McEwen v Registrar of Companies
[2021] NZHC 2653
•6 October 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-1566
[2021] NZHC 2653
UNDER the Companies Act 1993 IN THE MATTER
of an application to restore EASTZONE REALTY LIMITED (Removed) to the Companies Register
BETWEEN
RODNEY JAMES McEWEN
Applicant
AND
THE REGISTRAR OF COMPANIES
First Respondent
EASTZONE REALTY LIMITED
(Removed)
Hearing: On the papers Counsel:
B Easton and J Wong for the Applicant G Caro for the First Respondent
JH Morrison for the Second Respondent
Judgment:
6 October 2021
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 6 October 2021 at 2pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors/Counsel:
Grimshaw & Co, Auckland
Registrar of Companies, Auckland Heaney & Partners, Auckland
McEWEN v THE REGISTRAR OF COMPANIES [2021] NZHC 2653 [6 October 2021]
Introduction
[1] This is an application to restore Eastzone Realty Ltd (“Eastzone Realty”) to the Companies Register in reliance on s 329(1)(a)(ii) of the Companies Act 1993.
[2] An order for restoration can be made in reliance on this section where a company was a party to legal proceedings at the time it was removed from the Register.
Relevant legal provisions and principles
[3] The Companies Act provides for the removal and the restoration of companies to the Companies Register. As the Court of Appeal states in Commissioner of Inland Revenue v Commercial Management Ltd:1
… the provisions concerning removal of a company 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.
[4] Section 328 provides for the circumstances in which the Registrar may restore a company to the Register and s 329 where an application must be made to the Court. Section 329 provides:
329 Court may restore company to New Zealand register
(1) The Court may, on the application of a person referred to in subsection (2) of this section, 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
1 Commissioner of Inland Revenue v Commercial Management Ltd [2019] NZCA 479 at [29].
(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 of this Act; 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.
Can Mr McEwen apply to restore the company?
[5] The applicant in this case is Mr Rodney James McEwen who, from the affidavit filed in support of the application, is one of the plaintiffs in proceedings against Eastzone Realty as second defendant, CIV2019-404-1691. Section 329(2)(a)(iii) provides that a party to any proceedings against a company that has been removed
may bring an application under s 329(1).2 Mr McEwen may therefore bring the application.
At the time the company was removed from the Register, was the company a party to legal proceedings?
[6] Ms Kwintkiewicz’s affidavit filed in support of the application records the date on which the proceedings were filed against the company as 22 August 2019, and the date of service on Eastzone Realty as 10 September 2019.
[7] The affidavit further records that Eastzone Realty, through its solicitors, has actively defended the claim since being served with the proceedings. A copy of the statement of defence dated 18 October 2019 is annexed to Ms Kwintkiewicz’s affidavit. Also annexed is an amended statement of defence filed on 25 January 2021 supporting the applicant’s position that Eastzone Realty is continuing to actively defend the claim brought against it, despite being removed.
[8] The evidence filed records that Eastzone Realty was removed from the Companies Register on 6 December 2019 so there is no question that it was a party to legal proceedings when it was removed from the Register.
Position of the Registrar of Companies
[9] A joint memorandum has been filed on behalf of the applicant and the Registrar of Companies dated 27 August 2021 confirming that the Registrar consents to the order for restoration.
Secretary to the Treasury
[10] A further memorandum has been filed by counsel for the applicant dated 23 August 2021 attaching a letter from the Secretary to the Treasury confirming that the Secretary has no objection to the restoration of Eastzone Realty, does not wish to be heard by the Court and will abide by its decision.
2 Companies Act 1993, s 329(2)(a)(iii).
Position of the removed company (Eastzone Realty)
[11] A further joint memorandum has been filed between the applicant and counsel for Eastzone Realty in the proceeding CIV2019-404-1691 confirming that Eastzone Realty consents to the order sought by the applicant as well. There may be a question regarding whether a company that has been removed from the Register can indicate its position, but it is useful to know that there is no opposition.
Conclusion
[12] The applicant has met the requirements of s 329(1)(a)(ii) and there is no objection to the restoration of the company from the Registrar of Companies or the Secretary to the Treasury. I therefore make the order sought below together with an order for the necessary leave and an administrative order to allow the Register to be brought up to date if necessary.
Orders
[13]I order:
(a)that leave is granted to bring this proceeding by way of originating application;
(b)that Eastzone Realty Ltd is restored to the New Zealand Register of Companies;
(c)that Eastzone Realty Ltd is to comply with any requirements of the Companies Registrar in respect of the restoration.
Associate Judge Sussock
0
1
1