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 A declaration of loss was submitted, but withdrawn by a family member who had no authority to do so.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 company had been removed from the register in November 2001.

Application

[8]The application seeks in the alternative:

(a)a vesting order under s 324 of the Companies Act 1993; or

(b)a vesting order under s 52(1)(h) of the Trustee Act 1956.

Discussion

[9]        The evidence does not indicate whether the failure to transfer the property to Hector Keeley at the time of purchase in the 1960s was merely an oversight. One might infer that following the purchase, the company held the property on trust for Hector Keeley. In any event, as Mr Hemi submitted, it appears that following the memorandum of transfer executed in August 1990, the company held the property on trust for Hector Keeley. If so, his interest would not have been extinguished when the company was removed from the register and its property vested in the Crown.

[10]      However, the declaration prepared on behalf of the company in September 1990 for the purpose of arranging to change the title into the new name of the company (which did not proceed) states that the company is entitled to be registered as proprietor and:

To the best of my knowledge, information and belief there is no person entitled to any estate or interest at law in in (sic) equity affecting the estate and interest in respect of which the Company applies to be registered as proprietor.

[11]      This raises doubt as to whether the company held the property on trust for Hector Keeley. If not, the property would have vested in the Crown when the company was removed from the register. However, as the same director signed both documents,

I infer that he did not appreciate the correct position and I am satisfied that this does not negate the existence of the trust.

[12]      I am satisfied that there should be an order vesting the property in the applicants. In the circumstances, and given the Crown’s position, I make the vesting order under s 52(1)(h) of the Trustee Act 1956.

Result

[13]The applicants are entitled to a vesting order in respect of the property.

[14]There is no order as to costs.

Gault J