BALLANTYNE TRUSTEES LIMITED & ORS v THE REGISTRAR OF COMPANIES [2014] NZHC 685

BALLANTYNE TRUSTEES LIMITED & ORS v THE REGISTRAR OF COMPANIES [2014] NZHC 685 [4 April 2014]IN THE HIGH COURT OF NEW ZEALANDCHRISTCHURCH REGISTRYCIV 2011-409-2499[2014] NZHC 685UNDER The Companies Act 1993IN THE MATTER OF Goose Bay Ranch Holdings Limited(In Liquidation)BETWEEN BALLANTYNE TRUSTEES LIMITEDFirst PlaintiffKEUNG INVESTMENTS LIMITEDSecond PlaintiffSEUNG BOU KEUNGThird PlaintiffAND THE REGISTRAR OF COMPANIESDefendantHearing: 2 April 2014(On the Papers)Counsel: M J Wallace for PlaintiffsJudgment: 4 April 2014JUDGMENT OF MANDER J[1] The plaintiffs make a without notice application seeking extension of an order by Kos J made on 9 December 2013, that Goose Bay Ranch Holdings Limited (in liquidation) not be removed from the Register of Companies.[2] That order was made on a strictly time-limited basis. It was to expire four months from its making unless prior to that date:(a) an order was made under s 165 Companies Act 1993 granting leave to commence the intended derivative action; or(b) an order was made under s 284 Companies Act 1993 directing the liquidators to commence an action; or(c) a further order was made under s 321 extending the present order.[3] Neither conditions (a) or (b) having been satisfied, the plaintiffs make application for an extension of the present order.[4] The reason for bringing the original application was that the plaintiffs' intendto bring proceedings against the mortgagee of the principal asset of the company, land situated at Goose Bay near Kaikoura. The prospective claim is based on complaints relating to the marketing and sale of the property.[5] Proceedings seeking, in the alternative, orders under ss 165 or 284 Companies Act 1993 were filed in this Court on 1 April 2014. Counsel for the applicants, Mr Wallace, submits that it is inevitable that the first defendant (and likely the second defendant) will oppose orders being made to allow proceedings to be brought against the mortgagee. As a result there is no realistic prospect of orders being made before 9 April 2014, hence the application for the extension of the 9 December order.[6] In support of the application, Mr Wallace, counsel for the applicants, accepts responsibility for the proceeding not having been commenced in a timely fashion as contemplated by Kos J on the making of the order. Counsel submits that the plaintiffshareholders should not be prejudiced by counsel's delay.[7] In counsel's memorandum it is submitted that there has been no "active"delay by the shareholders. Mr Keung in his affidavit in support of this application deposes that the shareholders have incurred difficulties securing relevant information as a result of company records seized by the Commissioner of Inland Revenue only being returned at the end of January 2014. Reference is also made to having only recently obtained access to files held by Clark Boyce who previously acted in proceedings relating to the liquidation of the company.[8] Counsel submits that there is no prejudice to any party caused by extending the order that the company not be removed from the register and that the Registrar of Companies has throughout taken a neutral stance abiding the decision of the Court. For the purposes of this application, Mr Wallace has obtained confirmation from the Registrar of Companies that this remains her position.[9] It is regrettable that this matter has not been expedited before now as anticipated by Kos J on the making of the order on 9 December 2013. I am satisfied however that the basis upon which the original order was made to allow a right of action on behalf of the company to be pursued endures. Steps have now been taken by the shareholders to obtain orders.[10] Accordingly, I am satisfied that there remains, for the purposes of s 321(1)(e), a sufficient basis for pursuit of a right of action under s 165 Companies Act 1993. The order that Goose Bay Ranch Holdings Limited (in liquidation) not be removed from the Register of Companies is extended until further order of the Court unless the plaintiffs are unsuccessful in obtaining orders under either ss 165 or 284 Companies Act 1993, in which case this order will lapse.Solicitors:Kearney & Co, ChristchurchCopy to:Registrar of Companies