Booth v Rahal - [2025] NZHC 613

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2960

[2025] NZHC 613

UNDER Section 138 of the Trusts Act 2019 and Part 19 of the High Court Rules

IN THE MATTER

of First Trust Limited (in liquidation)

BETWEEN

JARED WAIATA BOOTH and TONY

LEONARD MAGINNESS as liquidators of First Trust Limited (in liquidation) Applicants

AND

DAVINDER SINGH RAHAL and JIVAN JYOTI RAHAL

Respondents

Hearing: On the papers

Counsel:

K R Lydiard for the Applicants

Judgment:

21 March 2025

JUDGMENT OF GAULT J

This judgment was delivered by me on 21 March 2024 at 4:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:
Ms K R Lydiard, Barrister, Auckland
Mr T Cooley (applicants’ instructing solicitor), Brookfields, Auckland

BOOTH and MAGINNESS v RAHAL [2025] NZHC 613 [21 March 2025]

[1] The applicants, liquidators of First Trust Ltd (the Company), seek by way of originating application the following orders under the Trusts Act 2019:

(a)appointing the applicants as joint and several receivers and managers of all of the property of the First Trust (the Trust) upon specified terms and conditions;

(b)that all steps taken to date by the applicants as liquidators of First Trust Limited (the Company) to secure and protect the assets of the Trust were proper and approved;

(c)directing that costs of this application on a solicitor/client basis and costs incurred to date by the applicants as liquidators of the Company (in liquidation) are expenses incurred by the applicants in the receivership of the Trust; and

(d)granting leave to the parties and any creditors to apply to the Court for further directions.

[2] Following service on the respondents and the known creditors, there was no opposition to the originating application. Once the applicants’ submissions were filed following a call of the application in the Duty Judge list, I indicated that I would deal with the application on the papers.

Factual background

[3] On 28 April 2017, the Company was incorporated. The respondents, Mr and Mrs Rahal, were its directors and shareholders. The sole purpose of the Company was to be a corporate trustee. Further, the constitution of the Company states that all incomings and outgoings of the Company must be accounted for as the incomings and outgoings of the trust, that the Company was to have no financial dealings of its own and that the Company would not operate a bank account other than as a trustee for the trust.

[4] On 1 May 2017, the Trust was settled by trust deed and the Company was named as the sole trustee. The settlors and appointers of new trustees were Mr and Mrs Rahal.

[5] On 26 May 2017, the Company became the registered proprietor of the property at 609-611 Great South Road, Papatoetoe, Auckland described as unique identifier NA82B/25 (the Property).

[6] On 29 March 2022, under a deed of retirement and appointment of new trustees the Company was replaced as trustee…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Booth v Rahal

Details

AGLC: Booth v Rahal [2025] NZHC 613
Case: [2025] NZHC 613
Decision Date: 21 March 2025

CaseChat Overview and Summary

In the case of Booth and Maginness v Rahal, the applicants, who are liquidators of First Trust Limited, sought orders from the High Court to appoint them as joint and several receivers and managers of the property of the First Trust. The respondents, Mr. and Mrs. Rahal, were directors and shareholders of First Trust Limited, which was incorporated on 28 April 2017 and served as the corporate trustee for the Trust. The applicants sought the orders due to the Trust's lack of a trustee, the continued operation of the Trust without proper trusteeship, and the inability to address the Trust's debts and obligations through the Company, which is now in liquidation. The Court was required to decide whether it was reasonably necessary and just and equitable to appoint a receiver to administer the Trust, and if so, whether the applicants were suitable candidates for the role.

The Court held that it was reasonably necessary and just and equitable to appoint a receiver to administer the Trust, as the Trust had been operating without a trustee and the Company was no longer the trustee. The applicants, as liquidators of the Company, were qualified and best placed to administer the Trust efficiently and avoid conflict. The Court also found that the liquidators' initial steps in securing and protecting the Trust's assets were proper and approved. The Court made orders appointing the applicants as joint and several receivers and managers of the property of the First Trust, approved the steps taken by the applicants, directed that the costs of the application and incurred by the applicants as liquidators are expenses incurred by the applicants in the receivership of the Trust, and granted leave to the parties and creditors to apply for further directions.

Orders