HENNAH v THE REGISTRAR OF COMPANIES [2020] NZHC 1232

HENNAH v THE REGISTRAR OF COMPANIES [2020] NZHC 1232 [4 June 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV-2019-404-1624[2020] NZHC 1232IN THE MATTER OF SECTION 329 OF THE COMPANIES ACT1993AND IN THE MATTER OF G M HENNAHLIMITEDBETWEEN GEOFFREY MAURICE HENNAHApplicantAND THE REGISTRAR OF COMPANIESRespondentHearing: 25 May 2020Appearances: E L Smith for ApplicantB J Upton & L B Harrison for Westpac New Zealand Limited &Westpac Banking CorporationJudgment: 4 June 2020JUDGMENT OF PAUL DAVISON JThis judgment was delivered by me on 4 June 2020 at 4:00 pmpursuant to r 11.5 of the High Court Rules.Registrar/Deputy RegistrarSolicitors:Tailored Legal Solutions Ltd, DargavilleSimpson Grierson, AucklandIntroduction[1] Geoffrey Maurice Hennah (the applicant), applies for an order pursuant tos 329(1)(b) of the Companies Act 1993 (the Act) restoring G M Hennah Limited (thecompany) to the New Zealand register of companies. The company, which had beenincorporated under the Act on 23 December 1986, was removed from the register bythe Registrar of Companies on 21 March 2014. The applicant also seeks an orderpursuant to s 329(4) appointing him as a director of the company.[2] The applicant was the sole director of the company and also a trustee of itsprincipal shareholder, the Beauly Trust. He seeks restoration of the company to theregister so that it may pursue claims against the company's former bank Westpac NewZealand Limited and Westpac Corporation (Westpac), alleging that Westpac engagedin misleading and deceptive conduct in the course of selling and managing thefinancial products known as Interest Rate Swaps, which agreement the company hadentered into with Westpac in 2008.[3] Both the Registrar of Companies (the Registrar) and the Secretary to theTreasury (the Treasury) have been served with the application and neither oppose it.However the application is opposed by Westpac, which was granted leave to appearand be heard on the application, after it too was served with the application inaccordance with an order of the Court.1Background[4] Following its incorporation in December 1986, the company traded in farmingand rural commercial activities. In 2006 the company entered into a lease to purchasearrangement in relation to a 400 hectare dairy farm situated at Berry Road, Te Pohue,in Hawkes Bay. The purchase agreement provided for the company to pay a depositof $905,000 upon taking possession, and thereafter pay an annual rental of $300,000for a term of five years, with the balance of the purchase price of $5,000,000 to bepaid in June 2012. In addition to purchasing the farm property the company alsoagreed to purchase the vendor's herd of 700 dairy cows for $709,000 plus GST.1 Minute of Associate Judge Sargisson (6 September 2019), and Minute of Associate Judge Smith(14 February 2020, para [5] corrected by subsequent Minute (17 February 2020).[5] In early 2008 the company approached Westpac to seek finance fordevelopment work to be undertaken on the farm, and to purchase additional livestockto increase production. In response to the company's application, on 9 April 2008Westpac made a proposal to provide the company with funding totalling $7.4 millionto cover the cost of completing the purchase of the farm, funds for farm development,purchase of some additional livestock, and to refinance some asset finance held by thecompany. The Westpac loans included $7 million for a term of 15 years with the initialfive years being on an interest only basis. The remaining $400,00 was to be advancedpursuant to an overdraft facility. The loans were to be secured by first mortgagesregistered on the titles to the farm property, a general security agreement over thecompany and guarantees provided by the Beauly Trust and by the applicant himselfpersonally.[6] Westpac then followed the initial loan offer with a further proposal entitled,"Interest rate risk management strategy" in which it made two alternative proposalsfor the provision of loan finance. The first proposal involved the application of acombination of fixed interest and floating interest rates allocated to the loan financeduring the term of the loan. The second proposal was described as a "ParticipatingSwap" and incorporating "some interest rate insurance" in respect of which aninsurance premium was payable. This Westpac proposal stated that it provided theborrower with the ability to participate in lower interest rates on 50 per cent of the debtfrom the second year of borrowing onwards. The proposal stated:This structure, which is approximately 0.28% more expensive than a straight3 year fixed rate, not only provides you with certainty, but also provides youwith flexibility when rates start to fall.[7] The company, Beauly Trust, and the applicant accepted Westpac's second loanfinance proposal and executed the loan documents in late April 2008. The applicantsays that the swap trade pursuant to the Westpac financing arrangement took place on2 May 2008.[8] The applicant says that within a matter of days after the company had enteredinto the Westpac loan finance arrangements the financial markets entered a period ofinstability and by later in 2008 dairy prices were significantly reduced and the NewZealand economy was in steep decline. The company suffered a significant reductionof cashflow over the next two and half years, defaulted on obligations under theWestpac loan facilities, and on 14 June 2011 Westpac acted pursuant to the terms ofthe General Security Agreement and placed the company in receivership.[9] Shortly prior to the appointment of receivers the applicant had written toWestpac to express his concerns about the loans and how they were being managed.In an email sent on 11 May 2011 he alleged that although the company had originallyagreed to settle its purchase of the farm at the end of a five year period of leasing it,Westpac had insisted that the purchase was completed early so that finance could beadvanced on the basis of first mortgage security. He said that when he had expressedhis concerns about the swap facility arrangements, he had been assured by a Westpacstaff member that the interest on the loan would work out exactly like a floating rate,and that he should not be concerned.[10] In October 2011 the applicant wrote to Westpac advising that he and the BeaulyTrust had taken advice from a barrister regarding the establishment and managementof the loans, and as to the actions of Westpac prior to it appointing the receivers. Hesaid:Our advice in brief is that while there are substantial grounds to take action ina number of areas of law, but the resulting cost and time involved would meanthe assets would by then have been sold and the opportunity to rectify thesituation and mitigate any loss would be lost.However putting all that aside for the moment the reason for my letter is tomake a genuine attempt to resolve the current situation and reduce thesubstantial losses we are both going to incur if the current tender and saleprocess is completed.[11] The applicant maintained further correspondence with Westpac during 2011,and in an email of 15 December 2011 set out a summary of the events leading to theestablishment of the Westpac loans. He said:The Westpac who I had approached after the takeover of the property, forseasonal finance [o]riginally agreed to an overdraft application, but latersaid they would only supply the overdraft if they got the first mortgage. Inother words we had to settle the purchase price four years early.I was not happy to accept the offer because as I said to our local Westpacmanager David Whillans at the time, "the maths are simple, the lease cost is$300,000 pa, and the interest on the purchase price is going to be at least$600,000. Plus we would not have the cash surplus under our existing lease tofund the development.He said, "Don't worry, the Westpac has have [sic] plenty of money and wewill fund it." He then added that if we did not settle the purchase early soWestpac could have 1st mortgage they would withdraw their overdraft offer.We have since been advised by a senior, now ex Westpac employee, the mainreason Westpac insisted on the changes to our commercial lease deal wasfirstly [that] Westpac wanted the settlement figure of $5,000,000 in theCrafar's account to help their equity position, and secondly because of thecommission the deal would earn the Westpac staff writing the deal.Shortly after accepting Westpac's offer we were advised by Westpac's DavidBarnett to enter into a "swap rate" agreement. I again was not happy with theoffer, and said to David Barnett, " I thought this could bite us on the arse", heassured me that "it was a very good option and it would never come out atmore than the floating rate, and may well come out less. This has not been thecase.[12] In a letter sent to the CEO of Westpac dated 4 March 2012, the applicant said:We have recorded and documented every breach of contract and interferencein commercial decisions to our detriment, and we believe it leaves the Westpacin a very vulnerable position legally for the losses.The overcharging of the interest in the swap rate deal that turned to custard isalso extremely damaging for the bank and will in the full course of timebecome public when it is addressed by the courts.We are advised that because both Westpac and [the receivers] did not follownormal commercial practises and made a serious error in [sic] judgement theyare jointly liable for the losses, they have caused.[13] Further correspondence sent by the applicant to Westpac in which he repeatedhis complaints regarding Westpac's conduct in relation to the establishment of theloans and management of the interest swap facility, were responded to with denials byWestpac of any wrongdoing or liability for the losses suffered by the company, theBeauly Trust, and the applicant's personal interests. Other than corresponding withWestpac, the applicant took no steps at that time to pursue the allegations he had madeby commencing legal proceedings.[14] Following the company being placed in receivership the applicant facedcreditor demands pursuant to personal guarantees he had given to support the financialobligations of the company and the Beauly Trust. He was unable to satisfy theguarantees and was adjudicated bankrupt on 25 March 2013, some 12 weeks prior tothe completion of the receivership.[15] At the date of receivership on 14 June 2011 the total sum owed by the companyand the Beauly Trust to Westpac was $9.3 million. By completion of the receivershipon 13 June 2013 and following recovery from the sale of secured assets the totalWestpac debt was $7.07 million. The company also had unsecured creditors totallingapproximately $280,000. The applicant says that following completion of thereceivership in 2013 the company did not resume trading. He says that by that timethe businesses previously conducted through the company and by the Beauly Trusthad been "obliterated and the ability to rebuild was virtually nil", and furthermore hisbankruptcy prevented him from acting as a director of the company.[16] On 21 March 2014 the Registrar removed the company from the register ofcompanies. The applicant says that he was not notified of the Registrar's intention toremove the company from the register, and no steps were taken on behalf of thecompany to oppose its removal. He says that in any event his bankrupt status meantthat he was disqualified as a director of the company and had no standing to opposethe removal, and his family interests had no financial resources to do so.The Commerce Commission investigation and settlements[17] In 2013 the Commerce Commission (the Commission) commenced aninvestigation following complaints made about interest rate swap lending promotedand undertaken by several banks, including Westpac, to customers conducting ruralbusinesses. During 2013 – 2014, the Commission continued to receive and processcomplaints and in December 2014 it announced that it had reached a $19 millionsettlement with the ANZ Bank New Zealand Limited, and a $3.2 million settlementwith ASB Bank Limited in relation to the marketing, promotion and sale of interestrate swaps to its rural customers between 2005 and 2009.[18] In February 2015 the Commission announced that it had reached a $2.97million settlement with Westpac in relation to the marketing, promotion and sale ofinterest rate swaps to rural customers between 2005 and 2012. The applicant says thatby this time the company had been removed from the register, and the Westpacsettlement offer that followed was made on terms that would offset the settlement sumagainst the unpaid debt that remained owing by the company at the conclusion of thereceivership.[19] The applicant was discharged from bankruptcy in April 2016.[20] The applicant says that while he and his co-trustees of the Beauly Trust hadsuspicions regarding the correctness of Westpac's calculations of interest due underthe loans, prior to the Commission's investigation and settlement with Westpac theirconcerns were mere suspicions.2 He says that it was only following receipt of theCommission's findings in 2015 that he began to understand that he and his co-trusteeshad been misled and deceived by Westpac representatives in relation to the loans.[21] The applicant explains the delay between the Commission announcing itssettlement with Westpac and his commencing this application in July 2019, as due tothe time engaged in the process of obtaining legal advice and assembling informationnecessary to bring a claim against Westpac. The applicant says that during this periodhe had limited financial resources, and that it was not until he was advised by hispresent legal counsel that any claim that he proposed to make would require thecompany to participate as a party to the proceedings, that he made the presentapplication.[22] The applicant seeks restoration of the company to the register for the solepurpose of enabling it to pursue a claim against Westpac in relation to the interest swaploans. He says that although the company has no financial resources, he proposes tomeet the costs of pursuing the claims personally.[23] The applicant also seeks an order that would operate to "wind the clock back"and exclude the time which has elapsed between the date on which the company wasremoved from the register to the date of restoration to the register, from computationsof time for the purposes of limitation of actions under the Limitation Act 2010.2 The current trustees of the Beauly Trust are the applicant, his wife Cheryl Ellen Hennah, and theiraccountant, Mr Warwick Grieve who was appointed in 2011 following the death of Mr GeoffreyMyles in 2010, and who had been a trustee of the Beauly Trust since 2007.[24] Ms Smith for the applicant says that although the unsecured creditors of thecompany total in excess $280,000, they are businesses that the applicant resumedbusiness with following his discharge from bankruptcy, and with whom he is confidentof being able to enter into arrangements with to withhold any recovery or enforcementaction against the company pending determination of the company's claims againstWestpac.Section 329 Companies Act 1993[25] Section 329 of the Act provides: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 New Zealand registerbe 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 proper reasonexisted for the company to continue in existence; or(ii) the company was a party to legal proceedings; or(iii) the company was in receivership, or liquidation, or both;or(iv) the applicant was a creditor, or a shareholder, or a personwho had an undischarged claim against the company; 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 the companyto the New Zealand register.(1A) In considering whether to restore a company to the register on the groundreferred to in subsection (1)(a)(i) or (b), the court must have regard to thereasons for the company's removal and whether those grounds existed at thetime of removal or exist at the time of the hearing 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 from theNew 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, thecompany:(b) the Registrar:(c) with the leave of the court, any other person.(3) Before the court makes an order restoring a company to the New Zealandregister under this section, it may require any provisions of this Act or anyregulations made under this Act, being provisions with which the companyhad failed to comply before it was removed from the register, to be compliedwith.(4) The court may give such directions or make such orders as may be necessaryor desirable for the purpose of placing the company and any other persons asnearly as possible in the same position as if the company had not beenremoved from the New Zealand register.SubmissionsApplicant's submissions[26] Ms Smith for the applicant submits that there are good reasons for the companyto have continued in existence so as to be able to pursue a claim against Westpac andshe notes that neither the Registrar nor the Treasury oppose the application.[27] Ms Smith addressed each of the considerations referred to by the Court ofAppeal in Commissioner of Inland Revenue v Commercial Management Limited 3 asbeing relevant to the Court's consideration of an application under s 329 of the Act.[28] Ms Smith submits that as a trustee of the Beauly Trust, which is a shareholderin the company, the applicant qualifies to bring an application pursuant tos 329(1)(a)(i).[29] Counsel submits that in his two affidavits filed in support of the application,the applicant has made full and frank disclosure of the circumstances leading to theremoval of the company from the register. She notes that prior to its removal, thecompany's receivership had been concluded, the company had ceased trading, and theapplicant's bankruptcy had left the company without a director, and without any assets.3 Commissioner of Inland Revenue v Commercial Management Limited [2019] NZCA 479, (2019)29 NZTC 24-019 at [58].Although the applicant has no direct evidence of the grounds on which the Registrarproceeded to remove the company from the register, Ms Smith submits that as thecompany had ceased to carry on business and had not filed annual returns, it isreasonable to conclude the removal was made pursuant to s 318(1)(b) of the Act. Shesubmits that in these circumstances the Registrar's removal of the company can belikened to the Registrar, "pruning dead wood".[30] Ms Smith further submits that the applicant's failure to oppose the removal canbe explained by the applicant not having knowledge of the Registrar's intention toremove the company because he did not receive notice of the Registrar's intention todo so. She says it is also relevant to note that the applicant did not know what wouldbe required for him to object to the proposed removal and that in any event at the timeof the removal he had insufficient knowledge as to whether the company had ajustifiable legal claim to make against Westpac in relation to the interest swap loans.[31] As regards the applicant's four and a half year delay in bringing the application,Ms Smith submits that such a delay is not a bar to the application but a factor to betaken into account. Counsel says that the time between the applicant learning of theCommission's findings and its settlements with the banks in 2015, and his bringingthe present application was three and a half years. Furthermore, it was as a result ofthe Commission's findings being published that the applicant became aware thatWestpac's actions in promoting and selling the interest swap loan products wasconsidered by the Commission to have involved deceptive and misleading conduct.She says it is also relevant to note that the interest swap products were complex andrecognition should be given to this factor as a reason why the applicant did notimmediately recognise there to be a basis for the company making a claim againstWestpac.[32] Ms Smith submits that the proposed claim against Westpac that the applicantwishes to be brought by the company has been shown to be well founded, havingregard the findings of the Commission. She says that nevertheless the claim could notbe commenced and the present application made before the applicant had obtained andassessed the available documentary evidence. She says that the applicant is acting ingood faith in seeking to restore the company to the register to enable the claim to bemade, and that in all the circumstances it is in the interests of justice, that thecompany's claims against Westpac as proposed by the applicant be brought anddetermined, and that the company is not denied access to justice.[33] As regards the opposition to the application advanced by Westpac, Ms Smithsays it cannot seek to avoid the proposed litigation by seeking to prevent therestoration of the company to the register. Counsel submits that an examination of themerits of the proposed claim is not appropriate or relevant to the determination of therestoration application. She further submits that it is not appropriate to considerwhether the proposed claim will be precluded by limitation issues in the context of thepresent application. She says that the time for any limitation defences to be raised andconsidered will arise after the claim has been brought and in the defendants' pleadingsin response to the claim.Westpac submissions[34] Mr Upton for Westpac submits that the applicant has failed to satisfy therequirements set out in Commissioner of Inland Revenue v Commercial ManagementLimited, and that the evidence presented by the applicant to support restoration isinsufficient to satisfy the Court of the requisite matters necessary to obtain an order.[35] Mr Upton submits that the applicant has not provided any evidence as to theground on which the company was removed from the register or the reasons for itsremoval by the Registrar. He submits that the applicant has failed to provide asatisfactory explanation for failing to take steps to oppose the Registrar removing thecompany from the register, and says that the applicant's bankruptcy would not haveprevented another person being appointed as the director of the company or thetrustees of the Beauly Trust taking steps to oppose the removal.[36] Mr Upton submits that the applicant's claim not to have known of the existenceof grounds for a claim against Westpac until the Commission's investigation resultedin a settlement with Westpac in 2015 is doubtful, having regard to the correspondencehe wrote to Westpac in 2011 and 2012 in which he made allegations that the bank wasresponsible for the company's financial situation deteriorating.[37] Counsel submits that the over four year delay between the applicant learningof the Commission's findings and the filing of his application cannot be justified onthe basis that the applicant needed all that time to gather information and evidence andobtain legal advice. He notes that Westpac only received the applicant's request forinformation regarding the loans after the current application had been filed.[38] Mr Upton submits that as the applicant had obtained legal advice from abarrister in October 2011, as was mentioned in his letter to Westpac, he was most likelyadvised at that time of the necessity of keeping the company on the register so as toenable it to pursue a claim against Westpac. He says that the applicant has failed toadequately explain the long delay that elapsed before making the application and thatthe delay is a factor telling against the making of an order to restore the company.[39] Mr Upton also notes that the applicant has not identified any steps required toremedy failures by the company to comply with filing requirements under the Act, andhas not provided copies of the documents that would be filed by the company onrestoration to remedy its prior filing failures. He further submits that the applicant hasprovided insufficient evidence as to how the company will fund the litigation andsecurity for costs that will inevitably be sought.[40] Mr Upton says however, that should the Court make an order restoring thecompany to the register it should be pursuant to s 329(4) of the Act directing that theperiod between the removal of the company and its restoration to the register is to beexcluded from limitation calculations as regards any creditors of the company whoseclaims were not statute barred as at the date of removal.[41] Westpac also opposes the applicant's re-appointment as a director of thecompany in the event that the Court grants his application to restore the company.Mr Upton says that the applicant is a discharged bankrupt who was adjudicated on thepetition of a creditor other than Westpac, although no details of the petitioning creditorhave been provided.Discussion[42] The purpose and application of ss 328 and 329 of the Act was described by theCourt of Appeal in Commercial Management as follows:[32] Section 328 contemplates a relatively simple and uncontroversialrestoration process where it is apparent that the company should not have beenremoved from the register having regard to the circumstances at the time ofthat removal, and where no one objects to that restoration. Section 329 enablesa wider range of grounds to be invoked, including the broad "just andequitable" ground. It is available in cases where restoration is opposed. Incircumstances where s 329 is invoked, and in particular where the "just andequitable" ground is relied on, an evaluative judgment is required.Responsibility for making that judgment is conferred on the court rather thanon the Registrar. As is apparent from the structure of these provisions, s 329is aimed at more complex cases where restoration may or may not beappropriate. A s 329 application is not simply a mechanical procedural hurdleto be overcome before arriving at an inevitable destination.[58] Section 329(1A) provides that the court must have regard to the reasonsfor the company's removal and whether those grounds existed at the time ofremoval or exist at the hearing of the application. It is incumbent on anapplicant associated with the removed company (such as a former shareholderor director) to provide the information that the court requires in order toconsider this mandatory relevant consideration. The applicant should identify:(a) the ground on which the company was removed;(b) whether that ground was in fact satisfied at the time of thecompany's removal;(c) the position in relation to that ground at the time of therestoration application;(d) what steps if any the company and its controllers took toprevent removal from the register. If no steps were taken, thereason for the failure to do so needs to be explained;(e) what if anything has changed since the time the company wasremoved from the register, which would justify the controllersof the company changing their position on the appropriatenessof the company continuing in existence; and(f) the explanation for any delay between the time when thereason for seeking restoration was first identified, and themaking of the application.[59] These matters should be addressed in an affidavit accompanying theapplication. Relevant documents should be exhibited.[43] The Court of Appeal observed that information in relation to those six issueswas important, as in the absence of such information "the Court is without materialupon which it can make an assessment of the justice of the matter",4 and that a failureto provide such information will generally result in the application being dismissed.5[44] The Court of Appeal said that furthermore:(a) the applicant should identify the steps that would need to be taken toremedy any failures to comply with filing requirements under theCompanies Act, and provide copies of the documents that would befiled on restoration of the company to remedy those failures.6(b) the application should address the financial position of the company atthe time of its removal and on restoration. And where a restoredcompany will be insolvent, there will need to be a "compelling reason"to bring it back to life, such as the discovery of overlooked rights orassets which, if realised, could be applied for the benefit of creditors ofthe company.7(c) the application should identify any outstanding creditors of thecompany and describe its financial affairs in sufficient detail as toenable the court to determine whether any orders under s 329(4) arerequired.[45] Applying those requirements to the present case, it is clear that the applicanthas failed to provide the requisite information.Registrar's reasons for removal of company from the registerSection 329(1A) stipulates a mandatory relevant consideration requiring the court tohave regard to the reasons for the company's removal, and whether those groundsexisted at the time of removal or exist at the time of the hearing of the application.4 Re Ghuznee Securities Limited (1983) 1 NZCLC 95-097 (HC) at [60].5 At [65].6 At [61].7 At [62].Here the applicant has failed to provide any evidence of the ground or grounds onwhich the Registrar acted to remove the company from the register on 21 March 2014.The applicant invites the Court to find that that the Registrar acted to remove thecompany from the register pursuant to s 318(1)(b) as it was no longer carrying onbusiness and the Registrar had concluded that there was no proper reason for thecompany to continue in business. While that may well have been the case, theapplicant has not produced any evidence as to the ground on which the Registrar actedwhen removing the company from the register, and in order to address the mandatoryconsiderations required by s 329(1A) the applicant must provide informationregarding the specific reasons for the company's removal. Without the requisiteinformation as to the ground on which the company was removed, the Court is unableto address the issue of whether the grounds existed at the time of removal or existpresently at the time of the hearing of the application for restoration.What steps if any the company and its controllers took to prevent removal from theregister[46] In his first affidavit in support of the application the applicant did not addressthe issue of whether or not any steps were taken to oppose the company's removalfrom the register.8 In his second affidavit9 the applicant says that at the time thereceivership ceased he was not aware that the company had potential claims againstWestpac, and as the company was not trading and had no financial resources availableto continue he did not seek to challenge the proposed removal of the company. Hesays that by that time he had been adjudicated bankrupt and he did not have standingto object to the company's removal.[47] However, in her written submissions Ms Smith says that the Registrar's noticeof proposed removal would have been sent to the registered office of the companywhich at the time was the receivers' address. She submits that the applicant is"adamant" that he did not receive notice from the Registrar of the intention to removethe company from the register. Whether or not the applicant received a notice fromthe Registrar of the proposed removal of the company, he does not assert that he had8 Affidavit of Geoffrey Maurice Hennah (sworn 18 July 2019).9 Second affidavit of Geoffrey Maurice Hennah (sworn 8 November 2019).no knowledge of the proposed removal. In his sworn affidavit the applicant sets outthe reasons why he did not object to the removal and he makes no claim of not knowingabout the proposed removal prior to it taking place. His explanation for not taking anysteps to object to removal at the time can only be read as confirming that he was awareof the proposed removal at the time, and for the reasons mentioned he and his co-trustees of the Beauly Trust decided not to take steps to oppose the removal.[48] I accordingly find that the applicant together with his co-trustees made adecision not to oppose removal of the company from the register as the company wasinsolvent and no longer trading. At that time, although the applicant had previouslyexpressed his concerns about the representations made to him by Westpac prior to thecompany entering into the interest swap loans, and in his correspondence with Westpachad claimed that what he had been told about the interest payable was not correct, heof course did not know what the Commission was to determine the following year,regarding the interest swap products sold by the banks to their rural customers.What has changed since the time the company was removed from the register, whichwould justify the controllers of the company changing their position on theappropriateness of the company continuing in existence?[49] Accordingly, what changed following the company being removed from theregister in March 2014, was the publication of the outcome of the Commission'sinvestigation into the interest swap lending undertaken by Westpac. The applicantconsidered the Commission's findings provided strong support for his assertionsregarding the representations which had been made by Westpac to him regarding theinterest swap lending to the company. The Commission's findings were consistentwith the concerns previously expressed by the applicant to Westpac prior to theremoval of the company from the register, and provided cogent material that could beused to support a civil claim being brought against Westpac. Had the Commission'sfindings been known to the applicant at the time that the Registrar was proposing toremove the company that information would have justified the applicant opposingremoval to enable a civil claim to be commenced against Westpac. Furthermore, oncethe Commission's findings were published in 2015, those findings would havejustified the applicant changing the stance he had previously adopted of not opposingthe removal.The explanation for any delay between the time when the reason for seekingrestoration was first identified, and the making of the application.[50] The publication of the Commission's findings in February 2015 providedgrounds on which the applicant could make an application for restoration of thecompany to the register so as to enable it to commence a civil claim against Westpacfor the benefit of the unsecured creditors and shareholders of the company. However,the applicant did not bring an application until July 2019, over four years later.[51] The applicant has not explained the reasons for the delay other than by sayingthat the time was occupied by a process of gathering evidence to assess the merits ofpossible causes of action before commencing steps to proceed with a claim andseeking restoration of the company. The applicant says that it was not until he met withhis current counsel that he had the opportunity to understand the bank's interest swaploan documents that had been entered into by the company. He says that his currentcounsel was the first legal adviser to advise him that restoration of the company to theregister would be necessary in order to investigate possible claims and thereaftercommence proceedings. The applicant says that as a lay person, he did not know thatan application for restoration of the company would be required to enable a civil claimagainst Westpac to be commenced.[52] In my view the four years and five months' delay in bringing the applicationhas not been adequately explained or justified by the applicant in his affidavits andexhibited documents. Any assessment of whether the company and its associatedparties had a claim against Westpac could have been undertaken over a period ofseveral months, and there is nothing to indicate that there were any unusual aspects ofthis matter which would warrant an investigation extending over several years.Accordingly while an unjustified delay of over four years does not itself present aninsurmountable barrier, it is nevertheless a factor to be taken into account and is onewhich reduces the strength of his application.The applicant should identify the steps that would need to be taken to remedy anyfailures to comply with filing requirements under the Companies Act, and providecopies of the documents that would be filed on restoration of the company to remedythose failures[53] The applicant has not provided any evidence addressing the steps that wouldneed to be taken to remedy the company's failures to comply with filing requirementsunder the Act during the period prior to and since removal from the register.The application should address the financial position of the company at the time of itsremoval and on restoration. And where a restored company will be insolvent, therewill need to be a "compelling reason" to bring it back to life, such as the discovery ofoverlooked rights or assets which, if realised, could be applied for the benefit ofcreditors of the company.[54] The applicant has produced the receivers' reports, including the final receivers'report dated 13 June 2013, which contain details of the company's financial positionas at that date. As the company did not trade following termination of the receivershipits financial position would not have materially changed by the date of removal on 21March 2014. The final receivers' report states that the total outstanding debt owing toWestpac following the realisation of secured assets of the company and the BeaulyTrust was $7.07 million. The receivers' report states that the company has unsecuredcreditors of approximately $282,000.[55] If restored the company would be insolvent. While the applicant says that hewill personally meet the company's costs of pursuing the proposed claim againstWestpac if it is restored, no information is given as to the applicant's financial meansand ability to do so.[56] The possibility of the company having an available claim against Westpac wasknown to the applicant well prior to the removal of the company, as is apparent fromhis correspondence with Westpac in 2011 and 2012. The publication of theCommission's report in February 2015 provided support for the applicant's allegationsof wrongdoing by Westpac in the manner in which it had promoted and representedthe interest swap loans, but those were matters he was already well aware of and couldhave pursued on behalf of the company in 2011.[57] While the applicant's intention that the company commence proceedingsagainst Westpac could justify restoration, in the absence of detailed information as tohow the restored company would be funded to conduct the proceedings, and how theinterests of the unsecured creditors would be addressed and resolved, there is muchuncertainty as to how the restored company could function and prosecute a claim inan efficient manner that would not involve further delays. I also agree with Mr Upton'ssubmission that the applicant has failed to address the issue of how the company wouldbe able to provide security for costs given the inevitability of an application forsecurity being made by Westpac.The application should identify any outstanding creditors of the company and describeits financial affairs in sufficient detail as to enable the court to determine whether anyorders under s 329(4) are required[58] The applicant has not presented any evidence listing the unsecured creditorsand the amounts owed to them as at the date of the company's removal, and has notexplained how the interests of the unsecured creditors would be dealt with followingrestoration.Conclusion[59] In Commercial Management the Court of Appeal said that there had been analmost complete absence of relevant information, and that the information providedas to why one of the companies in that case had been removed was "sketchy". TheCourt of Appeal observed that the applicant's failure to provide the requisiteinformation was alone a reason why the application ought to have been declined.10[60] Here too, the applicant has failed to provide the requisite information to enablethe Court to give proper consideration to the application. The applicant has failed toprovide information to enable the Court to address the mandatory considerations10 Commissioner of Inland Revenue v Commercial Management Limited, above n 3, at [64] and [65].required by s 329(1A), and has also failed to identify the filing requirements that wouldbe required to be remedied upon restoration to the register.[61] The applicant has also failed to provide sufficient detailed informationregarding the financial position of the company, how it would deal with the unsecuredcreditors, and its ability to fund the proposed legal proceedings against Westpacfollowing restoration.[62] While the delay in bringing the application is not an insurmountable obstacle,the inadequate explanation of the reasons for the delay would tell against the Courtexercising its discretion to grant the application.[63] However more fundamentally, without the requisite information the Court isplaced in a position of being unable to give proper consideration as to whether it wouldbe just and equitable to restore the company to the register.[64] Although the applicant has identified a claim that could be made by thecompany against Westpac as a reason why it would be necessary to restore thecompany to enable the claim to be made, in the absence of the requisite informationthat is necessary to enable the Court to give fully informed consideration to the issuesarising and consequences of an order for restoration of the company, I find that theapplicant has failed to satisfy the Court that it would be just and equitable to restorethe company to the register.[65] For those reasons, I shall decline the application.Result[66] The application for an order for the restoration of G M Hennah Limited to theRegister of Companies is dismissed.[67] The application for an order for the appointment of the applicant, GeoffreyMaurice Hennah, as a director of G M Hennah Limited following the company'srestoration to the register, is declined and dismissed.Costs[68] Westpac was served with the application in accordance with an order of theCourt. Westpac's opposition to the application was directed at issues relating to theinadequacy of the information presented by the applicant in support of the application,and it did not seek to argue the merits of the proposed claim against it that the applicantwishes the company to make. Accordingly, the approach adopted by Westpac and itscounsel was in substance akin to that of a contradictor to the arguments andsubmissions advanced by the applicant, by way of submissions directed at identifyingthe inadequacies of the information relied on by the applicant to support hisapplication.[69] In dismissing the application by reason of the incomplete and inadequateinformation relied on by the applicant, the Court has upheld the principal submissionsmade on behalf of Westpac. I accordingly consider that Westpac is entitled to costs tobe calculated on a scale 2B basis.[70] I direct that Westpac is to file and serve a costs memorandum setting out itsclaim for costs and disbursements within five working days from the date of deliveryof this judgment. The applicant is to file and serve a costs memorandum in reply withinfive working days following service of Westpac's costs memorandum.[71] The costs memoranda are not to exceed three pages in length (excluding thetitle page) apart from any annexures.[72] Following the filing of the parties' costs memoranda, I shall determine an orderfor costs on the papers._____________Paul Davison J