Lebanese Society of Aotearoa New Zealand Incorporated v The Lebanese Society of New Zealand Incorporated

[2024] NZHC 3460

IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY

I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE

CIV-2023-485-378

[2024] NZHC 3460

UNDER

Section 27 of the Incorporated Societies Act 1908

IN THE MATTER OF

a decision of the Registrar of Incorporated Societies dated 9 June 2023

BETWEEN

LEBANESE SOCIETY OF AOTEAROA NEW ZEALAND INCORPORATED

First Appellant

CEDARS OF LEBANON INCORPORATED

Second Appellant

AND

THE LEBANESE SOCIETY OF NEW ZEALAND (INCORPORATED)

First Respondent

THE REGISTRAR OF INCORPORATED SOCIETIES

Second Respondent

Hearing:

On the Papers

Counsel:

F E Geiringer for First and Second Appellants W Lim for First Respondent

S P Connolly for Second Respondent

Judgment:

19 November 2024

JUDGMENT OF CHURCHMAN J

LEBANESE SOCIETY OF AOTEAROA NEW ZEALAND INCORPORATED v THE LEBANESE SOCIETY OF NEW ZEALAND (INCORPORATED) [2024] NZHC 3460 [19 November 2024]

[1]                  On 25 July 2024 I issued a decision in this matter.1 In that decision I directed that the Registrar of Incorporated Societies  was to sell a residential property at     128 Abel Smith Street, Wellington (the Property). I reserved leave for the Registrar to apply to the Court for such further directions as may be required to implement this decision.

[2]By memorandum of 11 November 2024 the Registrar sought further directions.

[3]The directions sought were:

(a)that the sale of the Property occurs on terms and conditions acceptable to the Registrar that reflect that the Registrar is not the current owner of the Property and will not accept any personal liability in relation to the sale;

(b)that the Registrar is authorised to sign any transfer documentation or client authority and instruction for an electronic transaction required to effect a transfer of the Property to the purchaser; and

(c)that the Registrar is entitled to be reimbursed out of the proceeds of sale, reasonable costs incurred by them related to the sale (including the cost of obtaining these directions).

[4]                  Counsel for the first respondent filed a memorandum confirming that it did not oppose the application and orders sought by the second respondent. The memorandum acknowledged that the second respondent saw the orders sought as being fair and reasonable.

[5]                  However, counsel for the appellants have filed a memorandum opposing the application.

1      Lebanese Society of Aotearoa New Zealand Incorporated v The Lebanese Society of New Zealand Incorporated [2024] NZHC 2042.

[6]                  The grounds of opposition are that the orders sought are: ‘overly broad and unnecessary’; that there is no matter on which the parties have been asked to agree and on which agreement has not been forthcoming; that there is no need for the Registrar to be given the power to make all decisions about sales terms without reference to the other parties; if liability for the vendor is to be wholly excluded in a way that does not significantly damage the sale price then this would require the cooperation and involvement of the other parties; that an order that the Registrar is exercising its power to vest the Property of a defunct society under the Incorporated Societies Act 1908 is not required; that all reasonable fees that the Registrar might incur had already been made or are covered under arrangements already made or will be paid without objection by other parties; that what is effectively being sought is a prospective costs protection indemnity which is said to be inappropriate; that the position that the parties find themselves in is at least partially the fault of the Registrar; and that the Registrar’s memorandum of 11 November 2024 is unnecessary and the Registrar ought not to be given indemnity costs for filing.

Discussion

[7]                  As I expressly found in the substantive decision, there is an atmosphere of animosity and mutual distrust between the parties to this proceeding (other than the Registrar).

[8]                  As the substantive decision at [49] — [51] records the parties were unable to agree on the outcome which I had identified as the most pragmatic solution. While the parties appear to have been able to cooperate to some extent to facilitate the Court directed sale of the Property, it cannot confidently be predicted that they will continue to do so.

[9]                  Given the background of these proceedings it is understandable that the Registrar would seek the benefit of the directions that have been applied for.

[10]              There is no opposition by the appellants to the directions sought that the terms of sale exclude any liability for the Registrar. I therefore make that order.

[11]              There is opposition to that part of the application that seeks that the sale of the Property occur on terms and conditions acceptable to the Registrar and that reflect that the Registrar is not the current owner of the Property. The particular concern appears to be that the Registrar would have the power to make all decisions about sales terms without reference to the other parties, including potentially overriding the common wishes or interests of those other parties.

[12]              I anticipate that the Registrar will act responsibly and discuss with the parties matters such as the terms of sale. However ultimately, it is the Registrar that has been directed to sell the Property. My substantive decision did not require the Registrar to obtain the permission or consent of any of the other parties to the litigation in order to effect that sale. All of the terms sought in [3.1] of the Registrar’s memorandum of  11 November 2024 are therefore necessary and are approved.

[13]              The appellants accept that the Registrar should be authorised to sign any transfer documentation or client authority and instruction for an electronic transaction required to effect a transfer of the Property to a purchaser. The ground of opposition appears to be that such an order is not required.

[14]              Again, for the reasons discussed above, it is understandable why the Registrar would seek an order confirming this. The application is appropriate and is granted in the terms set out in [3.2] of the memorandum of 11 November 2024.

[15]              In relation to the order sought that the Registrar is entitled to be reimbursed out of the proceeds of sale for reasonable costs incurred by them relating to the sale (including the costs of obtaining these directions), the directions sought are consistent with what was set out in [53] of the substantive judgment which directed:

…the Registrar of Incorporated Societies is authorised to sell the Property, to collect any rent outstanding or received from any tenant of the Property

between the date of this decision and the settlement of the sale, and to add that sum to the corpus available for distribution and then to distribute the net proceeds (following payment of any outstanding rates or other costs) in accordance with this judgment.

[16]              The one additional matter is the request for reimbursement in respect of the costs of obtaining these directions.

[17]The appellant’s grounds for objection to this were that:

(a)the sales process can and should predominantly continue without the intervention of the parties’ lawyers;

(b)to the extent that further lawyer input has been required, all of the parties’ lawyers have had to be engaged; and

(c)there is no basis for the Registrar to have indemnity for these costs from the other parties.

[18]              The appellants also say that the memorandum of 11 November 2024 was unnecessary. I have already addressed that submission and as set above found that not only was the memorandum necessary, it was sensible and appropriate in the particular environment of animosity and mutual distrust that I have already commented upon.

[19]              Accordingly, I grant the orders sought out in [3.3] of the 11 November 2024 memorandum in full.

Costs

[20]              Only the appellants have objected to the orders sought by the Registrar. If the appellants had adopted the course followed by the first respondent, the directions sought could have been made by consent. As the appellants have been wholly unsuccessful in opposing the orders sought, it is appropriate that they meet the Registrar’s costs in respect of this application.

[21]              I direct that the Registrar is entitled to costs on a 2B basis in respect of this application, such costs payable by the appellants.

Churchman J

Solicitors:

Woodward Law, Lower Hutt for Appellants Oakley Moran, Wellington for First Respondent

Crown Law Office, Wellington for Second Respondent