COMMISSIONER OF INLAND REVENUE v INTERIOR DRYWALL SYSTEMS LIMITED (in liq.) [2018] NZHC 924

COMMISSIONER OF INLAND REVENUE v INTERIOR DRYWALL SYSTEMS LIMITED (in liq.) [2018]NZHC 924 [3 May 2018]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYI TE KŌTI MATUA O AOTEAROAŌTAUTAHI ROHECIV-2011-409-002594[2018] NZHC 924UNDER the Companies Act 1993ANDIN THE MATTER of an application for orders restoring InteriorDrywall Systems Limited to the Register andreversing the Liquidators' final reportBETWEEN COMMISSIONER OF INLANDREVENUEPlaintiffAND INTERIOR DRYWALL SYSTEMSLIMITED (in liq.)DefendantAppearances: G K Riach for ApplicantsJudgment: 3 May 2018(Determined on the papers)JUDGMENT OF ASSOCIATE JUDGE OSBORNE(restoring a company to the register)Introduction[1] Interior Drywall Systems Limited (the Company) was put into liquidation byCourt order on 21 February 2012.[2] Malcolm Grant Hollis and Maurice George Noone were appointed theliquidators. In the course of the liquidation they pursued repayment of an overdrawnaccount of a shareholder of the company. The shareholder was adjudicated bankrupt.The liquidators lodged a claim in his bankruptcy but no distribution followed.[3] The liquidators after realising all known available assets filed a finalliquidators' statutory report dated 5 February 2013. They requested that the companybe removed from the Register of Companies.1[4] The company was removed from the Register on 21 July 2014.This application[5] Mr Hollis and Wendy Ann Somerville apply for:(a) an order under s 329(1) of the Companies Act 1993 restoring thecompany to the Register of Companies; and(b) an order under s 284(1)(b) of the Act reversing the liquidators' finalreport; and(c) an order that Ms Somerville be appointed in place of Mr Noone as jointand several liquidator of the Company along with Mr Hollis.The grounds of the application[6] The grounds of the application (established through evidence from Mr Hollis)are:(a) matters occurred as summarised above;(b) there has since the removal of the company from the Register been arealisation in the shareholder's bankruptcy amounting to $266,418.The Official Assignee anticipates that there would be a distribution tothe Company of approximately $37,000;1 The Statutory Report being required under s 257(1) Companies Act 1993.(c) in that event, after costs associated with this application and liquidators'fees have been paid, there would likely be a 5 percent distribution tothe Company's preferential creditor, the Inland Revenue Department;(d) it is accordingly in the interests of the preferential creditors of thecompany that the company be restored to the register and thecompletion of the liquidation reversed; and(e) since the Company's removal from the register, Mr Noone no longertakes appointments as a liquidator whereas Ms Somerville is availableto take his place.[7] The Secretary of the Treasury has provided written confirmation that noobjection is taken to the restoration of the Company to the Register.The statutory regime[8] The statutory provisions referred to in the application represent together theappropriate regime to be applied to this application.[9] For the applicants, Mr Riach has referred to the judgment of the Court ofAppeal in Registrar of Companies v Body Corporate 307730.2 The applicants in thatproceeding came within the provisions of s 329(1)(a)(iv) in that they were personswho had undischarged claims against the struck-off company.[10] The Court of Appeal held (reversing a decision of the Associate Judge) that thefiling of the liquidators' final report had been an act of the liquidators and fell withinthe scope of the s 284(1)(b) power of reversal.3 The combined effect of a restorationand a reversal order is that the company is then restored to the Register, still inliquidation. The former liquidator resumes office, with the liquidation reinstated.42 Registrar of Companies v Body Corporate 307730 [2013] NZCA 659.3 Registrar of Companies v Body Corporate 307730 at [16].4 Registrar of Companies v Body Corporate 307730 at [16].Decision[11] I apply the conclusions in the Registrar of Companies v Body Corporate307730.[12] The distinct feature of this case is that with the retirement of one of the initialliquidators from this form of work it is expedient that he be replaced by Ms Somerville.The jurisdiction to make such a replacement order arises in s 284(1)(a) of the Act.Mr Hollis and Ms Somerville have provided their consents to their appointment.[13] In addition, Mr Hollis and Ms Somerville have provided details of their currentremuneration rates which are appropriate.Orders[14] I order:(a) Interior Drywall Systems Limited, previously registered companynumber 1762829 (the Company), is restored to the Register ofCompanies.(b) The final report of the liquidators of the Company dated 5 February2017 is reversed.(c) Malcolm Grant Hollis and Wendy Ann Somerville are appointedliquidators of the Company in place of Malcolm Grant Hollis andMaurice George Noone and are allowed to exercise their powersindividually pursuant to s 242 of the Companies Act 1993.(d) The liquidators' remuneration is fixed in accordance with theliquidators' consent to act subject to s 284 of the Companies Act 1993.Associate Judge OsborneSolicitors:Harmans, Christchurch