Ranolf Company Ltd (in liquidation) v Bhana

[2015] NZHC 73

IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY

CIV-2014-463-201 [2015] NZHC 73

UNDER

section 52 of the Trustee Act 1956 and

Part 19 of the High Court Rules 2008

IN THE MATTER

of The Ranolf Trust

BETWEEN

RANOLF COMPANY LTD (in liquidation)

Applicant

AND

ASHOK DENNIS BHANA AND JASU MATI BHANA

Respondents

Hearing:	(On the papers)
Counsel:	A Ho for Applicant
Judgment:	5 February 2015

JUDGMENT OF BREWER J

Solicitors:           Waterstone Insolvency (Auckland) for Applicant

RANOLF COMPANY LTD (in liquidation) v BHANA [2015] NZHC 73 [5 February 2015]

[1]      The  applicant  seeks  without  notice  orders  for  leave  to  commence  an application by way of originating application and for real estate to be vested in it.

[2]      The affidavit of Mr Jones filed in support of the applications goes to the proposition that the current registered proprietors of the real estate are the former trustees of a Trust of which the applicant is now the sole trustee.

[3]      Rule 7.46 of the High  Court Rules permits me to determine whether an application should proceed without notice only in a limited number of situations, two of  which  are  relevant  to  the  present  application.1      The  first  situation  is  where requiring an application to proceed on notice would cause undue delay or prejudice to the applicant.2    The second situation is where the interests of justice require the

determination of an application without notice.3  As to the second situation, the Court

will be reluctant to allow an application to proceed without notice if the Court would benefit from hearing contrary arguments and where the potential consequences, both financial and personal, for the respondents are severe.4

[4]      If I determine that the application should not proceed without notice, I may direct that it be served on the respondents.5

[5]      I grant leave to bring the application by way of an originating application.

[6]      I refuse leave to have the originating application determined without notice. My reasons are:

(a)       This is not a simple matter of correcting an oversight or irregularity.

In order to allow the application to proceed without notice, I would have to draw inferences on the material in the affidavit as to (a) the registered proprietors of the real estate being such in their capacities

as trustees, and (b) the applicant being at law the trustee in their place.

1      High Court Rules, r 7.64(3).

2      High Court Rules, r 7.64(3)(a).

3      High Court Rules, r 7.46(3)(e).

4      Colonial Mutual Life Assurance Society Ltd v Wilson Neill Ltd [1993] 2 NZLR 617 (HC) at 629.

5      High Court Rules, r 7.46(5).

(b)The  affidavit  of  Mr  Jones  is  comprehensive  and  the  documents exhibited to it are persuasive of the submissions set out in the memorandum of counsel.  But I cannot exclude as a real possibility the existence of contrary arguments.

[7]      Counsel for the applicant submits that the registered proprietors include a person who has the sole right of appointment of trustees of the Trust.  That person has already made one attempt to remove the applicant as trustee but it is argued that the attempt was unsuccessful because it did not satisfy matters of legal form.   In counsel’s submission, if the application were to proceed on notice the purpose of the application could be frustrated by the person holding the power of appointment exercising it invalidly.

[8]      The purpose of the application is to put the applicant (which is in liquidation) into a position where it can legally dispose of the real estate so as to pay debts which it has incurred (so it is deposed) as trustee.

[9]      I sympathise with the applicant, but the fact is that there are other people, including the beneficiaries of the Trust – and the person with the power of appointment  is  among  them  –  with  a  proper  interest  in  the  outcome  of  the application.

[10]     In summary, there is no undue prejudice to the applicant if the respondents are put on notice.  The applicant can, if it wants, take steps to restrain alienation of the real estate pending determination of its claims against the Trust for the debts it incurred on behalf of the Trust.

[11]     Given the real possibility of contrary arguments, and the consequences to the respondents if they exist but are not heard, the Court should not act without notice.

[12]     I direct that the application be served on the respondents. As soon as proof of service has been filed in the Court, I direct that the matter be put in a Chambers list

before an Associate Judge for case management.

Brewer J