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Cerny v Cerny

Cerny v Cerny

Case [2015] NZHC 2256 22 September 2015

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IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY

CIV-2015-406-000014 [2015] NZHC 2256

BETWEEN
MARTIN CERNY

Applicant

AND

JIRI GEORGE CERNY JITKA CERNY AND

187 BRIDGE TRUSTEES 70 LIMITED TRUSTEES OF THE RAINBOW TRUST Respondents

Hearing: 16 September 2015

Appearances:

K M Quinn for the Applicant
G M Downing for the Respondents

Judgment:

22 September 2015

JUDGMENT OF ASSOCIATE JUDGE MATTHEWS

Introduction

[1] This is an originating application for an order, under s 145A of the Land Transfer Act 1952, that caveat 9936057.1 not lapse. The caveat is registered against two titles: identifier 533125 and identifier MB6B/642. The respondents are the registered proprietors of the land comprised in each title. The former is a property located in the Marlborough Sounds known as Blackwood Bay. The latter is a property in Waikawa, Picton.

[2] Under the caveat, the applicant Martin Cerny claims an estate or interest in the land owned by the respondents in the following terms:

The above named caveator claims a beneficial interest in the land contained in the above certificate [sic] of title as Cestui Que Trust of which the registered proprietors 187 Bridge Trustees 70 Limited, Jiri George Cerny and Jitka Cerny are trustees.

CERNY v CERNY & 187 BRIDGE TRUSTEES 70 LTD Trustees of the Rainbow Trust [2015] NZHC 2256 [22 September 2015]

[3] Martin Cerny is the son of Jiri and Jitka Cerny. They, and the third named respondent 187 Bridge Trustees 70 Limited, are the present trustees of the Rainbow Trust.

The Rainbow Trust

[4] The Rainbow Trust was settled under a deed of trust on 30 November 1998 by Jiri Cerny. The trustees were Martin, Jitka and Jiri Cerny until Jiri and Jitka Cerny, exercising a power under cl 14.5 of the Deed of Trust, removed Martin Cerny as a trustee on 8 April 2014. On 24 July 2014, they excluded Martin Cerny as a beneficiary of the trust, pursuant to a power contained in cl 13.1. The beneficiaries of the trust are named as Jiri and Jitka Cerny, “the final beneficiary”, and any children the final beneficiary may have. Martin Cerny was named as the final beneficiary. Removal of him as the final beneficiary therefore also had the effect of removing him as a discretionary beneficiary for capital distributions. He does not, therefore, have any interest in the Rainbow Trust. These steps were the culmination of a period during which the relationship between Martin Cerny and his parents had deteriorated.

The principles to be applied to this application

[5] Section 137 of the Land Transfer Act 1952 provides, to the extent presently relevant:

137 Caveat against dealings with land under Act

(1) Any person may lodge with the Registrar a caveat in the prescribed form against dealings in any land or estate or interest under this Act if the person—

...

(a) claims to be entitled to, or to be beneficially interested in, the land or estate or interest by virtue of any unregistered agreement or other instrument or transmission, or of…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Cerny v Cerny

Details

AGLC: Cerny v Cerny [2015] NZHC 2256
Case: [2015] NZHC 2256
Decision Date: 22 September 2015

CaseChat Overview and Summary

The case of Cerny v Cerny and 187 Bridge Trustees 70 Limited Trustees of the Rainbow Trust was an originating application for an order, under s 145A of the Land Transfer Act 1952, that caveat 9936057.1 not lapse. The caveat was registered against two titles: identifier 533125 and identifier MB6B/642. The respondents were the registered proprietors of the land comprised in each title. The former was a property located in the Marlborough Sounds known as Blackwood Bay. The latter was a property in Waikawa, Picton. Martin Cerny, the son of Jiri and Jitka Cerny, claimed a beneficial interest in the land owned by the respondents in the following terms: The above named caveator claims a beneficial interest in the land contained in the above certificate of title as Cestui Que Trust of which the registered proprietors 187 Bridge Trustees 70 Limited, Jiri George Cerny and Jitka Cerny are trustees. The respondents argued that Martin Cerny had been removed as a beneficiary of the Rainbow Trust and that he did not have an interest in the properties in question. The court had to determine whether Martin Cerny had established an arguable case that he had an interest under a constructive trust in a half-share of the profit derived on the sale of the Golden Bay property which was traceable into the Blackwood Bay and Waikawa properties. The court had to consider whether the interest claimed by Martin Cerny was an interest in respect of which a caveat could be lodged under s 137 and whether the caveat adequately described the interest in the properties which Martin Cerny claimed and the way that interest was derived. The court found that Martin Cerny had established an arguable case that he had an interest under a constructive trust in a half-share of the profit derived on the sale of the Golden Bay property which was traceable into the Blackwood Bay and Waikawa properties. The court also found that the interest claimed by Martin Cerny was an interest in respect of which a caveat could be lodged under s 137 and that the caveat adequately described the interest in the properties which Martin Cerny claimed and the way that interest was derived. Therefore, the court made an order that caveat 9936057.1 shall not lapse until further order of the Court and that a substantive proceeding claiming as interest in the land described in the caveat is to be filed and served within 20 working days and pursued with reasonable expedition. The respondents will pay costs to the applicant on a 2B basis together with disbursements fixed by the Registrar.

Orders