Mason v Attorney-General

[2023] NZHC 3358

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2023-419-274

[2023] NZHC 3358

UNDER

the Companies Act 1993

BETWEEN

SHANE MICHAEL MASON and LINDA JANE MASON

Applicants

AND

ATTORNEY-GENERAL

Respondent

Hearing:	On the papers
Counsel:	P Prakash for the Applicants
Judgment:	24 November 2023

JUDGMENT OF GAULT J

This judgment was delivered by me on 24 November 2023 at 10:00 am pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

……………………………………

Solicitors:

Mr P Prakash, Gurnell Harrison Stanley Law, Hamilton

MASON v ATTORNEY-GENERAL [2023] NZHC 3358 [24 November 2023]

[1]    Mr and Mrs Mason apply by way of originating application for a vesting order under s 324 of the Companies Act 1993 (the Act) authorising Land  Information New Zealand (LINZ) to register the transfer of 89 Beach Road, Waihi Beach (Record of Title SA42A/389) (the property) to them in proportion to their respective former shareholdings in Mason Equities Limited (the company) which has been removed from the Companies Register. The application is necessary because, at the time of removal, the company still owned the property.

[2]In support of the application, Mr and Mrs Mason have each provided affidavits.

Background

[3]    In 2018, the Masons instructed their accountant to deregister the company.  At the time, they were the only directors and shareholders of the company. Mr Mason held 99 of the company’s 100 shares and Mrs Mason held the remaining one share. All its liabilities were paid.

[4]    On 10 June 2019, the company was removed from the Register but, as indicated, title to the property had not been transferred to the Masons. The reason for this, Mr and Mrs Mason explain, is that they were unaware that the property would not automatically transfer to them on the company’s deregistration. As shown on the Certificate of Title, the property remains in the name of the company.

[5]    In light of the Masons’ discovery that the property would not automatically transfer to them, they applied to the New Zealand Treasury pursuant to s 324 of the Act for confirmation that the Treasury had no objection to the property being vested in them.

[6]    On 30 May 2023, the Treasury advised by letter that it could not be satisfied that the property had vested in the Crown but that, if a vesting order were sought, it would have no objection to that application. That letter, appended to Mr Mason’s supporting affidavit, advised that Treasury had liaised with both LINZ and the Commissioner of Crown Lands who both agreed with that approach. The letter also said that the Treasury would abide the decision of the Court.

Discussion

[7]    As a preliminary matter, Mr and Mrs Mason seek permission under r 19.5 of the High Court Rules 2016 to commence this proceeding by way of originating application. They need permission to do so since applications under s 324 of the Act are not referred to in r 19.1. The Court must consider whether it is in the interests of justice to permit them to do so. It is well-established that originating applications can be brought for straightforward applications that involve the application of a specific statutory test.1 An application for vesting orders under s 324 of the Act has been made by originating application before.2 I am satisfied it is in the interests of justice to permit the proceeding to be commenced in this manner.

[8]Section 324 of the Act relevantly provides:

324     Property of company removed from register

(1)Property that, immediately before the removal of a company from the New Zealand register, had not been distributed or disclaimed, vests in the Crown with effect from the removal of the company from the register.

…

(4)Where property is vested in the Crown under this section, a person who would have been entitled to receive all or part of the property, or payment from the proceeds of its realisation, if it had been in the hands of the company immediately before the removal of the company from the New Zealand register, or any other person claiming through that person, may apply to the court for an order—

(a)vesting all or part of the property in that person; or

(b)for payment to that person by the Crown of compensation of an amount not greater than the value of the property.

[9]    I am satisfied that the requested vesting order should be made. As all liabilities of the company were met, the Masons would have been entitled to receive the property at the time of the company’s removal from the Companies’ Register. The Masons have also sought and obtained the approval of the Treasury to the vesting order.

1      Hong Kong and Shanghai Banking Corporation Ltd v Erceg (2010) 20 PRNZ 652 at [25].

2      Picklepie Ltd v Attorney-General [2022] NZHC 2148.

Result

[10]Leave to proceed by way of originating application is granted.

[11]   The property at 89 Beach Road, Waihi Beach (Record of Title SA42A/389) vests in the applicants, Shane Michael Mason (as to a 99/100 share) and Linda Jane Mason (as to a 1/100 share).

[12]   Land Information New Zealand  is  authorised  to  register  the  transfer  of  89 Beach Road, Waihi Beach (Record of Title SA42A/389) from the now removed Mason Equities Limited to Shane Michael Mason (as to a 99/100 share) and Linda Jane Mason (as to a 1/100 share).

Gault J