Waddell v Registrar of Companies

[2022] NZHC 1550

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2022-409-000254

[2022] NZHC 1550

IN THE MATTER

of an Application for orders under sections 329 and 284(1)(b) Companies Act 1993

BETWEEN

JAMES ALISTER WADDELL

Applicant

AND

REGISTRAR OF COMPANIES

First Respondent

AND

SECRETARY TO THE TREASURY

Second Respondent

AND

WADDELL CONSTRUCTION LIMITED (REMOVED)

Third Respondent

Hearing:

On the papers

Counsel:

S McLean for Applicant

G Caro for First Respondent

Judgment:

1 July 2022

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 1 July 2022 at 11.30 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

WADDELL v REGISTRAR OF COMPANIES [2022] NZHC 1550 [1 July 2022]

[1]The applicant, James Waddell, seeks the following orders:

(a)An order restoring Waddell Construction Ltd (removed) to the New Zealand Company Register, under s 329 of the Companies Act 1993.

(b)An order cancelling the liquidator’s final report and confirming the liquidator of Waddell Construction Ltd (removed) is Andrew Oorschot of Ashton Wheelans, Chartered Accountants, under s 284(1)(b) of the Companies Act.

(c)An order dispensing with service of this application.

Facts

[2]                   Waddell Construction Ltd was put into liquidation by shareholders’ resolution in 2002.

[3]Mr Waddell was the sole director of the company.

[4]Andrew Marchel Oorschot was appointed liquidator.

[5]There was no response to advertising by the liquidator for creditors’ claims.

[6]                   The company’s assets were properties which were distributed by way of an in specie distribution to the shareholders and there were no cash realisations or distributions.

[7]                   On 3 October 2002, Mr Oorschot filed his final report as required by s 257 of the Companies Act. In that report, Mr Oorschot stated:

All known Assets have been realised and distributed to Creditors and Shareholders in order of priority. Accordingly, the company is ready to be removed from the New Zealand Register.

[8]                   The company was subsequently removed from the Register on 8 November 2002.

[9]                   At the date the company was removed from the Register it still owned a property at 175 Ellesmere Road, Prebbleton. The applicant has made this application so that the property can be distributed to the shareholders.

[10]               Notice of the application has been given to the Registrar of Companies, the Secretary for the Treasury and Mr Oorschot. There is no opposition to the application from any of those parties.

Decision

[11]               I am satisfied that all persons who may have an interest in this application have had notice of it and do not oppose the orders sought. In those circumstances I dispense with service.

[12]               Under s 329 of the Companies Act a company that has been removed from the Register may be restored to the Register by the Court. Such an order may be made (amongst other reasons) if the Court is satisfied that at the time the company was removed from the Register a proper reason existed for the company to continue in existence or for some reason it is just and equitable to restore the company to the Register. Relevantly, in Commissioner of Inland Revenue v Commercial Management Limited, the Court of Appeal said:1

As noted above, the provisions concerning removal of a company from the register 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.

[13]                 I am satisfied that it is appropriate to restore this company to the Register in circumstances where its ownership of a property has been overlooked. The property should clearly have been dealt with in the liquidation and would have been distributed to the shareholders. As things stand, that cannot occur until such time as the company is restored.

1      Commissioner of Inland Revenue v Commercial Management Ltd [2019] NZCA 479 at [29].

[14]               The Court of Appeal in Registrar of Companies v Body Corporate 307730, described the process of the liquidation of a company and its subsequent removal from the Register.2 Following the filing of a final report by a liquidator, the liquidator is discharged from office and the Registrar is required to remove the company from the Register. Pending removal from the Register, the company is no longer in liquidation but is awaiting removal. This means that a restoration order on its own will not result in the restored company automatically resuming its former status as a company in liquidation. To have that effect, the restoration order must be accompanied by other orders and, in particular, an order under s 284(1)(b) reversing the filing of a liquidator’s final report, which will have the effect of abrogating the completion of the liquidation. The combined effect of a restoration and a reversal order is that the company is restored to the Register still in liquidation and the former liquidator resumes office.3 That is what is desired in this case.

[15]               Accordingly, it is appropriate for orders to be made in terms of paragraphs [1](a), (b) and (c) above.

Result

[16]               I grant the application to restore Waddell Construction Ltd (No 123365) (NZBN: 9429031980852) to the New Zealand Company Register pursuant to s 329 of the Companies Act 1993.

[17]               There shall be an order reversing the liquidator’s final report of 3 October 2002 under s 284(1)(b) of the Companies Act and confirming that the liquidator of the company is Andrew Marchel Oorschot of Ashton Wheelans, Chartered Accountants.

[18]I dispense with service of this application.

2      Registrar of Companies v Body Corporate 307730 [2014] 2 NZLR 623, [2013] NZCA 659.

3 At [16].

[19]There shall be no order for costs.

O G Paulsen Associate Judge

Solicitors:

Saunders & Co, Christchurch Companies Office, Auckland