Victoria Street Apartments Limited (in liq) v Sharma HC Auckland Civ-2009-404-008377

[2011] NZHC 980

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-008377

BETWEEN  VICTORIA STREET APARTMENTS LIMITED (IN LIQUIDATION)

First Plaintiff

ANDTREASURY TECHNOLOGY DISTRIBUTION LIMITED Second Plaintiff

ANDSUREN SHARMA First Defendant

ANDSUREN SHARMA AS TRUSTEE OF THE SHARMA FAMILY TRUST NO. 2

Second Defendant

ANDSUREN SHARMA AS TRUSTEE OF THE SHARMA FAMILY TRUST

Third Defendant

ANDQUAY STREET APARTMENTS LIMITED

Fourth Defendant

ANDMUTUAL TRUST PROPERTIES LIMITED

Fifth Defendant

ANDMISSION TRUSTEE ONE LIMITED AND MISSION TRUSTEE TWO LIMITED

Sixth Defendants and Ninth Third Parties

ANDREGINALD JAMES WATT Third Party

Hearing:         21 September 2011 (On the Papers)

Counsel:         D W Grove for the Plaintiffs

D E Smyth for the Defendants

Judgment:      21 September 2011

VICTORIA STREET APARTMENTS LTD (IN LIQUIDATION) and ANOR v SHARMA and ORS HC AK CIV-

2009-404-008377 21 September 2011

RESULT JUDGMENT OF DUFFY J

This judgment was delivered by Justice Duffy on 21 September 2011 at 12.45 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Date:

Counsel:     D W Grove P O Box 130 Shortland Street Auckland 1140 for the Plaintiff

D E Smyth P O Box 105270 Auckland City Auckland 1143 for the Defendants

[1]      The trial of the plaintiff’s claim against the defendants commenced on 4 July

2011.  On 8 July 2011, the trial concluded and I reserved my judgment.  The third party claim commenced on 5 September 2011 and concluded on 6 September 2011. I reserved my judgment.

[2]      Earlier, on 2 May 2011, the defendants filed an interlocutory application for the following orders (the application):

(i)To authorise the release of funds that are subject to freezing orders made on 17 August 2010 by Asher J;

(ii)To authorise the release of the defendants’ solicitor from an undertaking given to the plaintiff in this proceeding and in a separate  proceeding  CIV  2006-404-2975  (the  2975 proceeding) to hold the balance of the proceeds of sale of the second defendants property at Fairmall Road, Otara, pending agreement of the parties or order of the Court; and

(iii)For leave to file an amended statement of defence asserting, as a second affirmative defence, that there was a change of circumstances.

[3]      The defendants filed a second amended statement of defence dated 17 May

2011, which included the change of circumstance defence.  The plaintiff filed a reply to the second amended statement of defence (dated 29 June 2011).

[4]      During the course of the trial in July 2011, I became aware of the defendants’ application, which had been set down for hearing before a Duty Judge at 11.45 am on  Wednesday,  13  July  2011.    I  considered,  and  the  parties  agreed  that  the application should be dealt with by me as the trial Judge.  The parties agreed that the application  to  vary  the  freezing  order  and  the  solicitors’  guarantee  should  be allocated a new hearing date.   The part of the application which sought orders to amend the statement of defence appears to have been overtaken by the filing of the second amended statement of defence and the plaintiff’s reply to it.

[5]      During the course of the trial, it became clear to the plaintiff that it could not pursue the sixth cause of action, but that the liquidator or a creditor of the plaintiff could do so.   The plaintiff sought leave to join Treasury Technology Distribution Limited (Treasury) as a second plaintiff. The application was not opposed.  I granted the application.  Accordingly, on 19 July 2011, a third amended statement of claim was filed, with the addition of Treasury as a second plaintiff, and with Treasury bringing the claim in the sixth cause of action.

[6]      The applications to vary the freezing order and the solicitors’ guarantee were allocated a new hearing date of 22 July 2011.   On that date, the application was called before me.  However, due to Mr Sharma being ill at that time, he was unable to provide his counsel with full instructions, including additional affidavit evidence, and so his counsel sought an adjournment.  The application was adjourned to a date to be fixed by the Registry.

[7]      The defendants now seek an urgent hearing of the application to vary the freezing order and solicitors’ guarantee.  I am currently on Sabbatical Leave until the week commencing 10 October 2011.  The first available date that I am available to hear the application is 24 October 2011.

[8]      The judgment on the claims heard in July 2011 is almost completed.  In order to assist the parties and any Judge who might, as a matter of urgency, be allocated to hear the application to vary the freezing orders before I am available, I have decided to issue a result judgment now on those claims, with reasons to follow.

[9]      I have decided that the plaintiffs have proved liability of all defendants in all causes of action in the third amended statement of claim.  A judgment with reasons on the liability finding is to be issued as an interim judgment, in the near future.  The parties are to be given a further opportunity to be heard on the topic of quantification of relief and available remedies.   There will be a telephone conference to address those issues following release of the reasons for the liability findings.

Duffy J