Auckland Hotel Investments Ltd v Registrar of Companies

[2022] NZHC 224

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-001561

[2022] NZHC 224

UNDER

the Companies Act 1993

IN THE MATTER OF

an application for an order that a company, SDCIC NZ Construction Limited, not be removed from the register

BETWEEN

AUCKLAND HOTEL INVESTMENTS LTD

Applicant

AND

REGISTRAR OF COMPANIES

Respondent

Hearing:

17 February 2022

Appearances:

K C Grant for Applicant

No appearance for or by Respondent – Respondent abiding decision of the Court

Judgment:

18 February 2022

JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 18 February 2022 at 3.30pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel: Chapman Tripp, Auckland

AUCKLAND HOTEL INVESTMENTS LTD v REGISTRAR OF COMPANIES [2022] NZHC 224

Introduction

[1]    The respondent — the Registrar of Companies (the Registrar) — proposes to remove SDCIC NZ Construction Ltd (SDCIC) from the Companies Register for failing to file its annual return. The applicant — Auckland Hotel Investments Ltd (AHIL) — wishes to pursue an arbitration claim against SDCIC in respect of a contractual dispute and seeks an order that SDCIC be kept on the Register to enable it to pursue its claim and recover in the event that it is successful.

[2]The Registrar abides the decision of the Court.

[3]    There have been difficulties serving SDCIC but its sole director, Seli Kata, has been served. Mr Kata has taken no steps. Nor has SDCIC.

Background

[4]    AHIL was the developer of the Park Hyatt Hotel development in the Wynyard Quarter. In May 2018, it entered into a contract, pursuant to which it engaged SDCIC to undertake the fit out of the hotel.

[5]A dispute arose between AHIL and SDCIC over SDCIC’s performance and, on

20 January 2020, AHIL terminated the contract. AHIL then engaged another contractor to complete the fit out. AHIL says that it incurred significant additional costs as a result. It says that it has a claim against SDCIC for approximately $31.6 million.

[6]    On 3 November 2020, AHIL formally notified SDCIC that there was a dispute under the contract. In accordance with the dispute resolution provisions in the contract, the dispute was referred to the engineer nominated in the contract.

[7]The engineer has given a formal decision, recording that completion costs of

$5,141,777.53 and an unpaid advance or direct payments of $3,466,283 are payable by SDCIC to AHIL. These amounts have been certified. The engineer has also confirmed that liquidated damages are payable by SDCIC to AHIL. He noted that AHIL was claiming $1,199,306, but he was unable to confirm this sum.

[8]AHIL is also seeking an indemnity payment from SDCIC in the sum of

$21,831,069. The engineer did not deal with this claim.

[9]    AHIL is dissatisfied with the engineer’s decision and it intends to refer the dispute to arbitration.

Steps taken by AHIL to prevent SDCIC’s deregistration

[10]   In June 2021, AHIL became aware that the Registrar was proposing to remove SDCIC from the Companies Register. AHIL lodged an objection with the Registrar pursuant to s 321(1) of the Companies Act 1993. The Registrar advised AHIL that its objection had been accepted and requested AHIL to make application to the Court if it wished to keep SDCIC on the Register.

[11]AHIL has done so. It filed an originating application.

Relevant provisions

[12]The application is governed by Part 17 of the Companies Act 1993.

[13]   Section 323(1) confers a discretion on the Court to order that a company remains on the Register if certain grounds set out in s 321 are satisfied. Relevantly, the discretion can be exercised if the applicant is a creditor or has an undischarged claim against the company — s 321(1)(d). Section 321(2) details various claims that do not qualify as undischarged claims, but none of those exceptions is relevant in this case.

Analysis

[14]   AHIL requires leave to bring this application as an originating application. I am satisfied that it is appropriate to grant leave and I so order.

[15]   I am also satisfied that the grounds for the substantive order sought are made out. AHIL is a creditor of SDCIC as a result of the engineer’s decision. It also has an undischarged claim against SDCIC which it is intending to pursue. Accordingly, I order that:

(a)SDCIC not be removed from the New Zealand Register of Companies; and

(b)a sealed copy of this order be lodged with the Registrar of Companies, and served on Mr Kata, as the director of SDCIC.

Costs

[16]Costs are reserved.

Wylie J