APIC Trustees Ltd t/a Verplaetse Trust v Flanders Field Investment Ltd
[2020] NZHC 1200
•3 June 2020
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WHANGANUI-A-TARA ROHE
CIV-2019-485-397
[2020] NZHC 1200
BETWEEN APIC TRUSTEES LTD TRADING AS VERPLAETSE TRUST
Plaintiff
AND
FLANDERS FIELD INVESTMENT LTD
Defendant
AND
JOANNE ELIZABETH THUMIGER
Second Defendant
Hearing: 19 May 2020 Appearances:
D L Bennington for Plaintiff
Judgment:
3 June 2020
JUDGMENT OF GRICE J
[1] Mr Verplaetse is the settlor and a beneficiary of the Verplaetse trust. His mother died in Belgium in February 2010. Mr Verplaetse was her only son and sole heir and inherited her estate worth approximately €7 million.
[2] In June 2010 Mr Verplaetse moved from Belgium to London and asked Mr Van Hulle who had been his mother’s business adviser to assist him in finding a place to live. Mr Van Hulle was regarded by Mr Verplaetse as a trusted adviser. Therefore, when Mr Van Hulle advised Mr Verplaetse to set up a New Zealand trust for the purchase he agreed. From that time until Mr Verplaetse discovered that Mr Van Hulle was taking money from the trust which was not accounted for, Mr Verplaetse effectively handed over the management of his financial affairs to Mr Van Hulle.
APIC TRUSTEES LTD TRADING AS VERPLAETSE TRUST v FLANDERS FIELD INVESTMENT LTD [2020] NZHC 1200 [3 June 2020]
[3] Mr Verplaetse transferred £1 million to a bank account and a property at Clanricarde Gardens, London was purchased on 5 February 2011 for £810,000 in the name of Flanders Field Investment Ltd (Flanders Field). Mr Verplaetse was not aware at the time of the purchase of the Clanricarde Gardens property that only part of the funds he sent for the purchase were used to buy the property.
[4] Flanders Field is a New Zealand registered corporate trustee company incorporated on 1 February 2011. The trust was set up so that Mr Van Hulle was the sole director and Mr Verplaetse the sole shareholder of Flanders Field. Mr Van Hulle organised all the transactions.
[5] Mr Verplaetse did not sign the deed of trust. However, he has produced a copy of a document which he says is a copy of the trust deed. It is headed Verplaetse Trust with Flanders Field as the trustee. The deed contains a provision stating that the “… deed and the trusts it creates are governed by the laws of New Zealand provided that the Trustee may change the applicable law by written resolution”.
[6] Neither Mr Verplaetse nor Mr Van Hulle have ever been domiciled in New Zealand, the trust has had no business dealings in New Zealand and none of the property acquired or held by the trust is located in New Zealand. The only connection with New Zealand is that the trust deed indicates that it is governed by New Zealand law and the corporate trustee, Flanders Field was incorporated in New Zealand.
[7] Mr Van Hulle was appointed the initial director of Flanders Field and Mr Verplaetse was the only shareholder as well as the settlor with the exclusive power of appointment and removal of trustees as well as being one of the beneficiaries of the Verplaetse Trust. The other beneficiaries are listed in the deed as the Erwin Verplaetse Foundation and Mission without Borders in Belgium (or on their behalf). Mr Verplaetse has for all intents and purposes been the only beneficiary. He has lived in the London properties owned by the trust. He also has been receiving a monthly income from the trust of £4,000.00 which is paid from the Sarasin Bank account.
[8] Mr Verplaetse had left Mr Van Hulle to manage the affairs of the trust and his inheritance. Mr Verplaetse says that over the years as investments matured he transferred his inheritance to the bank account set up for the trust.
[9] In April 2016 Mr Verplaetse had seen some statements for the trust bank account which had been set up in June 2011 at the Swiss Private Bank, J Safra Sarasin (Sarasin). He noticed that large payments had been made out of the account to various companies which he did not recognise. Nevertheless, during that year until he confronted Mr Van Hulle in August 2016 he continued to sign various trust documents at Mr Van Hulle’s behest. However, when he asked about these transactions in a meeting with Mr Van Hulle in August 2016, Mr Van Hulle became angry and their relationship soured.
[10] It now appears that since 2013 substantial amounts of money had been moved out of the trust bank accounts by Mr Van Hulle to his own companies.
[11] In July 2018 Mr Verplaetse exercising his exclusive power of removal and appointment, removed Flanders Field as trustee and appointed APIC a Jersey based corporate trustee. This followed the discovery by Mr Verplaetse that Mr Van Hulle had taken substantial monies out of the trust’s bank account with the private bank, Sarasin, and unsuccessful attempts by Mr Verplaetse’s lawyers to meet with Mr Van Hulle. In response to the approaches by Mr Verplaetse’s lawyers, Mr Van Hulle’s Belgium based lawyer asserted that Mr Van Hulle was not only a director but also had taken over the shareholding in Flanders Field which had been transferred to his sole name. This was news to Mr Verplaetse.
[12] It also appears that since 2014 Mr Van Hulle had been taking steps to take over the full control and take the benefit of the trust in an attempt to transfer the trust assets to companies controlled by him. To achieve those ends he prepared various documents which he says were signed by Mr Verplaetse. Only scanned copies of these documents are available. They are: an expression of wishes dated 10 June 2016; a share transfer recording the transfer of the one share in Flanders Field to himself; and what was described as an “adional agreement” between himself and Mr Verplaetse which purported to make Mr Van Hulle’s appointment as director of Flanders Field
irrevocable and permanent and revoke Mr Verplaetse’s exclusive power of appointment and removal of trustees.
[13] Copies of those documents were used on behalf of Mr Van Hulle to resist answering inquiries directed at him and the other director, Ms Thumiger on behalf of Mr Verplaetse by his lawyers. The copies of documents provided by Mr Van Hulle, his Ghent based lawyer and Ms Thumiger were on their face apparently signed by Mr Verplaetse. However he says he did not consent, nor did he sign those documents. The conclusion on the basis of the material produced is that the signatures were forged by or on behalf of Mr Van Hulle.
[14] Mr Van Hulle and the second defendant Ms Thumiger who was apparently appointed in order to comply with New Zealand residency requirements for directors of foreign owned countries, are the present directors of Flanders Field.1 Mr Van Hulle is presently recorded as being the sole shareholder.
[15] APIC, the plaintiff, is the new trustee appointed by Mr Verplaetse and is now attempting to move the remaining trust assets into its name from Flanders Field. It has not been able to do so as the assets are in the name of Flanders Field whose directors maintain that Mr Van Hulle is the sole shareholder and appointor. They do not recognise Mr Verplaetse as having any rights nor the power to remove and appoint trustees.
[16] Sarasin bank had become suspicious about Mr Van Hulle’s dealings with the account. It has frozen the trust bank accounts but continues to allow a payment of
£4,000 per month to Mr Verplaetse. However, it points to the Swiss banking secrecy laws and says it is not permitted to provide the present balances held in the accounts and is unable to assist further. It advised Mr Verplaetse to involve Swiss authorities to prosecute Mr Van Hulle which would provide it with the evidence needed to transfer the accounts out of his control or that of Flanders Field. The prosecution has been commenced but not yet completed.
1 These requirements were introduced as a result of anti-money laundering laws introduced in New Zealand in 2015: The Companies Amendment Act (No 4) 2014.
[17] APIC seeks not only a declaration that the trust is a New Zealand trust and that its terms are those recorded in the copy of the deed of trust produced by Mr Verplaetse but also various orders designed to vest the assets presently held by Flanders Field in APIC.
The parties
[18] Mr Van Hulle arranged for the appointment of Joanna Elizabeth Thumiger in September 2016 as an additional director of Flanders Field to meet the residential requirement that at least one director of a New Zealand registered company. Ms Thumiger was said to be an Australian director which would have complied with the residency requirements. It has since transpired that she did not meet those requirements at the time and now lives in Singapore. Mr Verplaetse apparently did not agree to Ms Thumiger’s appointment.
[19] Mr Van Hulle was served with these proceedings by substituted service on Mr Gernay of Curalys, his Belgian lawyer, on 2 August 2019. He has taken no steps.
[20] Mr Van Hulle had earlier refused to cooperate when approached by Mr Verplaetse’s English lawyers, Sheridans. His response via Mr Gernay was to send a copy of the document headed “expression of wishes” which purported to give Mr Van Hulle control of the assets of the trust and the total discretion to stop Mr Verplaetse’s monthly allowance from the trust. Mr Verplaetse says the document, which on its face appeared to be signed by Mr Verplaetse had not been signed by him.
[21] Ms Thumiger refused to accept service of the proceedings when an attempt was made to serve her in Singapore. Orders for substituted service were made and service was effected in that manner.2 She has taken no steps.
[22] Ms Thumiger had also earlier been approached by Mr Verplaetse’s lawyers in an attempt to effect the change of trustee but had refused to cooperate. She pointed to
2 APIC Trustees Ltd v Flanders Field Investments Ltd HC Wellington CIV-2019-485-397, 1 November 2019 (Minute of Johnston AJ). She has been served by the documents being left at her home and work addresses as well as by email to an email address which she had used to respond in relation to earlier queries on this matter. She has not responded since service.
the “adional agreement” apparently signed by Mr Verplaetse which purported to make Mr Van Hulle a director and a trustee and also make Mr Van Hulle’s appointment as director irrevocable. Again, Mr Verplaetse denies agreeing to this or signing that agreement.
The legal principles: Declarations
[23] The Declaratory Judgments Act provides for the making of declarations in a wide variety of circumstances including in relation to the validity of a deed. Section 3 of the Act provides:
Where any person claims to have acquired any right under any such statute, regulation, bylaw, deed, will, document of title, agreement, memorandum, articles, or instrument, or to be in any other manner interested in the construction or validity thereof, —
such person may apply to the High Court by originating summons for a declaratory order determining any question as to the construction or validity of such statute, regulation, bylaw, deed, will, document of title, agreement, memorandum, articles, or instrument, or of any part thereof.
[24]Section 4 provides:
Any declaration so made on any such originating summons shall have the same effect as the like declaration in a judgment in an action, and shall be binding on the person making the application and on all persons to whom the summons has been served, and on all other persons who would have been bound by the said declaration if the proceedings wherein the declaration is made had been an action.
[25] Section 10 of the Declaratory Judgments Act provides that the jurisdiction granted under this Act is discretionary:
The jurisdiction hereby conferred upon the High Court to give or make a declaratory judgment or order shall be discretionary, and the said Court may, on any grounds which it deems sufficient, refuse to give or make any such judgment or order.
Trusts
[26] A testator or settlor not domiciled in New Zealand is free to set up a trust governed by New Zealand law.3
3 Morris The Conflict of Laws, (9th ed, Sweet & Maxwell, 2016) Thomson Reuters, London at [19- 002] and Attorney-General v Campbell (1872) LR 5 HL 524.
[27] The validity, interpretation and effect of a trust might be governed by one law while its administration may be governed by another. While uncommon, this may be the law of the place of administration of the trust. Regard must be had to the law of the place of administration insofar as the detailed procedures for administration of the trust are concerned.4
Declarations and orders sought
[28] The applicant seeks declarations that the Verplaetse Trust is a trust in accordance with New Zealand law; that Mr Verplaetse is a beneficiary of that trust; that Flanders Field was trustee of the trust until its removal on 30 July 2018 and that APIC was appointed as sole trustee of the Verplaetse Trust on 30 July 2018, in accordance with an express power contained in cl 15 of the Verplaetse Trust Deed.
[29] In addition, various declarations are sought in relation to the actions of Flanders Field as well as orders for the vesting of the London properties, a rental account held by the rental agent Kay & Co in London and the Saracin Swiss bank accounts, in APIC. A copy of the declarations and orders sought is attached
[30] Orders are also sought that the Court, in exercising its inherent jurisdiction to supervise the Verplaetse Trust for the welfare of beneficiaries directs Ms Thumiger to execute various documents to transfer property, funds and bank accounts to the plaintiff as trustee of the Verplaetse Trust. Ms Thumiger’s role is as one of two directors of Flanders Field.
Issue 1: The Trust Deed
[31] The applicant says that the trust was validly established, and that the terms of the trust are set out in the trust deed. That includes a provision that the governing law is that of New Zealand as follows:
21.Jurisdiction
21.1Governing law
4 Morris, above n 3, at [19-003]. See also Provost of Edinburgh v Aubrey (1754) Ambler 256; Attorney General v Lepine (1818) 2 Swanst. 181; Emery v Hill (1826) 1 Russ. 112; New v Bonaker (1867) LR 4 Eq 655.
This deed and the trusts it creates are governed by the laws of New Zealand provided that the Trustee may change the applicable law by written resolution.
21.2Transfer jurisdiction
The Trustee may transfer to any new Trustee appointed outside the jurisdiction of the New Zealand courts any, or all, of the Trust Fund in respect of which the new Trustee is appointed.
[32]The beneficiaries are:
(a)The Settlor;
(b)Erwin Verplaetse Foundation;
(c)Mission Without Borders in Belgium;
(d)The trustees (in their capacity as trustees) of any trust of which any of the Beneficiaries referred to in paragraphs (a) to (c) above is a beneficiary (including as a discretionary beneficiary); and
(e)Any other person or persons appointed by the Settlor by deed before Vesting Day.
[33] In addition, the applicant relies on paragraph 15 of the Trust Deed which relates to the appointment and removal of trustees and as the settlor he had the power of nomination under the Trust Deed. The relevant provisions read as follows:
15.Appointment and Removal of Trustees
15.1Vesting of power
The powers set out in clause 15.2 shall be vested as follows:
(a)In the Settlor during the Settlor’s lifetime, subject to any nomination by the Settlor pursuant to clause 15.1(b).
(b)The Settlor may, by revocable or irrevocable deed, grant to any person the Settlor’s powers of appointment.
(c)The Settlor may, by will, nominate any person to exercise the Settlor’s powers of appointment after the Settlor’s death. In such case the person so nominated shall upon the grant of
probate or administration in the Settlor’s estate be vested with the deceased Settlor’s power of appointment and any power of appointment vested in another person pursuant to his clause 15 shall cease unless a contrary intention is expressed in any deed granting the power of appointment.
(d)After the Settlor’s death, if there shall be no person nominated as specified in clause 15.1(c) to act, then the Settlor’s power of appointment shall vest in the Settlor’s administrators or the executors or trustees upon the grant of administration or probate of the Settlor’s will. Any power of appointment vested in another person pursuant to this clause 15 shall cease unless a contrary intention is expressed in any deed granting the power of appointment.
15.2Powers
The person or persons in whom the powers are vested under clause
15.1 shall have power at any time or times to:
(a)Appoint an additional Trustee or Trustees;
(b)Appoint any person or persons as Advisory Trustee;
(c)Appoint himself, herself or themselves to be a Trustee or Trustees; and
(d)Remove any existing Trustee or Advisory Trustee.
[34] Counsel submits the trust was established on 15 February 2011. Mr Verplaetse has produced a copy of the document headed “Verplaetse Trust, Trust Deed. Flanders Field Investment (Trustee)” on which the signature of Mr Van Hulle appears above the execution clause which reads as follows:
Executed as a deed
Signature: Reginald Van Hulle
Executed by Flanders Field Investments Limited by director in the presence of
Signature of witness
“Iven De Ho?n (witness), lawyer? Belgium”.5
[35] Mr Verplaetse did not sign the deed of trust as settlor. It is not clear when Mr Verplaetse first received a copy of the trust deed. He, however, says he was aware of the trust deed and the establishment of the trust.
5 The question marks indicate the letter or word is unclear.
[36] The applicant says that the evidence supports the settlement of the trust at the time of the purchase of the Clanricarde Gardens. It points to the following matters:
(a)Mr Verplaetse’s knowledge of the trust and that Mr Van Hulle had told him he was setting up a New Zealand trust for his inheritance and to buy the London property;
(b)Mr Verplaetse’s 100 per cent ownership (until Mr Van Hulle effected the transfer) of the shareholding in the New Zealand corporate trustee Flanders Field;
(c)The fact that Mr Verplaetse transferred £1 million from his Barclays account to solicitors acting for Flanders Field for the purpose of purchasing a property at Clanricarde Gardens. The initial settlement was recorded in the trust deed as being the funds for the purchase of that property;
(d)The Clanricarde Gardens property purchase occurred on 15 February 2011 for £810,000 and Flanders Field settled the purchase and the property remains in its name;
(e)On 17 February 2011 Flanders Field filed an Inland Revenue form (IR607) which is a foreign trust disclosure form which stated that the name of the foreign trust was Verplaetse Trust and the trustee was Flanders Field Investment Ltd.
(f)In June 2011 Mr Van Hulle applied Sarasin Bank to open a bank account in the name of Flanders Field. At that time, he advised the bank that:
(i)Mr Verplaetse established the trust from money he inherited from his mother’s estate;
(ii)Flanders Field is the trustee;
(iii)Mr Van Hulle is the director;
(iv)Mr Verplaetse is the sole shareholder of Flanders Field and the settlor; and
(v)the goal of the trust was to protect the family capital.
[37] On 7 July 2011 the Sarasin Bank confirmed that Mr Verplaetse was the beneficial owner of the trust; that there was a subsequent arrangement that the Verplaetse Trust via the Sarasin Bank pay Mr Verplaetse’s Barclays’ bank account the sum of £4,000 per month.
Mr Van Hulle
[38] Mr Verplaetse had discovered in April 2016 that unauthorised payments had been made out of the trust’s Sarasin Bank account.
[39] Matters came to a head in late 2016 when Mr Verplaetse’s allowance, which was funded from rent for the Clanricarde Gardens property was stopped. When he asked Mr Van Hulle about the payments, Mr Van Hulle who had had sole control of the bank accounts for the trust, became angry. Mr Verplaetse then became aware that Mr Van Hulle had transferred the shareholding in Flanders Field into his name out of the name of Mr Verplaetse.
[40] In February 2018 with the assistance of his English solicitors, Sheridans, Mr Verplaetse arranged to meet Mr Van Hulle to transfer the shareholding back into his name. However, before the meeting took place, Mr Van Hulle’s Belgium-based lawyer, Jean Jacques Gernay, of Curalys, wrote to Sheridans asserting that Mr Van Hulle was the sole shareholder and director of Flanders Field. A copy of the share transfer form apparently be signed by Mr Verplaetse and recording that all the shareholding in Flanders Field had been transferred to Mr Van Hulle together with a copy of the document headed up “expression of wishes.”
[41] The “expression of wishes” document is a peculiar document. The copy sent by Mr Gernay is signed by Mr Van Hulle on behalf of Flanders Field and by Mr Verplaetse. Mr Verplaetse denies agreeing to its terms and says he did not sign it.
[42] It is riddled with grammatical and spelling errors. It records that the shares in Flanders Field “in New Zealand and Hong Kong” are owned by Mr Van Hulle all from the date of the document (10 June 2016) and says they are received by him as “a free and irrevocable gift, including the properties and all the assets. Considered irrevocable and that in return second part [Mr Van Hulle] will take care of me during his life.”6
[43] The “expression of wishes” goes on to record that the “Erwin Verplaetse Foundation will have to be managed by second part. For setting up the foundation and the management, second part receives a one time allowance of £750,000, which second part can transfer to his personal or his managent (sic) companies account, the day he wishes to do, even from day one after date of this contract. The foundation will support children and it is up to second part to decide how this is to be done now or after my death.”
[44] The document goes on to confirm that monies from rent on Clanricarde Gardens will be transferred to Flanders Field investment. It continues: “and if not, you [Mr Van Hulle] have every right to use all possibilities to force this, even by court. It is second part allowed to square the outstanding rental amount with my allowance”.7
[45] In his letter of 29 January 2018 sending the copy of the “expression of wishes” to Sheridans Mr Gernay says that as Mr Van Hulle was the sole shareholder in Flanders Field and it was a free and irrevocable gift to Mr Van Hulle on “September 9, 2016, as announced in the expression of wishes from June 10, 2016”, so there was no reason to have any further discussions.
[46] I am satisfied that Mr Verplaetse did not sign the document. The “expression of wishes” document in my view has no effect and does not alter the terms of the trust
6 Words in square brackets added.
7 Words in square brackets added for clarification.
as set out in the trust deed. It was clearly not prepared professionally, is full of grammatical errors and spelling errors and purports to transfer the beneficial interest in the trust assets, as well as the shares in Flanders Field to Mr Van Hulle in breach of his fiduciary obligations as director of the trustee and adviser to Mr Verplaetse.
[47] A further point supporting the invalidity of the document is that the time that Mr Van Hulle apparently executed the “adional agreement” on behalf of Flanders Field as a trustee, it had been struck off the companies register in New Zealand. It was struck off on 21 May 2013 and restored to the register on 16 June 2014. Therefore, it was unable to execute the document. Mr Verplaetse says while the document purports to be signed by him it was not. He did not consent to the arrangement set out in the “expression of wishes”.
[48] I also accept the evidence of Mr Verplaetse, supported by the documentary evidence and the surrounding circumstances, that he did not consent to the arrangements set out in the “adional agreement” nor sign the share transfer. Therefore the documents are ineffective to effect the changes to the terms of the trust deed or the shareholding of Flanders Field. Mr Van Hulle was not authorised to transfer the shareholding in Flanders Field, therefore he has wrongly done so.
[49] There was nothing to prevent Mr Verplaetse as appointer removing Flanders Field as the trustee and appointing another corporate trustee, APIC. That appointment is therefore effective.
[50] Mr Van Hulle apparently told Sarasin Bank that Mr Verplaetse had mental health difficulties. That led the bank treating Mr Verplaetse as a vulnerable person so making it more difficult to transfer the trust funds to the new trustee. A letter was produced by Mr Verplaetse from his doctor who had attended Mr Verplaetse since 2012. That letter says that Mr Verplaetse suffers no mental health difficulties for which he has been treated and that the only treatment he is receiving is for high blood pressure. I accept that evidence and the assurance of Mr Verplaetse that he has no relevant mental health difficulties that would prevent Mr Verplaetse from exercising his rights under the trust.
[51] Mr Verplaetse has laid complaints in Switzerland with the Swiss prosecutor about Mr Van Hulle’s dealings with the Sarasin Bank account. He has also laid an official complaint against Mr Van Hulle with the judicial police of East Flanders alleging Mr Van Hulle has committed fraud and an abuse of trust through the diversion of Mr Verplaetse’s trust account fund into the Flanders landscape bank accounts. Neither of those have resulted in convictions of Mr Van Hulle to date.
The new trustee
[52] APIC is a Jersey registered corporate trustee. Its director, Mr Rhodes provided an affidavit. He noted that APIC was appointed by Mr Verplaetse on 30 July 2018 pursuant to the trust provisions referred to above. A copy of the appointment document was produced. Mr Rhodes noted that Flanders Field, by then having Mr Van Hulle and Ms Thumiger recorded as directors, was removed from the New Zealand company register on 30 July 2018. It has since been restored to the register.
[53] At present the trust assets include the two London properties (including the Clanricarde Gardens property) which had been purchased from trust funds, as well as the funds in the Sarasin Bank account and an amount of rent held by Kay & Co the rental agents in London which has been receiving rental from the Clanricarde Gardens property.
[54] The funds that have been used by the trust to purchase the London property came from the initial settlement of the trust of £1 million provided by Mr Verplaetse. The other property and funds came from amounts he was paid from investments maturing and being redeemed. Whatever assets the trust now holds apparently represent investments of somewhere in the vicinity of €7 million. Mr Verplaetse does not know how much money is in the bank accounts at present.
[55] The Sarasin Bank has refused to disclose the balance of the Sarasin Bank accounts, which are presently frozen at Mr Verplaetse’s behest. Apparently, that bank has been reasonably sympathetic to Mr Verplaetse’s predicament, allowing the accounts to be frozen and also reinstating Mr Verplaetse £4,000 a month allowance..
.The second London property was at least in part funded by a loan from Sarasin. The amount of that loan is not in evidence.
What are the terms of the trust?
[56] Ms Bennington for the plaintiff submitted that the trust deed while it had some deficiencies in execution evidenced the criteria of an express trust and was on the terms and conditions set out in the deed. She submitted that it was a trust that complied with the rule against perpetuities and the three certainties.8 Mrs Bennington submitted that the certainties necessary to prove the establishment of a trust had been proven as follows:
18.1Certainty of intention: Mr Verplaetse has confirmed his intention to set up a trust by his actions, through the payment of the funds to Flanders Field’s solicitors so that it could purchase Clanricarde Gardens, through the subsequent transfer of the proceeds of the redeemable shares into the bank account held at Sarasin Bank in the name of Flanders Field, and in his affidavit filed in support of this application.
18.2Certainty of object: The beneficiaries are named in the Verplaetse Trust Deed, and Mr Van Hulle subsequently advised both Sarasin Bank and New Zealand’s Inland Revenue Department19 that Mr Verplaetse was a beneficial owner of the trust fund.
18.3Certainty of subject: The Verplaetse Trust Deed sets out the property that is subject to the trust, and there are contemporaneous records which show that:
18.3.1Clanricarde Gardens was the Initial Settlement, and was purchased by Flanders Field, and registered in the name of Flanders Field.
18.3.2Bayswater Road was purchased by Flanders Field to ensure that it was property held by the Trust; and
18.3.3The Sarasin Bank account was opened as a bank account for the Trust, with Mr Van Hulle advising the Bank when he opened the account that the funds were owned by a Trust established by Mr Verplaetse from money he had inherited from his mother’s estate, that Flanders Field was the trustee, that Mr Van Hulle was the director of Flanders Field, and that Mr Verplaetse was the sole shareholder of Flanders Field and the beneficial owner of the Verplaetse Trust.
[57] While the Verplaetse Trust Deed was not signed by Mr Verplaetse as settlor, it was executed as a deed by Mr Van Hulle and complied with the requirements for execution pursuant to s 9 of the Property Law Act 2007. These are:
(a)It was in writing;
8 Knight v Knight (1840) 3 Beav 148; 49 ER 58 (Ch). Ruscoe v Cryptopia Ltd (in liquidation) [2020] NZHC 728 at [138].
(b)It was executed in accordance with s 9 of the PLA, by Mr Van Hulle, who at the time was the sole director of Flanders Field, and it was witnessed by a solicitor based in Belgium, who was not a party to the deed and who signed it.
(c)It was delivered to Mr Verplaetse.
[58] Ms Bennington submits that the document was drafted by Mr Van Hulle on behalf of Flanders Field and was executed as a deed by Mr Van Hulle who was the sole director of Flanders Field. Therefore, she says the Verplaetse Trust Deed produced by Mr Verplaetse governed the trust and a valid deed of trust binding in its terms on Flanders Field and therefore its directors.
[59] I am satisfied that the trust was established. The certainty requirements for a trust have been met. In addition, I am satisfied that the terms of the trust are those set out in the Verplaetse Trust deed a copy of which was produced by Mr Verplaetse and that Flanders Field was the appointed corporate trustee. Mr Verplaetse is the settlor and a beneficiary as well as having the exclusive power to appoint and remove trustees. I am also satisfied that the terms of that trust deed have not been varied as asserted by Mr Van Hulle.
[60] It is appropriate I exercise my discretion to make declarations that the Verplaetse Trust deed is an express trust set up in accordance with New Zealand law and that the terms of the trust are out as set out in the trust deed including the fact that Mr Verplaetse is the beneficiary of the trust, settlor and has the power of appointment and removal of trustees. I am also satisfied that the London properties were acquired by the trust and that Mr Verplaetse has validly removed Flanders Field as trustee and appointed APIC.
Declarations
[61]Therefore, I propose making declarations to:
(a)Declare that the Verplaetse Trust is a trust in accordance with New Zealand law;
(b)Declare that Mr Erwin Henri Prosper Verplaetse is a beneficiary of the Verplaetse Trust;
(c)Declare that Flanders Field, until its removal on 30 July 2018, was the trustee of the Verplaetse Trust;
(d)Declare that APIC was appointed as the sole trustee of the Verplaetse Trust on 30 July 2018, in accordance with an express power contained in clause 15 of the Verplaetse Trust Deed;
(e)Declare that Flanders Field opened a Sarasin Bank account in 2011 for the purpose of operating it as a bank account for the Verplaetse Trust.
(f)Declare that Flanders Field as trustee for the Verplaetse Trust acquired properties at:
(i)Clanricarde Gardens, London W2 4JW (title NGL 640297); and
(ii)Flat 1, Carolyn House, Bayswater Road, London W2 4RG (title NGL 813872) as trustee for the Verplaetse Trust.
[62] However, I am not satisfied on the evidence at present that the vesting orders of the further declarations should be made. These include that:
(a)Mr Verplaetse’s inheritance was transferred into the Sarasin Bank account;
(b)Mr Verplaetse, as a beneficiary under the Verplaetse Trust, is the beneficial owner of the funds held in the Sarasin Bank account held in the name of Flanders Field;
[63] The details of the funds in the bank accounts held by Saracin is not available. It appears that the second London property was purchased with using at least some borrowed money which is the subject of a Pledge agreement with Saracin. It has not been served.
[64] Similarly declarations and vesting orders are sought in relation to Kay & Co which is based in London and has apparently not been served.
[65] In addition, the effect of making the orders and directions relating to property outside New Zealand is not clear. There may be requirements in relation to money laundering, taxation and other matters of which the court should be made aware.
[66] I am also not satisfied that it is appropriate to make the directions sought in relation to Ms Thumiger at this stage. First she is only one of the directors of Flanders Field so the effect of her signing the documents in those circumstances is uncertain, secondly she is outside the jurisdiction. In addition I have more general concerns relating to the noncompliance of Flanders Field with New Zealand company requirements.
[67] In addition I note that Flanders Field was a corporate trustee at the time but does not comply with the New Zealand requirements including as to the residence of directors. The plaintiff has submitted that Flanders Field will be a non-compliant company and therefore is liable to be struck off which is why the assistance of the Court is sought with vesting orders. The removal of all assets out from Flanders Field while it is a non-compliant company may have ramifications which are not apparent to the Court.
[68] The removal of Flanders Field as trustee also further removes the connection with New Zealand. The jurisdiction clause of the deed states only that the governing law is that of New Zealand. The deed does not purport to provide the exclusive jurisdiction to the New Zealand courts. Therefore, it may be appropriate to have the further matters dealt with in the court in which the property is situated.
[69] The question of forum non conveniens now arises;9 with the underlying question being whether New Zealand is the appropriate forum for the further declarations and orders sought.
9 Spiliada Maritime Corp v Cansulex Ltd [1987] AC 460; [1986] 3 All ER 843.
[70] In this case the parties and the property including the bank accounts and other relevant parties reside outside New Zealand and have not been served. These include Kay & Co, the property manager with whom the rent monies are kept and Sarasin Bank. Lastly, any declaration from this Court will nonetheless require enforcement in the United Kingdom and Switzerland.
[71] These issues were not the subject of submissions therefore I do not consider it appropriate to issue a final judgment. I have made a number of declarations, but reserve leave to the applicant to bring the matter back before the Court by memorandum within 14 days of this judgment.
Conclusion
[72]The following declarations are made to:
(a)Declare that the Verplaetse Trust is a trust in accordance with New Zealand law;
(b)Declare that Mr Erwin Henri Prosper Verplaetse is a beneficiary of the Verplaetse Trust;
(c)Declare that Flanders Field, until its removal on 30 July 2018, was the trustee of the Verplaetse Trust;
(d)Declare that APIC was appointed as the sole trustee of the Verplaetse Trust on 30 July 2018, in accordance with an express power contained in clause 15 of the Verplaetse Trust Deed;
(e)Declare that Flanders Field opened a Sarasin Bank account in 2011 for the purpose of operating it as a bank account for the Verplaetse Trust;
(f)Declare that Flanders Field as trustee for the Verplaetse Trust acquired properties at:
(i)Clanricarde Gardens, London W2 4JW (title NGL 640297); and
(ii)Flat 1, Carolyn House, Bayswater Road, London W2 4RG (title NGL 813872) as trustee for the Verplaetse Trust.
[73] In relation to the other declarations and orders sought I reserve leave to the applicant to bring the matter back before the Court by memorandum within 14 days of this judgment. The Registrar will then arrange a teleconference at a time convenient to counsel in order to consider the issues arising.
Costs
[74] The plaintiff seeks costs against the first and second defendants on a 2B basis. The cost of the proceedings has come about because of the refusal of the directors to assist the plaintiff in the recognition of the appointment of a trustee in replace of Flanders Field Investments Ltd. It is appropriate that costs be awarded. The plaintiff is entitled to costs on a 2B basis and disbursements as fixed by the registrar against the first and second defendant.
Grice J
Solicitors:
Duncan Cotterill, Auckland
Attachment : Declarations and orders sought
[1]The declaration and orders sought are to:
(a)Declare that the Verplaetse Trust is a trust in accordance with New Zealand law;
(b)Declare that Mr Erwin Henri Prosper Verplaetse is the beneficiary of the Verplaetse Trust;
(c)Declare that Flanders Field, until its removal on 30 July 2018, was the trustee of the Verplaetse Trust;
(d)Declare that APIC was appointed as the sole trustee of the Verplaetse Trust on 30 July 2018, in accordance with an express power contained in clause 15 of the Verplaetse Trust Deed;
(e)Declare that Flanders Field opened the Sarasin Bank account in 2011 for the purpose of operating it as a bank account for the Verplaetse Trust;
(f)Declare that Mr Verplaetse’s inheritance was transferred into the Sarasin Bank account;
(g)Declare that Mr Verplaetse, as a beneficiary under the Verplaetse Trust, is the beneficial owner of the funds held in the Sarasin Bank account held in the name of Flanders Field;
(h)Vest the funds held in the Sarasin Bank account in the name of Flanders Field in APIC as trustee of the Verplaetse Trust;
(i)Declare that the funds held in the Sarasin Bank account in the name of Flanders Field have vested in APIC as trustee of the Verplaetse Trust;
(j)Declare that the interests as registered on HM Land Registry in the name of Flanders Field Investments Limited in respect of the following properties are beneficially owned by the Verplaetse Trust;
(k)Flat 3, 46 Clanricarde Gardens, London W2 4JW (Clanricarde Gardens);
(l)Flat 1, Caroline House, Bayswater Road, London W2 4RG (Bayswater Road) (the Verplaetse Trust properties);
(m)Vest the Verplaetse Trust properties in APIC as trustee of the Verplaetse Trust;
(n)Declare that the Verplaetse Trust properties have vested in APIC as trustee of the Verplaetse Trust;
(o)Declare that the funds held by Kay & Co for the rent paid on Clanricarde Gardens since August 2016 are an asset of the Verplaetse Trust;
(p)Vest the funds held by Kay & Co for the rent paid on Clanricarde Gardens since August 2016 in APIC as trustee of the Verplaetse Trust;
(q)Declare that the funds held by Kay & Co for the rent paid on Clanricarde Gardens since August 2016 have vested in APIC as trustee of the Verplaetse Trust; and
(r)Declare that the rent paid to Kay & Co for Clanricarde Gardens is income of the Verplaetse Trust, and should be paid to APIC as trustee of the Verplaetse Trust.
[2] APIC is also asking the Court to use its inherent jurisdiction to supervise trusts for the welfare of beneficiaries to make the following orders against Ms Thumiger:
(a)Direct Ms Thumiger, on behalf of Flanders Field, to effect the legal transfer of the Verplaetse Trust properties by executing the requisite TR1 forms required by the HM Land Registry for Clanricarde Gardens and Bayswater Road;
(b)Direct Ms Thumiger, on behalf of Flanders Field, to sign the requisite forms to effect the transfer of the funds held in the Sarasin Bank account to APIC;
(c)Direct Ms Thumiger, on behalf of Flanders Field, to authorise Kay & Co to release the Clanricarde Gardens rental it is currently holding to APIC; and
(d)Direct Ms Thumiger, on behalf of Flanders Field, to sign the requisite forms to ensure all future rent for Clanricarde Gardens is paid to APIC.
0
2
0