Re Body Corporate 206920 - [2015] NZHC 320

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-3073 [2015] NZHC 320

UNDER Section 52 0f the Trustee Act 1956

IN THE MATTER

of BODY CORPORATE 206920
First Applicant

AND

IN THE MATTER

of BODY CORPORATE 206920

NOMINEES LTD Second Applicant

Hearing: 4 February 2015

Appearances:

S J Corlett for First and Second Applicants

Judgment:

2 March 2015

RESERVED JUDGMENT OF ELLIS J

This judgment was delivered by me on Monday 2 March 2015 at pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date:………………………….

Counsel/Solicitors:
S J Corlett, Brookfields, Auckland

Body Corporate 206920 [2015] NZHC 320 [2 March 2015]

Introduction

[1] The applicants seek vesting orders under s 52 of the Trustee Act 1956 (“the Trustee Act”), vesting interests two struck off companies have in a unit title property located at 3-13 Shortland Street, Auckland

Background

[2] The applicants filed an originating application on 17 November 2014 seeking orders:

[3] granting leave for the application to be brought as an originating application under r 19.5 of the High Court Rules; and

[4] vesting all legal and beneficial rights and interests in three companies which were at the time struck off the New Zealand Companies Register, being Infraserv Assets Limited, Shortland Offices Limited, and Cityvest Limited, held in the land legally described as Unit 11A and 1/21 share of the Accessory Unit 38-40 Deposited Plan 206920 in Certificate of Title 289864 (North Auckland) (the Unit) (being 1/8,
1/24 and 1/24 shares respectively), in the second applicant, Body Corporate 206920 Nominees Limited (BCNL), pursuant to s 52(1)(b)(iv) of the Trustee Act 1956 (the TA).

[5] The grounds on which the orders were sought were set out in the application and affidavit of Catherine Jane Jollands sworn and dated 14 November 2014, and filed in support.

[6] The application was listed in the Duty Judge List on 8 December 2014 before

Her Honour Justice Thomas.

[7] However, subsequent to the application being filed, Cityvest Limited was restored to the Companies Register. Counsel for the applicants became aware of the restoration shortly before the scheduled appearance.

[8] As a result, on 8 December 2014, counsel sought an adjournment of the application to allow discussion relating to transfer of Cityvest’s Unit entitlement to BCNL to take place with Cityvest’s director.

[9] Those discussions have now taken place and transfer of Cityvest’s unit share

to BCNL was effected on 19 January 2015.

[10] The applicants have filed an amended application and updating affidavit of in support on 21 January 2015.1 Orders are sought:

[11] granting leave for the amended application to be brought s an originating application under r 19.5 of the High Court Rules; and

[12] vesting all legal and beneficial rights and interests which Infraserv Assets Limited and Shortland Offices Limited (the Companies) currently hold in the Unit (being 1/8 and 1/24 shares respectively), in BCNL pursuant to s 52(1)(b)(iv) of the TA.

Leave to commence by way of originating application

[13] High Court Rule 19.5 provides that the Court…

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: [2015] NZHC 320
Decision Date: 2 March 2015

CaseChat Overview and Summary

The applicants in this case, Body Corporate 206920 and Body Corporate 206920 Nominees Limited, sought vesting orders under section 52 of the Trustee Act 1956 to transfer the interests of three companies, Infraserv Assets Limited, Shortland Offices Limited, and Cityvest Limited, in a unit title property at 3-13 Shortland Street, Auckland. These companies were struck off the New Zealand Companies Register. The applicants aimed to vest these interests in Body Corporate 206920 Nominees Limited, to ensure that the property would benefit the members of the Body Corporate, as intended. The legal issues revolved around whether the Court should grant leave for the application to be brought as an originating application and whether the vesting orders were appropriate under the Trustee Act.

The Court considered the application under High Court Rule 19.5, which allows for proceedings to be commenced by way of originating application if it is in the interests of justice. The Court found that the application was appropriately brought as an originating application because the companies were struck off the Companies Register, and there was no opposition to the application. The Court also held that the companies' interests in the Unit were held on trust for the benefit of the Body Corporate's members, and therefore, the Crown did not have a legal interest in the Unit. Consequently, the Court granted leave for the amended application to proceed as an originating application.

In terms of the vesting orders, the Court accepted that the companies held their interests in the Unit on trust for the members of the Body Corporate. The evidence showed that the Unit was created from common property owned by the predecessor of Body Corporate 206920, and the companies never made any payment for their interests or towards Body Corporate levies and Council rates. The Court concluded that the companies' interests were held for the benefit of the Body Corporate's members, and therefore, the vesting orders were appropriate under section 52(1)(b)(iv) of the Trustee Act. An order was made vesting the legal and beneficial rights and interests of Infraserv Assets Limited and Shortland Offices Limited in the Unit in Body Corporate 206920 Nominees Limited.

Orders