YELCICH V DAVIES & CO SOLICITORS NOMINEE COMPANY LIMITED HC AK CIV 2012-404-007331

YELCICH V DAVIES & CO SOLICITORS NOMINEE COMPANY LIMITED HC AK CIV 2012-404-007331 [25 February 2013]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2012-404-007331[2013] NZHC 316BETWEEN LOIS JEAN YELCICHPlaintiffAND DAVIES & CO SOLICITORS NOMINEECOMPANY LIMITEDDefendantHearing: 25 February 2013Counsel: J A R Cox for the PlaintiffS Judd for the DefendantJudgment: 25 February 2013[ORAL] JUDGMENT OF WYLIE JDistribution:JAR Cox: jcox@blomlaw.co.nzS Judd: simon@simonjudd.com[1] Ms Yelcich has brought proceedings against the defendant nominee company. It holds a mortgage over a property comprising 93.9342 hectares situated at Black Swan Road, Mangawhai. It was granted the mortgage by a company, Sandhills Development Limited. Ms Yelcich was a director of that company. In her statement of claim, she asserted that a Property Law Act 2007 notice served by the nominee company on Sandhills Development Limited was invalid and that the nominee company was unable to act on the notice it has given.[2] Ms Yelcich sought interim relief on an ex parte basis. Relief was declined by Potter J in a minute issued on 11 December 2012.[3] When the nominee company became aware of the application, it filed an interlocutory application seeking to strike out the statement of claim in reliance on r 15.1 of the High Court Rules and on various provisions contained in the Insolvency Act 2006.[4] A supporting affidavit was filed by a Mr Davies. He deposed that Ms Yelcich is an undischarged bankrupt. He annexed details of her insolvency taken from the Insolvency Service website. Ms Yelcich was adjudicated bankrupt on 27 May 2010. Mr Davies also deposed that Sandhills Development Limited has been struck off the Register of Companies. The directors and shareholders of the company were Ms Yelcich and a Mr Crawford. Mr Crawford is also an undischarged bankrupt.[5] Ms Yelcich filed a notice of opposition to the application for an order striking out her statement of claim.[6] I have heard this morning from Mr Judd on behalf of the nominee company, and from Mr Cox on behalf of Ms Yelcich.[7] First, I note that Ms Yelcich was not herself a party to the mortgage documentation. She was a shareholder in Sandhills Development Limited and a director of that company. According to her own pleadings, the land the subject of the mortgage was owned by the company.[8] It is not obvious what standing Ms Yelcich had to bring the proceedings in her own name. Moreover, the proceedings were filed in December 2012. As at that date, Ms Yelcich was an undischarged bankrupt. When she was adjudicated bankrupt, her property, including her interests as a shareholder in Sandhills Development Limited, vested in the Official Assignee.1 Following her adjudication, Ms Yelcich had no power to recover any property that is part of her estate.2 The only person who can bring proceedings in respect of Ms Yelcich's estateis the Official Assignee.[9] Accordingly, it seems to me that the proceedings must be struck out. They have not been commenced by the correct plaintiff. Indeed, I am told that, at least on a preliminary basis, the Official Assignee has indicated that he does not consent tothe proceedings being brought in Ms Yelcich's name. The correct plaintiff,Sandhills Development Limited, has been struck off, although I am told that an application has been made to restore that company to the Register. That has not, as yet, occurred. Given that both former directors and shareholders are undischarged bankrupts, restoration is unlikely. When and if the company is restored to the Register, there will be nothing to preclude it bringing fresh proceedings in its own name if it wishes to do so.[10] There is one additional issue I record, simply because it was raised by Mr Cox. Mr Cox queried whether or not the nominee company had complied with the Lawyers and Conveyancers Act (Lawyers: Nominee Company) Rules 2008, r 13. His submissions in that regard were speculative. The issue was not raised in the notice of opposition and there is no affidavit suggesting non-compliance by the nominee company. Even if there was non-compliance, and that is not to be assumed, there is nothing in the rule to suggest that the nominee company is precluded from filing an application to strike out proceedings brought against it.[11] Accordingly, the statement of claim filed in Court on 6 December 2012 is struck out.1 Insolvency Act 2006, s 101.2 Section 154(1).Costs[12] Costs are reserved. I heard from both Mr Judd and Mr Cox. Mr Cox is to file a memorandum on or before 5.00 pm on 26 February 2013, advising whether or not the staff solicitor dealing with the matter was aware that Ms Yelcich was an undischarged bankrupt._________________________Wylie J