BENJAMIN BRIAN FRANCIS and GARRY CECIL WHIMP as receivers of THE FISHBOWL TRUSTEE LIMITED s GEORGE MICHAEL GORDON HUNTER GUMDIGGER LIMITED AND FISHBOWL TRUSTEE STANLEY LIMITED as trustee of the FISHBOWL TRUST

[2024] NZHC 3058

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2504

[2024] NZHC 3058

UNDER

Section 138 of the Trusts Act 2019

IN THE MATTER OF

an application for the appointment of a receiver

BETWEEN

BENJAMIN BRIAN FRANCIS and

GARRY CECIL WHIMP as receivers of THE FISHBOWL TRUSTEE LIMITED

First applicants

GEORGE MICHAEL GORDON HUNTER
Second applicant

GUMDIGGER LIMITED
Third applicant

AND

FISHBOWL TRUSTEE STANLEY

LIMITED as trustee of the FISHBOWL TRUST

Respondent

Hearing:	On the papers
Counsel:	O J Ward for applicants
Date of judgment:	18 October 2024

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 18 October 2024 at 2.00pm.

Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Counsel/Solicitors:

JPJ Mackie, Barrister, Auckland Urlich Milne Lawyers, Auckland

FRANCIS v FISHBOWL TRUSTEE STANLEY LTD [2024] NZHC 3058 [18 October 2024]

[1]                 As duty judge, I have without notice applications for leave to commence proceedings by originating application, and then for orders under s 138 of the Trusts Act 2019.

Background

[2]                 The applicants are the receivers of The Fishbowl Trustee Limited (company 1) appointed under a general security agreement, their appointer (George Hunter) in relation to funds advanced to the Fishbowl Trust and the provider of those funds (Gumdigger).

[3]                 Company 1 and Fishbowl Trustee Stanley Limited (company 2) were the corporate trustees of the Fishbowl Trust. On appointment of the receivers to company 1, its assets were transferred to company 2.

[4]                 Mr Hunter would seek on originating application the receivers be appointed directly as receivers of the Fishbowl Trust to enforce company 1’s right of indemnity against the trust’s assets, by realising them and distributing their profits to meet company 1’s obligations to its creditors, including Mr Hunter.

Approach to without notice applications

[5]                 I may determine the application for leave can properly be dealt with without notice if I am satisfied here an enactment expressly permits the application to be made without serving notice of it.1 Leave to commence proceedings by originating application may be sought without notice.2 I therefore am so satisfied and determine accordingly.

Approach to originating applications

[6]The Court of Appeal has observed:3

Proceedings in the High Court are normally commenced by filing a statement of claim. However, consistent with the overall objective of the Rules to secure

1      High Court Rules 2016, r 7.46(3) and (5).

2      High Court Rules, r 19.5(2).

3      Siemer v Attorney-General [2022] NZCA 200, (2022) 26 PRNZ 113 at [2], citing the High Court Rules, r 1.2.

the just, speedy and inexpensive determination of any proceeding or interlocutory application, rr 19.2 to 19.4 provide that various proceedings must be commenced by originating application. These include applications made pursuant to various specified enactments. … However, r 19.5 provides that the court may permit any proceeding not mentioned in rr 19.2 to 19.4 to be commenced by originating application if it is in the interests of justice to do so.

A proceeding brought under s 138 of the Trusts Act is not one of those mentioned in rr 19.2 to 19.4. But, under r 19.5(1), it may be commenced by originating application “if … in the interests of justice”.

[7]                 The originating application procedure is “generally used for cases where it is not necessary to have full pleadings and interlocutory steps such as discovery for the proper determination of the issues”.4 Such a case:5

… tends to be an application under a specific statutory provision, where the issue that arises can be clearly defined, and the issues confined. The procedure is not well suited to the determination of substantive rights involving the application of common law doctrines as distinct from statutory tests. It is not well suited to cases involving multiple parties, and cases where there is a possibility of crossclaims or counterclaims.

“[A]ppropriate case management directions” can address such interlocutory issues as may arise,6 but the originating application procedure “is nevertheless, in relation to contested proceedings not listed in r 19.2, an exceptional procedure”.7 The “truncated procedure” is not to be used “as a short cut for urgent cases”,8 and “[i]t is not appropriate where factual issues are in dispute”.9 Finally, “the Court will generally adopt a conservative approach” to interlocutory applications in proceedings commenced by originating application.10

Discussion

[8]                 There is substantial ground to doubt the originating application procedure appropriately is deployed here. The loan at issue has material history, involving a

4      Fisk v [E] Ltd [2014] NZHC 2797 at [18] citing Groves v TSSN Ltd (in Liq) [2012] NZHC 2402, [2013] 1 NZLR 111 at [25], and Hong Kong and Shanghai Banking Corporation v Erceg (2010) 20 PRNZ 652 (HC) at [26]. See also Public Trust v Kain [2018] NZHC 1547 at [35].

5      Hong Kong and Shanghai Banking Corporation v Erceg, above n 4, at [25].

6      Fisk v [E] Ltd, above n 4, at [19].

7      Hong Kong v Shanghai Banking Corporation v Erceg, above n 4, at [26].

8 At [26].

9      Jones v O’Keeffe [2019] NZCA 222, (2019) 24 PRNZ 529 at [52].

10     Public Trust v Kain, above n 4, at [35].

variety of third parties, extending to dispute if any loan is outstanding or security remains for enforcement and if Mr Hunter’s prior attempts to obtain repayment by statutory demand or liquidation were appropriate. So contested, commencement by originating application would be exceptional. Full pleadings and (likely) interlocutories are inescapable for proper determination of the prospective claim for appointment of a receiver to administer the trust as reasonably necessary in the circumstances of the trust and just and equitable.11

[9]                 Mr Hunter’s contention he has “no further remedies for exercising [his] claim and [his] security under the Fishbowl GSA” is insufficient to establish the originating application procedure nonetheless is in the interests of justice. There are more appropriate mechanisms to address the applicants’ concerns the trust’s assets may be removed or dealt with in a way that may frustrate prospective judgment.12 I would not in any event have been satisfied the substantive application may be determined without notice.

Result

[10]             Leave to commence the proposed proceeding by originating application is declined.

—Jagose J

11     Trusts Act 2019, s 138(2).

12     High Court Rules, r 32.5(4).