IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2010-404-005306

BETWEEN	DONALD EOIN HOOPER Plaintiff

AND	MICHAEL GRAHAM GILL AND DIANE FRANCES ORANJE
First Defendants

AND	LESLEY HOOPER Second Defendant

Hearing:	13 August 2010

Appearances: D G Collecutt for Plaintiff

Judgment:	13 August 2010

ORAL JUDGMENT OF VENNING J

Solicitors:	Simpson Dowsett Mackie, Auckland
Copy to:	D G Collecutt, Auckland

HOOPER V GILL AND ORANJE AND ANOR HC AK CIV-2010-404-005306  13 August 2010

[1]       This is an ex parte application for a freezing order against property belonging to the first defendants.  Although made on an ex parte basis copies of the application have been served on the two solicitors acting for the first defendants.

[2]       Counsel has spoken to Mr Williams in relation to the matter before appearing before the Court this afternoon.

[3]       The proceeding arises out of a family dispute.  The plaintiff is the stepfather of the second-named first defendant (Diane).   The first named first defendant, Michael is Diane’s husband.  The second defendant is the plaintiff’s wife.  They are presently separated.

[4]       The  plaintiff  claims  that  Diane  and  Michael  owe  him  and  the  second defendant a number of sums of money.  The claims are made under three heads.

[5]       First, in relation to a number of advances made by the plaintiff and second defendant for the benefit of Diane and Michael.  The plaintiff’s evidence is that as at February 2010  Diane  and  Michael  owed  the  plaintiff  and  the  second  defendant
$121,000.  The plaintiff says he is entitled to one half of that, namely $60,500.

[6]       The second head of claim relates to the plaintiff’s interest in the company Tricolors  Limited  which  formerly  ran  a  café  at  Teed  Street,  Newmarket.    The plaintiff was a 30 per cent shareholder in that company.   Although he has no recollection  of  transferring  that  shareholding  to  his  and  the  second  defendant’s names, the Companies Office records show that the shareholding was transferred, so that the 30 per cent was held in both his and the second defendant’s name.  In any event the business of the company has been sold.   The plaintiff understands for approximately $280,000 – $288,000.  Diane was the 70 per cent shareholder in the company.   There has been no accounting to the plaintiff for his interest in the company on the sale of the business.

[7]       The plaintiff raises other issues concerning the lack of his approval to the sale but for present purposes it is sufficient to note that the interest he claims of 30 per cent would equate to a maximum of $85,000 approximately (subject to the debts of the business).

[8]       The third head of claim arises out of circumstances in which the plaintiff and second defendant sold the property at 10 Bodi Place to Diane and Michael.   The plaintiff and second defendant sold it to the first defendants in August 2006.  The plaintiff says it was agreed the price would be reduced by $50,000 in consideration of Diane and Michael agreeing to allow the plaintiff and second defendant to stay in the home on a rent free basis.

[9]       In addition to selling the business of the café Diane and Michael have now sold the home at Bodi Place.  The plaintiff has been forced to vacate the property. He understands the property is due for settlement on Monday.

[10]     Diane  has  left  New  Zealand  and  shifted  to  Australia.     The  plaintiff understands  that  following  the  completion  of  the  settlement  of  the  sale  of  the property at Bodi Place, Michael also intends to shift to Australia.

[11]     The plaintiff lodged a caveat against the home at Bodi Place and there have been a number of communications between the plaintiff’s advisers and Diane and Michael’s advisers regarding the matters in issue, particularly the debt claimed by the plaintiff.  In short the position is that Diane and Michael acknowledge advances by the plaintiff and second defendant but there is a dispute as to the balance owing. Although Diane and Michael’s solicitor wrote on 8 March 2010 to advise that on settlement of the sale of Bodi Place, the plaintiff would repay the amount owing to him, the solicitor has recently not had instructions to directly respond on that issue. It also appears that Diane and Michael have instructed a different firm of solicitors to act on the settlement of the sale.

[12]     In  those  circumstances  the  plaintiff  seeks  a  freezing  order  directed  at preventing the settlement of the sale of the Bodi Place property and in the alternative freezing the proceeds of sale.

[13]     The  application  is  supported  by  an  affidavit  of  the  plaintiff.    On  the information before the Court the evidence satisfies the Court there is a good arguable claim by the plaintiff that Diane and Michael owe him moneys.   The quantum is clearly in issue.

[14]     Mr Collecutt has properly advised the Court that in his discussion with Mr Williams for Diane and Michael he understands an issue may be raised that as the plaintiff allowed the caveat to lapse there is a form of implied abandonment in relation to any claim to the proceeds of the sale of the property at Bodi Place.  The circumstances in which the caveat was allowed to lapse will of course be relevant to any such argument.  Even in the event that the caveat was permitted to lapse, on the present information before the Court, I cannot see that would create any form of estoppels or would otherwise prevent the plaintiff from now seeking to pursue the freezing order.

[15]     I note  the  earlier  indication  from  Diane  and  Michael’s  solicitor  that  the plaintiff was to be paid from the proceeds of sale and the apparent subsequent change in their position as disclosed by their actions.

[16]     There are clearly assets within the jurisdiction.   I accept on the evidence before the Court that there is a risk of dissipation of those assets.  Diane and Michael are relocating to Australia.   They have sold their business.   They have sold their home and it is for settlement on Monday.  In those circumstances I accept that if the assets are not frozen there is a risk of their dissipation.  While there is a reciprocal enforcement of judgment regime in relation to Australia, given the circumstances of the parties, I do not accept that that is a complete answer.  There is also of course the risk of dissipation of the proceeds of sale by Diane and Michael before the entry of any judgment.

[17]     The   plaintiff   has   given   an   undertaking  as   required.      It   has   to   be acknowledged, that his undertaking is of limited value but nevertheless at the least there is an acknowledgement by Diane and Michael through their solicitor that some moneys are owing to the plaintiff.

[18]     On balance the plaintiff satisfies the court the order sought is appropriate.  I have discussed with counsel whether the order can be limited to a quantified sum. There are a number of difficulties with that.   At present there is not sufficient information particularly in relation to the equity in relation to the sale of the café business.

[19]     Nor does the plaintiff have any information about the equity that will be available from the sale of the property at 10 Bodi Place.

[20]     It is obviously in the interests of all parties that the settlement of the sale go through on Monday if at all possible.  To that end the draft order has been prepared with a mechanism to allow the sale to take place provided appropriate undertakings and arrangements are made to recognise the plaintiff’s claim.

[21]     In short the plaintiff makes out its case for the orders sought.

[22]     I make an order in terms of the draft.  The details at paragraph 7 will be at
10 a.m. on Thursday 19 August 2010 in the duty Judge list.  The time at paragraph 8 for notice to be given is not less than 24 hours.  Paragraph 10 is not applicable.

Venning J