Lock v Registrar of Companies

[2023] NZHC 509

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-000221

[2023] NZHC 509

UNDER

Section 329 of the Companies Act 1993

IN THE MATTER OF

an application to restore FA Dubois Limited to the New Zealand Companies Register

BETWEEN

CAREN KA-PIK LOCK

Applicant

AND

THE REGISTRAR OF COMPANIES

First Respondent

THE SECRETARY TO THE TREASURY

Second Respondent

Hearing:	On the papers
Judgment:	15 March 2023

JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 15 March 2023 at 9.00 am

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

Date:…………………………

Solicitors/counsel:

Fletcher Vautier Moore, Nelson

LOCK v THE REGISTRAR OF COMPANIES [2023] NZHC 509 [15 March 2023]

Background

[1]                  The applicant, Caren Lock, seeks to restore a company to the New Zealand Companies Register. The company the subject of the application is FA Dubois Limited. It was incorporated on 22 March 2005 and removed from the Register on 8 July 2016.

[2]  The company’s sole shareholder and director at all material times was Stephen Racz. Mr Racz died in Quebec, Canada, on 19 March 2014. His last will, dated 14 July 2001, appointed Ms Lock as the executor of his estate. Probate was granted to Ms Lock on 27 July 2016 by the Superior Court of the Province of Quebec. Probate was resealed by this Court at Wellington on 3 May 2022.

[3]                  Following Mr Racz’s death, an annual return was filed for the company by Warren Hardie of WH Accounting and Advisory Ltd on 3 June 2014. Mr Hardie was an authorised person. No further annual returns were filed thereafter and, as noted, on 8 July 2016, the company was removed from the Register.

The application

[4]                  The application for restoration is made in reliance on s 329(1)(a)(i) and 329(1)(b) of the Companies Act 1993. Relevantly, s 329 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

…

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

[5]                  Ms Lock filed a without notice application for leave to apply for restoration of the company. She was entitled to apply for leave pursuant to s 329(2)(c) and was granted the required leave by Moore J on 10 February 2023.

[6]                  The Overseas Investment Commission has confirmed that there is no obstacle to the proposed course under the Overseas Investment Act 2005.

[7]                  The first respondent—The Registrar of Companies—has consented to the application. The second respondent —The Secretary to the Treasury—has indicated that the Treasury abides the decision of the Court.

Analysis

[8]                  Mr Racz’s shares in the company are assets in his estate. Ms Lock has deposed that to the best of her knowledge, the company’s only asset was a block of freehold land, certificate of title NL8B/88, situated near Murchison. It appears that the ownership of the land was the sole reason for the company’s existence and that the land will be the company’s sole asset if it is restored to the Register. Ms Lock deposes that she intends to cause the company to sell the land to a New Zealand resident if it is restored to the Register.

[9]                  I am satisfied that a proper reason existed for the company to continue in existence as at the time it was removed from the Register—namely its ownership of the land near Murchison. I am also satisfied that it is just and equitable to restore the company to the Register so that Ms Lock can advance the administration of Mr Racz’s estate by disposing of the company’s sole asset.

[10]              There is one difficulty. Ms Lock is resident in the United States of America. Section 10(d)(i) of the Companies Act requires that any company have at least one New Zealand director. Ms Lock advises that it is her intention to appoint Janette Moore, of Reefton, as a director of the company once it is restored to the Register. This leads to a timing issue. If the company were to be restored to the Register without Ms Moore being appointed as a director, there would immediately be a breach of s 10(d)(i) of the Companies Act. The Court should not be asked to condone such a

breach.    I note in passing that there is nothing from Ms Moore on the file—in particular, there is no consent from her to act as a director.

[11]              I am prepared to make an order that FA Dubois Limited be restored to the New Zealand Companies Register, but I consider that such order should lie in Court until the directorship issue can be resolved.

[12]              Accordingly, I order that FA Dubois Limited be restored to the New Zealand Companies Register but that such order lie in Court until:

(a)Ms Moore has confirmed that she is prepared to accept appointment as a director of the company and has signed all papers required for such appointment; and

(b)Ms Lock’s solicitors have provided an irrevocable undertaking to the Registrar that they will, on uplifting the order and serving the same on the Register of Companies, at the same time file the necessary papers to have Ms Moore appointed as a director.

If these requirements cannot be met within 20 working days of the making of this order, or such longer period as the Court shall allow, then this order is to lapse.

[13]There is no order as to costs.

[14]              The call of this matter on Thursday 16 March 2023 is vacated and appearances are excused.

Wylie J