McCullagh v Registrar of Companies HC Auckland CIV-2011-404-1799

[2011] NZHC 337

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-1799

UNDER  Sections 284 and 329 of the Companies Act

1993

IN THE MATTER OF     PERRON DUKE ST 2 LIMITED BETWEEN  ANTHONY JOHN MCCULLAGH AND

STEPHEN MARK LAWRENCE

Applicants

ANDTHE REGISTRAR OF COMPANIES First Respondent

ANDTHE SECRETARY TO THE TREASURY Second Respondent

Hearing:         (On the papers) Counsel:          A Liew for Applicant Judgment:          6 May 2011 at 3:00 PM

JUDGMENT OF TOOGOOD J

This judgment was delivered by me on 6 May 2011 at 3:00 pm

Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:

A Liew, Auckland ([email protected] )

MCCULLAGH & ANOR V THE REGISTRAR OF COMPANIES HC AK CIV-2011-404-1799 6 May 2011

[1]      By application  on notice dated 29 March 2011, the applicant seeks:

(a)	An order under s 284(1)(b) of the Companies Act 1993 directing that the  filing  of  “the  liquidators’  final  report  to  shareholders  and
creditors” dated 17 November 2010 by the applicants be reversed and
that the said report be cancelled; and
(b)	An order under s 329 of the Companies Act 1993 directing that Perron
Duke St 2 Limited be restored to the register of companies.
[2]	The	applicant  has  brought  the  proceedings  by  originating  application,

purportedly under r 19.4 High Court Rules.

[3]      Section 329(1) Companies Act 1993 provides that the Court may order that a company that has been removed from the register be restored to the register if it is satisfied that, at the time the company was removed from the register, the company was in liquidation, or for any other reason it is just and equitable to make such an order.  Subsection (4) allows the Court to 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 register.

[4]      Section 329(2)(a) provides:

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

of this section:

(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.

[5]      The grounds on which these orders are sought are as follows:

(a)       The applicants, in their capacity as the liquidators of Perron Duke St 2

Limited (“the company”), filed the liquidators’ final report to shareholders and creditors dated 17 November 2010 (“the liquidators’ final report”).

(b)      As a result of the filing of the liquidators’ final report the Registrar of

Companies removed the company from the register of companies on

11 January 2011.

(c)       The liquidators’ final report was filed in error by the applicants.

(d)The company is the registered owner of the 36 apartments situated at the property known as 188 Hobson Street, Auckland (“the apartments”).

(e)     The apartments are mortgaged to FM Custodian Limited (“the mortgagee”).

(f)      The   mortgagee   is   owed   $8,284,972.43   as   at   1 January 2011 (excluding penalty interest).

(g)In exercise of its powers of enforcement, the mortgagee has taken possession of the apartments, has not disposed of the same, and is receiving the income from the rental of the apartments.

(h)Until the mortgagee withdraws from possession of the apartments and filed  its  final  report  pursuant  to  s 163(1)(b)  of  the  Property  Law Act 2007,  the  mortgagee  is  required  to  file  with  the  Registrar  of Companies, at the end of each six months after the date of entry into possession, a report summarising the state of affairs with respect of the apartments.

(i)The mortgagee has not been able to comply with its obligations under s 163 of the Property Law Act 2007 as the Registrar of Companies has refused to accept the filing of any such report on the grounds that the company no longer exists.

[6]      These grounds have been verified by affidavit.

[7]      Rule 19.4 High Court Rules provides as follows:

19.4     Certain directions may be sought by originating application

The following office holders may seek the directions of the court by originating application:

(a)      a liquidator: (b)   a receiver:

(c)      a  judicial  manager  appointed  under  Part  1A of  the  Life

Insurance Act 1908:

(d)      a  statutory  manager  appointed  under  the  Corporations

(Investigation and Management) Act 1989:

(e)      a statutory manager appointed under the Reserve Bank of

New Zealand Act 1989.

[8]      In  my  view,  the  purpose  of  the  rule  is  to  allow  persons  having  certain statutory functions to adopt the commercially expedient process of making an originating application where such persons require the guidance or directions of the Court in the exercise of their functions.  I do not consider that the rule contemplates granting access to the originating application procedure, as of right, to a person who applies under s 329 to restore to the New Zealand register, a removed company of which the applicant was formerly the liquidator or a receiver of the company’s property.

[9]      In the present case, the applicants are applying not as the liquidators of the company but as former liquidators entitled to bring an application for restoration by virtue of s 329(2)(a)(v).  They are not seeking directions of the Court in respect of the exercise of their functions as liquidators, but are seeking, as former liquidators, an order restoring the company to the register.   Other persons who are entitled by s 329(2)(a)  of  the Act  to  apply  for  restoration  include  former  shareholders  and directors, and former creditors, and any person who had an undischarged claim

against the company.  All such persons who wish to apply for restoration may do so by originating application only by leave of the Court. There is no reason why former liquidators or receivers should be singled out for the privilege of bringing such an application by originating application as of right.

[10]     However,  r 19.5  High  Court  Rules  provides  that  the  Court  may,  in  the interests  of justice,  permit  a proceeding not  mentioned in  rr 19.2  to 19.4  to be commenced by originating application.   The criteria for permitting an originating application under the rule, where there is no opposition, are broadly expressed.  The respondents have been served and have indicated that they do not wish to be heard on the application.  I am satisfied that  it is not necessary in the interests of justice that, in respect of this application, there should be particularised pleadings or the availability of discovery and other interlocutory steps, for the proper determination of the issues.

[11]     Having regard to the circumstances revealed by the affidavit filed in support of the application, I am satisfied that it is just and equitable that the company should be restored to the New Zealand register.

[12]     Accordingly, leave is granted under r 19.5 High Court Rules to bring the proceedings as an originating application  and the following orders are made:

(a)       Perron  Duke  St  2  Limited  shall  be  restored  to  the  New  Zealand register; and

(b)      the final report of the liquidators is revoked. [13]        Costs are not sought.

..............................................

Toogood J