ICL Assets Limited v Registrar of Companies

[2025] NZHC 112

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2910

[2025] NZHC 112

UNDER

the Companies Act 1993, section 323 and Part 19 of the High Court Rules 2016

IN THE MATTER OF

an application that SHADOW LION

ENTERPRISES LIMITED not be removed from the Companies Register

BETWEEN

ICL ASSETS LIMITED

Applicant

AND

REGISTRAR OF COMPANIES

Respondent

Hearing:	On the papers
Counsel:	Shane Campbell/Jackson Fletcher for the Applicant
Judgment:	11 February 2025

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application that company not be removed from the Companies Register]

This judgment was delivered by me 11 February 2025 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:
Wynn Williams (S D Campbell/J B Fletcher), Christchurch, for the Applicant

ICL ASSETS LIMITED v REGISTRAR OF COMPANIES [2025] NZHC 112 [11 February 2025]

[1]    The applicant, ICL Assets Ltd, has applied by without notice interlocutory application dated 13 November 2024 for an order permitting the proceeding to be commenced by originating application under r 19.5 of the High Court Rules 2016.

[2]    Filed  with  the  interlocutory  application  were  the  following,  all  dated   13 November 2024:

(a)the originating application seeking an order that Shadow Lion Enterprise Limited (SLE) not be removed from the Companies Register;

(b)affidavit of Cole Stephens Wenmoth in support of the originating application;

(c)memorandum of counsel.

Background

[3]    On 12 September 2024 the Registrar of Companies gave notice of its intention to remove SLE from the Register. On 15 October 2024 the applicant objected to the notice on  the  basis  that  it  has  an  undischarged  claim  against  SLE  pursuant  to s 321(1)(d) of the Companies Act 1993.

[4]    The application is brought by the applicant on the basis that it has an undischarged claim against SLE arising from:

(a)the applicant and the SLE are party to a deed of indemnity dated      27 October 2023;

(b)the purpose of the deed is to indemnify the applicant (and others) for any obligations that arise with SLE under a loan agreement;

(c)SLE has since defaulted on its obligations under the loan agreement and the applicant is entitled to call on that indemnity pursuant to the deed.

[5]    The applicant is currently taking advice on the merits of enforcing the deed and that advice would be redundant should SLE be removed from the Register as it would deprive the applicant from enforcing its rights under the deed.

Legal principles

[6]Rule 19.5 of the High Court Rules 2016 provides as follows:

19.5 Court may permit proceeding to be commenced by originating application

(1)The court may, in the interests of justice, permit any proceeding not mentioned in rules 19.2 to 19.4 to be commenced by originating application.

(2)The court’s permission may be sought without notice.

(3)The proposed application must be filed with an application for permission under this rule.

[7]    The originating application procedure, in contrast to standard proceedings, provides a short and streamlined civil litigation procedure.1 It is a “genuine exception” to the standard procedure and is an expedient in cases where there is, in reality, no opposing party. The procedure is not intended routinely to be used where there is another party with contrary interests.2 As well, where the proposed proceeding does not fall into one of the categories prescribed in r 19.2, the originating application procedure is strictly exceptional.3

[8]    Rule 19.5 provides that a court may, in the interests of justice, permit any proceeding not mentioned in rr 19.2 to 19.4, to be commenced by originating

1      Hong Kong and Shanghai Banking Corp v Erceg (2010) 20 PRNZ 652 (HC) at [20].

2      Jones v H W Broe Ltd (1989) 5 PRNZ 206 (HC) at 207; and Re Hollinshead [2020] NZHC 2119 at [11].

3      Lung v Liu [2021] NZHC 1810 at [9].

application. The “interests of justice” entails securing the just, speedy and inexpensive determination of the proceeding.4

[9]    A primary indicator for whether a proceeding is amenable to the originating application procedure is whether the issue or issues the subject of that proceeding are “predetermined or obvious under the relevant statute or other rule of law, or whether the issues need to be defined by an exchange of pleadings”. As well, cases where there are likely to be underlying factual disputes are often ill-suited to the originating application procedure.5

[10]   The leading authorities in relation to r 19.5 are Hong Kong and Shanghai Banking Corp Ltd v Erceg6and Solar Bright Ltd v Martin.7 A useful statement of the Court’s approach to leave applications is the statement of Asher J:8

… the type of proceeding suited to the originating application procedure is a straightforward application, not requiring detailed pleadings or interlocutory orders for its fair resolution. Such a type of proceeding tends to be an application under a specific statutory provision, where the issue that arises can be clearly defined, and the issues confined. The procedure is not well suited to the determination of substantive rights involving the application of common law doctrines as distinct from statutory tests. It is not well suited to cases involving multiple parties, and cases where there is the possibility of cross- claims or counterclaims.

Grounds upon which leave under r 19.5 is sought

[11]   The grounds submitted by counsel for the applicant supporting leave being granted to commence the proceedings by originating application are that it is in the interests of justice because the originating application procedure:

(a)will assist with the just, swift and inexpensive determination of this proceeding;

(b)the relevant law is settled and straightforward;

4      See young v Young [2020] NZHC 2569 at [12]; and Solar Bright Ltd v Martin [2019] NZHC 300, at [18] to [26]. This is also the overriding objective of the High Court Rules 2016: see r 1.2.

5      100 Investments Ltd v Walker [2020[ NZHC 1947 at [11].

6      Hong Kong and Shanghai Banking Corp v Erceg (2010) 20 PRNZ 652 (HC), at [25].

7      Solar Bright Ltd v Martin [2019] NZHC 300, at [18].

8 Above, n 6 at [25].

(c)the material facts are undisputed; and

(d)there are a limited number of parties to this proceeding.

Grounds upon which the order that SLE not be removed from the Register

[12]   The grounds upon which the order that SLE not be removed from the Register are sought are:

(a)the applicant is a creditor and there is an undischarged claim against SLE;

(b)removal of SLE from the Register would deprive the applicant of that claim.

Result

Leave under r 19.5

[13]   I am of the view the application for leave under r 19.5 should be granted. The reasons for this are as follows:

(a)the originating application is to be determined under s 321(1)(d) and   s 323 of the Companies Act 1993 which are statutory tests, and therefore the proceedings are properly defined;

(b)the proceedings are straightforward and it is unlikely there will be a need for any more detailed pleadings;

(c)there will be no need to join other parties and it is unlikely discovery orders will be necessary.

Order that SLE not be removed from the Register.

[14]   An order should be made that SLE not be removed from the Register. I am satisfied that the applicant has an undischarged claim against SLE and removal of SLE

from the Register would deprive the applicant of that claim. The circumstances are similar to the decision of the Court in Beneficial Insurance Ltd v Registrar of Companies.9

Orders

[15]I make the following orders that:

(a)the application for leave to commence this proceeding by way of originating application under Part 19 of the High Court Rules 2016 is granted;

(b)the company Shadow Lion Enterprises Ltd not be removed from the Companies Register;

(c)costs ae reserved.

…………………………….. Associate Judge Taylor

9      Beneficial Insurance Ltd v Registrar of Companies [2017] NZHC 2437.