Body Corporate 68792 v Memelink
[2020] NZHC 1685
•13 July 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2020-485-162
[2020] NZHC 1685
BETWEEN BODY CORPORATE 68792
Plaintiff
AND
HARRY MEMELINK AND CISCA JOHNETTE FORSTER AS TRUSTEES OF LINK TRUST NO. 1
Defendants
Hearing: 13 July 2020 Appearances:
Mr Dewer for the Applicant
Mr Livingston for the Defendants Mr Chisnall for the Official Assignee
Judgment:
13 July 2020
JUDGMENT OF GRICE J
[1] This is an application for urgency to set the matter down for hearing. The application is made by Mr Dewer on behalf of the plaintiff.1
[2] The application itself was described by Clark J in her minute of 11 June as follows:
I drew Mr Livingston’s attention to the very simple statement of claim in relation to which it seems only two substantial points arise by the denials of the defendant. The points in contention are the levies applicable to the six units owned by the Link Trust [No. 1] and insurance costs. Mr Livingston wishes to drill down into the levies to see what is owed. But as Mr Dewer observed, if indeed a receiver is appointed, it will be that Court appointed officer’s responsibility to be sure any debts claimed appropriately attach to the Body Corporate. The essence of the claim is less about the detail and amount of the debts than what is described as Mr Memelink’s “endless non-
1 This decision was delivered orally on 13 July 2020. The written form has been edited and footnoted before distribution.
BODY CORPORATE 68792 v HARRY MEMELINK AND CISCA JOHNETTE FORSTER AS TRUSTEES OF LINK TRUST NO. 1 [2020] NZHC 1685 [13 July 2020]
cooperation” and whether a receiver should be appointed. Further, the whole financial situation of the Body Corporate was reviewed by Deloitte up to 2018. Mr O’Connor confirmed the Deloitte report, read with a copy of each monthly invoice from January 2018 to May 2020 will provide all the relevant information that is available.
[3] The Judge went on to note that the report in combination with Mr Gambitsis’ affidavit was the full extent of material available and able to be provided if an order for discovery were to be made and Mr O’Connor undertook to provide those documents to Mr Livingston by 12 June and to keep Mr Livingston updated on any developments or changes in relation to the insurance.
[4] Mr Gambitsis has filed an affidavit of 9 July which provides some background to the matter. Mr Gambitsis was appointed the administrator of the Body Corporate with the cooperation and indeed the nomination of Mr Memelink some time ago.
[5] Mr Dewer seeks the matter be accorded some urgency for hearing because he says that confusion reigns at present in relation to the Body Corporate’s affairs. It is owed somewhere in the vicinity of $800,000 by Link Trust No. 1 (the Trust), no levies have been paid by the Trust since October 2017 and the Body Corporate has been crippled by the lack of funds.
[6] Mr Gambitsis in his affidavit of 9 July refers to the dysfunctional nature of the Body Corporate and it appears that Mr Memelink who swore an affidavit in these proceedings earlier is of the same view. Mr Gambitsis is also clear in his evidence that there has been mismanagement of the Trust.
[7] Mr Livingston appeared for the Trustees, and Mr Memelink has been present through the hearing. Mr Livingston indicated that he was seeking more time before the matter was set down for a hearing in an attempt to get to the bottom of the full detail as to the makeup of the levies. In that regard he pointed to the fact there was a hearing scheduled for 16 September in Memelink v The Official Assignee2 in which the detail of the levies was to be considered. This proceeding is in relation to proofs of debt accepted by the Official Assignee. Mr Livingston explained that other extant
2 Memelink v The Official Assignee Wellington HC CIV-2018-485-363.
proceedings, Memelink v Body Corporate 687923 related to levies due but covered a different time period. Those proceedings have not progressed as they stalled while awaiting a forensic report from Deloittes. That report was obtained in 2018 but Mr Livingston indicated that the Trustees were unhappy with that report and a further report was being sought from a forensic accountant, Mr Sutherland.
[8] Therefore, Mr Livingston said it was appropriate for this matter to be delayed and not be set down for hearing in the near future to enable those other matters to be resolved and for Mr Sutherland to be instructed and prepare a report. He also urged on the Court that the Trustees were agreeable to paying part of the levies but they were seeking information as to how the levies were apportioned between insurance and other. Therefore, Mr Livingston said that was an indication that the Trust was not insolvent.
[9] In my view and bearing in mind the comments of Clark J in her minute of 11 June 2020 and her earlier judgment of 20 March 2020,4 this matter does need to be moved on to an early hearing. Clark J mentioned in her judgment that it had been submitted that this application was made in some desperation given the ongoing conduct of the Trustee, Mr Memelink, and the non-payment of accruing levies which was crippling the Body Corporate. She observed that the matter should be brought to a head without delay and to that end put in place a timetable on 20 March 2020 and then a further timetable on 11 June 2020. According to the timetable of 11 June 2020 the defendant was to file and serve any affidavits in response no later than 20 June 2020 and the plaintiff was given a further 10 days to file any affidavits in reply. That time should now have expired.
[10] The issue before Clark J on 11 June 2020 related to whether further documents were required. No disclosure was ordered on that date and I note her comments in relation to the material that was already available and what was necessary for the matter to be dealt with.
3 Memelink v Body Corporate 68792 Wellington HC CIV-2016-485-141.
4 Body Corporate 68792 v Memelink [2020] NZHC 594.
[11] Bearing that in mind it is clear that this matter should be brought to a hearing as soon as possible. However, at the same time some latitude must be allowed to enable the defendant to prepare and ready itself for trial.
[12] Mr Dewer has indicated that in his view ample time would be provided if two days were allocated. That would mean a day and a half for hearing and submissions and a margin of a half day to ensure it was completed. Mr Livingston considered the matter might take three days. In my view the estimate of two days is more realistic given the nature of the hearing and the issues involved to which I have referred earlier.
[13] Therefore, I consider the matter should be set down for a two day hearing but that should be after 30 September 2020. The two days allocated are 5 and 6 October 2020. That will accommodate, to some extent, Mr Livingston’s concerns and give him some time to order matters before the hearing.
[14] Given this matter has been brought on relatively quickly I consider a further case management conference should be set in order to review the timetable to trial. This is allocated for 4 August 2020 at midday.
[15] If the matter is able to be resolved and all matters timetabled before that the conference may not be necessary if a joint memorandum is filed.
[16] Mr Chisnall seeks no formal standing in this matter at present. However he indicated that he will be filing an affidavit to clarify some matters relating to Mr Memelink’s bankruptcy relevant to this matter. That is to be filed and served on or before 10 days from today. At the same time he will file a memorandum as to the future involvement of the Official Assignee by reference to the High Court Rules 2016.5
Grice J
5 High Court Rules 2016, sch 1.
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