Rosebud Corporate Trustee Limited v Bublitz

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2013-404-000899 [2014] NZHC 2018

BETWEEN

ROSEBUD CORPORATE TRUSTEE

LIMITED Plaintiff

AND

PAUL NEVILLE BUBLITZ First Defendant

CHRISTOPHER GIL COOK Second Defendant

HUNTER GILLS ROAD LIMITED (in liquidation)

Third Defendant

Hearing:	28–31 July and 1 August 2014
Appearances:	A Swan for the Plaintiff J K Goodall for the First and Second Defendants S Barter for the Third Defendant
Judgment:	25 August 2014

[RESERVED] JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie on 25 August 2014 at 4.00 pm

Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

ROSEBUD CORPORATE TRUSTEE LIMITED v BUBLITZ & ORS [2014] NZHC 2018 [25 August 2014]

INDEX

Para

Introduction ............................................................................................................[1]

Factual Background ...............................................................................................[8]

Mr Nielson ...................................................................................................[8] Rosebud and the Rosebud Trust .................................................................[10] The Albany Heights Development..............................................................[18] The Hunter Sterling Agreement .................................................................[32] The Deed of Assignment.............................................................................[36] Rosebud – Change of Directors/Bank Account/Accounts ..........................[40] Progress with the Albany Heights Development ........................................[46] The Buyout Agreement ...............................................................................[56] Subsequent Developments..........................................................................[68] Extension of Mr Nielsen’s bankrupt ...........................................................[85]

Was the Rosebud Trust a Sham? ..........................................................................[88]

Trusts/Sham Trusts .....................................................................................[88] What was intended at the outset by Rosebud? ...........................................[96] Control over the Trust ..............................................................................[102] Lack of Proper Administration of the Rosebud Trust .............................. [117] Use of Trust for Personal Benefit.............................................................[122] Conclusion ...............................................................................................[129]

Did Mr Nielsen Enter into the “Hunter Sterling” Agreement as Agent or

Trustee for Rosebud or the Rosebud Trust? .......................................................[131]

Did such rights as Mr Nielsen had, or that he acquired in the “Hunter Sterling”

agreement, vest in the Official Assignee? ..........................................................[137] Does Rosebud have standing to sue on the buyout agreement?.........................[144] Costs ...................................................................................................................[145] Further orders .....................................................................................................[147]

Introduction

[1]      The plaintiff, Rosebud Corporate Trustee Limited (“Rosebud”), has sued the defendants for sums of money it alleges are owing to it pursuant to an agreement dated 10 May 2012 (“the buyout agreement”).   Rosebud asserts that the claim is straightforward and that the obligations of the defendants are clear.

[2]      The defendants have denied any liability and they argue that the claim is anything but straightforward.

[3]      The first and second defendants (“Mr Bublitz” and “Mr Cook” respectively)

plead various affirmative defences, namely:

(a)      that Rosebud is trustee of a sham trust (“the Rosebud Trust”), that the trust was void ab initio, that Rosebud has no standing to bring the proceedings, and that it has done so on behalf of an undischarged bankrupt, a Mr Rod Neilson;

(b)that an agreement dated 18 October 2010, (the “Hunter Sterling agreement”), was entered into by Mr Nielsen in his personal capacity, that Rosebud could only acquire an interest in it by taking an assignment, and that because Mr Nielsen was a bankrupt at the time, all  of  his  rights,  including  such  rights  as  he  acquired  under  the Hunter Sterling agreement, were vested in the Official Assignee under s 102 of the Insolvency Act 2006; and

(c)      that an assignment dated 22 October 2010 which Mr Nielsen entered into in favour of Rosebud was ineffective to vest any interest…