CHERRY & ORS V HUDSON HC AK CIV-2008-404-002767

CHERRY & ORS V HUDSON HC AK CIV-2008-404-002767

The Court granted interim relief because there was a serious question to be tried on the plaintiffs' claim to beneficial ownership and directorship, the balance of convenience favored preservation of the companies' assets from sale given the risk of irreversible dissipation and minimal likely prejudice to defendants over the short listed period, and overall justice required maintaining the status quo pending the sworn affidavit and interlocutory hearing.

Citation
openlaw-b82eec9f_0125_4d62_8fb5_92733eb20393.pdf
Parties
First Plaintiff: Darryn Paul Cherry; Second Plaintiff: Keith Sheffield; Third Plaintiff: Rachael Jane Meakins; Fourth Plaintiff: Wayne Gordon Cherry; First Defendant: Brian Leslie Hudson; Second Defendant: City Rentals Trustees Limited; Third Defendant: City Property Holdings Limited; Fourth Defendant: City Property Investment Group; Fifth Defendant: Cherry Investment Properties Limited; Sixth Defendant: KB Investment Company NZ Limited; Seventh Defendant: 53 Greenlane Road Limited; Eighth Defendant: 42 Westend Road Limited; Ninth Defendant: Ronald Gordon Leslie Hudson; Tenth Defendant: Stuart Francis Clarke; Eleventh Defendant: CK Accountants Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
20 May 2008
Procedural Posture
Companies Act 1993 Rectification of Share Registers and Reinstatement of Directors / Interim Injunction Granted (ex Parte); Interlocutory Return Date Set for 3 June 2008
Outcome
Interim injunction granted restraining dealings with specified properties, certain bank accounts, drawdowns and share dealings until further order; matter to be called on 3 June 2008; first plaintiff's sworn affidavit to be filed by 30 May 2008; costs reserved.
Legal Topics
Rectification of Share Register, Beneficial Ownership, Interim Injunction, Balance of Convenience, Trusts Over Property, Reinstatement of Directors
Company Law Equity and Trusts Injunctions Civil Procedure Rectification of Share Register Beneficial Ownership Interim Injunction Balance of Convenience +2 more

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Parties

Darryn Paul Cherry

First Plaintiff

Keith Sheffield

Second Plaintiff

Rachael Jane Meakins

Third Plaintiff

Wayne Gordon Cherry

Fourth Plaintiff

Brian Leslie Hudson

First Defendant

City Rentals Trustees Limited

Second Defendant

City Property Holdings Limited

Third Defendant

City Property Investment Group

Fourth Defendant

Cherry Investment Properties Limited

Fifth Defendant

KB Investment Company NZ Limited

Sixth Defendant

53 Greenlane Road Limited

Seventh Defendant

42 Westend Road Limited

Eighth Defendant

Ronald Gordon Leslie Hudson

Ninth Defendant

Stuart Francis Clarke

Tenth Defendant

CK Accountants Limited

Eleventh Defendant

Procedural Posture

Companies Act 1993 Rectification of Share Registers and Reinstatement of Directors / Interim Injunction Granted (ex Parte); Interlocutory Return Date Set for 3 June 2008

Legal Issues

  1. 1 Whether there is a serious question to be tried as to beneficial ownership and proper directorships
  2. 2 Whether the balance of convenience favors granting interim relief to prevent dissipation of assets
  3. 3 Whether overall justice requires preservation of assets pending full hearing

Ratio Decidendi

The Court granted interim relief because there was a serious question to be tried on the plaintiffs' claim to beneficial ownership and directorship, the balance of convenience favored preservation of the companies' assets from sale given the risk of irreversible dissipation and minimal likely prejudice to defendants over the short listed period, and overall justice required maintaining the status quo pending the sworn affidavit and interlocutory hearing.

Court Disposition

Interim injunction granted restraining dealings with specified properties, certain bank accounts, drawdowns and share dealings until further order; matter to be called on 3 June 2008; first plaintiff's sworn affidavit to be filed by 30 May 2008; costs reserved.

Orders

  • Each of the second to eighth defendants inclusive and their subsidiaries is restrained from selling, transferring, encumbering, charging, refinancing or otherwise dealing in any way with the properties listed in Schedule 1 to the plaintiffs' application
  • Each of the Corporate Defendants and their subsidiaries is restrained from making or authorising any payments from any bank accounts held in their names other than payments in the ordinary course of business (including trade debts and fixed or periodic mortgage, rates or similar outgoings for the Scheduled Properties)