This Act may be cited as the Cornish Companies Management Act 1974.

This Act shall be deemed to have come into force at 7.30 p.m. on the 2nd day of July 1974.

In this Act, unless the context otherwise requires,—

For the purposes of section 3 of this Act a company shall be deemed to be associated with another company if, under section 3 of the Land and Income Tax Act 1954, the 2 companies are deemed to be under the control of substantially the same persons or to consist of substantially the same shareholders.

This Act shall apply to—

This Act shall apply to any such company notwithstanding that it has been dissolved or struck off the register; and no such company shall be struck off the register after the commencement of this Act unless the prior consent in writing of the manager is given to the Registrar of Companies.

This Act shall bind the Crown.

Except as otherwise provided in this Act or while the Order in Council (if any) applying this Act to any company otherwise provides, there shall be a statutory manager of all the companies incorporated in New Zealand to which this Act applies and of the assets in New Zealand of all the companies not incorporated in New Zealand to which this Act applies and of the property of the said Arthur Scott Cornish, and there may also be appointed by the Minister in respect of those companies and of the property of the said Arthur Scott Cornish a deputy statutory manager who shall have (subject to the control of the manager) all the powers and functions of the manager in respect of those companies.

The first statutory manager in respect of the companies to which this Act applies shall be,—

Every statutory manager or deputy statutory manager shall hold office at the pleasure of the Minister, who may from time to time appoint a different or an additional person as statutory manager or deputy statutory manager.

All property and rights whatsoever of each of the companies to which this Act applies and of the said Arthur Scott Cornish shall be and the same are hereby vested without conveyance or assignment in Cornish Investments Limited,—

Provided that any shares held by the said Arthur Scott Cornish or by any company to which this Act applies in Cornish Investments Limited shall be held by the manager for the time being of Cornish Investments Limited in trust for the person or persons ultimately entitled thereto.

All the debts, liabilities, charges, and obligations of each of the companies to which this Act applies and of the said Arthur Scott Cornish shall be deemed to be the debts, liabilities, charges, and obligations of Cornish Investments Limited, and every instrument, agreement, or other document relating thereto shall be construed accordingly.

Subject to section 8 of this Act, all actions and other proceedings that, at the commencement of the application of this Act to the company, are pending by or against any of the companies to which this Act applies or by or against the said Arthur Scott Cornish shall be deemed to be pending by or against Cornish Investments Limited.

Notwithstanding anything in any other Act, where any property or right vests in Cornish Investments Limited under this section and the title of that company thereto is or should have been entered in any register required by law to be kept, the registrar, or company, or other person whose duty it is to keep that register shall, on the request in writing of the manager reciting the property or right to be affected, without fee, make such entries in the register and generally do all such things as may be necessary to give full effect to the provisions of this section.

Nothing in this section shall restrict sections 65 and 66 of the Life Insurance Act 1908 or section 3 of the Life Insurance Amendment Act 1925.

Section 11 of the Stamp and Cheque Duties Act 1971 is hereby amended by adding to subsection (2) the following paragraph:

The said Arthur Scott Cornish shall be entitled, within 7 days of the commencement of this Act or within such further period as the manager allows, to select and retain as his own property his necessary tools of trade and household furniture and effects, including the wearing apparel of himself and his family, to the value in the opinion of the manager of $1,000.

The manager may allow the said Arthur Scott Cornish to retain necessary tools of trade and household furniture and effects in excess of $1,000, subject to the consent of the advisory committee.

The Manager may from time to time, subject to the consent of the advisory committee but without derogating from the powers contained in section 9 of this Act, make such an allowance of money as he thinks just out of the pooled property to the said Arthur Scott Cornish or any member of his family for the support of the said Arthur Scott Cornish and his family.

The manager may allow the said Arthur Scott Cornish to retain any money that the said Arthur Scott Cornish has in his possession or in a bank account at the commencement of this Act for the immediate maintenance of himself and his family up to a limit of $100.

After the commencement of this Act, no person shall,—

Subject to the provisions of this Act, nothing in subsection (1) of this section shall affect the existence of any security over the property of any company to which this Act applies or of the said Arthur Scott Cornish or its priority in relation to other debts.

While any company to which this Act applies or the pooled property remains under the management of a statutory manager appointed by or under this Act, it shall not be lawful or competent for any director, manager, or other person to be engaged in the management or conduct of that company or property, or to act as its or his agent or servant, save with the permission of the statutory manager and so far as that permission extends.

In the case of any company not incorporated in New Zealand, being a company to which this Act applies, the provisions of this section shall apply only in respect of the property in New Zealand of that company.

The manager of any company to which this Act applies or of the pooled property may at any time terminate any contract of service or agency between the company or the said Arthur Scott Cornish and any person who is its or his servant or agent, notwithstanding that by law, apart from this Act, the company or the said Arthur Scott Cornish could not have so terminated the contract until some future date; and where a contract is so terminated under this section the company or the said Arthur Scott Cornish, as the case may be, shall thereupon be discharged from the further performance of the contract, and from all liabilities for subsequent nonperformance of the contract:

Provided that, after the termination of his contract, the person may, within 6 months of receiving notice of the termination, apply to the Court for compensation in respect of the contract; and the Court may award such compensation in respect of the contract as it considers just and reasonable having regard to the value of the consideration provided by the person, and to all amounts and benefits which the person has received under the contract, and to the conduct of the parties.

Every award of compensation made under subsection (1) of this section shall be accorded a priority in accordance with subsection (4) of section 13 of this Act.

Every person holding the office of director of any of the companies incorporated in New Zealand to which this Act applies shall cease to hold that office upon the commencement of this Act.

In the exercise in relation to any company or to the pooled property of the powers and functions conferred upon the manager by this Act, it shall be the duty of the manager to take possession of and protect the pooled property, to manage the same, and (having due regard to the rights and interests of all creditors and shareholders) to pay the liabilities of each company existing at the commencement of the application of this Act to the company in accordance with the scheme settled under section 13 of this Act. Nothing in this section shall be construed to limit the powers expressly conferred on the manager by section 13 of this Act.

In the realisation of the pooled property for the settlement of the liabilities of Cornish Investments Limited, the manager shall have recourse to the property which immediately before the commencement of this Act constituted the personal assets (other than trading assets) of the said Arthur Scott Cornish only after all other property has been realised.

In respect of the property which belonged to the said Arthur Scott Cornish immediately before the commencement of this Act, the manager shall have the following powers:

The manager (if any) in respect of any company to which this Act applies shall have all the powers of the Board of Directors and the members in general meeting of that company and notwithstanding the provisions of the articles of that company may exercise alone all such powers.

In addition to the powers conferred by subsections (1) and (2) of this section, any such manager shall have the following additional powers:

In settling any such scheme the manager shall ensure that all money received by him by the realisation or administration of the pooled property shall be applied in payment of claims as follows:

Before exercising any of the powers conferred by the foregoing provisions of this section, the manager may in his discretion apply to the Court ex parte for directions with respect to the exercise of those powers, and the Court may, on any such application, make such order declaring the rights of persons before the Court or otherwise, as the Court thinks just.

In the case of any company not incorporated in New Zealand, being a company to which this Act applies, the powers conferred by this section shall be exercisable only in respect of the assets in New Zealand of that company.

All debts in one order of priority shall be paid in full before those with a lower priority, but among debts of the same priority they shall rank equally among themselves, and if the assets are insufficient to meet them in full they shall abate proportionately.

Notwithstanding anything in this Act, the manager may pay any debt the total amount of which payable to the creditor does not exceed $100 without reference to its priority.

In addition to the powers conferred by section 13 of this Act, the manager of any company, or of the pooled property shall have, in relation to that company or property, such further powers (if any) as the Court, on the application of the manager, thinks fit to confer.

Notwithstanding the provisions of subsection (4) of section 13 of this Act, where any property the subject of a security is realised by the manager, the secured creditors shall be paid out of the proceeds of the realisation in priority to all other claims other than the costs of the manager in realising the secured property:

Provided that, where a security has been given over stock in trade, sale of that stock in trade in the normal course of business shall be deemed not to be a realisation of the security.

It shall be the duty of all persons having possession and control of—

forthwith after the passing of this Act in the case of the said Arthur Scott Cornish or of any company specified in the First Schedule to this Act, or forthwith after the first manager (if any) is appointed in respect of any other company to which this Act applies, to deliver or yield up possession of all such books, records, documents, or other property as aforesaid to the manager in respect of the company or to his authorised agent.

If any person fails for 14 days to comply with the requirements of subsection (1) of this section, he commits an offence, and is liable on summary conviction to a fine not exceeding $500 and to a further fine not exceeding $10 for every day after the expiration of those 14 days during which the offence has continued.

If any person fails to comply with the requirements of subsection (1) of this section, the manager may at any time certify the failure to the Court (whether or not an offence has been committed under subsection (2) of this section), and the Court may thereupon inquire into the matter of the failure and, after hearing any witnesses who may be produced against or by or on behalf of the alleged offender, and after hearing any statement which may be offered in defence, may punish the offender in like manner as if he had been guilty of contempt of the Court.

It shall be no defence to any proceedings under this section that the person in possession or control of any property as aforesaid is or was a trustee of the property for any company incorporated in New Zealand to which this Act applies or entitled to a lien or other charge over the property, or was a receiver or manager of the property appointed under Part VII of the Companies Act 1955.

The rights of any person who, in accordance with this section, delivers any property to the manager in respect of any company incorporated in New Zealand to which this Act applies or his authorised agent shall continue while the management continues as if the person had not so delivered the property; and on the termination of the management, subject to the provisions of this Act and unless the Court otherwise orders, the property shall be returned to the person who delivered it or to someone who derives a right to possession of the property from that person. The provisions of this subsection shall apply whether the person who delivers the property is a receiver or manager appointed under Part VII of the Companies Act 1955, or a person entitled to a lien or charge in respect of the property, or any other person having any rights whatsoever in respect thereof.

For the purposes of this Act the manager in respect of the pooled property or of any company to which this Act applies shall be deemed to be an agent of Cornish Investments Limited and in the exercise of his powers and functions under this Act shall have all the privileges and be entitled to the same protection as a director has under any rule of law or under any Act or pursuant to the articles of the last-mentioned company.

No such manager shall be liable for any acts done by him in good faith in the exercise of his powers and functions as manager, and every such manager shall be indemnified out of the pooled property in respect of all liabilities properly incurred.

No action or proceeding shall be brought or commenced against any such manager except by leave of the Court and subject to such terms as the Court may impose.

All costs, charges, and expenses properly incurred by a manager appointed by or under this Act in the exercise, in relation to the pooled property, or any company to which this Act applies, of his powers and functions under this Act (including such fees, commission, or other remuneration as may be approved by the Minister in respect of the services of the manager) shall be payable out of the pooled property in priority to all other claims.

Every company to which this Act applies, and the pooled property, shall remain subject to management under this Act from the time when the first manager in respect thereof is appointed in accordance with section 4 of this Act until the management ceases in accordance with this Act, whether or not there is for the time being a manager in office in respect thereof.

A company shall cease to be subject to management under this Act if the Governor-General, by Order in Council, so provides.

As soon as possible after taking up his appointment, the first statutory manager shall report to the Minister on the affairs of Cornish Investments Limited showing at the date of his appointment, the particulars of the company’s assets, debts, and liabilities, the names, addresses, and descriptions of its creditors, the securities held by them respectively, the dates when the securities were respectively given, and such further or other information as the manager thinks fit or the Minister requires.

The statement of affairs shall be accompanied by any comments that the manager sees fit to make thereon.

At the end of each six-monthly period after his appointment the manager shall report to the Minister on the financial affairs of the company and his management thereof.

In each period of 12 months and within one month after the determination of his appointment, the manager shall submit a statement of accounts, duly audited, showing in detail his receipts and payments in respect of that company.

A copy of every report and financial statement presented to the Minister pursuant to this section shall be lodged by the manager with the Registrar of Companies.

The Minister may from time to time appoint one or more suitable persons as an advisory committee in respect of all or any of the companies to which this Act applies and the pooled property.

The functions of any such advisory committee shall be—

The members of any such advisory committee shall receive such remuneration by way of fees, salary, or allowances, and such travelling allowances and expenses, as the Minister may approve, and the amount thereof shall be payable out of the pooled property as if they were expenses of administration of the manager in respect of that company and shall be recoverable by the members as a debt due by that company.

Ifany director, officer, servant, or agent of any company to which this Act applies or of the said Arthur Scott Cornish, or any other person,—

he commits an offence and is liable on conviction on indictment to imprisonment for a term not exceeding 2 years or to a fine not exceeding $5,000 or to both.

If in any prosecution for an offence alleged to have been committed against this section it is proved that the person charged with the offence has destroyed or altered any book, document, or record as aforesaid, or has sent or attempted to send or conspired to send out of New Zealand any such book, document, or record, or any other thing, the onus of proving that in so doing he had not acted in contravention of this section shall lie on him.

The First Schedule to the Summary Proceedings Act 1957 is hereby amended by inserting, in its appropriate alphabetical order in Part II, the following item:

If it appears to any manager appointed under this Act that any person has been guilty of any offence against this Act, or any other offence in relation to the pooled property or any company to which this Act applies, he shall report the matter to the Solicitor-General.

With the consent of the Minister of Finance, there may be advanced, out of money in the Consolidated Revenue Account appropriated by Parliament for the purpose, to any person who is a manager or a member of any advisory committee appointed under this Act in respect of any company or companies, or of the pooled property, or who is a liquidator or receiver of any of those companies appointed under the Companies Act 1955 before this Act applied to those companies, such amounts as the Minister may approve in respect of remuneration or allowances due to that person or expenses incurred by that person.

All money so advanced to any such person shall be refunded to the Crown out of money payable to that person in respect of the company or companies or property to which the advance or advances related, and the Crown shall have all the rights of the person to whom the advance was made to receive and recover any such money. All money so refunded to the Crown shall be credited upon receipt to the Consolidated Revenue Account.

The manager in respect of any company to which this Act applies shall notify the Registrar of Companies of his appointment as manager and of the termination of his appointment.

Notwithstanding anything to the contrary in the Companies Act 1955, it shall not be obligatory on the manager to furnish in respect of any company of which he is manager any annual or other return required by that Act.

Subject to the provisions of this Act, all the provisions of the Companies Act 1955 and all rules and regulations under that Act, shall, so far as they are applicable, and with the necessary modifications, apply to any company to which this Act applies:

Provided that, except as otherwise provided in this Act, the provisions of the Companies Act 1955 specified in the Second Schedule to this Act shall not so apply.