NZ Bloodstock pulled up short in attempts to recover $645,000 owed by Auckland lawyer Greg Jones with its attempt to force sale of shares held by Jones’ family trust. NZ Bloodstock allege the trust does not exist and is being used to camouflage Jones ownership of shares in a company called Harlow Holdings.
Harlow Holdings Ltd has a chequered history. Mr Jones is listed as holding personally a one-third interest in Harlow. The company was voluntarily de-registered in 2012, taken off the company register. Nine years later it was miraculously re-incarnated, restored to the register following a court application by Mr Jones. This re-incarnation occurred the year after Mr Jones was held liable to repay NZ Bloodstock loans.
Mr Jones is fiercely resisting attempts to enforce repayment. NZ Bloodstock has court proceedings underway attempting to bankrupt him.
Separately, it sought a court order forcing sale of Mr Jones shareholding in Harlow Holdings. The value of these shares is unknown. Mr Jones says he does not own these shares personally; he holds them as trustee of a family trust: the MOF2 Trust. NZ Bloodstock alleges the Trust is a fiction.
Mr Jones produced to the High Court a trust deed dated 1995, together with financial records dated back in 2007. Justice Downs said the documents are authentic. There is no doubt that a trust exists and that it owns the Harlow shares, he ruled.
NZ Bloodstock then challenged the Trust’s validity, claiming it was a sham and no more than Mr Jones alter ego. NZ Bloodstock provided no evidence to support these claims, Justice Downs said.
Justice Downs said a better argument is that the Trust is simply invalid and that the Harlow shares are Mr Jones’ personal assets. Trust deed wording gives Mr Jones complete control of all trust aspects such that it could be said no trust exists at all. But it is not for the judge to argue NZ Bloodstock’s case on its behalf, he said.
While NZ Bloodstock’s attack against the existence of Jones’ family trust failed, Justice Downs did impose a charging order in favour of NZ Bloodstock against Mr Jones interest in MOF2 Trust assets as a named beneficiary. A charging order tags an asset; the first step to a forced sale. NZ Bloodstock’s application for a forced sale of the Harlow shares was declined. Mr Jones is a discretionary beneficiary of the Trust. The interests of other beneficiaries must be identified before any sale can be ordered, Justice Downs said.
NZ Bloodstock Finance & Leasing Ltd v. Jones – High Court (10.08.23)
23.135