R H Tregoweth Limited v Registrar of Companies

[2014] NZHC 1899

IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

CIV-2014-419-000255 [2014] NZHC 1899

UNDER	the Companies Act 1993
IN THE MATTER OF	an application pursuant to s 329 of the the Companies Act to restore a company to the Register
BETWEEN	R H TREGOWETH LIMITED Plaintiff
AND	THE REGISTRAR OF COMPANIES Defendant

Hearing:

12 August 2014

[On the Papers]

Counsel:

E J Hudson for the Plaintiff

Judgment:

12 August 2014

JUDGMENT OF DUFFY J

This judgment was delivered by Justice Duffy on 12 August 2014 at 4.30 pm, pursuant to

r 11.5 of the High Court Rules

Registrar/Deputy Registrar
Date:

Counsel:     E J Hudson, Hamilton

Solicitors:    Lamb Bain Laubscher (S A Laubscher), Te Kuiti

Copies To:   The Registrar of Companies (G S Caro), Auckland

The Treasury (W H D More), Wellington

Fletcher Building Limited (F C W Bolt), Auckland

R H TREGOWETH LTD v REGISTRAR OF COMPANIES [2014] NZHC 1899 [12 August 2014]

[1]      The  plaintiff,  R  H  Tregoweth  Limited  (“Tregoweth”)  applies  to  have Ellis and Burnand Limited (“E and B”) restored to the Companies Register.   The application is not opposed.   It has been served on the Registrar of Companies, Treasury and Fletcher Building Limited (“Fletcher”), which is a company that indirectly acquired the shares in E and B prior to the latter company being struck off the Companies Register.

[2]      I am satisfied that Tregoweth has established the following facts.  Some time in the mid to late 1960’s, Tregoweth agreed to acquire two pieces of land at Mapara from E and B, they being the lands in Certificate of Title 99/9 (Taranaki Registry) and Certificate of Title 143/2 (Taranaki Registry) (“the property”).   The purchase price was £5 per acre and was paid for on the spot.

[3]      For reasons unknown to Tregoweth or seemingly to E and B, neither took steps to complete the agreement by transferring the property into the name of Tregoweth.

[4]      Subsequent to the agreement, Tregoweth has:

(a)       Farmed the property in conjunction with its own land;

(b)      Cleared part of the property, planted and harvested a crop of pines; (c)           Replanted pine on the property; and

(d)      Met rates levied against the property.

[5]      E and B was removed from the Register of Companies on 7 September 1988. [6]      Tregoweth’s communications with counsel for Fletcher reveals that:

(a)       In 1961, E and B was a partly owned subsidiary of Kauri Timber

Company, which was itself acquired by Fletcher Holdings Limited;

(b)Kauri Timber Company became a  wholly owned  company of the Fletcher  Group,  variously trading  under  Fletcher Trust  Investment Company Limited, Fletcher Timber Limited and Fletcher Merchants Limited;

(c)       Those companies all merged in 1980; and

(d)      The  property  does  not  appear  in  the  Fletcher  Group’s  register  of

properties.

[7]      Tregoweth has now entered into an agreement to sell its lands at Mapara, including the property that is the subject of this application.

[8]      By reason of E and B having been removed from the Companies Register in

1988, it is the Companies Act 1955 (“the Act”) that applies to the restoration.  Under that Act, s 336(7) permitted a company to be restored to the Register on application before  the  expiration  of  20  years  from  publication  of  notice  in  the  Gazette. Section 42(4) of the Companies Amendment Act 1993 continued s 336 in force, notwithstanding the enactment of the Companies Act 1993, but a period of two years was substituted for the original 20 years.

[9]      The Companies Repeal Act 1993 was then enacted.  Section 399(2) continued the operation of s 42(3) to (7) of the Companies Amendment Act 1993, thereby continuing the application of s 336, but with the reduced time limit.

[10]     The Companies Act 1955 Amendment Act 1997 by s 12 then inserted into s 42 of the Companies Amendment Act 1993 a new subsection (4A), which had the effect of permitting an application for restoration to be made with leave of the Court after the expiry of the two year period.  Prior to the 1997 Amendment, leave was still required to bring an application.

[11]     An application under s 336(7) of the Act can only be brought by “… the Registrar or a member or a creditor of the company”.  In the Companies Act 1955, a creditor is not defined.

[12]     Tregoweth contends that it is a creditor in terms of s 336(7).   Tregoweth relies on Mozley and Whiteley’s Law Dictionary (6th ed), which defines creditor as:

He that trusts another with any debt, be it in money or wares.  But the word is generally (though less accurately) used in a larger sense, to signify anyone has a legal claim against another.

[13]     In W v P (1982) 1 NZFLR 103 (HC), Hardie Boys J considered the meaning of the word “creditor” in relation to the Property Law Act 1952 and its earlier versions.  The Judge at 106 cited with approval the following extract from Kerr on Fraud and Mistake (7th ed):

The words “creditors and others” in the old Act are and possibly the word “creditors” in the new is, wide enough to include any person who has a legal or equitable right or claim against the grantor or settlor, by virtue of which he is, or may become, entitled to rank as a creditor of the latter.  The claim may arise out of a tort, as well as a contract, express or implied, or other legal obligation.

[14]     Tregoweth submits that W v P [1969] 1 Ch 457 is consistent with the English decision of Re Harvest Lane Motor Bodies Ltd, a decision of the English High Court on an application to restore a company to the Register under the Companies Act

1948 (UK) 11 & 12 Geo VI c 38.  Megarry J held that it would be wrong to construe the word “creditor” narrowly, following an earlier decision of Re Telegraph Construction Co (1870) LR 10 Eq 384 where James VC said:

I think we must give a liberal construction to the statute, such as is consistent with common justice and common sense; and it appears to me it would not be consistent with common justice or common sense for the person who has entered into a contingent obligation, by which he has bound himself, should be permitted to say that, because the contingency has not yet happened, although it may still happen, he is not bound to give any security in respect of it.

[15]     The provisions of s 336(7) were considered by Hammond J in Re Saxpack

Foods Ltd [1994] 1 NZLR 605 (HC). The Judge held:

(a)       The Court was required to consider the justice of the case by reference to normal standards and criteria;

(b)The principles relevant to an application for restoration were, amongst other things:

(i)       There must be a full and frank disclosure to the Court as to the

circumstances leading up to the company’s removal;

(ii)Countervailing   public    and   private   disadvantages   to   the applicant and the public should be identified and assessed;

(iii)     The length of time since removal; and

(iv)     Misconduct on the part of the applicant.

[16]     In John Hammonds & Co Ltd v Registrar of Companies, Hammond J said at

[19] that the relevant considerations under an application under s 336(7) were: (a)    Whether any relevant limitation period had been infringed;

(b)      Whether there had been undue delay;

(c)       Whether  there  is  a  real  and  operative  prejudice  to  prospective defendants; and

(d)      The overall justice of the case.

[17]     Tregoweth submits the case closest to the factual situation here is Rawlings v Registrar  of  Companies  HC  Auckland  1880/97,  10  February  1998.    There,  a company owning land had been struck off the Register.  On the death of the director, his executor learned of the existence of the company and the fact that the company owned lands.  The executor made an application for restoration to enable the lands to be legally dealt with.  There was no opposition to the application and, accordingly, Giles J considered it appropriate for an order to be made.

[18]     Here, Tregoweth acknowledges there has been some delay in bringing the application.  Tregoweth became aware that the property had not been transferred to it, in or about 2008, but due to the expense and difficulty in correcting the error, it did not  until now take steps  for restoration.    But,  whilst  there has  been  delay, Tregoweth submits that nonetheless this must be considered against the potential

prejudice if nothing is done to address the present situation.   Here, all the parties directed to be served have given consent to the application, including Fletcher, which had acquired the assets of E and B.  Secondly, it is in the public interest for E and B to be restored.  If it is not, then the property in question will forever remain in the name of a company which in a legal sense no longer exists and, therefore, the property can at no time in the future be dealt with.

[19]     Finally, Tregoweth submits that to decline to restore E and B to the Register would be prejudicial to Tregoweth.   It entered into an agreement to acquire the property and paid consideration for it.   If that evidence is accepted, Tregoweth submits that it had an equitable interest in the property from that point in time.  It conducted its affairs upon the basis of it being the owner, including paying local body rates.  Accordingly, to decline Tregoweth the ability to deal with the property would be prejudicial to it.

[20]     Tregoweth seeks the following orders:

(a)      An order granting leave pursuant to s 42(4A) of the Companies Act Amendment 1993 to bring proceedings to have Ellis and Burnand Ltd restored to the Register of Companies;

(b)      An order pursuant to s 336(7) of the Act restoring Ellis and Burnand

Ltd to the Register of Companies;

(c)       An    order    pursuant    to    s    336(7A)    of    the    Act    appointing

Mr Kevin Tregoweth as a director of Ellis and Burnand Ltd;

(d)An   order   pursuant    to   s    336(7A)   of   the   Act    authorising Mr Kevin Tregoweth as a director of Ellis and Burnand Ltd to execute all documents necessary to transfer the property described in Certificate of Title 99/9 (Taranaki Registry) and Certificate of Title

143/2 (Taranaki Registry) to Tregoweth;

(e)      An order pursuant to s 336(7A) removing Ellis and Burnand Ltd from the Register of Companies upon registration of the transfer of the lands contained in Certificate of Title 99/9 (Taranaki Registry) and Certificate of Title 143/2 (Taranaki Registry) to Tregoweth;

(f)      The authority to Kevin Tregoweth to execute documents necessary to affect a transfer of the lands in question includes authority to execute any documents necessary to transfer the property in Certificate of Title 99/9 which, in error, is in the name of Ellis and Burnard; and

(g)An  order  that  Tregoweth  pay  the  reasonable  costs  of  the  parties directed to be served.

[21]     None of the parties directed to be served has opposed the making of these orders.   I am satisfied they are appropriate and, accordingly, I make the orders as sought.

Duffy J