Davies v Registrar of Companies

[2025] NZHC 2228

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2025-409-335

[2025] NZHC 2228

UNDER

the Companies Act 1993

IN THE MATTER

of an application to restore a company to the Companies Register

BETWEEN

JUDITH KATHLEEN DAVIES and RAJVINDER SINGH BASSI

Applicants

AND

THE REGISTRAR OF COMPANIES

First Respondent

THE SECRETARY TO THE TREASURY

Second Respondent

Hearing:	7 August 2025
Appearances:	C Upton and N C Dodds for Applicants
Judgment:	8 August 2025

MINUTE OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 8 August 2025 at 10.00 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

DAVIES v THE REGISTRAR OF COMPANIES [2025] NZHC 2228 [8 August 2025]

[1]    The applicants seek an order that Bassinghi Estate Ltd (removed)1 (the company) be restored to the New Zealand Companies Register under s 329 of the Companies Act 1993.

[2]    The application has been served upon both the Registrar of Companies and The Secretary to the Treasury. The Registrar of Companies does not oppose the application and I understand The Secretary to the Treasury abides the decision of the Court.

[3]    The applicants were formerly the sole shareholders and directors of the company. The company was incorporated on 12 February 2008. At all relevant times the company was the legal owner of a property at Christchurch. The company had been incorporated for the sole purpose of holding the property and receiving rental income from it and the property was its only significant asset.

[4]    In 2011, the Inland Revenue Department notified certain qualifying companies that there was an option to change their tax status from a company to a look-through company or partnership. On 30 September 2011, the company applied to the Inland Revenue Department for a Qualifying Company Transition (IR891) to a partnership. The Inland Revenue Department confirmed the transition had been accepted.

[5]    From 15 November 2011 what had been the business of the company was carried on by the applicants as the Bassinghi Partnership. They never turned their minds to the need for the property to be transferred from the company to the partnership, and never received advice to that effect. I understand that from that time on the partnership received the income from the property and submitted tax returns in relation to the income to the Commissioner of Inland Revenue under its partnership tax status. There is a mortgage on the property which I understand has continued to be paid.

[6]    The company was  removed from the New Zealand Companies Register on   8 August 2016 because its accountant stopped filing annual returns in respect to it.

1      Company number 2093310.

[7]    The applicants now wish to sell the property but have discovered they are prevented from doing so by virtue of the fact it remains registered in the name of the company.

[8]    An application to restore a company to the Companies Register is made pursuant to s 329 of the Companies Act. It provides as follows:

329     Court may restore company to New Zealand register

(1)The court may, on the application of a person referred to in subsection (2), order that a company that has been removed from the New Zealand register be restored to the register if it is satisfied that,—

(a)at the time the company was removed from the register,—

(i)the company was carrying on business or a proper reason existed for the company to continue in existence; or

(ii)the company was a party to legal proceedings; or

(iii)the company was in receivership, or liquidation, or both; or

(iv)the applicant was a creditor, or a shareholder, or a person who had an undischarged claim against the company; or

(v)the applicant believed that a right of action existed, or intended to pursue a right of action, on behalf of the company under Part 9; or

(b)for any other reason it is just and equitable to restore the company to the New Zealand register.

(1A) In considering whether to restore a company to the register on the ground referred to in subsection (1)(a)(i) or (b), the court must have regard to the reasons for the company’s removal and whether those grounds existed at the time of removal or exist at the time of the hearing of the application.

(2)The following persons may make an application under subsection (1):

(a)any person who, at the time the company was removed from the New Zealand register,—

(i)was a shareholder or director of the company; or

(ii)was a creditor of the company; or

(iii)was a party to any legal proceedings against the company; or

(iv)had an undischarged claim against the company; or

(v)was the liquidator, or a receiver of the property of, the company:

(b)the Registrar:

(c)with the leave of the court, any other person.

(3)Before the court makes an order restoring a company to the New Zealand register under this section, it may require any provisions of this Act or any regulations made under this Act, being provisions with which the company had failed to comply before it was removed from the register, to be complied with.

(4)The court may give such directions or make such orders as may be necessary or desirable for the purpose of placing the company and any other persons as nearly as possible in the same position as if the company had not been removed from the New Zealand register.

[9]    It will be observed that under this section the Court may restore a company to the Register if (amongst other reasons) the Court is satisfied that at the time the company was removed from the Register a proper reason existed for it to continue in existence or for some reason it is just and equitable to restore the company to the Register.

[10]   The Court of Appeal in Commissioner of Inland Revenue v Commercial Management Ltd said:2

... the provisions concerning removal of a company from the register are designed to ensure that a company is only removed if there is no good reason for it to continue in existence. The controllers of the company and other interested persons are given the opportunity to object to removal for a range of reasons. But there can be cases where a company is removed from the register as a result of an error or oversight, or where circumstances change and it becomes apparent with the benefit of hindsight that there were good reasons for the company to continue in existence. In such cases, a company can be restored to the register.

[11]   I am satisfied it is appropriate to restore the company to the Register in circumstances where the ownership of the property in the company’s name was overlooked following the rearrangement of the company’s tax affairs. The property should clearly have been transferred at that time to the applicants as partners of the Bassinghi Partnership but as things stand that cannot occur.

2      Commissioner of Inland Revenue v Commercial Management Ltd [2019] NZCA 479 at [29].

[12]   Section 329(3) provides that before making a restoration order the Court may require the company to comply with any provisions of the Companies Act with which the company failed to comply before it was removed. In this case it appears the company was removed following its failure to file annual returns. When a company is restored to the Companies Register it continues in existence as if it had never been removed.3 I therefore include a direction that the company is to file annual returns for any years missed and is to comply with any other filing requirements by the end of August 2025.

Result

[13]   I grant the application to restore the company to the New Zealand Companies Register pursuant to s 329 of the Companies Act 1993.

[14]   The company is to file any outstanding annual returns and comply with any other filing requirements to bring the Companies Register up to date by 31 August 2025.

O G Paulsen Associate Judge

Solicitors:

Malley & Co, Christchurch

The Treasury Legal Team, Wellington

3      Companies Act 1993, s 330(2).