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Dewat v Lal

Dewat v Lal

Case [2023] NZHC 1908 21 July 2023

Trustee Removal

Summary Judgment

Quorum Requirements

Interpretation of Trust Deed

Statutory Construction

Interlocutory Orders

Interim Relief

Trusts & Equity

Civil Litigation & Procedure

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IN THE HIGH COURT OF NEW ZEALAND TAURANGA REGISTRY

I TE KŌTI MATUA O AOTEAROA TAURANGA MOANA ROHE

CIV-2023-470-09

[2023] NZHC 1908

UNDER Part 18 of the High Court Rules 2016 and the Trusts Act 2019

IN THE MATTER

of the SANATAN DHARAM TRUST

BETWEEN

SANJEEV DEWAT, KULDIP KUMAR, MOHAN LAL SAILY, ROMAN SAILY and

SANJEEV SHARMA as trustees of the SANATAN DHARAM TRUST

Plaintiffs/Applicants

AND

DARYODHAN LAL, RAM LUBHAIA, AJAY SHARMA and RAM DITTA SAILY

as trustees of the SANATAN DHARAM TRUST

First Defendants/Respondents

Hearing: 23 May 2023

Appearances:

J Delaney for the Plaintiffs/Applicants A Singh for the Defendants/Respondents K E Wilkinson for the Public Trust

Judgment:

21 July 2023

JUDGMENT OF ASSOCIATE JUDGE SUSSOCK

This judgment was delivered by me on 21 July 2023 at 4 pm pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

DEWAT v LAL [2023] NZHC 1908 [21 July 2023]

Introduction

[1] The plaintiffs have applied for summary judgment seeking orders setting aside the purported resolution of the first defendants to remove the plaintiffs as trustees of the second defendant and the appointment of new trustees in their place.

[2] The plaintiffs and first defendants are (or were) trustees of the Sanatan Dharam Trust (Trust). In addition to other charitable purposes, the Trust is responsible for the administration and operation of the Sanatan Dharam Mandir Hindu Temple in Tauranga.

[3] There is a tenth trustee of the Trust, Kiran Patel, who is neither a plaintiff nor a first defendant. Kiran Patel has been served with these proceedings but did not participate in the hearing.

[4] In October 2022, the first defendants purported to remove the plaintiffs as trustees of the Trust pursuant to cl 6.7(g) of the Trust Deed (Trust Deed). The plaintiffs submit that the purported removal was not in accordance with the Trust Deed as the plaintiffs were prevented from voting despite being current trustees on the basis that they were the subject of the proposed resolution to remove.

[5] The plaintiffs say that the Court is able to interpret the Trust Deed on a summary basis because no additional evidence or discovery is required on this discrete issue. There is no dispute about the facts relating to the removal, the only dispute is whether those facts meet the requirements of cl 6.7(g) of the Trust Deed.

[6] The plaintiffs say further that the first defendants seek to justify the removal of the plaintiffs as trustees by reference to their alleged shortcomings as trustees. The plaintiffs deny the allegations but submit it is not relevant to the question for which summary judgment is sought as justification cannot cure the first defendants’ ultra vires actions. The plaintiffs say the removal or appointment of trustees is a matter of such importance that strict compliance with the Trust Deed must be achieved. It cannot be cured or overlooked.1

1 Attorney-General v Ngati Karewa and Ngati Tahinga Trust [2002] BCL 75 at [95].

[7] If summary judgment is granted…

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 Dewat v Lal

Details

AGLC: Dewat v Lal [2023] NZHC 1908
Case: [2023] NZHC 1908
Decision Date: 21 July 2023

CaseChat Overview and Summary

Sanjeev Dewat, Kuldip Kumar, Mohan Lal Saily, Roman Saily, and Sanjeev Sharma (the plaintiffs/applicants) brought proceedings against Daryodhan Lal, Ram Lubhaia, Ajay Sharma, and Ram Ditta Saily (the first defendants/respondents) seeking orders to set aside the removal of the plaintiffs as trustees of the Sanatan Dharam Trust (the Trust). The plaintiffs further sought interim orders removing all ten trustees and appointing the Public Trust as a replacement trustee. The first defendants opposed the application.

The Trust was founded by the Trust Deed dated 14 September 2009. The objects of the Trust include the administration and operation of the Sanatan Dharam Mandir Hindu Temple in Tauranga, among other charitable purposes. The Trust Board comprises up to 11 trustees. The plaintiffs and the first defendants are (or were) trustees of the Trust. Clause 6.7(g) of the Trust Deed provides that a Trust Board member’s appointment may be terminated by resolution of a majority of the other members of the Trust Board and confirmed in writing by the Trustees where the remaining trustees do not believe the trustee to be performing their duties in accordance with the principles recorded in this Deed. The first defendants purported to remove the plaintiffs as trustees under this clause and appointed new trustees in their place.

The court found that it was not reasonably arguable that the first defendants had the power to remove the plaintiffs as trustees in the manner in which they purported to do so. The court set aside the resolution to remove the plaintiffs as trustees and the appointment of the replacement trustees. The court declined to make the interim orders sought by the plaintiffs and instead adjourned that part of the application pending service of the Attorney General. The court ordered a case management conference to be held in the week beginning 14 August 2023 to discuss next steps, including whether a judicial settlement conference ought to be convened. The court granted the application for orders by way of summary judgment setting aside the resolution to remove the plaintiffs as trustees and the appointment of the replacement trustees. The Attorney General is to be served with these proceedings in accordance with s 60(2) of the Charitable Trusts Act. The plaintiffs have succeeded and in the usual course would be entitled to costs. The plaintiffs ask that costs be determined after memoranda have been filed but indicate that they will be seeking increased costs against the first defendants personally. The parties are to confer and only if costs cannot be agreed to file memoranda on behalf of the plaintiffs within 25 working days of this judgment, and the first defendants, 35 working days.

Orders