Section 324 of the Companies Act 1993 provides that property belonging to a company vests in the Crown with effect from the removal of the company from the Companies Register. Similar provisions exist in previous Companies Acts and, depending on when the company was removed from the Companies Register, may apply. This guidance refers only to the most recent Companies Act.
Restoration to the Companies Register
Where property vests in the Crown pursuant to the Companies Act 1993 and someone wishes to claim that property, the simplest means of transferring the property to that person may be to have the company restored to the Companies Register.
Section 331 of the Companies Act 1993 provides that, on a company’s restoration to the Companies Register, property which had vested in the Crown under section 324 re-vests in the company as if the company had not been removed from the Register.
Details on restoring a company to the Companies Register can be found at www.business.govt.nz.
If restoration of the company to the Companies Register is not practicable, an application may be made to the High Court for an order vesting the property in the applicant under section 324(4) of the Companies Act 1993.
Exercise of Crown’s Discretion
If a company restoration or a vesting order is not practicable, The Treasury may exercise its discretion and deal with the property as requested by the application. Prior to doing so The Treasury must be satisfied that a bona vacantia situation exists and that dealing with the property in the requested way will not lead to other parties having or bringing claims against the Crown.
To assess a claim, The Treasury requires the applicant to provide a number of documents. The Treasury will assess each application on its merits and consider whether, in the particular circumstances of the case, it should ask for additional information.
Before dealing with property as bona vacantia, The Treasury generally requires:
- a statutory declaration from the Applicant outlining why the property can be considered bona vacantia and confirming that the property is not held on trust for another person;
- an indemnity in favour of the Crown, indemnifying the Crown in respect of all or any liability that may be incurred by the Crown in respect of all actions taken in dealing with the bona vacantia property;
- certified copies of all relevant documentation; and
- an undertaking that all reasonable costs and fees incurred in processing the application, including advertising costs where appropriate, will be paid (see the Fees section below for more information).
In respect of land that may be bona vacantia, The Treasury will generally not take any action without first seeking advice from the Commissioner of Crown Lands within Land Information New Zealand (“LINZ”). LINZ will conduct a detailed analysis of the property and then advise The Treasury as to whether in their opinion the land has vested in the Crown as bona vacantia.
Property held on trust for any other person is not bona vacantia
The Companies Act 1993 states that property, which immediately before the removal of a company from the Companies Register had not been distributed or disclaimed, vests in the Crown with effect from the removal of the company from the Companies Register. However, the Companies Act 1993 also states that for the purposes of section 324 of the Companies Act 1993, “property of the former company” does not include property held by the former company on trust for any other person.
Accordingly, before accepting that the property of a former company has vested in the Crown, The Treasury requires evidence that the property is not, in fact, held on trust for another person.