Vance v Vey Group Limited - [2018] NZHC 1994

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA TE PAPAIOEA ROHE

CIV-2018-485-505 [2018] NZHC 1994

BETWEEN
DAVID VANCE AND IAN MILLARD

Plaintiffs

AND

VEY GROUP LIMITED First Defendant

AND

LESLIE WILLIAM FUGLE Second Defendant

Hearing: 2 August 2018

Appearances:

R Roff for Plaintiff
C Wilkinson-Smith for Defendants

Judgment:

7 August 2018

JUDGMENT OF GRICE J

(Order transferring rights in shares to court appointed trustees)

[1] The plaintiffs are the trustees of Orana Trust (the Trust). They sought an order restraining the sale of a property at 72 Webb Street, Wellington (the property), to R Pratt until further order of the Court (the interim injunction). The Trust says it is the owner of 49 shares in Vey Group Limited, which in turn owns the property. The shares however remain registered in the name of the former trustees, Patricia and Daryn Turvey.

[2] While orders were made for the removal of Patricia and Daryn Turvey as trustees and the plaintiffs appointed in their stead in 2017, no order was made vesting the Vey Group Ltd shares in the plaintiffs. The plaintiffs now seek by way of interlocutory application the transfer of those shares to them. That application was
made in response to a proposed sale of the property. It was only at the last moment

DAVID VANCE AND IAN MILLARD v VEY GROUP LIMITED [2018] NZHC 1994 [7 August 2018]

the plaintiffs realised that the shares were still registered in the name of the previous trustees.

The short history of this dispute

[3] The Trust was established by deed dated 1 July 1996 as a family trust.1 When the trust was created Daryn and Patricia Turvey were the two trustees.

[4] Vey Group Ltd (the first defendant) is a limited liability company that was incorporated on 24 April 1996. It was established for the purpose of managing and owning the property. Initially Patricia and Daryn Turvey were the directors of the company until November 2014 and September 2016 respectively. The Trust originally owned all the shares in Vey Group Ltd, until 2016 when 51 per cent of the shares were sold.

[5] Mr Fugle (the second defendant) is Ms Turvey’s cousin and the only director of Vey Group Ltd at present. He was appointed on 16 September 2016 at Ms Turvey’s invitation. Ms Turvey resigned from her role as a director in Vey Group soon after appointing Mr Fugle.

[6] In 2017 Patricia and Daryn Turvey had some disagreements resulting in litigation between them. Eventually, they both agreed to being removed as trustees and replaced by two independent professional trustees in September 2017. By consent, the Court ordered both parties be removed as trustees, that they were ineligible for reappointment, two new independent trustees be appointed (an accountant and a solicitor) and that they had 15 working days to file the consent order confirming the independent trustees. If this was not done, the Court indicated it would appoint the independent trustees.2 On 27 October…

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: [2018] NZHC 1994
Decision Date: 7 August 2018

CaseChat Overview and Summary

David Vance and Ian Millard, as trustees of the Orana Trust, filed an interlocutory application against Vey Group Limited and Leslie William Fugle, seeking an order that would restrain the sale of the property at 72 Webb Street, Wellington until further order of the Court. The trust claims to be the owner of 49 shares in Vey Group Limited, which in turn owns the property. However, the shares remain registered in the name of the former trustees, Patricia and Daryn Turvey. The plaintiffs seek an order vesting the right to transfer the shares to themselves. The court was required to determine whether the plaintiffs were entitled to an interlocutory order vesting the shares in them without following the usual procedures of filing substantive proceedings. The court also had to consider whether the lack of service on Patricia and Daryn Turvey would be a valid concern. The court held that it was appropriate to make an order vesting the right to transfer the 49 shares presently registered in the name of Patricia and Daryn Turvey, to the name of the plaintiffs as trustees of the Orana Trust. The court reasoned that Patricia and Daryn Turvey had already consented to the making of the orders for their removal and the appointment of the plaintiffs as trustees. Additionally, the urgency surrounding the present application to restrain the sale of the property brought to their attention the fact that the shares were not registered on the company register. The court also noted that all parties had been sent reports from the new trustees, and there was no reason to believe the emails did not reach the addressees.

The court made the following orders: (a) The right to transfer the 49 shares in Vey Group Ltd presently owned by Patricia and Daryn Turvey is vested in the plaintiffs in their capacity as trustees of the Orana Trust; (b) The plaintiffs are to transfer the shares to themselves as trustees; (c) Upon receipt of such transfer the second defendant will update the share register with the plaintiffs’ names accordingly. The parties indicated that no orders are sought as to costs.

Orders