NEW ZEALAND TRANSPORT AGENCY v TRANSPORT & STRUCTURE LIMITED [2020] NZHC 2536

NEW ZEALAND TRANSPORT AGENCY v TRANSPORT & STRUCTURE LIMITED [2020] NZHC 2536 [28September 2020]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYI TE KŌTI MATUA O AOTEAROATĀMAKI MAKAURAU ROHECIV 2020-404-001353[2020] NZHC 2536UNDER Section 323 of the Companies Act 1993BETWEEN NEW ZEALAND TRANSPORT AGENCYApplicantAND TRANSPORT & STRUCTURE LIMITEDRespondentHearing: 28 September 2020Appearances: H L Hui for the ApplicantNo appearance for the RespondentJudgment: 28 September 2020Reissued: 06 October 2020ORAL JUDGMENT OF CAMPBELL JThis judgment was delivered by me on 28 September 2020 and re-delivered by me on06 October 2020 (for transposed NZHC number) in accordance with Rule 11.10 of the High CourtRules 2016.Registrar/Deputy RegistrarSolicitors/Counsel:Meredith Connell, Auckland[1] The applicant, the New Zealand Transport Agency (NZTA), says that it is acreditor with an undischarged claim against the respondent company, Transport &Structure Ltd (T&S). The NZTA applies for an order under s 323 of the CompaniesAct 1993 (the Act) that T&S not be removed from the New Zealand companiesregister. The NZTA also applies for leave under rule 19.5 to commence thisproceeding by way of originating application.[2] The originating application procedure is appropriate for this proceeding. Igrant leave under rule 19.5.Background[3] Earlier this year the shareholders or directors of T&S sent a request to theRegistrar of Companies that T&S be removed from the companies register. Thatrequest was made under s 318(1)(d) of the Act. Such a request can be made on thegrounds set out s 318(2). Essentially those grounds are that the company has paid allits known creditors in full.[4] The Registrar, having received the request, gave public notice under s 320 ofintention to remove T&S from the register. Once such a notice is given, certainpersons can object under s 321. The NZTA then delivered to the Registrar, unders 321, an objection to T&S's removal. The NZTA's objection was broadly that it hadasserted a claim against T&S, of which T&S's shareholders and directors were aware.[5] The Registrar accepted NZTA's objection on 20 July 2020. The effect ofs 322(3) is that this only stops the removal process temporarily. The Registrar mustproceed with the removal of T&S from the register unless the NZTA applies for andobtains an order under s 323. Hence this application.[6] The NZTA's application is supported by a detailed affidavit made by itsGeneral Counsel – Litigation, Mr Penlington. This sets out the circumstances thathave led the NZTA to assert a claim against T&S. The affidavit includescorrespondence showing that T&S was made well aware of the NZTA's claim. Thisincludes letters from T&S's then solicitors responding to NZTA's assertion of a claim.[7] The NZTA served the application and affidavit on T&S on 31 August 2020.The application was first called on 11 September 2020 before Associate JudgeGardiner. There was no appearance from T&S. The Associate Judge lackedjurisdiction to make an order under s 323, and so adjourned the application to today'slist. Today there has been no appearance by T&S.Decision[8] Section 323 confers a discretion on the Court. In order to be able to exercisethat discretion the Court first has to be satisfied, in the circumstances of this case, thatthe NZTA is a creditor of T&S or has an undischarged claim against T&S. Havingread Mr Penlington's affidavit, I am satisfied that the NZTA has an undischarged claimagainst T&S. Given the lack of any opposition to the application, it is not necessaryfor me to traverse the basis of the NZTA's claim.[9] It is appropriate that I exercise my discretion under s 323 to order that T&S isnot to be removed from the register. The claim by NZTA is a substantial one. T&Swas well aware of it. Where, in such circumstances, the company has nonethelessrequested removal on the ground that it has paid all its known creditors in full, it willusually be appropriate to make an order that the company not be removed from theregister.[10] Accordingly, I order under s 323(2) of the Companies Act 1993 that Transport& Structure Limited is not to be removed from the New Zealand register of companies.[11] The NZTA is also entitled to costs. A schedule of costs was attached to amemorandum of counsel dated 10 September 2020. I approve the costs set out in thatschedule.______________________Campbell J