Lifestyle Loans Limited v Pope
[2025] NZHC 2181
•5 August 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-001187
[2025] NZHC 2181
UNDER the Land Transfer Act 2017 and s 143 of the High Court Rules 2016 BETWEEN
LIFESTYLE LOANS LIMITED
Applicant
AND
LAURENCE ROBERT POPE and AARON
RODNEY NICHOLLS as trustees of the Samcro Trust
Respondents
Hearing: 15 July 2025 Appearances:
S Dalgleish for the Applicant
R McNaughton for the Respondents
Judgment:
5 August 2025
JUDGMENT OF ASSOCIATE JUDGE COGSWELL
This judgment was delivered by me on 5 August 2025 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
MBC Law Ltd, Auckland P Brinsley, Auckland
S Dalgleish, Auckland
LIFESTYLE LOANS LTD v POPE [2025] NZHC 2181 [5 August 2025]
Introduction
[1]Lifestyle Loans Limited seeks an order that caveat 13291583.1 not lapse.
[2] The caveat is registered over the respondents’ property at 1/81A Woodglen Road, Glen Eden, Auckland (Woodglen). The Record of Title reference for Woodglen is NA83C/246.
[3]The caveat expresses the estate or interest claimed as follows:
The caveator is a beneficiary of a constructive trust. The caveator claims an interest in the land under a constructive trust whereas the legal owner, as the constructive trustee, holds this interest on behalf of the caveator. The interest claimed relates to both registered owners, namely Aaron Rodney Nicholls and Laurence Robert Pope.
[4]There are three properties relevant to determination of this application:
Property Acquisition Date
Sale Date
2/32 Glendhu Road, Bayview, North Shore,
Auckland (Glendhu)
25 January 2024
5 April 2024
191 Metcalfe Road,
Ranui, Auckland (Metcalfe)
3 April 2024
14 May 2025
1/81A Woodglen Road, Glen Eden, Auckland
(Woodglen)
6 November 2024
-
[5] The applicant alleges an institutional constructive trust arose in its favour when Mr Pope diverted funds from the sale of the Glendhu property to buy the Metcalfe property and did not repay the applicant from the proceeds of sale of the Glendhu
property. The applicant seeks to trace the funds from Glendhu, through Metcalfe, to Woodglen.
[6] The respondents applied to lapse the caveat. They say that the applicant has no caveatable interest in Woodglen. They say that any claim can only be a claim for breach of contract.
Legal principles
[7] The right to lodge a caveat is set out in s 138 of the Land Transfer Act 2017 (the Act). The relevant part of s 138 provides that the grounds for lodging a caveat include:
(a)where a person claims an estate or interest in the land, whether capable of registration or not (s 138(1)(a)); and
(b)where a person has a beneficial estate or interest in the land under an express, implied, resulting, or constructive trust (s 138(1)(b)).
[8] The Court of Appeal in Botany Land Development Ltd v Auckland Council summarised the principles to be applied when considering an application for an order that a caveat not lapse.1 The same test applies whether an application is made to sustain the caveat (under s 143 of the Act) or to remove it (under s 142).2
[9] The application is determined on a summary basis with the Court having regard to the following principles:
(a)The caveator bears the onus of demonstrating that they have an interest in the land sufficient to support a caveat.3 They need not establish the interest definitively, it is enough if they present a reasonably arguable case.
1 Botany Land Development Ltd v Auckland Council [2014] NZCA 61 at [23]–[25].
2 Paugra Holdings Ltd (in liq) v Harvestfield Holdings Ltd [2014] NZCA 164, (2014) 15 NZCPR 227 at [34] referring to the equivalent provisions under the Land Transfer Act 1952, ss 143, 145 and 145A.
3 Sims v Lowe [1988] 1 NZLR 656 (CA) at 660.
(b)An order for the removal of a caveat will only be made if it is patently clear that the caveat cannot be maintained—either because there was no valid ground for lodging one in the first place, or, alternatively, that such ground has now ceased to exist.
(c)The summary process by which applications are determined is ill-suited to resolving disputed questions of fact.4 A conflict between affidavits will generally be resolved in the caveator’s favour.5 However, the Court is not bound to accept uncritically statements in an affidavit that are equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable.6
(d)When the caveator has discharged its burden, the Court retains a residual discretion to remove the caveat. The Court will exercise this discretion cautiously and must be satisfied removal will not prejudice the caveator’s legitimate interest.7
[10]A caveatable interest must exist at the time the caveat is lodged.8
Background
[11] The contextual background to this claim is the falling out between two friends and business associates, Matthew Peter Ryan9 and Laurence Robert Pope. They have had a personal and business relationship over many years. That relationship is now in significant conflict. There are other proceedings on foot between them and/or entities related to them.
4 Re Ede (1882) 1 NZLR SC 258; New Zealand Limousin Cattle Breeders Society Inc v Robertson
[1984] 1 NZLR 41 (CA).
5 Bethell v Rickard [2013] NZCA 68 at [22]
6 Barrett v IBC International Ltd [1995] 3 NZLR 170 (CA) at 175, citing Eng Mee Yong v Letchumanan s/o Velayutham [1980] AC 331 (PC) at 341. See also Xie v 126 Waimumu Ltd [2020] NZHC 1109 at [8].
7 Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at 656.
8 Kilmartin v Monk (2005) 5 NZ ConvC 194,122 (HC) at [13].
9 Mr Ryan is the sole director and shareholder of the applicant.
[12] Perhaps because of this, much of the evidence that is filed in this application is irrelevant or inadmissible, or both.
[13]The key facts, however, can be shortly stated.
[14] On 17 January 2024, Mr Pope contacted Mr Ryan advising him that he was in a dire financial situation regarding the impending settlement of the Glendhu property. He said that the Glendhu property was a “phenomenally good buy” that would result in a good profit but that he was $209,000 short on the purchase price.
[15]A settlement notice had been issued and was due to expire on 25 January 2024.
[16] He implored Mr Ryan to advance him the funds necessary to settle the transaction, together with further funds that he would use to deal with the financial issues his other businesses were experiencing.
[17] On 23 January 2024, Mr Pope messaged Mr Ryan again. The message outlined various financial issues he was facing, including tax issues, supplier issues, and the need to let go of various staff members. That message included the key statement:
Can you lend me $550k at 20%, with my personal guarantee of course. I’ll get [Glendhu] turned over quickly and pay you the entire surplus, I’ve also got crown lynn I need to cash out of.
[18] Mr Pope required approximately $209,000 of that $550,000 to settle the Glendhu purchase and the balance of the funds were intended to deal with his other financial demands.
[19] On 25 January 2024 the applicant forwarded the sum of $550,000 to an account nominated by Mr Pope. There was no formal documenting of the agreement.
[20] The seeming informality of this arrangement is a feature of the historical dealings between Mr Ryan and Mr Pope.
[21] The advance was made to an unrelated bank account. The account was a BNZ account called “The Flying Bear Trust” account. This had occurred between the parties on several earlier occasions. It seems that Mr Pope had authority to use this account for business purposes.
[22] The bank statement records of The Flying Bear Trust are in evidence. They confirm receipt of the $550,000 in three payments. The Particulars/Code/Reference columns are completed with the narration, “Loan/6 months/20%.” I assume that these entries were made by Mr Ryan as the payer.
[23] The funds were used to settle the purchase of the Glendhu property. There is no argument that the applicant’s funds were applied to this purchase. There is a transaction record dated 25 January 2024 where the sum of $211,135.72 was transferred to the respondents’ lawyers, Nicholls Law, to settle the purchase.
[24] Other than the exchanges referred to above, there is no other documentary evidence relevant to the terms on which the applicant advanced the funds to Mr Pope.
[25] The respondents became the registered proprietors of the Glendhu property on 25 January 2024.
[26] What followed was a series of communications between the parties where the applicant was seeking information about the Glendhu property sale. Mr Pope had told Mr Ryan that the property would be sold promptly.
[27] The Glendhu property was sold on 15 March 2024 and settlement occurred on 5 April 2024.
[28] There was an exchange between the parties on 10 and 11 April 2024 when Mr Pope confirmed to Mr Ryan that Glendhu had settled on 5 April 2024. That was met with great dissatisfaction by Mr Ryan, who responded:
I’ve been asking about Glendhu countless times, and you’ve ignored them all. Then finally you say it’s gone [unconditional], and even settled on Monday! I should have registered a mortgage or at least a caveat, not doing so saves you money but leaves me seriously exposed, AKA, the scenario of right now.
Where is the money, that’s 550k right, and you’ve said nada until I repeatedly ask. That REALLY [expletive] me off that I text you 4 times on a Wednesday before you reply, and it settled 2 days earlier. Unacceptable and not happening again, from now on everything will be mortgaged. Furthermore, you haven’t even caught up on ALL your overdue interest that’s been mounting up, or for your recent loans. It’s ALL too [expletive] loose, and unlike you, so don’t do loose well. You know that about me and railroad regardless. You’re not reading my vibe once again, [Mr Pope].
[29] The net sale proceeds of the Glendhu sale were $391,487.84. Those funds were not paid to the applicant by the respondents.
[30] The respondents then purchased two further properties, Metcalfe and Woodglen.
[31] On discovering that Mr Pope (or interests associated with him) had not repaid the applicant’s advance on settlement of the Glendhu sale, caveats were registered on both the Metcalf and Woodglen properties.
[32] The applicant withdrew its caveat on the Metcalfe property to enable settlement to occur. No funds were received by the applicant from that sale.
The parties’ positions
[33] The current position is that the Glendhu property has been sold, but payment of the net proceeds of sale was not made to the applicant.
[34] Metcalfe was purchased and sold but no funds were paid to the applicant on that sale. The applicant released its caveat to allow settlement to proceed.
[35] Woodglen is still owned by the respondents and the applicant’s caveat on that property is the subject of this application.
[36] The applicant claims that there was an enforceable term of the agreement that Mr Pope was required to repay the entire $550,000, together with interest, on sale of the Glendhu property.
[37] The applicant asserts an institutional constructive trust over the Woodglen property, on the basis of what it alleges is a fraudulent diversion of the proceeds of sale of Glendhu to Metcalfe and/or Woodglen.
[38] The respondents say that the applicant has no proprietary interest in Woodglen and that the case is a simple breach of contract claim and nothing else. They say that the proceeds of sale of the Glendhu property were returned to The Flying Bear Trust and did not form any part of the funds used to acquire Metcalfe or Woodglen.
[39]They say that:
(a)the Metcalfe purchase was settled with funds from two entities unrelated to the applicant or The Flying Bear Trust; and
(b)the Woodglen purchase was settled with funds from an unrelated lender, not the applicant or The Flying Bear Trust.
[40] They therefore deny any intermingling of funds and any right to trace the funds into either Metcalfe or Woodglen.
Issues
[41]The following issues need to be determined:
(a)What was the agreement between the parties?
(b)Does the applicant have a proprietary interest in the Woodglen property due to an institutional constructive trust arising from the alleged fraud on the part of Mr Pope in failing to repay the applicant on sale of the Glendhu property?
(c)Were any of the proceeds from Glendhu used in the purchase of either the Metcalfe or Woodglen properties, such that a tracing remedy is available?
First issue—what was the agreement between the parties?
[42] The applicant argues that the agreement between the parties gave it the right to security over Glendhu and that the respondents’ failure to repay the advance in full following the sale of Glendhu gives it a proprietary interest in the later properties and that they are held by the respondents as constructive trustees for it.
[43] There is no mention at all in the exchanges between Mr Ryan and Mr Pope about any security for the advance. It is not possible to infer that security was granted when the advance was made.
[44] On 11 April 2024 on discovering that Glendhu had settled but that Mr Pope had not repaid the applicant in full, Mr Ryan messaged Mr Pope. The message is set out in full above. The message included the statement:
I should have registered a mortgage or at least a caveat, not doing so saves you money but leaves me seriously exposed, AKA, the scenario of right now
... from now on everything will be mortgaged.
[45] This message is significant because, contrary to Mr Ryan’s assertion that he was entitled to caveat the Glendhu property, this communication leaves it unclear as to whether he had that entitlement or whether he was rueing the fact that he had not sought it and would insist on security on any further advances to Mr Pope.
[46] There is disputed evidence to the effect that he tried at the last minute before settlement to have the second-named respondent, Mr Nicholls, register a caveat on Glendhu. Mr Nicholls was a solicitor.
[47] Although I do not need to determine whether or not Mr Ryan sought to have a caveat registered by Mr Nicholls, it would seem unusual for an experienced property businessperson such as Mr Ryan to not have his own solicitor lodge a caveat on the property, if he thought he was entitled to do so. It appears inconsistent with common sense that he would instead hold off lodging a caveat and then at the last minute require the borrower’s lawyer to lodge a caveat on his behalf, when it was a simple matter to instruct his own solicitor to do so. That is what happened with the Metcalfe and Woodglen caveats.
[48] The message demonstrates that there was no agreement to provide security in favour of the applicant to secure the lending it had made to the respondents to purchase Glendhu.
[49] I note here that Mr Ryan says in his evidence that Mr Pope verbally agreed and confirmed by text message the terms of the agreement, including that he would provide a personal guarantee and “that he would arrange a caveat on Glendhu to protect [Mr Ryan’s] interest.” The message that followed this discussion did not mention the caveat. It did mention the personal guarantee.
[50] I would expect something as significant as a security being granted to have been mentioned in that message. It wasn’t and I consider that this supports Mr Pope’s case that no right to caveat was granted.
[51] I consider that the agreement between the parties was that set out in the message of 23 January 2024. The agreement was that the advance was unsecured, but that Mr Pope gave a personal guarantee to pay the entire surplus once Glendhu settled.
[52] The respondents’ failure to forward the entire sale proceeds of Glendhu to the applicant is a breach of contract.
[53] It does not give rise to any proprietary interest in subsequent properties purchased by the respondents. It gives the applicant a claim in personam against Mr Pope.
[54] Mr Pope characterises the agreement between the parties differently. He says that the agreement was that there would be a six month loan between the parties on which he would pay interest at 20 per cent per annum. In support of this argument, he refers to narrations in The Flying Bear Trust bank account documents which record the three separate deposits made by the applicant to that account which total $550,000. Those payments are described in the bank statement as “Loan/6 months/20%”.
[55] Mr Pope says this demonstrates that it was agreed that this was a six month loan at 20%, and that he was not obliged to repay the loan until then. He rejects the
argument that he had to pay the full surplus of the sale proceeds from Glendhu to the applicant on settlement of that sale.
[56] I do not need to determine that issue to determine this application. I consider that it is more likely than not that the agreement was that Mr Pope would borrow the funds on an unsecured basis from the applicant and personally guarantee repayment of the loan from the full proceeds of sale of the Glendhu property.
[57] The agreement does not deal with a situation where the available proceeds of sale were insufficient to fully repay the loan. That supports an argument that the advance was for a period beyond the expected settlement of the Glendhu property as the bank statement narrations imply.
[58] Ultimately, I do not think that this matters because I find that this was a simple loan between the applicant and the respondents, supported by the promise of a personal guarantee from Mr Pope.
Second issue—is there an institutional constructive trust?
[59] The applicant says that the agreement required the respondents to pay the full proceeds of sale of the Glendhu property. It is submitted that failure to do this was a fraud on the applicant which results in the imposition of an institutional constructive trust.
[60] The Supreme Court decision in Avondale Printers & Stationers Ltd v Haggie10 is illustrative of why the applicant does not have a caveatable interest in Woodglen. In that case Mahon J said that “a constructive trust arises where it would be a fraud for the legal owner to assert his beneficial interest”.11
[61] The Court imposed a constructive trust on the defendants in Avondale Printers on the grounds that their denial of an earlier oral agreement with the plaintiff amounted to fraudulent conduct. Under that agreement the plaintiff abandoned its
10 Avondale Printers & Stationers Ltd v Haggie [1979] 2 NZLR 124 (SC).
11 At 160.
rights to purchase the property in issue subject to the defendants investing in its development and granting the plaintiff the option to purchase at the end of two years.
[62] In considering the situations where the existence of fraud would result in the imposition of a constructive trust, the Supreme Court in Avondale Printers referred to Bannister v Bannister.12 Expressing a broad approach to the concept of fraud, the Court said that it is not necessary that the agreement include a stipulation that a grantee hold the property as trustee but that “It is enough that the bargain should have included a stipulation under which some sufficiently defined beneficial interest in the property was to be taken by another.”13
[63] The Court in Avondale Printers went on to state that where property is conveyed or proprietary rights released in consideration of an oral promise by the transferee that the transferor will retain or later acquire a beneficial interest in the property in question, and where retraction of the promise amounts to a fraud upon the transferor, then the transferee will be considered a constructive trustee for the benefit of the transferor of either the whole property or of the relevant interest therein.14 Mahon J further explained:
The key to this type of inquiry in my opinion lies in the question whether the transferor would have parted with his property but for the oral undertaking of the transferee. If that question is answered in the negative, then renunciation of the promise or disavowal of the common intention will operate in equity as a fraud on the transferor and entitle him to the appropriate remedy.
[64] In the present case, the applicant never had any reasonable expectation that it would acquire a proprietary interest in any other property that the respondents may own or later acquire. Nothing the respondents did or said induced the applicant to act to its own detriment in the reasonable belief that by so acting it was acquiring a beneficial interest in either Metcalfe or Woodglen.
12 Bannister v Bannister [1948] 2 All ER 133.
13 At 136.
14 At 163.
[65]Again by reference to Avondale Printers, the correct approach is:15
…it must be kept in mind that the holder of the legal title to property will not in all cases be constituted a constructive trustee merely by reason of the fact that he has been shown to be in breach of an oral agreement affecting that property and made between himself and the plaintiff. The circumstances must show that reliance upon the legal title in that particular situation amounts to a fraud upon the plaintiff. Where the relationship between the parties, or the terms of the oral agreement, or the terms of a common intention not constituting a completed agreement, are such as to show that the owner of the legal title has not committed any fraud in the legal or equitable sense, then the plaintiff must be left to whatever contractual remedy he may have for breach of the oral agreement, if it is enforceable.
(emphasis added)
[66] It follows from this analysis and my findings on the terms of the agreement between the parties that the applicant had no reasonable expectation, nor was there any common intention, that the applicant would have any beneficial interest in any of the properties acquired by the respondents. Rather, the applicant has rights in breach of contract only.
[67] The applicant relies on Paugra Holdings Ltd (in liq) v Harvestfield Holdings Ltd as establishing the right to an institutional constructive trust on the basis of fraud.16 However, I do not consider that the Paugra case assists the applicant’s position. It is distinguishable on the facts.
[68] The Paugra case can be distinguished because, similar to Avondale Printers, the defendants made promises or came to a common intention with the plaintiff in relation to the land itself. In the present case, it is not reasonable for the applicant to have believed it was acquiring a beneficial interest in the land through the loan arrangements (and that it was therefore defrauded by the respondents asserting legal title in Woodglen).
[69] In Paugra, the fraud was on both the vendor and the Inland Revenue Department (IRD). The purchaser and vendor were related companies that were ultimately controlled by the same group (the interests of Mr Tao) at the time of the
15 At 163.
16 Paugra Holdings Ltd (in liq) v Harvestfield Holdings Ltd [2014] NZCA 164, (2014) 15 NZCPR 227.
transaction in question. The transaction at issue was a clearly fraudulent device intended to defeat the IRD.
[70] The Court of Appeal held that in completing the transaction in the way they did, the interests of Mr Tao committed a fraud on the IRD and a fraud on the vendor through the two companies they controlled. That is not the situation here. The applicant was never a vendor or a purchaser of any relevant property. It was simply an unsecured creditor of the respondents.
[71] In this case no articulation of why the transaction was a fraud on the applicant beyond there being a simple breach of contract was advanced by the applicant. Clearly, the applicant’s expectation was that it would be fully repaid from the sale of the Glendhu transaction. That did not occur. Instead, the respondent continued to pay interest to the applicant on the loan on the basis that it considered there was a term loan (of disputed length).
[72] In Paugra, the Court of Appeal held that an institutional constructive trust could arise where there had been a non-consensual transfer of an interest in land from a vendor to a purchaser, as a result of a fraud perpetrated on the vendor by the purchaser. That was the only ground on which the Court of Appeal held it was reasonably arguable that there was a caveatable interest.
[73] That is distinguishable from the present case. The applicant never had an interest in Glendhu, nor did it have an interest in or reasonable expectation of an interest in the subsequent properties, Metcalfe and Woodglen.
[74] The circumstances must show the defendant’s reliance upon the legal title amounts to a fraud upon the plaintiff either in law or equity. Fraud in equity arises when the legal owner has induced the other party to act to their own detriment in the reasonable belief that by doing so they were acquiring a beneficial interest in the land.17
17 Above n 10, at 163–164.
[75] I do not consider that Paugra gives any support to the applicant to claim an institutional constructive trust. There is a breach of contract, but no fraud in the present circumstances.
[76] The applicant is an unsecured creditor. It does not have a proprietary interest in Glendhu or any other property owned by the respondents as a result of an institutional constructive trust.
Third issue—tracing?
[77] In support of its argument for the institutional constructive trust, the applicant says that the respondents’ breach of the agreement enabled the respondents to acquire both the Metcalf and Woodglen properties, using its equity.
[78] This is not supported by the documentary evidence. The settlement statements of both the Metcalfe and Woodglen properties are before the Court.
[79] In the case of Metcalfe, the funding for that purchase came from a combination of Basecorp Finance Ltd and Stand Out NZ Ltd. Counsel for the respondents confirmed to me at the hearing that neither company is related to the respondents, and that it was all independent funding. In relation to Woodglen, the funding for that purchase came from Basecorp Finance Ltd.
[80] There is no evidence that funds derived from the sale of Glendhu were used in the acquisition of either Metcalfe or Woodglen.
Discretion
[81] Having concluded that there is no arguable claim that the applicant is the beneficiary of an institutional constructive trust over the Woodglen property, I turn to consider whether, notwithstanding that finding, the Court should exercise its discretion to nonetheless sustain the caveat.
[82] Considering the background between these parties, the long history of dealings between them, the clear terms on which the advance was made to the respondents on
an unsecured basis, and the fact that there is no evidence of any tracing into the property, I do not consider that this is a case where the Court should exercise its discretion to sustain the caveat.
Result
[83] The applicant has not demonstrated the existence of an institutional constructive trust.
[84]I make an order that Caveat 13291583.1 lapse.
[85] The respondents are the successful parties. They are entitled to costs. I award scale costs on a 2B basis, together with disbursements, as fixed by the Registrar.
Associate Judge Cogswell
0
4
0