Keeley v The Queen - [2019] NZHC 2533

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE

CIV 2019-463-43

[2019] NZHC 2533

UNDER The Companies Act 1993 and the Trustee Act 1956

IN THE MATTER OF

an order vesting property in those persons entitled

BETWEEN

BRUCE TERRENCE KEELEY and RANA MARIE KEELEY

Plaintiff

AND

THE CROWN

Respondent

Hearing: 3 October 2019

Appearances:

L Hemi for the Applicants

No appearance for the Respondent

Judgment:

4 October 2019

JUDGMENT OF GAULT J

This judgment was delivered by me on 4 October 2019 at 4.30 p.m. pursuant to r 11.5 of the High Court Rules 2016.

Solicitors:
Potts & Hodgson, Opotiki

KEELEY v THE CROWN [2019] NZHC 2533 [4 October 2019]

[1] Bruce Keeley and Rana Keeley are the administrators of the estate of Hector Keeley who died on 28 August 2001. They apply for an order vesting a property at 53 Denby Street, Whangarei (the property).1

[2] The registered proprietor of the property was a company, Paramount Homes (1965) Ltd (the company), which has been removed from the companies register.

[3] On 28 May 2019 Woolford J granted permission to commence proceedings by originating application and directed service on the Crown. The Crown has confirmed that it has no objection to the property being vested in the applicants, and will abide the decision of the Court. The matter has effectively proceeded by way of a formal proof hearing.

Factual background

[4] Hector Keeley purchased the property in the 1960s from the company, which had developed a sub-division and built the house. Title to the property was never transferred into his name. He remained living at the property until 1986. Since his death in 2001 the family has also treated the house as theirs. It is currently rented out and the family receive the income, pay the rates and meet all other expenses.

[5] After Hector Keeley became ill in 1986 his family became aware that the title was still in the name of the company and began to take steps to have it transferred into Hector Keeley's name. The company had been purchased by an employee and changed its name. Documentation was prepared to effect the company name change on the title and then transfer the property to Hector Keeley. However, the title could not be located. A declaration of loss was submitted, but withdrawn by a family member who had no authority to do so.

[6] Although Hector Keeley died in 2001, the applicants did not take steps to start administering his estate until 2010. There were a number of complications and letters of administration were not granted until September 2015. In October 2016 the applicants gave instructions to resend the application for the transfer of the property

1 Described as 721 m2 more or less being Lot 16 Deposited Plan 56519 NA9C/756519 North Auckland Registry.

to be registered. But LINZ advised that by this time paper registration of the transfer could not occur.

[7] As a further complication, the…

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.

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Details

Case: [2019] NZHC 2533
Decision Date: 4 October 2019

CaseChat Overview and Summary

The applicants, Bruce Terrence Keeley and Rana Marie Keeley, as administrators of the estate of Hector Keeley, sought an order vesting a property located at 53 Denby Street, Whangarei, in their possession. The property, originally purchased by Hector Keeley from the company Paramount Homes (1965) Ltd in the 1960s, remained registered in the company's name even after Hector's death in 2001. The applicants claimed that the property had been held on trust for Hector Keeley and sought a vesting order under the Companies Act 1993 or the Trustee Act 1956. The Crown, which had become the registered proprietor after the company was removed from the register, did not object to the property being vested in the applicants.

The primary legal issue before the court was whether the property should be vested in the applicants as trustees for Hector Keeley, or whether it should vest in the Crown. The court had to determine if the company held the property on trust for Hector Keeley, and if so, whether this interest survived the company's removal from the register. This required an examination of the relevant statutory provisions and the facts surrounding the property's ownership history.

The court found that while there was doubt whether the company held the property on trust for Hector Keeley, the fact that the same director signed both the memorandum of transfer and the declaration for the company's name change suggested that the director did not fully understand the legal implications of the latter document. The court inferred that the company did hold the property on trust for Hector Keeley and that his interest had not been extinguished when the company was removed from the register. Given the Crown's acquiescence and the applicants' long-standing treatment of the property as their own, Gault J concluded that the applicants were entitled to a vesting order under section 52(1)(h) of the Trustee Act 1956.

The High Court of New Zealand ordered that the property at 53 Denby Street, Whangarei, be vested in Bruce Terrence Keeley and Rana Marie Keeley, as administrators of Hector Keeley's estate. The court made no order as to costs.

Orders