Cadness v Aspinall
[2025] NZHC 308
•26 February 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-002462
[2025] NZHC 308
UNDER Section 133 of the Trusts Act 2019 and Part 19 of the High Court Rules 2016 IN THE MATTER OF
an application for blessing orders in relation to the Aspinall Family Trust
BETWEEN
AUDREY ELIZABETH CADNESS and NEW ZEALAND TRUSTEE SERVICES
LIMITED as Trustees of the Aspinall Family Trust
ApplicantsAND
KYLE JONATHAN ASPINALL
Respondent
Hearing: 18 November 2025 Appearances:
A Cameron for the Applicants
No appearance by the Respondent
Judgment:
26 February 2025
JUDGMENT OF WALKER J
This judgment was delivered by me on 26 February 2025 at 4 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
CADNESS v ASPINALL [2025] NZHC 308 [26 February 2025]
[1] Trustees of the Aspinall Family Trust (AFT) seek the Court’s blessing under s 133 of the Trusts Act 2019 (the Act) to carry out a trustees’ resolution to sell the Trust property at 21A Buckleys Track, Paremoremo (the Property) and distribute the net sale proceeds between the two primary beneficiaries.1
[2]The orders they seek are:2
(a)Directions required to facilitate the sale of the Property and distribution of the net proceeds of sale (after sale costs, and repayment of monies secured by the existing mortgage to Audrey Elizabeth Cadness and Roger Herbert Cadness secured by a caveat) in equal shares to Audrey Elizabeth Cadness and Kyle Jonathan Aspinall.
(b)Indemnification of the trustees’ reasonable costs and disbursements in bringing the application from the assets of AFT.
[3] Ms Cadness, one of the continuing trustees, was in a de facto relationship with the respondent, Mr Aspinall, between 2004 and early 2018. They have four children together aged between 10 and 18 years. New Zealand Trustee Services Limited (NZTS) is an independent corporate trustee. Mr Aspinall was originally also a trustee of the AFT. Ms Cadness and NZTS contend that he is no longer a trustee for reasons which will emerge in this judgment.
[4] The application for a blessing order is not opposed. The respondent, Mr Aspinall, was served with the application but has taken no steps prior to or after the expiry of deadline for the filing of notices of opposition.3
[5] Mr Cameron, counsel for the applicant, filed fulsome written submissions prior to the hearing and assisted the Court when the matter was called. After the hearing, with leave, he filed further submissions explaining that, wishing to remove any
1 Originating application for Orders under section 133 of the Trusts Act 2019 dated 4 October 2024. Leave to proceed by way of originating application and to dispense with service on a number of named beneficiaries was granted on 9 October 2024. See Cadness v Aspinall HC Auckland CIV 2024-404-2462, 9 October 2024 (Minute of Walker J)
2 The orders sought in the originating application were amended following the hearing.
3 Cadness v Aspinall HC Auckland CIV 2024-404-2462, 6 November 2024 (Minute of Campbell J)
impediment, the trustees no longer intended to deduct repayment of a particular loan facility from Mr Aspinall’s personal share of the net sale proceeds. He also confirmed that an order for “party and party” costs against Mr Aspinall was no longer sought for pragmatic reasons and in view of the lack of opposition to the application.
Background
[6] Ms Cadness filed an affidavit in support of the application followed by a supplementary affidavit to clarify aspects and confirm the trustees’ change of position noted above. She sets out the relationship between her and Mr Aspinall and her current living rental situation housing herself and their four children. I take the following factual background from that affidavit, cross-referring to the annexed exhibits where necessary.
[7] Before meeting Mr Aspinall, Ms Cadness was a trustee, along with her father, of a (separate) family trust which owned a property in Schnapper Rock Road.
[8] In late May 2008, Mr Aspinall and Ms Cadness settled the AFT. The primary reason for doing so was to hold the Property and to provide for themselves and their family. As noted, the original trustees were Ms Cadness, Mr Aspinall and NZTS. The primary beneficiaries are Ms Cadness, Mr Aspinall and any of their children or grandchildren or more remote issue. The secondary beneficiaries are any other persons related to Mr Aspinall and Ms Cadness; any trust or superannuation scheme or plan established by Mr Aspinall and Ms Cadness or by any other person for the purpose of providing benefits for any one or more of the discretionary beneficiaries, or of which a discretionary beneficiary is a member; and any organisation or purpose deemed to be charitable under New Zealand law.
[9] The power of appointment of new trustees vests in Mr Aspinall and Ms Cadness, or the survivor of them, and any person or persons they (by deed or by will) nominate.
[10]Clause 15 of the Trust Deed provides:
Removal of Trustees
The Person having the power to appoint new Trustees pursuant to clause 13 (other than the proviso) shall have the power without being obliged to give any reason to remove any trustee provided that if such removal will result in the number of continuing Trustees being reduced below two this power of removal shall be exercisable only in conjunction with the appointment of a new trustee or new Trustees so that there shall at all times be at least two Trustees except where the sole trustee is a Company registered pursuant to the Companies Act 1993 whereby such a Company may act as sole Trustee hereunder. No liability whatever shall attach to any Trustee removed under this provision in respect of any breach of trust arising out of or subsequent to their removal.
[11] The Property was purchased by the trustees in early 2008 and settled on 20 June 2008. A first-ranking mortgage to New Zealand Home Lending Limited was registered. In 2011, the trustees restructured their borrowings through the ASB Bank. Ms Cadness and Mr Aspinall gave personal guarantees for the sums secured against the Property.
[12] As at July 2024, approximately $421,000 was outstanding in the primary mortgage account. In addition, the parties have a joint account with ASB Bank with a credit limit of $40,000 from which mortgage repayments are made (Joint Orbit Facility). Mr Aspinall holds a separate Orbit facility with a credit limit of $130,000. Both facilities were at or above their borrowing limits when Ms Cadness affirmed her first affidavit.
[13] Ms Cadness deposed in her first affidavit that the ASB Bank has told her that she is a guarantor of Mr Aspinall’s personal indebtedness which is secured against the Property. She says that she has no recollection of Mr Aspinall opening a line of credit personally and only discovered this when a friend of Mr Aspinall informed her. She says that Mr Aspinall would from time to time give her “a stack of documents to sign” relating to his business, Exceed Online Limited. She says that she never knew about, or agreed to that amount of debt and has no access to historical bank records associated with Mr Aspinall’s separate Orbit facility.
[14] However, since the filing of her first affidavit, Ms Cadness made a second updating affidavit. She made further enquiries with ASB Bank and obtained a copy of the loan agreement and personal guarantee provided in her capacity as a trustee of the AFT. Ms Cadness accepts that she executed that guarantee in her capacity as a
trustee and that the agreement bears her signature. She continues to deny that this is a relationship debt but no longer seeks any adjustment, rather reserving all her rights to claim the adjustment via a deduction out of any relationship property, if any.
[15] Ms Cadness and her father, in their capacity as trustees of the Andromeda Trust, lodged a caveat over the Property on 5 July 2022. The caveat records the interest claimed based on a Deed of Acknowledgement of Debt and Agreement to Mortgage dated 18 June 2008 between the trustees of the AFT, Ms Cadness and her father, and Ramjet Enterprises Limited (Ramjet).4 The recitals of the Deed record:
(a)The trustees of the Andromeda Trust have advanced the sum of
$384,000 to Ramjet to assist Ramjet to purchase 15/64 Schnapper Rock Road, Albany.
(b)The trustees of the AFT have agreed to provide a guarantee to the trustees of the Andromeda Trust supported by an agreement to mortgage in favour of the lender over the Property.
[16] Ms Cadness and Mr Aspinall separated in early 2018 and have never reconciled. Ms Cadness has not lived in the Property since separation.
[17] A final protection order was made against Mr Aspinall in favour of Ms Cadness in April 2022.
[18] Between 2018 and 2022 the Property was tenanted with the income servicing the mortgage. Ms Cadness understands that the Property sustained some damage in the Auckland Anniversary Week floods in early 2023 but is unaware of the extent of damage.
[19] After the tenant moved out in early 2022, the ability to service the mortgage was significantly affected. Mr Aspinall moved back into the Property without paying rent. Rates are outstanding. ASB Bank made demand for payment of arrears on both
4 Ms Cadness deposes that Ramjet was a company she established with Mr Aspinall in 2008 and that it was removed from the Companies Register in 2012.
the joint Orbit Facility and Mr Aspinall’s individual Orbit facility between May 2021 and June 2023 and then in respect of the latter between September 2023 and May 2024.
[20] ASB Bank has also issued Property Law Act notices in relation to mortgage arrears on various occasions between March 2023 and June 2024.
[21] Ms Cadness has received demands from ASB Bank in her capacity as guarantor of lending secured against the Property.
[22] On each occasion to date, Mr Aspinall has paid the arrears to ASB Bank before it exercised its power of sale.
[23] Ms Cadness and the director of NZTS tried to arrange trustee meetings to determine what to do with the Property but say that Mr Aspinall either did not respond or would not cooperate.
[24] In late November 2022, Ms Cadness and NZTS engaged solicitors to prepare a Deed of Removal of Trustee pursuant to ss 92(1)(b) and 105(1)(b)(i) of the Act on the basis that Mr Aspinall had shown himself to be unwilling to act in his capacity as trustee and had repeatedly failed to act as a trustee of the AFT.5
[25] Notice of the Deed was served on 25 November 2022 by Ms Cadness’ family lawyer emailing it to Mr Aspinall at his usual email address. On 22 December 2022, Mr Aspinall purported to file an application to prevent his removal (pursuant to s 109 of the Act) in the High Court. Ms Cadness’ lawyer was included as a “blind” recipient of this email. Ms Cadness disputes many of the claims in the document but in any event, it was unclear whether the application had in fact been accepted for filing by the High Court.
[26] Ms Cadness instructed her solicitors to search the Court record to find out the status of the application but no such application or any documents relating to AFT were located by the Court Registry.
5 The Deed of Removal of Trustee is dated 24 November 2022.
[27] The continuing trustees, Ms Cadness and NZTS, met on 2 October 2024 and passed a resolution requiring the Property to be sold on the open market and the net proceeds to be divided equally and distributed between Mr Aspinall and Ms Cadness.
[28] That resolution included reference to repayment of the monies owed personally by Mr Aspinall to be repaid out of his share of the net proceeds. As already noted, the trustees have since resolved not to deduct monies owed personally by Mr Aspinall for pragmatic reasons, primarily to bring this matter to a close as quickly as possible.
Legal principles
[29]Section 133 of the Act relevantly provides:
133 Trustee may apply to court for directions
(1)A trustee may apply to the court for directions about—
(a)the trust property; or
(b)the exercise of any power or performance of any function by the trustee.
(2)The application must be served, in accordance with the rules of court, on each person interested in the application or any of them as the court thinks fit.
(3)On an application under this section, the court may give any direction it thinks fit.
(4)This section does not restrict the availability of alternative proceedings within the court’s jurisdiction, including a declaration interpreting the terms of the trust.
[30] Section 134 indemnifies trustees in the event that a s 133 order is made, unless a trustee has acted in bad faith in obtaining the direction or acquiescing in the court making the order or giving the direction.6 A trustee who has acted in accordance with any direction of the Court issued under s 133 must be treated as having discharged the trustee’s duties, even if the order is later declared invalid or set aside.7 Hence the colloquially termed “blessing order”.
6 Trusts Act 2019, s 134(2)(b).
7 Section 134(1).
[31]The Court must address the following questions:8
(a)Whether the trustees have in fact formed a relevant opinion which the Court is asked to bless;
(b)whether the opinion is one which a reasonable body of trustees could properly have arrived at; and
(c)whether the opinion of the trustees is vitiated by a conflict of interest.
[32] In Turner v Vance, Gendall J set out the applicable principles which I gratefully adopt:9
(a)The Court is not a rubber stamp and it must be satisfied that the trustees are indeed justified in proceeding in accordance with their decision. But the Court should not place insurmountable hurdles in the way of trustees.
(b)The Court may disagree with a trustee’s decision, but if it is within the range of reasonable decisions the trustee could make, the Court should not hesitate to bless it.
(c)The lengths to which the Court must go in examining the process by which the trustee arrived at the decision must depend upon the particular decision. In some cases, the decision may be a difficult and doubtful one, requiring fine judgment in the face of competing considerations, in others it may be obvious.
(d)Deciding whether the decision is one at which a reasonable trustee properly could have arrived requires “scrupulous consideration of the evidence” but does not “require second guessing or a line by line micro analysis” by the Court.
8 Calver v Fogarty [2024] NZHC 961 at [19].
9 Turner v Vance [2022] NZHC 1167 at [25] (footnotes omitted).
(e)The Court will sometimes engage in a dialogue with the trustees as a result of which the trustee’s decision is modified; but, properly analysed, that is no more than a process by which the Court identifies the circumstances es in which it will be satisfied that the proposed exercise of the power is within the proper range of such an exercise.
Preliminary question
[33] As noted, there is a preliminary question — whether Mr Aspinall has been removed as trustee of the AFT. If not, this would be fatal to the application since clause 24 of the Trust Deed for the AFT requires that while there is more than one trustee, the decisions of the trustees must be unanimous. If there is an extant application under s 109 of the Act then this application cannot succeed.
[34] Section 106 of the Act provides that continuing trustees can give notice of their intention to remove a trustee in certain circumstances. It reads:
106 Notice of decision to remove
(1)A person who makes a decision under section 103 to remove a trustee must give that trustee notice of the decision.
(2)However, the person is not required to give notice of the decision if, despite the person’s reasonable efforts to locate and contact the trustee, it is not known where the trustee is and the trustee cannot be contacted.
[35] Section 107(3) provides that if the trustee has not made an application under s 109 (to prevent removal) within the stipulated statutory timeframe, then the notice takes effect. In short, the trustee is automatically removed.
[36] It is apparent that Mr Aspinall received notice of the execution of the Deed of Removal from Ms Cadness’ lawyer because, as already noted, at 5.06 pm on 22 December 2022 (being the final day for compliance with s 109 of the Act) Mr Aspinall emailed the Auckland High Court purporting to make an application to prevent his removal. The email attached a document of the same date headed “Application in the High Court of New Zealand Auckland Registry” in which he contended:
(a)The value of the Property deteriorated materially between January 2018 and March 2022 when Ms Cadness managed the Property.
(b)He took control of the Property on 6 March 2022 and since then has taken exhaustive measures to repair and protect the value of the Property at his own financial cost including making payment of mortgage arrears.
(c)There are important family matters to address in respect of the parties’ separation including child custody and access and the equitable division of relationship property, which will be frustrated and circumvented if he does not remain a trustee.
(d)He remains open to meeting with Ms Cadness to resolve all outstanding matters.
[37] It is also apparent that the applicants were not formally served with any application under s 109 — only blind copied into the email to the Court. Subsequent search of Court records has not identified any such application made by Mr Aspinall.
[38] In those circumstances, the defective and non-compliant nature of the purported application along with lack of service, satisfies me that there is no extant application obstructing this application.10 The passage of time since the purported application was made lends support to this conclusion. Had it been otherwise, the application would have been placed before the Court. I accept Mr Cameron’s submission that based on the text and in light of the purpose and context of ss 107 and 109 of the Act, purporting to make an application which is in fact a nullity does not constitute “applying to the Court” or having “made an application” under s 107 of the Act.
10 The application was required to be commenced under Part 18 of the High Court Rules 2016 (HCR) by statement of claim and accompanied by an application for directions as to service and representation under r 18.7. There was no application for directions as to service and there was no formal service of the application. Further, there is no record of payment of any filing fee.
[39] It follows that the Deed removing Mr Aspinall was effective as at 5 pm on 22 December 2022. The application passes the first hurdle and the applicants are entitled to proceed accordingly.
Discussion
[40] To address the questions set out at [31] above, the Court must also consider the following sub-issues:
(a)Whether Mr Aspinall was lawfully removed as a trustee by notice pursuant to s 106 of the Act.
(b)Whether in light of Mr Aspinall’s numerous defaults, giving rise to bank demands and notices under the Property Law Act 2007, the applicants’ proposal to sell the Property is an appropriate one.
(c)Given the long period of separation, the existence of protection orders, and the absence of any prospect of reconciliation, whether the decision by the applicants to distribute the net sale proceeds equally between Ms Cadness and Mr Aspinall is an appropriate one.
Have the trustees in fact formed the opinion which the Court is asked to bless?
[41] The trustees’ resolution is clear and unambiguous on its face. Both Ms Cadness and Mr Ivamy, the director and General Manager of NZTS, confirm that the requisite opinion has been formed. This requirement is satisfied.
Is the proposed exercise within the trustees’ powers?
[42] As would be expected, there is clear and express authority in the Trust Deed to sell the Property; repay monies secured against the Property, the costs associated with sale, any unpaid rates, utilities and other service charges; and to distribute the net sale proceeds as between Ms Cadness and Mr Aspinall.11
11 The authority is found in clauses 21, 22.2, 22.12, 22.26 and 22.35 of the Trust Deed.
[43]This requirement is therefore also satisfied.
Is the proposed sale and distribution a reasonable exercise of the trustees’ powers?
[44] I am satisfied that the proposed exercise is lawful in the sense that the trustees can properly form the view which they have.12 In making such finding, I have had regard to the trustees’ duties, imposed by s 29 of the Act, to exercise care and skill that is reasonable in the circumstances.
[45] There are three reasons for being so satisfied. First, it is reasonable to consider the risks of a mortgagee sale of the Property and the associated potential for a lower sale value derived from such sale to the detriment of all beneficiaries. The Property has a current rateable value of $1.925 million and the total sums lent against the Property exceeded $500,000 as at November 2024.
[46] There have been at least four notices under ss 119 and 122 of the Property Law Act 2007 issued by ASB Bank. Bank statements attached to Ms Cadness’ affidavit indicate that the Joint Orbit Facility is near to its own credit limit and Mr Aspinall’s personal Orbit facility was overdrawn as at August 2024. While Mr Aspinall remains in occupation of the Property (as opposed to renting out the Property for income to meet mortgage repayments) the risk of default is present.
[47] I record that the applicants seek to terminate whatever informal occupation right Mr Aspinall claims to hold in his capacity as beneficiary of the AFT to enable sale of the Property with vacant possession.
[48] A sale will require the caveat lodged by the trustees of the Andromeda Trust to be withdrawn or removed prior to sale. This will in turn require that the funds of
$384,000 advanced to the AFT by the Andromeda Trust are secured.
[49] Secondly, the proposed distribution of the net proceeds of sale equally between Ms Cadness and Mr Aspinall is consistent with the default position under the Property (Relationships) Act 1976 (PRA) which, while not operative in respect of trust property
Re Honoris Trust [2017] NZHC 2957, [2018] 3 NZLR 160 at [58] citing David Hayton et al
Underhill and Hayton Law of Trusts and Trustees (19th ed, LexisNexis, London, 2016) at [85.7].
informs the reality of the present situation. It is noted that the parties never married so are unable to seek relief under s 182 of the Family Proceedings Act 1980. I understand that the Property is the single asset relating to the de facto relationship.
[50] Thirdly, the fact that the trustees have now further resolved not to make an adjustment out of the sale proceeds of the Property to reflect the personal nature of the borrowing in Mr Aspinall’s name in order not to hold up or otherwise interfere with the blessing order, advances the position.
[51] I am satisfied after this revised approach that the opinion formed is one which a reasonable body of trustees, properly instructed as to the meaning of the provisions of the AFT, could have arrived at.
Is the opinion vitiated by any conflict of interest under which any of the trustees might have been labouring?
[52] Mr Cameron properly points out that, as both a trustee and a discretionary beneficiary, Ms Cadness is clearly interested in the outcome of the application. Clause 16 of the Trust Deed enables Ms Cadness to act and deal with Trust property notwithstanding her direct financial interest in it.
[53] The fact that the applicants have sought to engage the Court’s supervisory jurisdiction is the appropriate mechanism, on the present facts, to ensure that the opinion is not vitiated by any conflict of interest. The independence and professionalism of NZTS gives the Court comfort in this regard. Mr Ivamy has not expressed any concerns about the appropriateness of the proposed actions. As a corporate trustee, NZTS has no interest in the outcome of the decision other than to see that the terms of the Trust are properly complied with on a reasoned basis.
[54] I see nothing on the material before me to suggest any basis to find that the opinion of the trustees is vitiated by any conflict of interest. While it is possible that Ms Cadness and Mr Aspinall have claims and cross-claims against one another, no claims are presently on foot. The orders which the trustees seek do not prevent the making of such claims and cross-claims and Mr Aspinall had the opportunity to raise claims against the trustees on service of this application.
[55] I further find that it is appropriate and orthodox that the trustees’ reasonable costs in pursuing this application are met from the assets of the AFT.
Result
[56] The evidence presented in support of this application satisfies me that the Court ought to make the orders sought in the originating application (as amended). Accordingly, I make orders:
(a)Directing the applicants to sell the Trust property at 21A Buckleys Track, Paremoremo on the open market.
(b)Directing the applicants to distribute the net proceeds of sale (after deduction of sale costs and repayment of monies secured by the existing mortgage to ASB Bank Limited and repayment of monies secured by the separate mortgage to Audrey Elizabeth Cadness and Roger Herbert Cadness as trustees of the Andromeda Trust) in equal shares to Audrey Elizabeth Cadness and Kyle Jonathan Aspinall.
(c)Indemnifying the applicants from the assets of the AFT for their reasonable costs and disbursements in bringing this application (to be paid from the assets of the AFT prior to the distribution in (b) above).
............................................................
Walker J
0