been removed from the register.
In 1996, in Natural Selection Clothing Ltd v Commissioner of Trade Marks (Natural Selection), this Court considered the effect of removal of a company from, and reinstatement to, a companies register on a decision of the Commissioner of Trade Marks (the Commissioner) to grant the company an extension of time.[12] Section 547(2) of the (now repealed) Corporations Act 1989 in Australia was similar to s 330(2) of the Companies Act (NZ). Mr Hodder, for the company, submitted that the section retrospectively validated the application for the extension of time in the name of the company, but validation did not extend beyond that application to acts of the Commissioner.[13] In rejecting such a bifurcated approach, the Court considered and followed the Court of Appeal of England and Wales in Tyman’s Ltd v Craven about the effect of similar statutory wording.[14] This Court stated:[15]
We have no doubt that [the section] should extend to all matters the only defect in which stems from the non-existence of the company. To take the more restrictive view would be to create difficulties in such areas as company contracts and dealings by the company and its officers in the course of business. There is also an illogicality in treating the application as valid but the decisions as invalid when the only basis for their invalidity is the invalidity of the application.
[12]Natural Selection Clothing Ltd v Commissioner of Trade Marks [1996] 2 NZLR 148 (CA).
[13]At 154.
[14]At 154, citing Tyman’s Ltd v Craven [1952] 2 QB 100 (CA).
[15]Natural Selection Clothing Ltd v Commissioner of Trade Marks, above n 12, at 154–155.
In 2006, in Clark v Libra Developments Ltd, this Court considered s 330(2) directly.[16] It noted that Natural Selection and Tyman’s Ltd had been followed in the High Court and examined the statutory context to s 330(2).[17] The Court considered:
[202] Taken in combination, those provisions support the view that it is appropriate to give s 330(2) its literal meaning. Removal from the register places the company and those operating it or dealing with it in legally a state of “suspended inanition”. As it is no longer registered and does not comply with the requirements of the Act, it is no longer a “company” as defined by s 2.
[16]Clark v Libra Developments Ltd [2007] 2 NZLR 709 (CA).
[17]At [195] and [200]–[203].
Following Natural Selection and Tyman’s Ltd, the Court concluded that Parliament recognised that, on exercise of the power of restoration:
[203] … it is also appropriate that the company and all those dealing with it during the period of removal should not be disadvantaged by its and their actions during the period it was off the register. Accordingly, neither it nor they can challenge the validity of actions taken, including during the period of its removal …
Submissions
Mr Gurnick, for Scott Forestry, submits Scott Forestry is and always was a party to the proceeding for the purposes of bringing a claim because s 330(2) of the Companies Act deems it to have continued in existence as if it had not been removed from the Register.
Mr Weston KC, for Orion, submits that as at February 2023, when the proceedings were filed, Scott Forestry was not a party. When Scott Forestry was struck out, after it had received enormous indulgences and was still not restored to the register, it was still not a party. Section 330(2) does not help because Scott Forestry was not restored before being struck out and this distinguishes the present case from Tyman’s Ltd.[18]
Reasoning and decision
[18]Citing Tyman’s Ltd v Craven, above n 14.
On the basis of the reasoning of Tyman’s Ltd, Natural Selection and Clark, s 330(2) deems Scott Forestry “to have continued in existence as if it had not been removed from the register” upon reinstatement. If it had not been removed from the Register, it would have been a party to the proceedings when they were filed and there would have been no ground to strike it out as a party. Accordingly, s 330(2) would have the effect of reinstating not only Scott Forestry to the Register but reinstating Scott Forestry’s status as party to the proceeding which had been filed in its name.
We do not accept that Tyman’s Ltd is distinguishable. The Court of Appeal of England and Wales was explicit that it was not deciding the outcome where a company was not restored until after being struck out.[19] And its reasoning about the policy behind the deeming provision, to allow the company and third parties — where justice requires — to take actions within any necessary timeframes, stands.[20] In any case, the reinstatement in Natural Selection did not occur until after the Commissioner’s decision and that is the more authoritative decision for our purposes.[21]
[19]At 112–113.
[20]At 111.
[21]Natural Selection Clothing Ltd v Commissioner of Trade Marks, above n 12.
We put to one side any argument about whether an unless order being made would justify the strike-out decision.[22] We acknowledge that, at the time the High Court made its strike-out decision, Scott Forestry was not a party. The High Court did not err at that point in time. But the retrospective deeming effect of s 330(2) effectively reinstated Scott Forestry as a party from the outset of the proceeding and so it retrospectively removed the basis for the strike-out and created a material error in the Judge’s decision.
Issue 2: has the High Court struck out “part of” the proceeding?
[22]We say this because, arguably, the Judge’s earlier order fell short of strictly constituting an unless order because it did not “specify clearly what is to be done, by when and what is the sanction for non-compliance” per SM v LFDB [2014] NZCA 326, [2014] 3 NZLR 494 at [31(b)]. It depended on both the satisfaction of opposing counsel and the further exercise of discretion by the Court.
Under s 56(4)(a) of the Senior Courts Act, a party is able to appeal without leave against any order or decision of the High Court “striking out or dismissing the whole or part of a proceeding, claim, or defence”.
By contrast, leave is required under ss 56(3) or 56(5) to appeal “an interlocutory application in respect of any civil proceeding”. An interlocutory application is defined by s 4(1) to mean any application for “an order or a direction relating to a matter of procedure” or “for some relief ancillary to that claimed in a pleading”.
Case law
In a 2022 decision of this Court, Dokad Trustees Ltd v Auckland Council, Goddard J held that s 56(4) applied to an appeal of a High Court judgment determining that certain proceedings could not be brought:[23]
[10] The scheme of s 56 is that appeals as of right are reserved for final determinations in respect of a proceeding. A leave filter applies to appeals from decisions on interlocutory applications in order to avoid delay and unnecessary cost. The underlying assumption is that such decisions are made in the course of a proceeding, and appeal rights should be exercised when the proceeding comes to an end. If a procedural decision has affected the ultimate outcome, that issue can be raised in an appeal against the substantive High Court decision that concludes the proceeding: see s 56(6). I consider that s 56(4) must be interpreted purposively, to apply to decisions that have the effect of bringing to an end the whole of a proceeding. Such a decision is, for the purposes of s 56(4), a decision that dismisses the proceeding.
[23]Dokad Trustees Ltd v Auckland Council [2022] NZCA 177.
In a 2023 decision of this Court, in Ressels v Southern Response Earthquake Services Ltd, French and Katz JJ considered an application for leave to appeal a High Court decision, under r 4.56 of the Rules, declining an applicant joinder to existing proceedings to sue as a plaintiff in a representative capacity.[24] French J stated for the Court:[25]
[14] According to Mr Shand, s 56(4) applies because the effect of the Judge’s decision is that it has brought Mr Ressels’ involvement in the Sneesby proceeding to an end. In our view this argument is untenable. The right conferred under s 56(4) is expressly limited to a party to a proceeding, which Mr Ressels is not. Further the proceeding has not been struck out or dismissed in whole or part, nor has summary judgment been granted. The proceeding still exists.
[15] In our view there is no doubt that a joinder application is an interlocutory application and accordingly that the impugned decision was a decision made on an interlocutory application. That means by virtue of ss 56(3) and 56(5) that leave to appeal from either the High Court, or failing that, leave from this Court, is required.
[24]Ressels v Southern Response Earthquake Services Ltd [2023] NZCA 614.
[25]Footnote omitted.
In 2024, in Stewart v Eversons International Ltd (in liq), Gilbert and Wylie JJ held that a decision declining an application to set aside a judgment entered on an admission under r 15.16(1) of the Rules was able to be appealed as of right under s 56(4).[26] They followed the purposive approach in DokadTrustees Ltd as required by s 10(1) of the Legislation Act 2019, holding that s 56(4) applied because the effect of the judgment brought the proceeding to an end, could be enforced against the applicant, and he would have no ability to challenge it.[27]
Submissions
[26]Stewart v Eversons International Ltd (in liq) [2024] NZCA 104, (2024) 26 PRNZ 529.
[27]At [51].
Mr Gates, for Scott Forestry, relies on Dokad Trustees Ltd and Stewart to submit that Scott Forestry’s only recourse is to appeal the strike-out decision, so it has an automatic right of appeal under s 56(4).
Mr Weston submits that neither Dokad Trustees Ltd nor Stewart are directly on point. Neither deals with multi-plaintiff proceedings where party status was in issue. However, they accepted that if Scott Forestry is a party, then the terms of s 56(4) are otherwise met.
Reasoning and decision
We agree with counsel for both parties that — in light of our finding on issue 1 — the terms of s 56(4) are met. The High Court struck out part of the proceeding or claim by striking out Scott Forestry as a party to the proceedings. That meant that the elements of Scott Forestry’s proceeding or claim, including the claim it made and the relief it sought as the 12th of 12 plaintiffs, were struck out. That is part of the proceeding or the whole of its claim.
As this Court stated in Dokad Trustees Ltd and Stewart, a purposive reading of s 56(4) is required by s 10(1) of the Legislation Act. The relevant purpose is to ensure that appeals as of right are reserved for final determinations of a proceeding or claim, where they are effectively brought to an end.[28] For Scott Forestry, the strike-out was a final determination in respect of its proceeding and claim. If it cannot appeal that decision, it cannot appeal the final determination of its proceeding and claim.
[28]See: Dokad Trustees Ltd v Auckland Council, above n 23, at [10].
An obiter sentence in Ressells suggested the proceeding there had not been struck out or dismissed, but still existed.[29] But the decision under appeal there was an application for joinder to sue in a representative capacity. Declining that application did not affect the proceeding or claim. And the statement was made in the context of the applicant not being a party to the proceeding, whereas we have found the applicant here is a party.
[29]Ressels v Southern Response Earthquake Services Ltd, above n 24, at [14].
Accordingly, the High Court order striking out Scott Forestry as a party struck out or dismissed part of a proceeding or claim. As a party to that proceeding, Scott Forestry has a right of appeal under s 56(4).
Extension of time to appeal
If the Court were to accept that leave is not required, Scott Forestry seeks an extension of time to file a notice of appeal, on the basis the delay was modest, there is no prejudice to the respondent, and the appeal raises important considerations.[30]
[30]Citing Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801.
As above, we have found that leave to appeal is not required. We grant the application for an extension of time for the reasons given by Scott Forestry.
Costs
The parties agreed that, if leave to appeal is granted, costs should be reserved pending the outcome of the appeal.[31] We have found that leave to appeal is not required. In the circumstances, we do not consider that the application for an extension of time arose from a default on Scott Forestry’s part.[32] We reserve costs pending the outcome of the appeal.
Result
[31]Court of Appeal (Civil) Rules 2005, r 53G(3).
[32]Rule 53G(3) and (6).
The application for leave to appeal is declined; leave to appeal is not required.
The application for an extension of time to bring the appeal is granted.
Costs are reserved pending the outcome of the appeal.
Solicitors:
Glaister Keegan, Auckland for Applicant
Kennedys, Auckland for First Respondent
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