HEWITT v REGISTRAR OF COMPANIES [2020] NZHC 3206

HEWITT v REGISTRAR OF COMPANIES [2020] NZHC 3206 [7 December 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2020-404-002356[2020] NZHC 3206UNDER THE Companies Act 1993IN THE MATTER of the restoration of Ruapehu CottagesLimited (Removed) to the New Zealandregister of companiesBETWEEN CLAIRE ELIZABETH HEWITTApplicantAND REGISTRAR OF COMPANIESRespondentHearing: (On the papers)Judgment: 7 December 2020JUDGMENT OF VENNING JThis judgment was delivered by me on 7 December 2020 at 11.45 am, pursuant to Rule 11.5 of theHigh Court Rules.Registrar/Deputy RegistrarDateSolicitors: Keegan Alexander, Auckland[1] Claire Elizabeth Hewitt (the applicant) applies to the Court for orders:(a) restoring Ruapehu Cottages Limited (Removed) (the company) to theNew Zealand register of companies; and(b) dispensing with service of these proceedings.[2] The application was made under s 329 of the Companies Act 1993. As relevantthe section provides:329 Court may restore company to New Zealand register(1) The court may, on the application of a person referred to in subsection(2), order that a company that has been removed from the NewZealand register be restored to the register if it is satisfied that,—(a) at the time the company was removed from the register,—(i) the company was carrying on business or a properreason existed for the company to continue inexistence; or(ii) the company was a party to legal proceedings; or(iii) the company was in receivership, or liquidation, orboth; or(iv) the applicant was a creditor, or a shareholder, or aperson who had an undischarged claim against thecompany; or(v) the applicant believed that a right of action existed, orintended to pursue a right of action, on behalf of thecompany under Part 9; or(b) for any other reason it is just and equitable to restore thecompany to the New Zealand register.(1A) In considering whether to restore a company to the register on theground referred to in subsection (1)(a)(i) or (b), the court must haveregard to the reasons for the company's removal and whether thosegrounds existed at the time of removal or exist at the time of thehearing of the application.(2) The following persons may make an application under subsection (1):(a) any person who, at the time the company was removed fromthe 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 thecompany; or(iv) had an undischarged claim against the company; or(v) was the liquidator, or a receiver of the property of, thecompany:(b) the Registrar:(c) with the leave of the court, any other person.[3] The applicant was the sole director and majority shareholder. She says thecompany has claims against third parties (former solicitor and accountant) in relationto negligent advice (failure to advise) concerning a right of first refusal over a propertyat Hospital Terrace, Napier.[4] The proceedings can only be pursued by the company. If the proceedings areto be pursued the company will need to be restored to the register.[5] There is a degree of urgency in determining the application as there may belimitation issues in relation to the claims.[6] The application does not satisfy any of the criteria in s 329(1)(a) of the Act. Itis pursued on the grounds it would be just and equitable to restore the company to theregister. The applicant has explained in an affidavit the background to the factualsituation giving rise to the potential claim. She has also annexed a copy of a decisionof the New Zealand Law Society Hawke's Bay Lawyers Standards Committee inrelation to the lawyer's conduct and an opinion of Mr Nolan, which supports thepossibility of a claim against the former adviser.[7] The Commentary to s 329 suggests the Court will not simply restore a companyto the register because it is asked to even if it was purportedly for the purpose ofallowing the company to pursue litigation against a third party.11 Company Law (online ed, Thomson Reuters) at [CA329.08].[8] There have been a number of cases where the Court has considered whether torestore a company to the register for that purpose. Although decided under previouslegislation the principles discussed in the case of Re Saxpack Foods Ltd are oftencited.2 Relevantly in the present case the company was a solvent company whenremoved from the register. It had complied with its obligations under the CompaniesAct (including filing annual returns on time). In her affidavit the applicant hasexplained the reason for the delay. She only became aware of the potential claim in2019. She then initiated a complaint to the New Zealand Law Society. The outcomeof the complaint was notified to her on 9 September 2020. She then obtained a legalopinion from Mr Nolan.[9] While the claim may not be entirely straightforward it certainly cannot bedescribed as vexatious or specious.[10] In the circumstances the Court is satisfied it is just and equitable to restore thecompany. The applications are granted and there will be orders:(a) restoring the company to the register of companies; and(b) confirming service of the application is not required.__________________________Venning J2 Re Saxpack Foods Ltd [1994] 1 NZLR 605.