Shera v Public Trust

[2015] NZHC 3036

IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY

CIV 2015-443-051 [2015] NZHC 3036

BETWEEN

SIMON SHERA AND LILA

ROSEWARNE TRUSTEES LTD Applicant

AND

PUBLIC TRUST Respondent

Hearing:	2 December 2015 (by telephone)
Counsel:	C P Ussher for Applicant D O'Leary for Respndent
Judgment:	3 December 2015

JUDGMENT OF HEATH J

This judgment was delivered by me on 3 December 2015 at 2.00pm pursuant to

Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Young Carrington + Ussher, New Plymouth

Public Trust, New Plymouth

SHERA v PUBLIC TRUST [2015] NZHC 3036 [3 December 2015]

Introduction

[1]      On 7 May 2014, the Stratford District Council exercised powers under the Local Government (Rating) Act 2002 (the Act)1  to sell a property at 48 and 48A Whangamomona Road, Stratford to a third party.  The sale was effected in order to recover outstanding rates.  The net proceeds of sale were paid to Public Trust on 30

June 2014, in the sum of $19,939.35.2

[2]      Mr Shera and Lila Rosewarne Trustees Ltd, as trustees of the Lila Rosewarne Trust (the Trust), apply for an order under s 76(2) of the Act directing Public Trust to pay the balance to them.  Section 76(2) provides:

76   Application of balance of proceeds

…

(2) Public Trust, on the order of the High Court (which may be made by motion in Chambers), must pay the balance to those persons who are entitled to it, together with interest.

….

[3]      At the time of the sale, the original trustees of the Trust (Mr Shera and Ms Lila Rosewarne) were the registered proprietors of the property.  However, the rating sale application was made by Mr Alan Rosewarne and his then partner who were recorded on the Stratford District Valuation Roll as owners of the property.   The reasons why that was so are somewhat convoluted.  Having reviewed the evidence, I am satisfied that the property was never transferred into their names.  Nor do they retain any beneficial ownership in their own right.

[4]      Although s 76(2) of the Act does not state that net proceeds of sale should be paid to the registered proprietors, that is accepted as the prima facie starting point for consideration of the issue.3

[5]      In McLellan v Terry, Chisholm J was confronted by an argument that raised the question whether this Court should go behind the indefeasibility provisions of the

1      Local Government (Rating) Act 2002, s 68.

2      Ibid, ss 75 and 76(1).

3      McLellan v Terry HC Greymouth CIV-2010-418-123, 15 June 2011 (Chisholm J) at para [23].

Land Transfer Act 1952 to permit payment to a person other than the registered proprietor.  In this case, no such issue arises.  On the evidence presented to me, there does not seem to be any basis on which I could properly order that the proceeds be paid to anyone other than the present trustees of the Trust.

[6]      I am told that both Mr Rosewarne and his then partner were advised of their ability to make an application in relation to the distribution of the proceeds of sale. Neither has taken any step to do so.

[7]      I understand that the trustees intend to distribute the property to the sole beneficiary Mr Rosewarne.  He is currently an inmate at Whanganui prison.4   Before making any distribution to Mr Rosewarne, the trustees should (for their own protection)  ensure that  there are no  relationship property proceedings  (actual or pending) that may affect a claim to moneys in their hands.

[8]      I do not propose to make a formal order at this stage.   It is preferable to identify the precise amount of money to be transferred before doing so.  No doubt Public Trust will have incurred costs that should properly be deducted from the fund.

[9]      I direct the trustees and Public Trust to confer, and to submit an agreed order to the Registrar. That shall specify the amount to be paid to the trustees.

[10]     Unless  the  trustees  or  Public Trust  disagree  on  any particular  issue  that requires a judicial ruling, the Registrar shall seal a judgment in the form proposed in

the joint memorandum.

P R Heath J

Delivered at 2.00pm on 3 December 2015

4      For background, see Rosewarne v R [2015] NZCA 537.