MASON v ATTORNEY-GENERAL [2023] NZHC 3358

MASON v ATTORNEY-GENERAL [2023] NZHC 3358 [24 November 2023]IN THE HIGH COURT OF NEW ZEALANDHAMILTON REGISTRYI TE KŌTI MATUA O AOTEAROAKIRIKIRIROA ROHECIV-2023-419-274[2023] NZHC 3358UNDER the Companies Act 1993BETWEEN SHANE MICHAEL MASON and LINDAJANE MASONApplicantsAND ATTORNEY-GENERALRespondentHearing: On the papersCounsel: P Prakash for the ApplicantsJudgment: 24 November 2023JUDGMENT OF GAULT JThis judgment was delivered by me on 24 November 2023 at 10:00 ampursuant to r 11.5 of the High Court Rules 2016.Registrar/Deputy RegistrarSolicitors:Mr P Prakash, Gurnell Harrison Stanley Law, Hamilton[1] Mr and Mrs Mason apply by way of originating application for a vesting orderunder s 324 of the Companies Act 1993 (the Act) authorising Land InformationNew Zealand (LINZ) to register the transfer of 89 Beach Road, Waihi Beach (Recordof Title SA42A/389) (the property) to them in proportion to their respective formershareholdings in Mason Equities Limited (the company) which has been removedfrom the Companies Register. The application is necessary because, at the time ofremoval, the company still owned the property.[2] In support of the application, Mr and Mrs Mason have each provided affidavits.Background[3] In 2018, the Masons instructed their accountant to deregister the company.At the time, they were the only directors and shareholders of the company. Mr Masonheld 99 of the company's 100 shares and Mrs Mason held the remaining one share.All its liabilities were paid.[4] On 10 June 2019, the company was removed from the Register but, asindicated, title to the property had not been transferred to the Masons. The reason forthis, Mr and Mrs Mason explain, is that they were unaware that the property wouldnot automatically transfer to them on the company's deregistration. As shown on theCertificate of Title, the property remains in the name of the company.[5] In light of the Masons' discovery that the property would not automaticallytransfer to them, they applied to the New Zealand Treasury pursuant to s 324 of theAct for confirmation that the Treasury had no objection to the property being vestedin them.[6] On 30 May 2023, the Treasury advised by letter that it could not be satisfiedthat the property had vested in the Crown but that, if a vesting order were sought, itwould have no objection to that application. That letter, appended to Mr Mason'ssupporting affidavit, advised that Treasury had liaised with both LINZ and theCommissioner of Crown Lands who both agreed with that approach. The letter alsosaid that the Treasury would abide the decision of the Court.Discussion[7] As a preliminary matter, Mr and Mrs Mason seek permission under r 19.5 ofthe High Court Rules 2016 to commence this proceeding by way of originatingapplication. They need permission to do so since applications under s 324 of the Actare not referred to in r 19.1. The Court must consider whether it is in the interests ofjustice to permit them to do so. It is well-established that originating applications canbe brought for straightforward applications that involve the application of a specificstatutory test.1 An application for vesting orders under s 324 of the Act has been madeby originating application before.2 I am satisfied it is in the interests of justice topermit the proceeding to be commenced in this manner.[8] Section 324 of the Act relevantly provides:324 Property of company removed from register(1) Property that, immediately before the removal of a company from theNew Zealand register, had not been distributed or disclaimed, vests inthe Crown with effect from the removal of the company from theregister.(4) Where property is vested in the Crown under this section, a personwho would have been entitled to receive all or part of the property, orpayment from the proceeds of its realisation, if it had been in the handsof the company immediately before the removal of the company fromthe New Zealand register, or any other person claiming through thatperson, may apply to the court for an order—(a) vesting all or part of the property in that person; or(b) for payment to that person by the Crown of compensation ofan amount not greater than the value of the property.[9] I am satisfied that the requested vesting order should be made. As all liabilitiesof the company were met, the Masons would have been entitled to receive the propertyat the time of the company's removal from the Companies' Register. The Masons havealso sought and obtained the approval of the Treasury to the vesting order.1 Hong Kong and Shanghai Banking Corporation Ltd v Erceg (2010) 20 PRNZ 652 at [25].2 Picklepie Ltd v Attorney-General [2022] NZHC 2148.Result[10] Leave to proceed by way of originating application is granted.[11] The property at 89 Beach Road, Waihi Beach (Record of Title SA42A/389)vests in the applicants, Shane Michael Mason (as to a 99/100 share) and Linda JaneMason (as to a 1/100 share).[12] Land Information New Zealand is authorised to register the transfer of89 Beach Road, Waihi Beach (Record of Title SA42A/389) from the now removedMason Equities Limited to Shane Michael Mason (as to a 99/100 share) and LindaJane Mason (as to a 1/100 share).________________________________Gault J