BETWEEN DAVID BRYAN COOK Applicant AND DB AND JH COOK PARTNERSHIP First Respondent JUDITH HUNTER COOK Second Respondent
[2023] NZHC 3071
•1 November 2023
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CIV-2023-409-421
[2023] NZHC 3071
UNDER Section 76 of the Partnership Law Act 2019 BETWEEN
DAVID BRYAN COOK
Applicant
AND
DB AND JH COOK PARTNERSHIP
First Respondent
JUDITH HUNTER COOK
Second Respondent
Hearing: 9 October 2023 Appearances:
M D W King and A M McLuskie for Applicant
C A Gibson and N R Fanning for Second Respondent
Judgment:
1 November 2023
JUDGMENT OF ASSOCIATE JUDGE PAULSEN
This judgment was delivered by me on 1 November 2023 at 4.00 pm pursuant to rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date:
COOK v DB AND JH COOK PARTNERSHIP [2023] NZHC 3071 [1 November 2023]
[1] The applicant (Mr Cook) and the second respondent (Ms Cook) are a separated couple and were partners in the DB and JH Cook Partnership. The partnership was recently dissolved. The major asset of the partnership was a farm property at Staveley (the farm).
[2] In this proceeding, Mr Cook applies for the appointment of a receiver and manager of the assets of the partnership in reliance upon the inherent jurisdiction of the court.1
[3] Since the application was made Ms Cook has issued proceedings in the Family Court in respect to the division of relationship property. It is accepted that the partnership assets are relationship property.
[4] The application presently before me is made by Ms Cook seeking a stay of this proceeding on the grounds that:
(a)the application will likely cause prejudice to her by defeating the court’s ability to make a just division of the parties’ relationship property and, specifically, prevent her from retaining the farm;2 and
(b)the dispute between the parties is subject to an arbitration agreement and Ms Cook wishes the dispute to be referred to arbitration.3
[5]Ms Cook’s application can be resolved by addressing the following issues:
(a)whether Mr Cook’s pleading is likely to cause prejudice or delay or this application is otherwise an abuse of the process of the court such that a stay should be granted; and
1 Rea v Omana Ranch Ltd [2013] NZLR 587; Kidd v van Heeren [2020] NZHC 1449 at [10]; Receiverships Act 1993, s 2(1) definition of “receiver”; and High Court Rules 2016, rr 7.59–7.67.
2 High Court Rules, r 15.1(1)(b) and (3).
3 Arbitration Act 1996, sch 1 art 8.
(b)whether Ms Cook’s opposition to the appointment of a receiver and manager of the partnership assets is a dispute capable of being determined by arbitration.
Background
[6] Mr and Ms Cook married in 1980. During their marriage they entered into a partnership agreement dated 21 March 2008 and formed the DB and JH Cook Partnership.
[7]The partnership’s primary asset is the farm, which has a rateable value of
$6.2 million. Mr Cook considers the farm is worth in excess of $7 million but the value he attributes to both it and other assets is disputed by Ms Cook.
[8] The farm was leased by B B Cook Ltd (BBCL) pursuant to a deed of lease dated 7 June 2019 (the lease). BBCL is a company principally owned by Mr and Ms Cook’s son, Benjamin. Mr and Ms Cook each hold one of the 100 shares in BBCL.
[9] BBCL’s lease has expired and BBCL is holding over. Mr Cook’s view is that BBCL is leasing the farm at well below market rental.
[10] Disagreements as to the manner in which Benjamin is managing the farm contributed to the breakdown in Mr and Ms Cook’s relationship. Mr Cook’s relationship with Benjamin has also deteriorated to the extent that Mr Cook is excluded from the day-to-day operation of the farm. Benjamin’s interests are plainly aligned with Ms Cook, and she wishes to maintain the farm so it can continue to be farmed with the assistance of Benjamin and his family.
[11] BBCL owes the partnership at least $68,607 in respect to rent and outgoings on the farm. It also owes the partnership an amount for the purchase of stock and plant, which is recorded in the 2022 partnership accounts as $240,974.
[12] BBCL is also in default of its obligations to Rabobank, which has called up its loans and said farm debt mediation will now be required. Mr and Ms Cook are guarantors for BBCL’s borrowings.
[13] Mr Cook has a concern that if Rabobank requires BBCL to sell its machinery the parties will be left in a situation where BBCL remains in possession of the farm but without the ability to operate it.
[14] Mr Cook also considers that BBCL is not maintaining the farm, specifically because it is failing to carry out weed control and track, fence and drainage maintenance.
[15] Mr and Ms Cook separated in May 2022. The partnership was dissolved on 7 August 2023 when Mr Cook’s lawyers gave notice of dissolution to Ms Cook’s lawyers.
[16] Mr and Ms Cook have endeavoured to reach an agreement as to the division of relationship property. No agreement has been reached. The parties’ positions on several issues are deadlocked with them being unable to communicate other than through their lawyers.
[17] Mr Cook filed his application for the appointment of a receiver and manager on 16 August 2023, approximately a month before Ms Cook filed proceedings for division of relationship property in the Family Court.
[18] Mr Cook considers that the sale of the farm is inevitable and that Ms Cook’s wish to retain it is unrealistic. Regardless, he believes a receiver and manager should be appointed because:
(a)BBCL’s lease has expired;
(b)BBCL is in default of its obligations to the partnership;
(c)BBCL is not maintaining the farm;
(d)the parties are deadlocked in respect to matters concerning how to deal with partnership assets;
(e)the deadlock is prejudicing Mr Cook and he is struggling financially; and
(f)the property market is likely to deteriorate.
Principles
Rule 15.1(1)(b) and (3) of the High Court Rules provides:
15.1 Dismissing or staying all or part of proceeding
The court may strike out all or part of a pleading if it—
…
(b) is likely to cause prejudice or delay; …
…
(d) is otherwise an abuse of the process of the court.
…
(3)Instead of striking out all or part of a pleading under subclause (1), the court may stay all or part of the proceeding on such conditions as are considered just.
[20] The court’s jurisdiction to strike out or stay a proceeding is sparingly used. As noted in McGechan on Procedure, r 15.1(1)(b) requires some element of impropriety and abuse of the court’s processes.4
[21] Counsel refer me to Commissioner of Inland Revenue v Chesterfields Preschools Ltd where it was held:5
The grounds of strike out listed in r 15.1(1)(b)–(d) concern the misuse of the court’s processes. Rule 15.1(1)(b), which deals with pleadings that are likely to cause prejudice or delay, requires an element of impropriety and abuse of the court’s processes. Pleadings which can cause delay include those that are prolix; are scandalous and irrelevant; plead purely evidential matters; or are unintelligible. In regards to r 15.1(1)(c), a “frivolous” pleading is one which trifles with the court’s processes, while a vexatious one contains an element of impropriety. Rule 15.1(1)(d) – “otherwise an abuse of process of the court”
4 R A Osborne and others McGechan on Procedure (online ed, Thomson Reuters) at [HR15.1.03(1)].
5 Commissioner of Inland Revenue v Chesterfields Preschools Ltd [2013] NZCA 53, [2013] 2 NZLR 679 at [89] (footnotes omitted).
– extends beyond the other grounds and captures all other instances of misuse of the court’s processes, such as a proceedings that has been brought with an improper motive or are an attempt to obtain a collateral benefit. An important qualification to the grounds of strike out listed in r 15.1(1) is that the jurisdiction to dismiss the proceeding is only used sparingly. The powers of the court must be used properly and for bona fide purposes. If the defect in the pleadings can be cured, then the court would normally order an amendment of the statement of claim.
[22] Mr King submits that Ms Cook’s reliance upon r 15.1(1)(b) is misplaced because there is no suggestion that Mr Cook’s pleading is causing any prejudice in respect to the disposal of this proceeding. He referred to the decision of Associate Judge Johnstone in Vervaart v Klimeck where the Judge said:6
Although, in his synopsis, Mr Taylor referred to r 15.1(1)(b) as being one potential basis for the application, in my view, that provision applies only to situations where a pleading has the potential to cause prejudice or delay to the disposal of the proceeding in which it is made. The argument in this case would need to be that the entire proceeding in this Court is likely to prejudice or delay the disposal of Katie-Jane’s proceeding in the Family Court. I am unaware of any authority that r 15.1(1)(b) extends so far and I am inclined to the view that it cannot do so.
[23] There is force in Mr King’s submission. As was the case in Vervaart v Klimeck, Ms Cook would be on firmer ground to rely on the abuse of process ground under r 15.1(1)(d) and I am prepared to deal with this application on that basis.
[24] Ms Gibson began her submissions by referring to the Property (Relationships) Act 1976 as a code. She submits all other enactments are required to be read subject to it unless expressly provided, and that it establishes jurisdiction to determine matters relating to the classification and division of relationship property. She emphasises ss 4(4) and 4A of the Act.
[25]Section 4(4) provides:
Where, in proceedings that are not proceedings under this Act, any question relating to relationship property arises between spouses or partners, or between either or both of them and any other person, the question must be decided as if it had been raised in proceedings under this Act.
[26]Section 4A provides:
6 Vervaart v Klimeck [2021] NZHC 3117 at [8].
Every enactment must be read subject to this Act, unless this Act or the other enactment expressly provides to the contrary.
[27] Ms Gibson accepts there is no jurisdictional bar to the court appointing a receiver and manager,7 but argues it is inappropriate for Mr Cook to invoke the court’s jurisdiction to do so in circumstances where that will prejudice the court’s ability to do justice between the parties in the Family Court proceedings.
[28] She refers to McLean v Cheyne and Shorter v Shorter, where the court refused summary judgment to force the sale of properties under the Property Law Act 1952 prior to the resolution of relationship property proceedings.8
[29]In Shorter v Shorter, Master Towle said:9
The real question before me is whether it is appropriate for the plaintiff to invoke the procedures of summary judgment to try and force a position which effectively amounts to a disposition of the matrimonial property. …
… I believe it is wholly inappropriate in this instance. Indeed, if the Court were to permit this procedure to be invoked it would obviously open the flood- gates to a host of applications between married couples as a short-cut method to try and force the disposal of what is usually the most important single item of matrimonial property. …
… [M]y view is that, because of the very strict and all embracing provisions of the Matrimonial Property Act as a code to dispose of all property matters between husband and wives, it would be inappropriate by virtue of s 4(4) of the Act for the summary judgment procedure to be used. To allow otherwise would be to place one party in a position of advantage before their conflicting rights could be disposed of in terms of the Act. As counsel for the wife put it, the Court should not be used as a crow-bar to resolve a matrimonial property dispute and, in a summary judgment context where the application is brought in reliance upon s 140 Property Law Act simpliciter, the Court simply does not have the full information it would need to make a determination in isolation from a proper consideration of the parties' matrimonial property rights as a whole.
[30] However, more recently in Lung v Liu, in setting aside a protest to jurisdiction Associate Judge Sussock held that the provisions of the Property (Relationships) Act
7 Mikkelsen v P & D Mikkelsen Partnership [2023] NZHC 1006 at [42]; and Lung v Liu [2022] NZHC 3074, [2022] NZFLR 608 at [71].
8 McLean v Cheyne [2003] NZFLR 805 (HC); and Shorter v Shorter [1991] NZFLR 286 (HC).
9 At 286–287.
do not exclude the High Court from ordering a sale of a property under s 339 of the Property Law Act 2007.10 The Associate Judge said:
[71] I consider that the same conclusion must be reached in this case. The plaintiff’s application is not an application under the [Property (Relationships) Act] and so there is no requirement for it to be heard and determined in the Family Court. Section 4(4) of the [Property (Relationships) Act] will apply and will require the Court to decide any questions arising in relation to relationship property as if they had been raised in proceedings under the [Property (Relationships) Act]. But this Court still has jurisdiction to determine the plaintiff’s application under the [Property Law Act].
[31] In Mikkelsen v P & D Mikkelsen Partnership, Associate Judge Taylor set aside a protest to the jurisdiction of this court to determine an application to appoint receivers to wind up a partnership.11 The protest was brought on the basis that the partnership property was relationship property, and the Family Court had exclusive jurisdiction over the subject matter of the proceeding to classify and divide relationship property under the Property (Relationships) Act. The Associate Judge followed the approach of Associate Judge Sussock in Lung v Liu that, as the substantive application was not one under the Property (Relationships) Act, the High Court had jurisdiction to appoint a receiver.12
[32] However, those authorities do not directly respond to Ms Cook’s submission that, in the particular circumstances of this case, Mr Cook’s application should not be allowed to proceed because of the prejudice that will result from it and that it is, for that reason, an abuse of process.
[33] Ms Gibson submits that Mr Cook’s application seeks to circumvent the objectives of the Property (Relationships) Act and the processes of the Family Court that Ms Cook has now engaged. She says this is because:
(a)Ms Cook’s relationship property claims are yet to be determined, and therefore the court cannot determine the status or just division of relationship property;
10 Lung v Liu, above n 7, at [65].
11 Mikkelsen v P & D Mikkelsen Partnership, above n 7.
12 At [42]–[43].
(b)Ms Cook has challenged the validity of a contracting out agreement entered into by the parties, and the result of that challenge may bring into the pool of relationship property two properties of significant value and thereby significantly increase Ms Cook’s ability to purchase the farm; and
(c)Ms Cook should have the opportunity to purchase the farm because it is where she presently lives, and it provides a livelihood and home for Benjamin and his family.
[34] Ms Gibson argues there is no substance in Mr Cook’s evidence that he is struggling financially, and that the allegations that BBCL is failing to maintain the property or that delay will risk eroding the value of the property are disputed.
[35] She also argues that these allegations have only arisen since July/August 2023, contrary to Mr Cook’s previous proposal that the lease to BBCL be extended (albeit on conditions not agreed to). She submits the position now being taken by Mr Cook is to force a sale of the farm as retaliation for Ms Cook’s challenge in the Family Court to the contracting out agreement.
[36] Mr King submits that since the parties separated Ms Cook has had ample time to purchase the farm and has not done so. He argues there is no realistic prospect that Ms Cook will be able to purchase the farm even if she is successful in her challenge to the contracting out agreement. He submits, therefore, that there is in fact no prejudice to her if a receiver was appointed and the farm was sold.
[37] Next, Mr King submits there is no conflict between the orders sought for the appointment of a receiver and manager and relationship property principles because, upon sale of the farm, the proceeds of sale can be held (net of expenses) pending resolution of the Family Court proceedings.
[38] In the alternative, Mr King submits that should the court consider that the sale of the farm will indeed prejudice Ms Cook, then a receiver and manager should still
be appointed, accompanied by directions that the farm not be sold pending further order of the court.
[39] Mr King submits that such an order has utility as it will allow an independent person to deal with the farm and the issues that have arisen with BBCL, including its breaches of the lease, failure to maintain the farm and breaches of its obligations to Rabobank. Mr King submits a receiver and manager might, for instance, terminate BBCL’s occupation of the farm and relet it at a market rent and on terms that see it properly maintained for the benefit of the parties.
[40] Mr King also notes that in Mikkelsen Associate Judge Taylor considered that no relationship property issues would arise in that case if the receiver’s powers were restricted in certain respects.13 In this regard, s 14 of the Receiverships Act 1993 sets out the general powers of receivers, but they are subject to anything in the order appointing a receiver and, of course, the court exercises a general supervisory jurisdiction over receivers it has appointed.14
[41] As I have noted earlier, there is no dispute as between the parties that the court has jurisdiction to appoint a receiver and manager in this case. Whether it should do so is the real contest between the parties. It is not for me on this application to decide whether, on an assessment of the merits, a receiver and manager is to be appointed. Nor is it presently my role to decide what powers the court shall confer upon a receiver and manager in the event it decides to appoint one. I am presently dealing only with Ms Cook’s application for a stay of the proceeding.
[42] On the evidence before me, I accept it is possible the sale of the farm by a receiver to a third party may prejudice Ms Cook by depriving her of the opportunity to acquire Mr Cook’s interest in it. I am also not at all convinced that Mr Cook is presently suffering significant financial hardship.
[43] On the other hand, Ms Cook’s concern that she be given the opportunity to acquire the farm can be protected by the court imposing limits on the powers to be
13 Mikkelsen v P & D Mikkelsen Partnership, above n 7, at [44].
14 Receiverships Act, ss 14 and 34; and High Court Rules, r 7.66.
exercised by a receiver and manager. I do not consider there is any real basis for the submission that Mr Cook is seeking to appoint a receiver for an improper purpose. Importantly, I also consider that the parties’ interests are so deadlocked that there is at least an arguable case for the appointment of a receiver and manager to protect the partnership assets and to deal with issues arising with BBCL and Rabobank, to ensure the farm is maintained, and to manage it on a commercial basis pending resolution of the parties’ relationship property affairs.
[44] In those circumstances, I do not consider that this application should be stayed under either r 15.1(1)(b) or (d).
The Arbitration Act 1996
[45] The next ground advanced for Ms Cook is that this proceeding should be stayed under sch 1 art 8(1) of the Arbitration Act, which provides:
A court before which proceedings are brought in a matter which is the subject of an arbitration agreement shall, if a party so requests not later than when submitting that party’s first statement on the substance of the dispute, stay those proceedings and refer the parties to arbitration unless it finds that the agreement is null and void, inoperative, or incapable of being performed, or that there is not in fact any dispute between the parties with regard to the matters agreed to be referred.
[46]In s 2, “arbitration agreement” is defined to mean:
… an agreement by the parties to submit to arbitration all or certain disputes which have arisen or which may arise between them in respect of a defined legal relationship, whether contractual or not[.]
[47]In the same section, “party” is defined as:
… a party to an arbitration agreement, or, in any case where an arbitration does not involve all of the parties to the arbitration agreement, means a party to the arbitration.
[48]Section 10 of the Act provides:
10 Arbitrability of disputes
(1)Any dispute which the parties have agreed to submit to arbitration under an arbitration agreement may be determined by arbitration unless the arbitration agreement is contrary to public policy or, under
any other law, such a dispute is not capable of determination by arbitration.
(2)The fact that an enactment confers jurisdiction in respect of any matter on the High Court or the District Court but does not refer to the determination of that matter by arbitration does not, of itself, indicate that a dispute about that matter is not capable of determination by arbitration.
[49]Also relied upon by Ms Gibson is s 12 of the Arbitration Act, which provides:
12 Powers of arbitral tribunal in deciding disputes
(1)An arbitration agreement, unless otherwise agreed by the parties, is deemed to provide that an arbitral tribunal—
(a)may award any remedy or relief that could have been ordered by the High Court if the dispute had been the subject of civil proceedings in that court:
…
[50] Article 16(1) of sch 1 of the Arbitration Act provides that an arbitral tribunal has jurisdiction to rule on its own jurisdiction. It provides:
The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure (necessarily) the invalidity of the arbitration clause.
[51] The partnership agreement between Mr and Ms Cook is a very short document limited to just eight paragraphs. It does not contain clauses dealing with the winding up of the partnership except to the extent it says it shall continue until terminated by the death of a party or by notice of termination from either party. Of relevance is cl 8, which provides “[a]ny dispute shall be referred to arbitration”.
[52] Ms Gibson submits that whether this proceeding is to be stayed turns on whether there is an arbitrable dispute between the parties. She submits the terms of cl 8 of the partnership agreement are very broad and do not exclude any particular type of dispute arising between the partners from being determined by arbitration.
[53]She submits there are two disputes arising in this case, namely:
(a)how the partnership assets (i.e. the farm) shall be dealt with; and
(b)the jurisdiction of an arbitral tribunal to appoint a receiver and manager of partnership assets.
[54] Ms Gibson submits that either dispute may be determined by arbitration. While Mr Cook pleads that an arbitral tribunal does not have jurisdiction to appoint a receiver and manager, Ms Gibson refers to s 12(1)(a) of the Arbitration Act which she says gives an arbitral tribunal power to award any remedy or relief the High Court could grant if the dispute was the subject of proceedings before it.
[55] Mr King submits that an arbitration clause cannot oust the jurisdiction of the High Court to appoint and supervise receivers and that, in any event, there is no dispute capable of resolution at arbitration because it is established law that an arbitrator cannot appoint a receiver.
[56] Mr King argues that for present purposes the only dispute here is whether the court should appoint a receiver or not. He notes that the court’s power arises from the inherent jurisdiction of the High Court, which holds and retains a supervisory role in respect of court-appointed receivers who are officers of and answerable to the court.
[57] Mr King refers to Lockhart Trustee Services No 56 Ltd v Ryan.15 There, the applicant was an independent trustee. It sought orders discharging it as a trustee and appointing an interim trustee, or a receiver of the trust assets. Mr Lobb, who was a settlor of the trust, a trustee and a discretionary beneficiary, filed an appearance under protest to jurisdiction pleading that the application was contrary to the terms of the trust deed which required the parties to arbitrate any disputes.
[58] Edwards J noted that the issue was whether the applicant should be removed as a trustee, which was not the type of “dispute” contemplated by the clause requiring arbitration.16 She also held:17
15 Lockhart Trustee Services No 56 Ltd v Ryan [2020] NZHC 1823, (2020) 5 NZTR 30-019.
16 At [12].
17 At [13] (footnote omitted).
More importantly, the clause does not operate to oust the jurisdiction of this Court to appoint and remove trustees. The Court has both an inherent and statutory jurisdiction to supervise Trusts to ensure the interests of beneficiaries are protected. Clause 3.7 cannot prevent a Court from exercising that power, particularly in a case such as this where Trust assets are at risk. I am therefore satisfied that cl 3.7 does not prevent this Court from determining Lockhart’s application.
[59] Mr King submits that Lockhart is authority that an agreement to arbitrate cannot oust the inherent jurisdiction of the High Court, and that this must be so where a receiver is to be appointed to protect partnership assets that are at risk. He also refers to other authorities, which he submits confirm that an arbitrator has no power to appoint a receiver.18
[60] There is authority for the proposition that the existence of an agreement to arbitrate will not prevent the court from appointing a receiver. In The Compagnie du Sénégal v Woods it was alleged that a vessel had not been built in accordance with contractual specifications.19 The plaintiff applied for the appointment of receivers, and the defendant sought to have all proceedings stayed and the matters in dispute referred to arbitration in accordance with the term of contract. Kay J considered several authorities and said in respect to them:20
I do not read the dicta to which I have referred in the way in which it has been sought to read them here, namely, as laying down that the Court has not the power to protect the property pending the arbitration by appointing a receiver or by granting an injunction. I read them in a contrary sense, namely, that the Court has ample power to say that the matters in question ought to go to arbitration as the parties have agreed, but that pending the arbitration a receiver should be appointed or an injunction granted for the purpose of protecting the property. ...
[61] In Pini v Roncoroni, articles of partnership entered into by the plaintiff and defendant provided that all doubts, difficulties, or divergencies arising between them in the course of the partnership, or at its liquidation, should be resolved and adjusted by friendly arbitration.21 The plaintiff brought an action for dissolution and sought the
18 P R H Webb Laws of New Zealand: Partnership and Joint Ventures (online ed) at [152]; Roderick l’Anson Banks Lindley & Banks on Partnership (21st ed, Sweet & Maxwell, London, 2022) at [10-606] n 1925; and Pini v Roncoroni [1892] 1 Ch 633 at 637.
19 The Compagnie du Sénégal v Woods (1883) 53 LJ (Ch) 166.
20 At 169.21 Pini v Roncoroni, above n 18.
appointment of a receiver and manager. The defendant applied to stay the proceedings. Stirling J said:22
I further think that the jurisdiction of the Court to appoint a receiver is not ousted by the arbitration clause. That was carefully considered and decided by Mr. Justice Kay in Compagnie du Sénégal v. Woods. I entirely agree, if I may say so, with the reasons and conclusions of the learned Judge.
[62] Here, the appointment of a receiver and manager is sought in the nature of interim relief pending resolution of the relationship property matters in dispute between Mr and Ms Cook. The power of an arbitral tribunal to grant interim relief is now conferred by sch 1 ch 4A of the Arbitration Act.23 An arbitral tribunal may grant several interim measures, but they do not include a power to appoint receivers.
[63]The learned authors of Arbitration note:24
It would seem that if interim relief is required, which is not referred to in chapter 4A of sch 1 of the 1996 Act (such as the appointment of a receiver … ), then it will be necessary to have recourse to a court. Similarly where a party or the tribunal wishes to invoke the coercive powers of a court (see art 27 of sch 1 of the 1996 Act).
[64] Applied to this case, the dispute that arises is whether the court should appoint a receiver and manager to the assets of the partnership and, if so, upon what terms. I do not accept Ms Gibson’s submission that the dispute is the broader one of how the partnership assets (i.e. the farm) shall ultimately be dealt with under the Property (Relationships) Act. Further, it is accepted by Mr Cook that the powers to be granted to a receiver should be tailored so as not to defeat the parties’ entitlements under that Act.
[65] I am satisfied the existence of the agreement to arbitrate in the partnership agreement does not oust the court’s inherent jurisdiction to appoint a receiver and manager of the partnership assets. I am further satisfied that an arbitral tribunal does not have power to appoint a receiver, such that the dispute in issue is not capable of determination at arbitration.
22 At 637 (footnote omitted).
23 As inserted by Arbitration Amendment Act 2007, s 8(4).
24 Anthony Willy and Terry Sissons Arbitration (2nd ed, Thomson Reuters, Wellington, 2018) at 11.
[66] It follows that Ms Cook’s application to stay the proceeding on this basis must also be dismissed.
Result
[67]The application for a stay of this proceeding is dismissed.
[68] I reserve costs and encourage counsel to confer and attempt to reach agreement. In the event they cannot do so they may file memoranda of no more than five pages.
[69] Mr Cook’s application for the appointment of a receiver and manager must now be set down for hearing. Nothing in this judgment should be taken as an indication of his prospects of success on that application.
[70] Counsel shall confer and within seven days file memoranda with an estimate of time for the hearing, along with proposed timetable directions for the filing of further evidence (if any), synopses of argument, and a common bundle. I will then make further directions setting the case down for hearing on the papers.
O G Paulsen Associate Judge
Solicitors:
Lane Neave, Christchurch
Cuningham Taylor, Christchurch
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