BUTLAND HOLDINGS LIMITED V THE REGISTRAR OF COMPANIES HC AK CIV-2011-404-1913

BUTLAND HOLDINGS LIMITED V THE REGISTRAR OF COMPANIES HC AK CIV-2011-404-1913 5 May 2011IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2011-404-1913BETWEEN BUTLAND HOLDINGS LIMITEDApplicantAND THE REGISTRAR OF COMPANIESFirst RespondentAND BORIS VAN DELDEN AND PERIMICAELA FINNIGANSecond RespondentsHearing: 20 April 2011Counsel: P Moodley for ApplicantJudgment: 5 May 2011 at 3:00 PMJUDGMENT OF TOOGOOD JThis judgment was delivered by me on 5 May 2011 at 3:00 pmPursuant to Rule 11.5 High Court RulesRegistrar/Deputy RegistrarSOLICITORS:P Moodley, Brookfields Lawyers, Manukau (moodley@brookfields.co.nz )[1] By application on notice dated 31 March 2011, the applicant seeks orders under s 329 of the Companies Act 1993:(a) Restoring a company named Naglum 1 Limited to the New Zealand register; and(b) Revoking the final report of the liquidators.[2] It seeks leave under r 19.5 High Court Rules to bring the proceedings as an originating application.[3] The affidavit filed in support of the application reveals the following facts. On 14 November 1997 the applicant entered into a deed of lease with a companythen known as Icelandic Holdings Limited ("Icelandic") in respect of premisesowned by the applicant at 7 Stanway Place, Penrose. The term of the lease was six years from the commencement date of 1 May 1997, with two rights of renewal and a final expiry date of 28 February 2009.[4] Icelandic occupied the premises for the full term of the lease with no issues between the parties. On 29 January 2008, Icelandic changed its name to Naglum 1Limited ("Naglum"). The company did not notify the applicant of this change ofname.[5] The lease of the premises expired on 28 February 2009. The tenant wished to remain at the premises and requested a renewal of lease for a period of two years but with a right of early termination upon provision of six months notice by Icelandic. This was acceptable to the applicant and on 16 March 2009 the parties entered into a deed of renewal of lease.[6] The lessee continued to be described as Icelandic, despite the fact that the company had changed its name to Naglum on 29 January 2008. The applicant had at all times dealt with a Mr Dean Raymond Patterson. Mr Patterson was a director and the majority shareholder of Icelandic/Naglum. Mr Patterson signed the deed ofrenewal of lease on behalf of Icelandic. At no stage did Mr Patterson advise the applicant of the change of company name.[7] Following the renewal of lease, the tenant remained in occupation of the premises.[8] However, on 23 April 2009 the company was placed in liquidation pursuant to an order of the High Court. Boris van Delden and Peri Micaela Finnigan, the second respondents, were appointed as liquidators of the company. Three liquidators' reports have been filed in evidence.[9] Paragraph 3 of the liquidators' first report confirms that the liquidationresulted from a creditor of the company serving a statutory demand. It seems likely therefore that Mr Patterson would have known about the existence of the debt and the statutory demand when the renewal of lease was entered into on 16 March 2010, only four weeks before the company was placed into liquidation. Mr Patterson could well have known about the liquidation hearing date scheduled on 23 April 2009. However, Mr Patterson did not at any stage advise the applicant of the existence of the statutory demand or of the company being placed into liquidation on 23 April 2009.[10] Unfortunately, the liquidator did not contact the applicant regarding the liquidation, nor did the liquidator disclaim the lease.[11] As a result of lack of communication by the company and the liquidators, the applicant was unaware that Naglum had been placed in liquidation.[12] The tenant remained in occupation of the premises from the date of renewal, 16 March 2009, until mid September 2010; that is, for a period of 17 months after it had been placed into liquidation. The tenant continued to pay rent and outgoings for the premises for this period.[13] On 31 May 2010 Mr Patterson gave notice that the tenant would be terminating its tenancy on 31 August 2010.[14] The applicant did not accept this notice because clause 4.3 of the deed ofrenewal of lease required six months' notice by the lessee.[15] In addition, when the tenant vacated the premises, the applicant discovered portions of the premises that had been damaged and/or required repair and redecoration in accordance with the obligations imposed on the lessee by clause 10.1 of the deed of lease. Furthermore, the tenant had constructed a food preparation room which was required to be removed and any resulting damage made good. Accordingly, the applicant served a notice to tenant to pay rent and performobligations under the lease in respect to the lessee's failure to provide the full six months' notice and in respect to the repair and make good costs.[16] It appears that after 23 April 2009 the premises were occupied by a new company formed by Mr Patterson, namely, Icelandic Holdings (NZ) Limited("Icelandic NZ"). Accordingly, the applicant intends to pursue this company for thelosses that it has suffered.[17] In addition, however, the applicant intends to pursue Mr Patterson in his capacity as a director of Naglum 1 Limited pursuant to s 301 of the Companies Act on the basis that he has, as a director of the company, breached his duties in relation to the company.[18] Such proceedings cannot be commenced against Mr Patterson while the company is struck off the New Zealand register and the company is required to be restored to the register prior to these proceedings being commenced.[19] Rule 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 are broadly expressed and these proceedings are not contested. I am satisfied that it is not necessary in the interests of justice that there should be particularised pleadings or the availability of discovery and other interlocutory steps, for the proper determination of the issues. The respondents have been served and have indicated that they do not wish to be heard on the application. The secondrespondents have gone further and have indicated that they would be "happy to act as liquidators" if required.[20] 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. An order may be made on the application of a person who, at the time a company was removed from the New Zealand register, was a creditor of the company. 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.[21] 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.[22] Accordingly, leave is granted to bring the proceedings as an originating application and the following orders are made:(a) Naglum 1 Limited (In liquidation) shall be restored to the New Zealand register.(b) The final report of the liquidators is revoked.(c) Boris van Delden and Peri Micaela Finnigan of Auckland, insolvency practitioners, shall be appointed as liquidators of the company.[23] Costs are not sought............................................... Toogood J