McCullagh v Registrar of Companies HC Auckland CIV-2011-404-1799 [2011] NZHC 337 (6 May 2011)

Last Updated: 1 June 2011

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

AND THE REGISTRAR OF COMPANIES First Respondent

AND THE 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 ([e-mail] )}

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