FFP Trustee (NZ) v Peng

[2020] NZHC 927

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-002631

[2020] NZHC 927

BETWEEN

FFP TRUSTEE (NZ) LTD

First Applicant

FFP (CAYMAN) LIMITED
Second Applicant

AND

LOW HOCK PENG

First Respondent

GOH GAIK EWE
Second Respondent

LOW MAY LIN

Third Respondent

LOW TAEK SZEN
Fourth Respondent

LOW TAEK JHO

Fifth Respondent

Hearing:

6 May 2020

Appearances:

N Williams and S O’Connor for Applicants No appearance for or by Respondents

B Hennigan for VHG Beverly Hills LLC

Judgment:

6 May 2020

FINAL JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 6 May 2020 at 5.00 pm

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

FFP TRUSTEE (NZ) LTD v PENG [2020] NZHC 927 [6 May 2020]

[1]    I refer to my interim judgment dated 16 December 2019.1 I made various orders and gave a direction under s 66 of the Trustee Act 1956. I declined to give a direction in respect of the proceedings identified as numbers 9 and 10 in Schedule 2 to my interim judgment, because a claimant who was not a party to the Stipulation and Request that led to the consent judgments for forfeiture had not been served.

[2]    The claimant was an entity known as VHG Beverly Hills LLC (VHG). It was affected by the orders sought by FFP in relation to the real property and business assets respectively the subject of proceedings United States of America v The Real Property Known as The Viceroy L’Ermitage Beverly Hills2 and United States of America v All Business Assets of the Viceroy L’Ermitage Beverly Hills, Including all Chattels and Intangible Assets, Inventory, Equipment and All Leases, Rents and Profits Derived Therefrom3 (jointly the L’Ermitage proceedings). I required that VHG be served.

[3]    VHG has since been served with all relevant papers, through its US attorney, Mr Brian Hennigan. Mr Hennigan appeared before me and I was grateful for his attendance.

[4]Mr Williams, appearing for the applicants, advised that:

(a)the JW Trust4 ultimately owns a 50 per cent interest in five companies that together operate the Viceroy Hotel Group. The other 50 per cent of the Group is indirectly owned by Mubadala,5 through various holding and intermediate companies and nominees;

(b)VHG is wholly owned by VHG Hotel Management LLC, one of the five companies that make up the Viceroy Hotel Group;

(c)VHG Hotel Management LLC is ultimately owned by Mubadala and the JW Trust;

1      FFP Trustee (NZ) Ltd v Peng [2019] NZHC 3301.

2      United States of America v The Real Property Known as The Viceroy L’Ermitage Beverly Hills

CIV 16-5368 DSF (PLAx).

3      United States of America v All Business Assets of the Viceroy L’Ermitage Beverly Hills, Including all Chattels and Intangible Assets, Inventory, Equipment and All Leases, Rents and Profits Derived Therefrom CIV 16-5369 DSF (PLAx).

4      See interim judgment.

5      See interim judgment.

(d)FFP is not a director of VHG and FFP does not control it;

(e)none of the respondents are directors or officers of VHG. They do not control it either; and

(f)VHG has an independent board of directors.

[5]    VHG has a hotel management agreement with the entity that owns the L’Ermitage real property assets. That agreement gives VHG the exclusive right to manage the Viceroy L’Ermitage real property assets, and to collect fees for doing so. VHG filed its claims in the L’Ermitage proceedings to protect its interests under the agreement. The basis of its claims was that the agreement entitled it to certain fees and management rights.

[6]    I was advised by a memorandum filed by Mr Hennigan dated 24 April 2020 that VHG did not oppose the application made by FFP, and it has not filed a notice in opposition. More recently, there have been further developments. VHG and the United States of America (as the plaintiff in the L’Ermitage proceedings) have entered into a further Stipulation, agreeing to the “interlocutory sale” of both the L’Ermitage real property and business assets, with the purchase price substituting for the “res” in each action. The Federal District Court for the Central District of California approved this Stipulation on 1 May 2020. Pursuant to the Stipulation, VHG has withdrawn its claims in the L’Ermitage proceedings. This was confirmed by Mr Hennigan.

[7]    Accordingly, there is no objection to the Court making the same direction under the Trustee Act that it has already made in respect of the other proceedings in the interim judgment.

[8]    I approve the draft directions submitted by counsel for the applicants, a copy of which is attached to this final judgment, and so order.

Wylie J

Solicitors/counsel:

Meredith Connell, Auckland Copy to: B Hennigan

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