Zhou v Qian - [2014] NZHC 1662

IN THE HIGH COURT OF NEW ZEALAND PALMERSTON NORTH REGISTRY

CIV-2012-454-693 [2014] NZHC 1562

BETWEEN
ANZ NATIONAL BANK LIMITED

Applicant

AND

JUBILEE MANAGEMENT LIMITED (IN LIQUIDATION)

First Claimant

BOON KEE SIA-FOX, GRAHAM JAMES FOX and QA MEDIA PRODUCTIONS LIMITED

Second Claimants

LYN MAREE CAREY Third Claimant

JOHN HAMISH FREEBAIRN and BARRY WILLIAM JOHN ROCHE Fourth Claimant

Hearing: On the papers

Counsel:

D I Sheppard for First, Third and Fourth Claimants
G J Fox in person for Second Claimants
B K Sia-Fox in person

Judgment:

4 July 2014

JUDGMENT OF MACKENZIE J

I direct that the delivery time of this judgment is
4.30 pm on the 4th day of July 2014.

Solicitors: Fitzherbert Rowe, Palmerston North, for First, Third and Fourth Claimants

Copies to: G J Fox and B K Sia-Fox

ANZ NATIONAL BANK LIMITED v JUBILEE MANAGEMENT LIMITED (IN LIQUIDATION) [2014] NZHC 1562 [4 July 2014]

[1] This is an interpleader application under r 4.58 of the High Court Rules brought by ANZ National Bank Limited (ANZ). It seeks orders as to the disposal of surplus funds following mortgagee sales.

[2] Mr Fox and Ms Sia-Fox were married, but separated in November 2007. Their relationship was a business one as well as a domestic one. Among other interests, they owned a company, Jubilee Management Limited (Jubilee) and were the settlors of a family trust, the Grace Jubilee Family Trust (the Trust). The trustee of the Trust was a company called QA Media Productions Limited (QA Media), the directors of which were Mr Fox and Ms Sia-Fox.

[3] ANZ advanced finance by way of a number of loan and current account facilities to Jubilee, the Trust and a related company named QA Homes Limited (QA Homes). By a Deed of Cross-Guarantee dated 27 April 2006, Jubilee, the Trust, Ms Sia-Fox, QA Homes and another associated company QA Joinery Limited (QA Joinery) each cross-guaranteed all obligations of each other owed to the ANZ. As security for the advances, and the guarantees, ANZ held registered first mortgages over the following properties:

(a) 150 Rangiuru Road, Otaki, owned by Jubilee; (b) 75B Atkinson Avenue, Otaki, owned by Jubilee; (c) 7 Dunstan Street, Otaki, owned by the Trust; and (d) 64 Toi Street, Otaki, owned by the Trust.

[4] Following their separation in November 2007, the business relationship between Mr Fox and Ms Sia-Fox also broke down. There were defaults in payments due to ANZ. Jubilee was placed in liquidation. There was (and is) litigation involving various entities.

[5] ANZ sold the four properties at mortgagee sales. There was a surplus after the indebtedness to ANZ was met. ANZ brought an interpleader application to

determine who was entitled to the surplus funds. It nominated four possible claimants:

(a) Jubilee;

(b) The Trust;

(c) the liquidator of Jubilee; or

(d)the solicitors for the liquidator, to whom the liquidator had granted a mortgage over the two properties of which Jubilee was the registered proprietor.

[6] The funds are presently held in Court, and ANZ has been removed…

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.

Continue reading Zhou v Qian

Details

AGLC: Zhou v Qian [2014] NZHC 1662
Case: [2014] NZHC 1662
Decision Date: 4 July 2014

CaseChat Overview and Summary

This case involved an interpleader application by ANZ National Bank Limited to determine the entitlement to surplus funds after mortgagee sales of properties owned by Jubilee Management Limited and the Grace Jubilee Family Trust. The key legal issue was the apportionment of the surplus funds between the various claimants, including the liquidator of Jubilee, the trustees of the Trust, and the second mortgagee. The court determined that the surplus from the sale of Jubilee-owned properties should be paid to the solicitors representing the liquidator, as they held a registered second mortgage. The surplus from the sale of Trust-owned properties should be paid to the trustees of the Trust. The court assessed the net sale proceeds and the debts owed to ANZ to determine the appropriate apportionment of the surplus funds. After considering the evidence provided by the claimants, the court found that 91 per cent of the surplus should be paid to the solicitors for the liquidator, the first, third, and fourth claimants, while the remaining nine per cent should be paid to the trustees of the Trust. However, the court could not make an order for payment to the Trust at that stage due to insufficient evidence of the current trustees. The funds would remain in court until an authority to make payment was provided by both Mr Fox and Ms Sia-Fox, or until the identities of the trustees were established.

The court directed that 91 per cent of the amount held in court at the time of payment would be disbursed to the solicitors for the first, third, and fourth claimants, as they were agreed on the entitlement of the fourth claimant. The remaining nine per cent of the funds belonged to the Trust, but no order for payment was made due to the dispute between Mr Fox and Ms Sia-Fox regarding the identity of the trustees. The funds would remain in court until an authority to make payment was provided or the identities of the trustees were established. The court reserved leave to the second claimants to apply for further directions in this regard.

Orders