Nadan v Sharma - [2022] NZHC 2553

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-002331

[2022] NZHC 2553

BETWEEN
PARAMSIWAN (SIWAN) NADAN

Plaintiff

AND

NILESHNI SHARMA

Defendant

Hearing: 17 August 2022

Appearances:

Callum McLean and Wendy Prior for the Plaintiff Defendant in person

Judgment:

5 October 2022

JUDGMENT OF MOORE J

This judgment was delivered by me on 5 October 2022 at 11:00 am.

Registrar / Deputy Registrar Date:

NADAN v SHARMA [2022] NZHC 2553 [5 October 2022]

Introduction

[1] Paramsiwan Nadan and Nileshni Sharma were formerly husband and wife. Their marriage broke down after Mr Nadan had an affair. The aftermath was extremely acrimonious. The continuing level of bitterness between the estranged couple is relevant in terms of both the context and genesis of these proceedings.

[2] That is because Mr Nadan and Ms Sharma are the joint trustees and beneficiaries of the Shivam Family Trust (“the Trust”). The primary beneficiaries are their two children, Shyla and Shinel Nadan.

[3] The Trust’s sole asset is the former family home in New Lynn, Auckland (“the Property”). Ms Sharma wants to retain ownership of the Property. But Mr Nadan wants to sell it and distribute the proceeds among the beneficiaries. He obtained orders to this effect by way of an arbitral award given by the Hon Paul Heath KC and issued on 3 December 2020.

[4] Ms Sharma has taken no steps to sell the Property. To the contrary, she has rented it out and has continued to service and pay down the mortgage loan.

[5] The couple have reached an impasse. Mr Nadan now brings this application seeking the following orders:

(a)removal of himself and Ms Sharma as trustees of the Trust;

(b)the appointment of the Comac Trustees Ltd (“Comac Trustees”) as a replacement trustee of the Trust;1

(c)that he and Ms Sharma be divested of the Property and that it be vested in Comac Trustees; and

1 Mr Nadan’s first application was for the Public Trust to be appointed as a replacement trustee. The Public Trust subsequently advised that it would not accept the appointment. Mr Nadan’s solicitors contacted a number of other independent trustees enquiring whether they were able to act. Comac Trustees confirmed it was able and willing to act by way of an email dated 12 August 2022.

(d)an order that Ms Sharma disgorge the profit earned tenanting the property to the Trust.

[6] Ms Sharma opposes the making of these orders. She says Mr Nadan should be removed as a trustee and that Shyla and Shinel should be appointed as his replacements.

Background facts

[7] The Property was purchased in June 2005. As part of this process, Mr Nadan and Ms Sharma obtained legal advice. One aspect of the advice they received was to the effect that the family home should be purchased by a trust established for that purpose. The Trust was established by deed dated 24 June 2005. Shortly afterwards the Property was transferred to it. While they were…

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 Nadan v Sharma

Details

AGLC: Nadan v Sharma [2022] NZHC 2553
Case: [2022] NZHC 2553
Decision Date: 5 October 2022

CaseChat Overview and Summary

The High Court of New Zealand dealt with an application brought by Paramsiwan Nadan against Nileshni Sharma concerning the administration of the Shivam Family Trust, which holds the former family home as its sole asset. Nadan and Sharma were formerly married and are the joint trustees and beneficiaries of the Trust, with their two children as primary beneficiaries. The central issue was whether Nadan and Sharma should be removed as trustees and replaced by an independent trustee, as Nadan sought, or whether Sharma should be removed and Nadan should be replaced by their daughters, as Sharma proposed. The application followed two earlier arbitrations and a judgment where Sharma was ordered to vacate the property and it was to be sold, which she had refused to do. Nadan sought the removal of both himself and Sharma as trustees, the appointment of Comac Trustees as the replacement trustee, and that the Trust's property be divested from Nadan and Sharma and vested in Comac Trustees. He also sought an order for Sharma to disgorge the profit earned from renting out the property to the Trust.

The court found that the irreconcilability of Nadan and Sharma, and their inability to act fairly and impartially towards the beneficiaries, made their continued tenure as trustees both necessary and desirable to remove. The deadlock in the administration of the Trust, with Sharma refusing to agree to the sale of the property despite the arbitration award and the court's judgment, further supported their removal. Comac Trustees was deemed a suitable replacement, and the court granted the application to appoint them as the sole trustee of the Trust. The court ordered the divestiture of the Trust's property from Nadan and Sharma and its vesting in Comac Trustees. However, the court declined to order Sharma to disgorge the rental profit to the Trust, finding that the matter was best dealt with by the replacement trustee.

The court granted Nadan's application in part, ordering the removal of Nadan and Sharma as trustees, the appointment of Comac Trustees as the replacement trustee, and the divestiture and vesting of the Trust's property in Comac Trustees. Nadan, as the successful party, was entitled to costs on a 2B basis, with the parties encouraged to resolve any costs issues between themselves.

Orders