WESTPAC NEW ZEALAND LIMITED V THE REGISTRAR OF COMPANIES HC AK CIV 2011-404-4812

WESTPAC NEW ZEALAND LIMITED V THE REGISTRAR OF COMPANIES HC AK CIV 2011-404-4812 7 September 2011IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV 2011-404-4812BETWEEN WESTPAC NEW ZEALAND LIMITEDApplicantAND THE REGISTRAR OF COMPANIESRespondentHearing: 7 September 2011Counsel: S F Pearson for PlaintiffNo appearance by or on behalf of Respondent (abides decision ofCourt)Judgment: 7 September 2011(ORAL) JUDGMENT OF HEATH JSolicitors:Minter Ellison Rudd Watts, PO Box 3798, AucklandCopy to:Ministry of Economic Development, Private Bag 92513, Wellesley Street, Auckland (G Caro)Introduction[1] Westpac New Zealand Ltd (Westpac) seeks an order, under s 323 of the Companies Act 1993 (the Act) that Totara Tranquility Ltd not be removed from the register of companies. The application follows notice from the Registrar of Companies of his intention to remove that company from the register.[2] The application has been served on the Registrar of Companies. The Registrar has acknowledged receipt of the Court proceedings. He abides the decision of the Court.[3] Application has also been made for an order that the substantive application be made by originating application. That is appropriate.Background[4] On 21 December 2007, Totara Tranquility entered into a loan agreement with Westpac, through which a loan facility was to be provided up to a maximum of $355,000. Security for the loan was given on 15 January 2011, in the form of a first registered mortgage over a property situated at 127 Totara North Road, RD 2, Kaeo. Totara Tranquility is the registered property of that property.[5] By 16 February 2011, Totara Tranquility had fallen into default under the terms of the loan agreement and mortgage. At that stage there were arrears due and owing of just over $3000. A notice was issued under s 119 of the Property Law Act 2007. That notice was served on 21 February 2011. The notice has not been complied with. As a result of its expiry, all moneys payable to Westpac have become due and Westpac has rights to sell the mortgaged property or to enter into possession of it.[6] As at 4 August 2011, the amount owing to Westpac was $362,105.39.[7] The Registrar of Companies initiated action to remove Totara Tranquility from the register on the basis that it had ceased to carry on business. Under s 321(1)(d) of the Act, Westpac gave notice of objection to the proposed removal. That sub-section permits a creditor such as Westpac to object on the grounds that it has an undischarged claim against the company.[8] The Registrar responded to the objection on 12 July 2011. The effect of that response was to temporarily suspend the removal process. Section 322(2) of the Act provides that an application must be made to this Court for an order that the company not be removed from the register, if the ground of objection is under s 321(1)(d).[9] A timely application has been filed. As indicated, there is no opposition to it. It seems to me clear that it is desirable that Totara Tranquility remain on the register, to avoid unnecessary difficulties for Westpac in enforcing its debt against the mortgaged property.[10] In those circumstances, I am satisfied that the discretion conferred by s 323(2) of the Act may properly be exercised to make the order sought.Result[11] I make the following orders:(a) Leave is granted for the application under s 323 to be brought by originating application.(b) Totara Tranquility Ltd shall not be removed from the New Zealand register of companies.(c) A copy of the sealed order shall be lodged with the Registrar of Companies.[12] Costs are not sought. There is no order as to costs.[13] I thank Mr Pearson for his helpful documentation that has enabled me to give judgment orally today._________________________P R Heath J