Watt v Sharma HC Auckland CIV-2006-404-2975

[2008] NZHC 2656

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, Auckland

D 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.