Bowler

[2018] NZHC 2417

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-001835

[2018] NZHC 2417

UNDER

Section 52 of the Trustee Act 1956

RE AN APPLCATION BY

PATRICK CHRISTOPHER BOWLER

Applicant

Hearing:	On the papers
Counsel:	I M Gault and S T Coupe for the Applicant
Judgment:	13 September 2018

JUDGMENT OF MUIR J

This judgment was delivered by me on Thursday 13 September 2018 at 4.00 pm Pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:…………………………

Solicitors:
Bell Gully, Auckland

Re an application by Bowler [2018] NZHC 2417 [13 September 2018]

Introduction

[1]                  The applicant seeks leave to commence proceeding by way of originating application and substantive orders vesting property in him.

[2]                  The application relates to a mortgage (B495050.3) registered in the name of Bell Gully Buddle Weir Solicitors Nominee Company Limited (the Nominee Company). That company has since been removed from the Register. The mortgage is secured over a property at 1/6 Alison Avenue, Takapuna, which is registered in the name of the applicant’s brother, Mr John Grahame Bowler.

[3]                  The mortgage related to a loan facility made available by the Nominee Company in 1983. It secured an amount of $40,000.

[4]                  In 1991 the applicant repaid the mortgage for his brother in order to assist him. Each of the applicant, his brother and former Bell Gully partner, Mr David McGregor, depose that the intention at the time was that the mortgage would be transferred to the applicant who would “replace the [Nominee] Company and acquire the right of first mortgagee from the Company. The applicant records he had no expectation of interest payments on the mortgage.

[5]                  Due to what Mr McGregor describes as an administrative oversight, the mortgage was not transferred to the applicant and in 1997 the Nominee Company was wound up and removed from the Register. As a result, the Nominee Company is not now able to transfer the mortgage to the applicant. Vesting orders in favour of the applicant are accordingly sought.

Application to commence by way of originating application

[6]                  The application is not one which, in terms of r 19.2-19.4 of the High Court Rules, is expressly authorised to be brought by way of originating application. The Court’s jurisdiction to grant leave is accordingly that under r 19.5 which provides that the Court may, in the interests of justice, permit any other proceeding to be commenced by way of originating application.

[7]                  I accept that the proceeding is one appropriately commenced in this way. The substantive application is under s 52 of the Trustee Act 1956 (the Act) which gives the Court the power to make an order vesting land where a trustee is entitled to or possessed in any land or interest therein. The applicant’s case is that the agreement reached with his brother and the mortgagee was that the mortgage be transferred to him and he claims that, pending such transfer, it was held on trust for him. That position is supported by his brother and Mr McGregor.

[8]                  In both Re Landcorp Farming Limited and Re Body Corporate 206920 this Court has confirmed that applications under s 52 of the Act are appropriately commenced as originating applications.1

[9]                  Furthermore, the application is uncontested with no party other than the applicant, his brother (and potentially the Crown), having an interest in the proceeding. On a number of occasions this Court has recognised the utility of the originating application procedure in relation to uncontested applications.2

[10]              As to the Crown, although s 324(1) of the Companies Act 1993 provides that property not distributed or disclaimed immediately before removal of a company from the Register vests in it, this excludes property held by the former company on trust for any other person (s 324(2)). The Treasury has confirmed that it does not consider the mortgage to be bona vacantia at the time the Nominee Company was struck off, having regard to the applicant’s beneficial interest in the property.

Substantive application

[11]Section 52 of the Act relevantly provides:

52       Vesting orders of land

(1)Subject to the provisions of subsections (2) and (3) of this section, in any of the following cases, namely –

…

1      Re Landcorp Farming Limited HC Wellington CIV-2009-485-2012, 18 December 2009, Mallon J;

Re Body Corporate 206920 [2015] NZHC 320.

2      Re Estate of Campbell [2014] NZHC 1632, [2014] 3 NZLR 706, Body Corporate 194481 v Mason

[2016] NZHC 2858.

(b)Where a trustee entitled to or possessed of any land or interest therein, whether by way of mortgage or otherwise, or entitled to a contingent right therein, either solely or jointly with any other person –

…

(iv)Being a corporation, has eased to carry on business or is in liquidation or has been dissolved:

…

the court may make an order (in this Act called a vesting order) vesting the land or interest therein in any such person in any such manner and for any such estate or interest as the court may direct, or releasing or disposing of the contingent right to such person as the court may direct.

[12]              The case falls squarely within s 52(1)(b)(iv) of the Act. As the affidavits of the applicant, his brother and Mr McGregor confirm, the parties to the transaction clearly intended that the mortgage would be transferred to the applicant. I accept that pending the transfer, the mortgage was held on trust by the Nominee Company accordingly.

[13]              Section 52 gives the Court broad powers to deal with land or interests in circumstances where it was held on trust for another by a company that has ceased to carry on business, is in liquidation or has been dissolved.

[14]              The application is analogous to those in Re Landcorp Farming Ltd3 and Re Body Corporate 206920,4 both of which cases involve the failure, properly to transfer property from a company to another person or entity at the time of the transaction and the company’s subsequent deregistration, with the effect that the transaction could not be concluded as intended. In each of these cases the Court made orders vesting the property in the relevant party (being the intended recipient of the property).

[15]For the reasons stated above, the same result is appropriate in this case.

3      Re Landcorp Farming Limited HC Wellington CIV-2009-485-2012, 18 December 2009, Mallon J.

4      Re Body Corporate 206920 [2015] NZHC 320.

Result

[16]I order that:

(a)Leave be granted for the application being brought by way of originating application under r 19.5 of the High Court Rules 2016.

(b)Mortgage B495050.3 be vested in Patrick Christopher Bowler.

[17]I note that no order as to costs is sought.

[18]              I excuse counsel from attendance in the Duty Judge List on Monday 17 September 2018.

Muir J