Judgment: Perpetual Trust Limited v Lombard Finance

Press Release – New Zealand High Court

Perpetual applies for Court approval to retire as trustee and for the second applicant (Corporate Trust) to be appointed as a trustee in its place.[Full judgment: Perpetual_Trust_Limited_v_Lombard_Finance__Investments_Limited_In_Receivership.pdf]

IN THE HIGH COURT OF NEW ZEALAND
WELLINGTON REGISTRY
CIV 2013-485-8724
CIV 2013-485-8746
CIV 2013-485-8761
CIV 2013-485-8802
CIV 2013-485-8812
CIV 2013-485-8844
CIV 2013-485-8846
CIV 2013-485-8847
CIV 2013-485-8906
CIV 2013-485-9562

[2013] NZHC 3521

UNDER
Part 19 of the High Court Rules

IN THE MATTER OF
the Trustee Act 1956

BETWEEN
PERPETUAL TRUST LIMITED
First Applicant
CORPORATE TRUST LIMITED
Second Applicant
AND
LOMBARD FINANCE & INVESTMENTS LIMITED (IN RECEIVERSHIP)
IRONGATE PROPERTY LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
STRATEGIC FINANCE LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
OPI PACIFIC FINANCE LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
FINANCE AND LEASING LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
LDC FINANCE LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
NATHANS FINANCE NZ LIMITED (IN RECEIVERSHIP)
DOMINION FINANCE GROUP
LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
BOSTON FINANCE LIMITED (IN RECEIVERSHIP AND LIQUIDATION)
ST LAURENCE LIMITED (IN LIQUIDATION)
ST LAURENCE LENDING LIMITED (IN LIQUIDATION)
ST LAURENCE REALTY LIMITED (IN LIQUIDATION)
ST LAURENCE NO. 2 LIMITED (IN LIQUIDATION)
ST LAURENCE NO. 3 LIMITED (IN LIQUIDATION)
SL FIVE STAR HOTEL INVESTMENTS LIMITED (IN LIQUIDATION)

Respondents
Hearing:
12 December 2013

Appearances:
S Barker for the First Applicant
J Land for the Second Applicant
H Rennie QC for LDC Finance Limited (in receivership and liquidation)
P Chisnall as Amicus Curiae

Judgment:
19 December 2013

JUDGMENT OF MALLON J

Introduction

[1] The first applicant (“Perpetual”) is the trustee of the respondents (“Companies”) all of which are insolvent and unable to repay the vast sums of money owed to investors in the Companies. Perpetual applies for Court approval to retire as trustee and for the second applicant (“Corporate Trust”) to be appointed as a trustee in its place. Court approval is sought because the process by which a change of trustee can occur, that is provided for in each of the relevant trust deeds by which Perpetual was appointed, is said to be inexpedient, difficult and impracticable.

[...]

[30] Accordingly, I am satisfied that is appropriate to make orders as follows:

(a) Perpetual may, with immediate effect, retire as the trustee of the respondent companies.

(b) Corporate Trust is appointed as the new trustee of the respondent companies.

(c) All property (as defined in s 2 of the Companies Act 1993) held by Perpetual as trustee of the respondent companies shall, with immediate effect, be transferred to Corporate Trust subject to any rights to indemnity, lien, or such other rights to which Perpetual is legally entitled under the relevant trust deeds, equity, or statute including, but not limited to, those rights granted under the Trustee Act 1956 and the Securities Act 1978.

(d) Corporate Trust, as the new trustee of the respondent companies, will apply to the Court for the respondent companies currently just in receivership to be put into liquidation prior to the retirement of the receivers.

(e) Any significant decisions taken by Corporate Trust in respect of litigation action by or in respect of any of the respondent companies can only be made after consultation with the liquidator and funding for such litigation actions must be entered into on arm’s length commercial terms. The FMA must be notified in advance of any proposed litigation action and the proposed funding arrangements for this action.

(f) The costs of the applicants and the costs of the amicus curiae shall be a matter of discussion between Perpetual and the respective receivers of the respondent companies in terms of what is recoverable under the respective trust deeds. Unless in the view of the receivers it is plain under the respective trust deeds that the costs are recoverable under them, Perpetual shall meet such costs.

Mallon J

[Full judgment: Perpetual_Trust_Limited_v_Lombard_Finance__Investments_Limited_In_Receivership.pdf]

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