Mowbray Street Holdings Limited v Attorney-General

[2022] NZHC 1233

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2022-485-126

[2022] NZHC 1233

UNDER

section 324 of the Companies Act 1993

IN THE MATTER OF

an application by Mowbray Street Holdings Limited to vest land to the applicant

BETWEEN

MOWBRAY STREET HOLDINGS LIMITED

Applicant

AND

ATTORNEY-GENERAL

Respondent

CIV-2022-485-132

UNDER

section 324 of the Companies Act 1993

IN THE MATTER OF

an application by Delarente Corporation Limited to vest land to the applicant

BETWEEN

DELARENTE CORPORATION LIMITED

Applicant

AND

ATTORNEY-GENERAL

Respondent

Teleconference:	30 May 2022
Counsel:	E J Collins for Applicants in both proceedings J A Langford, counsel to assist the Court
Judgment:	31 May 2022

JUDGMENT OF CHURCHMAN J

MOWBRAY STREET HOLDINGS LIMITED v ATTORNEY-GENERAL [2022] NZHC 1233 [31 May 2022]

[1]    This hearing involved two separate applications for vesting orders for land pursuant to s 324(4)(a) of the Companies Act 1993. The relevant parts of s 324 provide:

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.

(5)On an application made under subsection (4), the court may—

(a)        decide any question concerning the value of the property, the entitlement of any applicant to the property or to compensation, and the apportionment of the property or compensation among 2 or more applicants; or

(b)        order that the hearing of 2 or more applications be consolidated; or

(c)        order that an application be treated as an application on behalf of all persons, or all members of a class of persons, with an interest in the property; or

(d)make an ancillary order.

(6)        Compensation ordered to be paid under subsection (4) shall be paid out of a Crown Bank Account without further appropriation than this section.

[2]    The hearing of these two applications is consolidated under s 324(5)(b).

[3]    In Mowbray Street Holdings Limited v Attorney General, the applicant wishes to have title to land relating to an apartment unit on Bolton Street vested in it. The

apartment in question was originally owned by Kerndal Investments Limited, which was put into liquidation voluntarily in 2019.

[4]    Prior to that liquidation, the subject apartment was sold to another company, Bolton Apartments Limited, which was then subsequently amalgamated with Mowbray Street Holdings Limited. The applicant subsequently purchased the property, but as the result of an oversight, the conveyancing process was not completed. Therefore, Kerndal Investments Limited remained the registered owner until it was removed from the companies register. Accordingly, the applicant seeks an order via originating application without notice vesting title to the apartment in it.

[5]    The Treasury has provided a letter stating that they do not oppose the making of the application. They do not provide an opinion on whether the apartment has vested in the Crown.

[6]    By a minute of 22 March 2022, Grice J appointed counsel, Mr Langford, to assist the Court to provide an opinion on the situation or the application of s 324.

[7]    Mr Langford, who has considerable experience in these matters provided a memorandum dated 4 May 2022, which sets out that:

7.In counsel’s respectful view:

(a)There was a valid sale of the unit to Bolton Apartments Limited. Equitable ownership passed, but not legal ownership (which can only be conveyed by registration at the Land Registry).

(b)There is no other claimant, or potential claimant to the unit.

(c)The liquidator supports the application.

(d)The unit did vest in the Crown, with effect from the removal of the company from the register. Despite Treasury’s reticence, they do not oppose the Orders sought, or seek to be heard in the matter.

(e)In terms of section 324(4) Mowbray Street Holdings Limited was the person who would have been entitled to receive all of the property, had it been in the hands of the company immediately before its removal from the register. The liquidator has confirmed that had he been aware of the property, he would have “signed it over” to the applicant/

8.Counsel respectfully recommends that Orders be made, as sought.

[8]    I accept counsel’s recommendation and make the orders as sought.

Delarente Corporation Limited v Attorney-General

[9]    In Delarente Corporation Limited v Attorney-General, the applicant seeks a similar order for the vesting of land in it situated at 166 High Street Lower Hutt (the Property). In this case, it appears that one of two titles to the Property was not transferred due to a conveyancing error.

[10]   The applicant purchased the Property from Devak Holdings Limited but the conveyancing was not completed prior to Devak Holdings Limited being removed from the register on 25 February 2009.

[11]   The former directors of Devak Holdings Limited have provided an affidavit consenting to the vesting of the property in the applicant dated 29 April 2022.

[12]   I am satisfied that this is an appropriate case for an order under s 324(4)(a) and make the vesting order in the terms sought.

Churchman J

Solicitors:

Collins & May Law, Lower Hutt for Applicant

Langford Law, Wellington, counsel to assist the Court