Reginald James Watt & Ors v Suren Sharma & Ors HC Auckland CIV-2006-404-2975
[2008] NZHC 2655
•29 October 2008
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CIV-2006-404-2975
IN THE MATTER OF Section 145A of the Land Transfer Act
1952
AND IN THE MATTER OF Caveat No. 6835462.1 (North Auckland
Registry)
BETWEEN REGINALD JAMES WATT & ORS First To Twenty Second Plaintiffs
ANDSUREN SHARMA & ORS First To Twelfth Defendants
Hearing: 29 October 2008
Counsel: D Grove for Plaintiffs
D Smyth for Defendants
Judgment: 29 October 2008
JUDGMENT OF JOHN HANSEN J
Solicitors:
Ellis Gould, PO Box 1509, Auckland
Ganda & associates, PO Box 27227, Mt Roskill, Auckland
Copy:
P Dale/D Grove, PO Box 130 Shortland Street, AucklandD Smyth, PO Box 105-270, Auckland
WATT & ORS V SHARMA & ORS HC AK CIV-2006-404-2975 29 October 2008
[1] In this matter the defendant seeks payment out of funds to meet various debts that it is acknowledged are owed by the company.
[2] The matter has changed somewhat in that initially it was an application to pay mortgage instalments and various other debts due in relation to a building situated at
1 Prescott Street, Penrose. The Court and the plaintiff were not informed, and I accept that counsel for the defendant was not aware, that at the time there was an unconditional sale of this property. In the short time available it has become apparent that Mr Sharma was responsible for incorporating the purchaser company, and I note in the agreement the purchaser is “company or nominee”.
[3] There has been, and there remains, a bitter dispute between these parties with serious allegations of impropriety being made. However, given that there is agreement on all but one point in relation to what should occur, I propose to deal with it shortly and not give a lengthy reasoned decision.
[4] There is, as of yesterday, $305,277.78 held in the trust account of Ganda & Associates, pursuant to the consent order of this Court. The sale proceeds of the building will lead to a shortfall, where payment of all the other legitimate debts of the company are concerned, if the money was simply released to be applied to the mortgage. It would be giving a priority to the Bank on moneys it has no security over.
[5] Accordingly, I propose to deal with the matter in this way, which I trust meets effectively the concerns of both parties.
[6] Mr Sharma is to file an affidavit within five days in which he undertakes that the purchaser in the agreement for sale and purchase that has been produced to the Court, or any nominee of that purchaser, is not Mr Sharma, his family Trust or any other legal entity associated with Mr Sharma or members of his family.
[7] There will be a further order that the sum of $47,320.64 is to be set aside and to be applied 24 hours after settlement of the sale of 1 Prescott Street, Penrose, as
follows:
• Auckland City Council $7,157.06 •
AON Insurance
$5,685.14
•
Terra Firma
$13,636.13
•
Grant Thornton
$20,842.31
Total
$47,320.64
[8] The balance of the sum that I have set aside, held in the Ganda and Associates trust account, is to be applied to the mortgage debt to FM Custodians Limited.
[9] Costs in the cause of the substantive proceeding are to be awarded on a 2B
basis.
……………………… John Hansen J
ADDENDUM
[10] I overlooked dealing with the caveat, although Mr Grove indicated that on settlement a discharge would be available. I should imagine there should be no difficulty over this, but if any eventuate the parties should request a telephone conference.
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