Glover Trust Ltd v Glover Trust Corp Ltd

[2013] NZHC 545

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2012-404-6931 [2013] NZHC 545

BETWEEN  THE GLOVER TRUST LIMITED, BAILEY TRUSTEE SERVICES LIMITED AND AUCKLAND WEST LEGAL SERVICES LIMITED AS TRUSTEES OF THE GLOVER TRUST

Plaintiffs

ANDGLOVER TRUST CORPORATION LIMITED

First Defendant

ANDGLOVER NO.2 LIMITED Second Defendant

Hearing:         4, 5 and 7 February 2013

Appearances: J P Nolen for plaintiffs

R C Knight for defendants

Judgment:      20 March 2013

JUDGMENT OF ALLAN J

In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 3.00pm on 20 March 2013

Solicitors/counsel :

Lowndes Associates  [email protected]

R C Knight Auckland  [email protected]

THE GLOVER TRUST LTD & ORSAS TRUSTEES OF THE GLOVER TRUST V GLOVER TRUST CORPORATION LTD & ANOR HC AK CIV 2012-404-6931 [20 March 2013]

Introduction

[1]      This proceeding is concerned with the proposed development of a group of properties at Waimarie Street in St Heliers, Auckland.  The parties are involved, in one capacity or another, in a scheme governed by a joint venture agreement and various supplementary documents.  In broad terms, the object of the joint venture is to  carry  out  certain  earth  works  and  then  to  construct  high  value  houses  or apartments on the land for ultimate sale.

[2]      A disagreement  arose  between  the  joint  venture  partners.   The  plaintiffs issued this proceeding with a view to obtaining orders for the transfer of certain shares and of some of the Waimarie Street properties.  Agreement was reached in respect of the shares, and on 5 February 2013, during the hearing, I made consent orders for the transfer of shares, the execution of the necessary documents and the entry of the share transfers in the relevant share registers.

[3]      That left for determination a dispute between the parties as to the legal and beneficial ownership of the disputed properties.

Background

[4]      The joint venture was established in furtherance of the business activities of Mr Gregory Olliver and his wife, Mrs Sarah Olliver.  They separated on 4 July 2012. Mrs Olliver is now known as Ms Sparks, and I will refer to her by that name in this judgment.    Mr Olliver  is  a  well  known  property  developer.    Ms Sparks  is  an experienced business-woman in her own right, owning and operating her own public relations company.

[5]      In September 1999, Mr Olliver established the Glover Trust.   It was then called the Waimarie Trust, but it changed its name in 2005.  Subsequently, Ms Sparks established her own trust, using the Waimarie Trust name.   References in this judgment to the Waimarie Trust are to the trust established by her.

[6]      Mr Olliver  and  Ms Sparks  were  trustees  of  the  Glover  Trust  along  with certain professional advisers or companies controlled by those advisers.  There were changes of trustee from time to time over the years but they are not material to this case.

[7]      In 2008, Mr Olliver got into financial difficulty.   On 12 December 2008, a creditor filed an application to have him adjudicated bankrupt.  On 5 February 2009, he filed a proposal under Part 5 of the Insolvency Act 2006 (the Act).   On 27

February 2009, the Glover Trust deed was modified so as to require at least three trustees, but permitting a corporate trustee to be the sole trustee.  On the same day, the  trustees  (including  Ms Sparks)  retired  as  trustees  of  the  Glover  Trust,  and Mr Olliver appointed Glover Trust Corporation Ltd, the first defendant, as the new trustee.  It was a special purpose company.  The directors and equal shareholders of the first defendant were Ms Sparks and Mr Thomas, the solicitor to both Mr Olliver and Ms Sparks, and certain entities associated with them.

[8]      On 4 March 2009, the first defendant, with Mr Olliver’s consent, modified the trust deed to exclude him personally as a discretionary beneficiary of the Glover Trust.

[9]      The primary assets of the Glover Trust are shares in CIT Holdings Ltd, CIT Properties   Ltd,   and   CIT  Administration   Ltd   (together  the  CIT  companies). Ms Sparks and Mr Thomas became directors of and equal shareholders in each of the CIT companies.

[10]     In March 2009, the Waimarie joint venture agreement was executed by the Glover Trust and the Waimarie Trust to develop the first tranche of Waimarie Street properties.  On 9 March 2009, CIT Holdings Ltd entered into an agreement for the purchase of those properties for $8,317,500, funded by way of a contribution of $2 million from the Waimarie Trust and $6,750,000 from the Bank of New Zealand (BNZ).  The bank advance was secured by a general security agreement over all of the  purchaser  company’s  present  and  after  acquired  property,  together  with mortgages over the first tranche Waimarie properties.

[11]     In April 2009, CIT Holdings Ltd entered into a further agreement to purchase the second tranche of Waimarie Street properties for $1,650,000, funded by an advance from the Waimarie Trust.  Importantly, this second tranche of properties was not secured to the BNZ.    In April 2009, the Waimarie joint venture supplementary agreement was executed, for the purpose of recording the inclusion of the second tranche of Waimarie Street properties in the joint venture.

[12]     On 13 May 2009, Mr Olliver’s proposal under Part 5 of the Act was approved

by the High Court.  Against debts exceeding $90 million, he was required to pay

$100,000 to the trustee and then on the first, second and third anniversaries of the approval of the proposal, to pay the greater of $100,000 or an amount equal to 50% of  his  net  earnings  from  employment  after  tax  for  the  immediately  preceding financial year. The proposal was underwritten by CIT Holdings Ltd.

[13]     In April 2010, the Auckland City Council granted consent to a proposed scheme plan providing for the maximum allowable development of the Waimarie Street properties.  A Waimarie joint venture implementation agreement was prepared for the joint venture partners to approve the scheme plan but it was never signed.

[14]     The BNZ loan secured over the Waimarie Street first tranche properties was for a term of two years. At the outset it was anticipated by Mr Olliver that two years would be a sufficient period within which to maximise the potential of the properties, save  for  22  Waimarie  Street  which  was  the  family  home.    Development  work entailed certain earth works and a subdivision of lots to increase the size and value of the lots that could then be sold for residential purposes.   The proposed scheme created two road frontage development lots (lots one and two, being 14a, 16, 16a and

20 Waimarie Street) suitable for multi-storey residential blocks comprising three substantial luxury apartments for each lot (six in total), and a rear lot (lot five being

31 Waimarie Street) suitable for a substantial single dwelling or another three apartment buildings.

[15]     The family home at 22 Waimarie Street was not to be affected, save that access to the property was proposed to be altered.

[16]     During 2010, Ms Sparks became concerned that the development might be over-ambitious.  She considered that the total development envisaged by the joint venture agreement might leave the parties unduly exposed.  Instead, she favoured a more limited development of the site and the on-sale of the land after earthworks were complete.

[17]     In the meantime, the relationship between Mr Olliver and Ms Sparks was deteriorating.  In October 2010, and again early in 2011, Ms Sparks sought advice from senior counsel about her marriage, and in particular about relationship property issues.

[18]     On the evening of 9 March 2011, there was a serious argument between the couple.  On the following morning, 10 March, Ms Sparks telephoned Mr Thomas, asking that he take steps to protect the second tranche assets so far as he could, from the reach of Mr Olliver and creditors generally.  The instruction was to act urgently because Mr Olliver had threatened to take immediate steps to assume control of the various entities and of the joint venture assets.

[19]     Mr Thomas acted with considerable speed.   Within an hour or so he had prepared a number of documents which Ms Sparks signed at his office later that morning.

[20]    I will return to the detail of those documents later in this judgment.  It is sufficient at this point to note that they included a trust deed creating the Glover No.2 Trust, the transfer of the second tranche properties from CIT Holdings Ltd to the new trust, and certain resolutions, two of which appear to be inconsistent.  On the one hand the trustee of the Glover No.2 Trust (Glover No.2 Limited of which the directors and shareholders were Ms Sparks and Mr Thomas) resolved to accept the distribution of the properties forming the second tranche as a distribution from the Glover Family Trust for the benefit of the beneficiaries of the Glover No.2 Trust.  On the other hand, the directors of Glover No.2 Limited also executed a deed (the Deed of Bare Trust), declaring that those properties were held on a bare trust for CIT Holdings Ltd, the existing registered proprietor of the properties.

[21]     The apparent inconsistency between these documents lies at the heart of this case.

[22]     Among the executed documents was a deed of novation, under which the

Waimarie Trust retired from the joint venture and was replaced by the Glover No.2

Trust.  The deed of novation is dated 17 October 2011, the same date as that upon which Glover No.2 Limited was registered as the legal owner of the second tranche properties.

[23]     The BNZ loan had expired in March 2011, but between then and July 2012, the BNZ extended the facility a number of times for short periods.   It is common ground that the bank has been adopting a pragmatic view until very recently, recognising that repayment of the loan is most likely to be achieved by an orderly completion of the development.  However, the loan has recently been called up.

[24]     On 4 July 2012, Mr Olliver and Ms Sparks separated. The former moved out of the family home.

[25]     Because Mr Thomas and Ms Sparks were the only directors of CIT Holdings Ltd and Glover No.2 Limited, the development as envisaged by Mr Olliver could not proceed without Ms Sparks’ consent.  Mr Olliver took the view that the delay was imperilling the joint venture business, and consequently placing at risk a number of other entities controlled by him.

[26]     On 23 August 2012, Mr Thomas resigned as a director of all of the CIT companies, Glover No.2 Limited and the first defendant.  That left Ms Sparks as the only director of CIT Holdings Ltd.

[27]     Accordingly, on 2 September 2012, Mr Olliver replaced the first defendant as trustee  of  the  Glover  Trust  as  a  first  step  towards  replacing  the  board  of  CIT Holdings Ltd.  On that day, the plaintiffs were appointed trustees of the Glover Trust in  place of Ms Sparks.   On 3  September 2012, Mr Olliver’s  solicitors wrote to Ms Sparks to advise of the change in trustees and requesting that the properties

owned by the Glover Trust be transferred to the plaintiffs.  Correspondence between counsel followed.

[28]     On 25 September 2012, the BNZ was advised of the change in trustees and of the dispute between Mr Olliver and Ms Sparks.   The bank reserved its position, although encouraging the parties to negotiate and settle if they could.

[29]     On 15 November 2012, Mr Thomas in his capacity as solicitor to various parties, released a number of documents.  On 21 November 2012, the plaintiffs commenced this proceeding.   Mr Olliver says that by her actions, Ms Sparks has placed the assets of the Glover Trust at risk.  Urgent action is required so as to regularise the position with a view to enabling the BNZ loan to be refinanced.  That can occur only if the relief sought in the statement of claim is granted, he claims.

[30]     As earlier noted, certain orders were made by consent during the hearing.

The relief now in contention is the plaintiffs’ claim for an order that Glover No.2

Limited transfer the second tranche Waimarie Street properties back to CIT Holdings Ltd.  In other words, the plaintiffs ask the Court to enforce the bare trust declaration, arguing that it must prevail over the more general documents which declare a trust in favour of the beneficiaries of the Glover No.2 Trust.

The 10 March 2011 documents

[31]    Several documents were prepared and executed on 10 March 2011.  They included a deed of family trust for the Glover No.2 Trust, settled by Ms Sparks and naming herself, her children and grandchildren as final beneficiaries.  The trustee, Glover No.2 Ltd, had a wide discretion in respect of distributions to discretionary beneficiaries who included the final beneficiaries and Mr Olliver, but for present purposes, the focus is upon the two documents referred to earlier.  The first is a resolution of the trustee of the Glover No.2 Trust, which reads as follows:

THIS RESOLUTION made this 10th  day of March 2011 as a resolution of the Trustees of the Glover No.2 Trust whereby it is resolved as follows:-

1.        The Trustees approve the receipt of the distribution of the properties at 14A, 14B, 16A and 20 Waimarie St as a distribution from the Glover Family Trust for the benefit of the beneficiaries of this trust.

2.        The   directors   of   the   trustee   GLOVER   NO.2   LIMITED   are authorised to act as managers for the daily operations of the Trust.  As such they are authorised to open and operate bank accounts on behalf of the Trust.

[32]     The trustee of the Glover No.2 Trust was Glover No.2 Ltd.  The resolution of trustees is signed by the directors of Glover No.2 Trust, Ms Sparks and Mr Thomas.

[33]     The second key document, the Deed of Bare Trust, reads as follows:

THIS TRUST DEED made the               day of March 2011 by Glover No.2

Ltd (“the Trustee”)

WHEREAS

1.ON the  day of March 2011 the Trustee became the registered proprietor of the property situated at and known as 14A,

14B, 16 and 20 Waimarie Street (“the property”).

2.        THE transfer was effected by the beneficial owner of the property

CIT Holdings Ltd (“the Beneficiary”).

3.        IT is intended that the Trustee should hold the property merely as a

Trustee for the Beneficiary as the Trustee doth hereby acknowledge.

NOW THIS DEED WITNESSETH that the Trustee HEREBY DECLARES that they hold the property upon trust for the Beneficiary AND FURTHER DECLARES  that  they  hold  all  income  accrued  or  to  accrue  from  the property upon trust for the Beneficiary or their Assignees.

IN WITNESS WHEREOF these presents have been executed the day and year first hereinbefore written.

SIGNED by the said Glover No.2 Ltd as Trustee

In the presence of:-

Again, this document is signed by Mr Thomas and Ms Sparks in their capacity as directors of Glover No.2 Ltd.

[34]    Other documents included formal transfers, a memorandum of wishes in common form, and a deed of novation dated 17 October 2011, substituting the Glover No.2 Trust for the Waimarie Trust in the joint venture arrangements.   The Waimarie Trust and both defendants were parties to that deed.

[35]     Certain documents, including the Deed of Bare Trust, are undated, but from the evidence of Ms Sparks and Mr Thomas, I am satisfied that they were all executed on 10 March 2011, including the deed of novation.  Mr Thomas did not proceed with registration of transfers to Glover No.2 Limited on the relevant titles because he considered it appropriate to wait for a period to see how the relationship between Mr Olliver and Ms Sparks developed.  If they were able to settle their differences, then there would be no need to give effect to the documents executed on 10 March.

[36]     Ms Sparks and Mr Thomas agree that she attended at his office later in the morning of 10 March, by which time all of the documents had been prepared.  Mr Thomas told Ms Sparks what each document was but he did not explain the intended effect of the separate documents, nor the manner in which each was intended to relate to the others.  Ms Sparks accepts that, and says that she read the documents before signing them; however, I infer from her evidence that she did not read the documents  with  any  particular  care.    She  was  content  to  accept  Mr  Thomas’ assurance that the overall effect was to protect her and the children from claims at the suit of Mr Olliver and other creditors so far as was possible.

Mr Thomas’ position

[37]     Mr Thomas had for many years been solicitor to both Mr Olliver and Ms Sparks,  together  with  a  number  of  entities  associated  with  them,  including companies and trusts.  He was a trustee, and a director and shareholder of various companies, including trustee companies.  He undoubtedly acted for Ms Sparks on 10

March 2011 with respect to matters that were relevant, and arguably adverse, to Mr

Olliver’s interests.

[38]    In August 2012, he resigned as a director of CIT Properties Ltd, CIT Administration Ltd, CIT Holdings Ltd, Glover Trust Corporation Ltd and Glover No.2  Ltd,  but  at  the  request  of  Mr  Olliver  he  agreed  to  the  appointment  of  a company controlled by him, Auckland West Services Ltd, as a trustee of the Glover Trust  at  or  about  the  same  time.    That  company  is  a  plaintiff  in  the  present proceeding and Mr Thomas filed an affidavit for and gave evidence on behalf of the plaintiffs.    He  acknowledged  in  evidence  that  in  so  doing  he  was  hopelessly

conflicted.  He indicated that he had taken advice from senior counsel as to his position and had been told that he must not permit himself or any entity controlled by him to remain an active participant in the proceeding. However, it seems that he considered that advice to have arrived too late.  No objection was taken on behalf of Ms Sparks to Mr Thomas giving evidence, which is of pivotal importance.

The issue

[39]     As initially pleaded, the plaintiffs’ claim was based upon an allegation that the transfer of the second tranche properties out of the name of CIT Holdings Ltd constituted a breach of the supplementary joint venture agreement.   There was no reference at all to the Deed of Bare Trust in the statement of claim or in Mr Olliver’s affidavit.  That is unsurprising because the plaintiffs, their legal advisers and Mr Olliver, were all unaware of the existence of that document until it was discovered in the course of the proceeding by Ms Sparks.  She cannot say precisely where it came from but believes that it must have come from Mr Thomas, who in November 2012 (after this proceeding had commenced), made disclosure to her of a great many documents held by him in his capacity as solicitor both to her and to entities associated with her.  Mr Thomas confirmed that the Deed of Bare Trust was among those prepared by him on 10 March 2011.

[40]     At trial, therefore, the focus of the argument moved away entirely from the claim as initially pleaded to an examination of the Deed of Bare Trust in the context of the other documents signed on that day.  Mr Olliver seems to have been aware in general terms of the steps taken by Ms Sparks in March 2011 within about a month. He may have been told by Ms Sparks.  He was not told by Mr Thomas, who, when taxed on the point by Mr Olliver, simply shrugged his shoulders and smiled.   Mr Olliver did have the various titles checked but having found that no transfers had been registered against them, he seems to have put the issue to one side for the time being.  Against that background, the issue for determination is whether the Deed of Bare Trust is a valid document having legal effect, and if it is, what that effect is when considered in the light of the other documents executed on the same day.

Discussion

[41]     Ms Sparks and Mr Thomas agree that when Ms Sparks rang on the morning of 10 March, she asked Mr Thomas to take all possible steps to protect the Waimarie second tranche properties from claims by creditors, including the bank and Mr Olliver.  She considered that Mr Olliver’s approach to the joint venture project had become over-ambitious and that the couple were likely to become over-exposed. Moreover, she was alarmed at Mr Olliver’s threats the previous evening to take over complete control of the joint venture and its assets.

[42]     The detail of the legal steps to be taken by way of asset protection was left entirely to Mr Thomas.  When Ms Sparks arrived at Mr Thomas’ office he presented a group of documents for her signature.  Although she says she read them, I am satisfied that she would have done so only to a limited extent, for the purpose of gaining an overall impression of what she was signing.  She accepts that she did not spend a great deal of time at Mr Thomas’ office on that day.

[43]     The decision to have Ms Sparks sign both a resolution of trustees accepting the distribution of the Waimarie second tranche documents and an apparently conflicting Deed of Bare Trust was entirely that of Mr Thomas.   He explained in evidence why the transactions had been structured in that way.   An absolute disposition of the properties to the Glover No.2 Trust by CIT Holdings Ltd would attract significant tax and GST consequences.  The overall financial position of the parties and their various entities was not strong enough to meet those liabilities and it was fiscally counterproductive to structure the transactions in that way.

[44]    The tax authorities had displayed a close interest in Mr Olliver’s business affairs.  He was a high profile developer who had undertaken transactions having significant tax consequences in the past.  The revenue authorities had visited Mr Thomas’ office on several occasions recently in order to inspect certain records held by him.  Accordingly, Mr Thomas had to be able to demonstrate to the authorities that there had been no outright disposition, but that the properties were held on a bare trust for the former registered proprietor.   That would avoid adverse tax and

GST consequences.  In other words, the Deed of Bare Trust was created for the purpose of production to the revenue authorities as required.

[45]     Mr Knight submits that against that background the Deed of Bare Trust must be characterised as a sham and of no legal effect.  He argues that the remaining documents ought to be enforced, with the result that the absolute transfer of the properties to Glover No.2 Limited must stand.

[46]    A sham exists where there is an intention to conceal the true nature of a transaction.1   The common intention of parties to commercial documents is normally ascertained objectively by reference to the language used, viewed against the overall commercial matrix.  But where a sham is alleged, the search must be for a subjective intention that the transaction be a sham, although this does not mean that a witness is later entitled to give oral evidence of his or her subjective intention.2

[47]     Here,  Ms  Sparks’ overall  intention  was  to  obtain  a  degree  of  financial protection and security, as best she could in all the circumstances.  She left the detail of the documentation and of the structuring of the overall transaction completely to Mr Thomas.   His intention was to structure the transaction so as to confer on Ms Sparks as much financial security as could be achieved in the circumstances.  But the circumstances did not permit an outright disposition.  To structure the transaction in such a way as to effect a transfer of the second tranche properties absolutely to Glover  No.2  Limited  would  be  to  risk  significantly adverse  revenue  authorities which neither Mr Olliver nor Ms Sparks was in a position to meet.

[48]     Mr Knight characterises the Deed of Bare Trust as a “ruse”.  That is perhaps an accurate description to the extent that it was intended that the deed be produced only to the revenue authorities for the purpose of establishing that the disposition was not made outright, but it does not follow that the Deed of Bare Trust was invalid or ineffective.  On the contrary, it had to be effective in order to achieve its objective,

namely that of avoiding a significant tax liability.  The Deed of Bare Trust could not

1      Snook v London and West Riding Investments Ltd [1967] 2 QB 786 (CA) at 802; Paintin and Nottingham Ltd v Miller Gale and Winter [1971] NZLR 164 (CA) at 175; Official Assignee v Wilson [2007] NZCA 122 at [26].

2      Official Assignee v Wilson, above n 1, at [50], [108] and [109].

be valid and effective for some purposes but not for others.   The result, in my opinion, was the best that Mr Thomas could produce in difficult circumstances.  He achieved for Ms Sparks a measure of protection and security by placing the second tranche properties in the name of an entity controlled by her.   Of course, absolute protection could not be secured but there would be significant obstacles in the way of such creditors as might seek to resort to the properties concerned.  And because Ms  Sparks  placed  herself  entirely  in  Mr  Thomas’  hands  with  respect  to  the structuring of the transaction, his intention, as reflected in the documents, was her intention also.  It is not claimed on behalf of Ms Sparks that Mr Thomas departed from her instructions, or that the documents did not reflect her intention.  She had forgotten about the Deed of Bare Trust until it was produced to her by Mr Thomas in November 2012.  That is consistent with her evidence that she left the detail entirely to him.

[49]     I consider that, contrary to Mr Knight’s argument, the Deed of Bare Trust was intended to be effective despite the resolution of the trustee approving the receipt of the distribution of the second tranche properties “... as a distribution from the Glover Family Trust for the benefit of the beneficiaries of this Trust”.   The directors of Glover No.2 Ltd must be taken to have passed that resolution subject to the terms of the bare trust.

[50]     Mr Knight raises a number of technical objections to the validity of the Deed of Bare Trust.    First,  he points  out  that the document  is  undated, save for the reference to March 2011.  He argues that it must logically post-date the deed of trust but says that it presumably post-dates the October 2011 registration, since it recognises the trustee is the registered proprietor of the properties.  Given evidence to the effect that all of the documents were executed on 10 March 2011, I accord no significance to the reference to the trustee being the registered proprietor of the properties.  Mr Thomas said in evidence that certain assumptions were made when he prepared the documents, including the assumption that the transfers would be registered forthwith after the documents were executed.  A later decision to defer registration does not in my view affect the initial validity of the Deed of Bare Trust.

[51]     Mr Knight argues also that the document is in error in that it refers to CIT Holdings Ltd as being the “beneficial owner of the property ...”.  Of course CIT Holdings Ltd, although the registered proprietor, was never the beneficial owner of the property in a technical sense because it was a trustee, but again I do not see that as derogating from the validity of the Deed of Bare Trust.

[52]     Next, Mr Knight says that the declaration of bare trust is ineffective because there is no corresponding indemnity by CIT Holdings Ltd to indemnify the trustee from any obligations arising in relation to the bare trust; nor can an indemnity be inferred by virtue of s 38 of the Trustee Act 1956 because CIT Holdings Ltd was not a party to the Deed of Bare Trust and therefore did not become bound by its terms.  I do not see that issue as being relevant for present purposes.  If Ms Sparks and Mr Thomas  thought  fit  to  enter  into  a  Deed  of  Bare  Trust  without  obtaining  an indemnity there may be financial consequences but the deed is not thereby rendered invalid.

[53]     In my view the Deed of Bare Trust is valid and effective, with the result that the second tranche properties are held in trust for CIT Holdings Limited.3   It follows that the plaintiffs are entitled to the relief sought.

Result

[54]     There  will  be  an  order  that  the  second  defendant  forthwith  execute  and deliver to the plaintiffs a registrable transfer of the second tranche Waimarie Street properties, namely:

(a)       14 Waimarie Street, St Heliers, Auckland comprised in Certificate of

Title 163298, described as Lot 1 DP 86277;

(b)      14a Waimarie Street, St Heliers, Auckland comprised in Certificate of

Title NA44A/276, described as Lot 2 DP 86277;

3      The Deed of Bare Trust complies with the requirements of s 25(2) of the Property Law Act 2007 in that the declaration of trust is in writing signed by the settlor.

(c)       16 Waimarie Street, St Heliers, Auckland comprised in Certificate of

Title 31658, described as Lot 1 DP 41983;

(d)      20 Waimarie Street, St Heliers, Auckland comprised in Certificate of

Title NA34D/425, described as Lot 1 DP 78798.

[55]     The  second  defendant  is  also  to  execute  any  such  ancillary  or  other documents as may be necessary to give effect to the order for transfer.

[56]     On 14 March 2013, I made an interlocutory freezing order in respect of the second tranche properties in favour of the plaintiffs, without notice to the defendants. The second tranche properties are now encumbered, the second defendant having raised funds on the security of a mortgage over those properties.   The second defendant is accordingly unable to execute a registrable transfer of the properties unless and until it procures a discharge from the mortgagee.  Compliance with the order for transfer may therefore present problems in the short-term.   I accordingly reserve leave to all parties to make further application to the Court in the context of the recent encumbering of the second tranche properties.  In that regard, I note that the freezing order application is next to be called for mention in Court for Chambers at 9.00 am on Tuesday next, 26 March 2013.

Costs

[57]     The plaintiffs are entitled to costs.  Counsel may file memoranda if they are unable to agree.

C J Allan J