Application to remove court-appointed administrator of body corporate by trustees of trust in receivership – s 248 Companies Act 1993
The trustees of Link Trust (No.1) (the Trust) filed an application to remove Mr Gambitsis (the Administrator) as administrator of Body Corporate 68792 (the Body Corporate), due to various complaints regarding the conduct of the Administrator.
This application was opposed due to a stay of proceedings being in place following orders made relating to the receivership of the Trust, and that to pursue litigation by, or for the Trust, the receivers must consent, or leave must be granted by the High Court, for the trustees to do so.
The Administrator, who is supported by the receivers as an interested party, says it is an abuse of process to bring such an application in a proceeding which relates to claims of interference by the trustees in arrangements for insurance of the Body Corporate.
The application was struck out for several reasons:
- The application was not an interlocutory application in the overall proceeding. The purpose of the proceeding was to remove the administrator and receivers of the Trust. It was therefore unrelated to procedure or relief or for the purposes of the proceeding.
- The trustees were attempting to use the application to relitigate matters which had already been determined by the courts, which amounts to an abuse of process.
- Any applications by the trustees as unit holders has been stayed by the receivership orders and would be stayed even if brought correctly. Attempting to get around the stay by removing the administrator (the “umbrella” of the proceeding) is an abuse of process.
- One of the trustees was also an undischarged bankrupt and a discretionary beneficiary of the Trust. They therefore did not have standing to bring such an application.
- The property of the Trust remains under the control of the receivers, to the exclusion of the trustees, and all proceedings by or against the Trust are stayed except with the receivers’ consent or by order of the Court.
- The application to remove the administrator was dismissed.
Unlike the use of the interlocutory application in this instance, the purpose of an interlocutory application is not to resolve the dispute arising in the main proceedings, or any other issues unrelated to the proceeding. Rather, its purposes are to maintain the status quo pending determination of the main proceeding (e.g. applications for freezing orders or injunction), to resolve a procedural dispute arising during the progress of the main proceeding (e.g. for further and better particulars), or to pursue a unique interlocutory remedy, some of which dispose of the main proceeding (e.g. summary judgment).
Body Corporate 68792 v Memelink [2023] NZHC 3637 [12 December 2023]
