Maiolini v Fideis (New Zealand) Limited
[2025] NZHC 1832
•4 July 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-417 [2025] NZHC 1832
UNDERPart 18 of the High Court Rules 2016, the Trusts Act 2019, and the inherent jurisdiction of the High Court
BETWEEN GIACOMO MAIOLINI
First Plaintiff
GIACOMO MAIOLINI, CARLA MANZATO and LORENZO MAIOLINI
Second Plaintiffs
AND FIDEIS (NEW ZEALAND) LIMITED
First Defendant
QUINOA TRUSTEES LIMITED
Second Defendant
Hearing: 11 June 2025
Appearances: T M Molloy and S R J Hamilton for the plaintiffs D Nilsson and A McDonald for the first defendant
D Bigio KC and C E Harris for the second defendant
Judgment: 4 July 2025
JUDGMENT OF BLANCHARD J
This judgment was delivered by me on 4 July 2025 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules 2016
Registrar/Deputy Registrar
Solicitors:
Cone Marshall Ltd, Auckland
Lee Salmon Long Barristers and Solicitors, Auckland Jackson Russell Lawyers, Auckland
Shortland Chambers, Auckland
MAIOLINI v FIDEIS (NEW ZEALAND) LTD [2025] NZHC 1832 [4 July 2025]
[1] The plaintiffs, Giacomo Maiolini, Carla Manzato and Lorenzo Maiolini, apply under s 138 of the Trusts Act 2019 (the Act) and the inherent jurisdiction of the Court for orders appointing interim receivers to administer the Riga Settlement (NZ) trust and the Quinoa Settlement trust.
[2] The first defendant is the trustee of the Riga Settlement (NZ), Fideis (New Zealand) Ltd (Fideis NZ). The second defendant is the trustee of the Quinoa Settlement, Quinoa Trustees Ltd (QTL). They oppose the orders. They also apply for security for costs under r 5.45 of the High Court Rules 2016 (HCR).
The Maiolini family
[3] Giacomo1 is an Italian citizen and entrepreneur in the music industry. He is the founder and CEO of a record label called Time Records. Carla is his wife and Lorenzo is his son.
The Riga Settlement
[4] In the 1990s, Giacomo engaged Erwin de Ruiter, a Dutch national, for advice on international asset structures.
[5] In 2005, on Mr de Ruiter’s advice, Giacomo settled the Riga Settlement trust by a deed dated 30 November 2005. The trustee was Fideis (Nevis) Ltd (Fideis Nevis), a company incorporated in Nevis, which was struck off the Nevis companies register in 2015 and therefore no longer exists. The shareholder of Fideis Nevis is not disclosed by the evidence, but Mr de Ruiter was one of its directors.
[6] Giacomo is not an expert in trust law. He says that he relied on Mr de Ruiter to prepare the trust deed, arrange the trustee and ensure the trust was administered properly. Mr de Ruiter was Giacomo’s sole point of contact for the Riga Settlement.
[7] Giacomo is not named as the settlor in the trust deed. Nor is he or his family referred to anywhere else in the deed. Giacomo has not explained why this is the case. At the hearing, I asked Mr Molloy, counsel for the plaintiffs, whether their names
1 For convenience and meaning no disrespect, I will use first names when referring to the Maiolinis.
do not appear in the deed for reasons to do with tax. Mr Molloy suggested that is a possibility, but he confirmed there is no evidence on this point.
[8] The trust deed names the Children’s Hospital in Brescia, Italy as a beneficiary, and includes a power for the trustee to appoint other beneficiaries.
[9] Giacomo signed a letter of wishes dated 30 November 2005 (the same date as the trust deed) that records his wishes that the trust benefit himself, Carla, Lorenzo and Luigi Maiolini (Giacomo’s father), with the Children’s Hospital as the final beneficiary, only to receive any benefit of the trust if Carla, Lorenzo and Luigi predeceased him. But the letter expressly says that it is not binding on the trustee and there are no documents indicating that Giacomo, Carla, Lorenzo and Luigi were formally appointed as beneficiaries of the trust.
[10] Until just before these proceedings were issued in February 2025, the plaintiffs always understood that they were beneficiaries of the Riga Settlement. However, they now say that the Children’s Hospital is the only beneficiary of the trust. The defendants do not dispute this.
[11] The trust deed records that the assets of the trust at the time it was established were 100 per cent of the shares in both Best Records NV and Riga Music Industries Ltd. Giacomo says that these companies played key roles in his business. He incorporated Best Records NV for structuring his recording and publishing operations and Riga Music Industries Ltd to manage foreign licencing revenues.
[12] The assets of the Riga Settlement were held in an account with UBI Banca International, Luxembourg (UBI Bank). Giacomo’s signature was required to operate the UBI Bank account.
The Riga Settlement (NZ)
[13] Around 2010, Mr de Ruiter advised Giacomo that Nevis had been added to the blacklist of non-cooperative jurisdictions for tax purposes. He advised Giacomo that, to maintain favourable conditions, the trust should be resettled into a country on the
whitelist. He suggested New Zealand. As a result, the assets of the Riga Settlement were resettled into the Riga Settlement (NZ).
[14] The Riga Settlement (NZ) was established by a deed dated 24 June 2010. Its trustee is Fideis NZ, a company incorporated in New Zealand. Mr de Ruiter is the sole shareholder of the trustee. He is one of the company’s two directors. The other director is Kieran Brush, an Australian businessman. Mr Brush became a director on 14 October 2015, after he entered the picture in 2015, as described below.
[15] Mr de Ruiter again prepared the trust deed and arranged the trustee company. He was Giacomo’s sole point of contact for the trust.
[16] The trust deed is in very similar terms to the deed for the Riga Settlement. But an important difference is that the Riga Settlement (NZ) trust deed does not name the Children’s Hospital in Brescia or any other party as a beneficiary.
[17] Two letters of wishes were signed in relation to the Riga Settlement (NZ). These were signed by Fideis Nevis as the settlor under the resettlement.
[18] The first letter of wishes, dated 24 June 2010 (the same date as the trust deed), is similar to the letter of wishes for the Riga Settlement. Again, the letter expressly says that it is not binding on the trustee, and there are no documents indicating that Giacomo, Carla, Lorenzo and Luigi were formally appointed as beneficiaries of the trust.
[19] The second letter of wishes is undated. It is similar to the dated letter of wishes except it names “regulated charities such as Red Cross, UNICEF, etc” as the final beneficiary (not the Children’s Hospital).
[20] Until February 2025, the plaintiffs always understood that they were beneficiaries of the Riga Settlement (NZ). However, they now say that the trust had no beneficiaries. The defendants do not dispute this. The plaintiffs say that, as the trust had no beneficiaries, it was invalid from the outset and the assets of the trust were held by Fideis NZ on resulting trust for the Riga Settlement.
[21] The assets of the trust, which were valued at approximately €20 million at the time of the resettlement, continued to be held by UBI Bank. Giacomo’s signature continued to be required to operate the UBI Bank account.
Mr de Ruiter’s criminal convictions
[22] Around 2012, Dutch authorities began investigating Mr de Ruiter with respect to his trust business.
[23] In December 2018, Mr de Ruiter was convicted and sentenced in the Netherlands to three years’ imprisonment for facilitating tax fraud, corruption and managing a criminal organisation in relation to his trust work. He was also fined approximately €2 million for illegal income derived from his criminality.
The Quinoa Settlement
[24] Due to the Dutch investigations into him, in 2015, Mr de Ruiter advised Giacomo to resettle the assets of the Riga Settlement (NZ) into another New Zealand trust that excluded Mr de Ruiter from a formal position.
[25] The Quinoa Settlement was established by a deed dated 2 March 2015. Its trustee is QTL, a company incorporated in New Zealand. The sole shareholder of the trustee is Earl Campbell, a Canadian businessman who was introduced to Giacomo by Mr de Ruiter at this time. When the Quinoa Settlement was established, Mr Campbell was a director of QTL. However, he ceased to be a director on 2 July 2018. The only current director of QTL is Mr Brush, who became involved when he became a director of QTL on 16 April 2015.
[26] Although Mr de Ruiter did not hold a formal role in the Quinoa Settlement, he introduced Mr Campbell to Giacomo on the understanding that Mr de Ruiter would continue to be involved with the administration of the trust company and that Giacomo would continue to deal with him directly with respect to trust affairs.
[27] The trust deed is very similar to the one for the Riga Settlement (NZ). It does not name any beneficiaries of the trust.
[28]The assets of the Riga Settlement (NZ), which were valued at approximately
€21.7 million, were transferred to the Quinoa Settlement via Mr Campbell. On 16 June 2015, the assets were transferred from Fideis NZ’s UBI Bank account to an account in Mr Campbell’s name. Then, on 22 June 2015, they were transferred from Mr Campbell’s account to QTL’s UBI account. There is an affidavit from an expert accountant engaged by the plaintiffs, Neale Jackson, confirming that all the assets transferred to Quinoa Settlement came from the Riga Settlement (NZ).
[29] What I have described so far comes from affidavit evidence of Giacomo that has not been disputed in the evidence filed by the defendants. There is no affidavit from Mr de Ruiter (or anyone else) disputing the above narrative. However, from this point, the defendants dispute significant parts of Giacomo’s narrative.
[30] Giacomo says that he does not know why the assets were transferred via Mr Campbell. The plaintiffs say he must merely have been a conduit and had no beneficial interest in the assets.
[31] Mr Brush says that, since he became involved in April 2015, he has always understood that the funds settled into the Quinoa Settlement were settled by Mr Campbell. But no affidavit has been filed by Mr Campbell about this (or anything else). Nor are there any documents that explain why the assets passed through Mr Campbell’s account.
[32] There are two letters of wishes from the time of this resettlement. Both are subject to dispute by the parties.
[33] The first is an undated letter of wishes. The wishes set out in this letter are similar to those in the undated letter of wishes for the Riga Settlement (NZ). Again, the letter expressly says that it was not binding on the trustee, and there are no documents indicating that Giacomo, Carla, Lorenzo and Luigi were formally appointed as beneficiaries of the trust.
[34] Until February 2025, the plaintiffs always understood that they were beneficiaries of the Quinoa Settlement. However, they now say that the trust had
no beneficiaries. The plaintiffs say that, as the trust had no beneficiaries, it was invalid from the outset and the assets of the trust are held by QTL on resulting trust for the Riga Settlement. As discussed below, QTL agrees that none of the Maiolinis are beneficiaries of the trust, but it does not accept that the trust had no beneficiaries when it was established.
[35] Mr Campbell (not Fideis NZ) signed the undated letter of wishes as settlor. Giacomo says that he did not consider this to be significant as the content of the letter was consistent with the letters of wishes in relation to the Riga Settlement and the Riga Settlement (NZ).
[36] Mr Brush says he had never seen the undated letter of wishes until it was provided to him by the plaintiffs’ lawyer in August 2024. He also says that Mr Campbell has advised he “did not recall” signing the letter. Further, Mr Brush points out that the letter is not dated or certified, whereas the other letters of wishes he has received from Mr Campbell were all dated and certified.
[37] The second letter of wishes is dated 2 March 2015, the date the trust deed was executed. It is signed by Mr Campbell as settlor. It records his wish that UNICEF is treated as the sole beneficiary of the Quinoa Settlement. Again, the letter expressly says that it is not binding on the trustee and there are no documents indicating that UNICEF was formally appointed as a beneficiary. But, despite this, QTL says that, from the time the trust was established, it had UNICEF as a beneficiary.
[38] The plaintiffs do not dispute that this letter was signed by Mr Campbell. But they dispute that UNICEF was appointed as a beneficiary of the Quinoa Settlement. As I have said, their position is that the trust had no beneficiaries when it was established and therefore the trust was invalid from the outset and holds its assets on resulting trust for the Riga Settlement.
[39] Mr Brush also says that, in or about December 2019, Mr Campbell provided QTL with an addendum dated 2 December 2019 to his letter of wishes dated 2 March 2015. This requested that he and his companies be appointed as beneficiaries to the
trust. Further, he says that QTL resolved to appoint Mr Campbell and his companies as beneficiaries of the trust, effective 1 January 2020.
[40] Giacomo says that these documents were prepared in secret and were never disclosed to him. The first he knew of them was when they were exhibited to one of Mr Brush’s affidavits in this proceeding.
Protector of the Quinoa Settlement
[41] In March 2015, QTL appointed Donald Calvetti as protector of the Quinoa Settlement. Giacomo says that the appointment was at his request. Mr Calvetti is a trusted advisor to the Maiolini family. The protector has wide powers under the trust deed, including powers to appoint new or additional trustees.
[42] Shortly afterwards, Mr Calvetti resigned due to a conflict. Mr Brush and Mr Campbell, as directors of QTL, also resolved to withdraw the appointment.
[43] In September 2019, QTL purported to appoint Pier Maini as protector of the trust. Mr Maini is Giacomo’s friend and a lawyer.
[44] I say QTL purported to appoint Mr Maini because the deed of appointment was in fact invalid as it was not witnessed,2 but QTL did not become aware of this until later. In December 2019, QTL’s directors resolved to rescind Mr Maini’s appointment. Giacomo says they did this without informing either him or Mr Maini, and they only discovered the appointment had been rescinded in late 2024. My understanding is that it was around this time that QTL became aware that the appointment had been invalid.
Administration of the Quinoa Settlement
[45] Giacomo says that he continued to direct investments in the Quinoa Settlement. He says that, initially, he provided investment directions to UBI Bank, with QTL confirming them via Mr Brush.
2 Property Law Act 2007, s 9.
[46] In November 2017, UBI Bank was sold to EFG Bank, Luxembourg (EFG Bank). In November 2019, EFG Bank advised that it would cease providing services to the trust. QTL subsequently transferred the trust assets to several bank accounts. Giacomo says that, from that time, he provided investment directions to Mr Campbell, who would then contact the relevant bank to implement his instructions, or to Mr de Ruiter, who would then provide them to Mr Brush for execution. Giacomo’s affidavits exhibit WhatsApp messages he exchanged with Mr Campbell and Mr de Ruiter that provide examples of him giving investment directions to them.
[47] In contrast, Mr Brush says Giacomo’s only role in relation to the Quinoa Settlement was his appointment as an “ambassador” in 2019. He says this was an informal role, which was not intended to give him any rights or standing in relation to the trust. Rather, in that role, Giacomo researched charitable organisations on the trust’s behalf and made recommendations to the trust for charitable support.
Breakdown of relationship
[48] Giacomo says that, from 2019, he became increasingly concerned by the manner in which Mr de Ruiter, Mr Campbell and Mr Brush were administering the trust. In particular, he was concerned about transactions and structures that were being put in place that appeared to be putting trust assets outside the direct control of QTL, and the fees that were being charged to the trust.
[49] Giacomo says that, by 2021, he was regularly communicating with Mr de Ruiter about winding up the trust or returning control of the trust to himself and Lorenzo. He says that Mr de Ruiter acknowledged Giacomo was the settlor of the trust funds and assured him that control over trust assets would be returned to him. One of Giacomo’s affidavits exhibits WhatsApp messages he exchanged with Mr de Ruiter that support his evidence about this.
[50] Giacomo says this led to two meetings in Dubai on 10 January and 4 March 2024 between himself and his advisors on the one hand, and Mr de Ruiter, Mr Campbell and Mr Brush on the other. He says the purpose of the meetings was to discuss the return of control of the trust assets to Giacomo and his family. Giacomo
says all present at the meeting, including Mr Brush, acknowledged his role as the source of the funds and his family as the ultimate beneficiaries of the trust assets.
[51] Giacomo says that the relationship between himself and Mr de Ruiter, Mr Campbell and Mr Brush subsequently collapsed.
[52] Mr Brush provides a different version of events. He says that, until 2024, none of the plaintiffs had ever contacted him asserting that they were beneficiaries or that Giacomo was the settlor. He also says Mr Campbell told him that, in 2024, his relationship with Giacomo and Lorenzo had soured due to issues unconnected to the trust.
[53] Whichever version is correct, the dispute came to a head in the second half of 2024. On 4 July 2024, Lorenzo emailed Mr Brush a letter requesting information regarding the Quinoa Settlement. In his email in response of 15 July 2024, Mr Brush said that Lorenzo was not a beneficiary of the Quinoa Settlement, and he must deliver up any trust records that he held as they were confidential to Mr Brush as trustee. By a letter dated 11 September 2024, QTL’s lawyers said that Giacomo, Carla and Lorenzo were not beneficiaries of the Quinoa Settlement, and that Mr Campbell was the settlor of the trust.
[54] By a letter dated 11 February 2025, the plaintiffs’ solicitors advised QTL that its failure to appoint Giacomo, Carla and Lorenzo as beneficiaries of the Quinoa Settlement was a breach of trust and demanded that QTL retire as trustee and appoint a new trustee nominated by the plaintiffs.
[55]On 21 February 2025, the plaintiffs commenced these proceedings.
The plaintiffs’ understanding of the current assets of the Quinoa Settlement
[56] As I have said, the Quinoa Settlement (via Mr Campbell) received into its UBI Bank account assets from the Riga Settlement (NZ) valued at approximately
€21.7 million.
[57] As discussed above, in November 2019, EFG Bank advised that it would cease providing services to the trust. QTL subsequently transferred the trust assets to several bank accounts. The plaintiffs understand that, as at 31 May 2024, funds transferred from EFG Bank were held in the following accounts:
(a)an account with CIBC bank in Canada in the name of Quinoa Investments Ltd, holding CAD 2,745,805.32;
(b)an account with Morgan Stanley in the name of EJC DWC LLC, holding USD 486,031.88;
(c)an account with Emirates NBD in Dubai in the name of EJC DWC LLC, holding AED 1,387,121.61;
(d)an account with Bank Edmond de Rothschild in the name of QTL, holding €6,699,580.97; and
(e)an account with Banque Richelieu in Monaco in the name of QTL, holding €5,893,028.63.
[58] The plaintiffs say that Quinoa Investments Ltd appears to be a company incorporated in Canada. EJC DWC LLC is a company incorporated in the United Arab Emirates (UAE). Both companies are controlled by Mr Brush and Mr Campbell. QTL says that the funds held by these companies are not assets of the Quinoa Settlement.
[59] The plaintiffs also say that, from 2022 to 2024, payments totalling €2,569,730 were paid from the funds of the Quinoa Settlement to Mr Campbell, Mr Brush, Mr de Ruiter or entities associated with them.
[60] Further, on 4 March 2024 (the same day as the second meeting in Dubai referred to above), Mr Campbell signed a letter of wishes directing distributions totalling €4.75 million from the Quinoa Settlement to his wife (€1.5 million), Mr de Ruiter (€2.5 million) and Mr Brush (€750,000). Giacomo says he only discovered the existence of this letter of wishes when it was exhibited to one of
Mr Brush’s affidavits. It is not clear whether the payments referred to in the letter of wishes have been made. Mr Brush does not say in his affidavits whether or not they have.
[61] The funds that appear to be held in the name of QTL in the accounts at Bank Edmond de Rothchild and Banque Richlieu referred to above total
€12,592,609.60. If €4.75 million has been paid from those funds, the amount held in QTL’s name will be only €7,842,609.60.
The plaintiffs’ substantive claims
[62] The statement of claim contains three causes of action. The first includes allegations that:
(a)At the time they were purportedly settled, neither the Riga Settlement (NZ) nor the Quinoa Settlement had any beneficiaries.
(b)Consequently, the trusts were invalid from the outset.
(c)Fideis NZ held, and QTL holds, the trust assets on resulting trust for the Riga Settlement.
(d)There is no current trustee of the Riga Settlement because Fideis Nevis was struck off the Nevis companies register and ceased to exist.
(e)The power of appointment of new trustees under the Riga Settlement rests with either the protector (who can be appointed by the trustee) or the trustee.
(f)There is neither a protector nor a trustee appointed to the Riga Settlement and, therefore, no person to appoint a new trustee.
[63]The relief sought in relation to this cause of action includes:
(a)a declaration that the Riga Settlement (NZ) and the Quinoa Settlement were invalid from the outset and Fideis NZ held, and QTL holds, the trust assets on resulting trust for the Riga Settlement;
(b)an order appointing New Zealand Trust Corporation Ltd (NZTC), a trust company operated by the plaintiffs’ solicitors, as trustee of the Riga Settlement; and
(c)orders that the defendants must account to NZTC as trustee of the Riga Settlement for all trust funds they received during their trusteeships.
[64] The second cause of action alleges that it is reasonably necessary in the circumstances and just and equitable for receivers to be appointed to the Riga Settlement (NZ) and the Quinoa Settlement. The relief sought in relation to this cause of action includes an order appointing Jeff Meltzer and Clive Bish, both of whom are chartered accountants and licenced insolvency practitioners, as receivers of the two trusts.
[65] The third cause of action is an alternative one that only applies if the Court finds that the Riga Settlement (NZ) and/or the Quinoa Settlement are valid. It alleges that the defendants have breached their fiduciary powers by failing or refusing to appoint Giacomo, Carla and Lorenzo as beneficiaries of the trusts. The relief sought includes orders removing the defendants as trustees and replacing them with NZTC.
The merits of the plaintiffs’ substantive claims
[66] The merits of the plaintiffs’ substantive claims are relevant to both the application for appointment of receivers and the applications for security for costs. I therefore provide my assessment of the strength of the claims to the extent this is possible at this stage.
[67] It is common ground that, if a trust that does not have any beneficiaries when it is established, it is invalid from the outset and the purported trustee holds any assets transferred to it on resulting trust for the settlor.3
[68] Fideis NZ does not dispute that the Riga Settlement (NZ) did not have any beneficiaries when its trust deed was executed and the assets were transferred to it.
[69] Further, while QTL says that the Quinoa Settlement did have a beneficiary when its trust deed was executed and the assets were transferred to it, based on the evidence before the Court, its argument appears weak. Mr Brush says that the letter of wishes dated 2 March 2015 was attached to the trust deed. QTL submits that this shows that Mr Campbell (who as the time was the sole director and shareholder of the trustee) intended that UNICEF would be a beneficiary. But this contradicts the letter itself, which, as I have said, states that it is not intended to be binding on the trustee.
[70] QTL says that, if the Quinoa Settlement did not have a beneficiary, it would be open for it to seek rectification on the ground that it made a mistake by failing to appoint UNICEF as a beneficiary. But it is not clear that QTL did mistakenly fail to appoint UNICEF. Certainly, because there is no affidavit from Mr Campbell, as things stand, there is no basis in the evidence for this submission.
[71] Even if the Quinoa Settlement is valid or, following rectification, it will be treated as such, the assets it received are still subject to a resulting trust. This is because, as the Riga Settlement (NZ) was invalid, Fideis NZ did not have the power to resettle the assets on the Quinoa Settlement. QTL may not previously have been subject to fiduciary duties because it was not aware of resulting trust at the time it received the assets,4 but it is now.
[72] The Riga Settlement is a foreign trust. It has no trustee as a result of Fideis Nevis being struck off the Nevis companies register. The defendants say that, therefore, instead of bringing this proceeding, the plaintiffs should be seeking to have Fideis Nevis restored to the register in Nevis. But I do not agree. As Fideis Nevis
3 See Trusts Act 2019, s 15(1)(b)(ii); and Re Exeter Settlement [2010] JLR 169, [2010] JRC 012.
4 See Port of Brisbane Corporation v ANZ Securities [2002] QCA 158 at [32]–[36].
is controlled by Mr de Ruiter, it is unsurprising that the plaintiffs do not want Fideis Nevis to be the trustee. A reasonable alternative is to seek a court order appointing a new trustee. It might be thought that Nevis is the natural place to seek the order as the trust is governed by Nevis law. But this Court has the power to appoint a trustee to a foreign trust.5 It is more efficient to seek the order in this proceeding at the same time as the other orders the plaintiffs are seeking.
[73] One thing that the plaintiffs have not explained is, if their claims in this proceeding are successful, what they intend to do to try to become beneficiaries of the Riga Settlement. Presumably, their expectation is that the trustee of the Riga Settlement appointed by the Court will appoint them as beneficiaries, but they have not confirmed this. However, I do not think I need to be concerned about the lack of clarity on this point. Whatever happens, the Riga Settlement will have at least one beneficiary, the Children’s Hospital, and that is sufficient.
[74] For these reasons, based on the evidence before the Court, my view is that the plaintiffs’ claims have a good prospect of success.
Application for appointment of interim receivers
[75] In the present application, the plaintiffs seek for the substantive order sought in the second cause of action to be made on an interim basis.
[76] The plaintiffs seek orders appointing receivers not only to the trusts but also to the trust companies. But at the hearing, counsel for the plaintiffs clarified that they are only seeking to appoint receivers to the trusts. They are not seeking to put the companies into receivership.
Legal principles — appointment of a receiver to a trust
[77] The source of the Court’s power to appoint receivers to trust property is both statutory, pursuant to s 138 of the Act, and under the Court’s inherent supervisory jurisdiction in respect of trusts.
5 See Chellaram v Chellaram [1985] Ch 409, [1985] 1 All ER 1043; Walbrook Trustees (Jersey) Ltd v Fattal [2009] EWHC 1446; and Heslop v Heslop [2021] EWHC 2957.
[78] Section 138(1) of the Act empowers the Court, either on application by an “interested person” or on its “own motion”, to appoint a receiver to administer a trust. The term “interested person” is not defined in the Act.
[79] The Act applies to express trusts governed by New Zealand law.6 But the Court may also apply the provisions of the Act to resulting or constructive trusts where “necessary and appropriate”.7
[80]Under s 138(2), the Court must be satisfied that appointing a receiver is both:
(a)reasonably necessary in the circumstances of the trust; and
(b)just and equitable.
[81] If the Court decides to appoint a receiver, it must also determine the extent of the receiver’s duties and powers, the duration of the receivership, the principles the receiver is to apply in determining priorities, and whether the receiver is to be paid from the trust assets.8
[82] If a receiver is given a power, the trustee cannot exercise that power during the receivership.9
[83] The Court’s inherent jurisdiction to appoint a receiver in relation to a trust is preserved by the Act,10 although the statutory power to appoint a receiver likely eclipses it.11
Issues in relation to the application for appointment of interim receivers
[84] The issues that arise in relation to the application for appointment of interim receivers are:
6 Trusts Act, s 5(1).
7 Section 5(2).
8 Section 138(4).
9 Section 138(5).
10 Section 8(1).
11 Re Cameron [2022] NZHC 2495, (2022) 5 NZTR 32-016 at [11].
(a)Do the plaintiffs have standing to make the application?
(b)Is the appointment of receivers reasonably necessary?
(c)Is it just and equitable to appoint receivers?
(d)If receivers are to be appointed, what terms should apply?
Do the plaintiffs have standing to make the application?
[85] As I have said, the term “interested person” in s 138(1) of the Act is not defined. It has been held to include a trustee, beneficiary or creditor of the trust.12 I consider it would clearly also include a settlor or protector of the trust.
[86] The plaintiffs hold none of these positions in relation to the Riga Settlement (NZ) or the Quinoa Settlement. But there is no reason to think that the term “interested person” was intended to be read in a narrow or limited way.13 Had it been intended that the term would only apply to well-recognised categories of persons like trustees, beneficiaries, creditors, settlors or protectors, they would have been listed in a definition of the term. It is therefore necessary to look at the particular circumstances of the case to work out whether persons falling outside of the well-recognised categories can be said to be an “interested person”.
[87] In my view, on the evidence before the Court, it is at least reasonably arguable that the plaintiffs are interested persons in relation to the Riga Settlement (NZ) and the Quinoa Settlement because:
(a)Giacomo is the ultimate source of all the assets settled into the Riga Settlement (NZ) and the Quinoa Settlement;
(b)Giacomo’s intention as the settlor of the Riga Settlement, as indicated by his letter of wishes, was that the trust funds would be administered for the benefit of the plaintiffs;
12 Armani v Armani [2021] NZHC 3145, [2022] 2 NZLR 547 at [79].
13 At [79].
(c)all the assets of the Riga Settlement (NZ) and the Quinoa Settlement were or are held on resulting trust for the Riga Settlement; and
(d)letters of wishes in relation to the Riga Settlement, the Riga Settlement (NZ) and the Quinoa Settlement all indicate that the plaintiffs were the settlor’s intended objects of the power of appointment of beneficiaries contained in the trust deeds.14
[88] I make two comments here. First, QTL attempted in its submissions to cast doubt on Giacomo’s evidence that he was the ultimate source of all the trust assets and that the trusts were intended to benefit himself and his family. It pointed to the fact that there is no documentary evidence to support some of the matters referred to in Giacomo’s affidavits. It also pointed to miscellaneous documents that it says cast doubt on his evidence. But Giacomo’s affidavits provide a full description of events from his point of view. In the absence of affidavits from Mr de Ruiter and Mr Campbell explaining their version of events, I do not find QTL’s submissions on this point persuasive.
[89] Second, QTL’s submissions attempt to challenge the undated letter of wishes relating to the Quinoa Settlement. But the evidential basis for its submission is weak. It relies on hearsay evidence from Mr Brush because Mr Campbell did not provide an affidavit. Also, all that Mr Brush says is Mr Campbell told him he “did not recall” signing the letter. If the plaintiffs truly have no interest in the Quinoa Settlement, Mr Campbell would be expected to categorically deny signing the letter, but he did not.
[90]For these reasons, I conclude that the plaintiffs have standing to seek the orders.
Is the appointment of receivers reasonably necessary?
[91] Under s 138, the applicant must show that appointment of a receiver is reasonably necessary in the circumstances of the trust. In this context, reasonably necessary means something more than expedient or desirable, falling closer
14 Schmidt v Rosewood Trust Ltd [2003] UKPC 26, [2003] 2 AC 709.
to “required” or essential to achieve a particular outcome or purpose, but is not necessarily restricted to measures of a last resort.15
[92] The plaintiffs say that assets of the trusts have been dissipated and the remaining assets are at serious risk. They say that appointment of receivers is reasonably necessary to secure the trust assets pending the outcome of the plaintiffs’ substantive claims.
[93] The positions of the two trusts are not the same. I therefore consider them separately below.
The Riga Settlement (NZ)
[94] I do not accept that appointment of receivers is necessary in the case of the Riga Settlement (NZ). It no longer has any assets, so there is no risk of further dissipation.
[95] The plaintiffs say that the Riga Settlement (NZ) has a “very significant and valuable” trust asset in the form of a claim against QTL or Mr Campbell to recover the assets that were transferred away. But, if there is a claim, it belongs to the Riga Settlement. Appointing receivers to the Riga Settlement (NZ) will have no bearing on the claim or the ability of the Riga Settlement to pursue it.
[96] The plaintiffs also say that appointment of receivers is necessary to secure trust records. But this is not a sufficient reason for receivers to be appointed. If receivers were appointed, they would have the power to require documents to be delivered to them. But the plaintiffs already have the ability to obtain any relevant documents through discovery, and Fideis NZ is subject to the usual obligation to preserve discoverable documents.
15 Armani v Armani, above n 12, at [86]; Re Cameron, above n 11, at [11]–[12]; and Maka v Toailoa
[2025] NZCA 261 at [164].
The Quinoa Settlement
[97] QTL says that the appointment of receivers is not reasonably necessary. It submits that:
(a)Aside from the claims the trust faces in this proceeding, the Quinoa Settlement’s present circumstances are unremarkable. The trust continues to be administered by the same trustee and function in an orthodox way. In this regard, the circumstances of this case are markedly different from the types of cases where the Court has appointed receivers to administer trusts. These cases have typically involved a combination of the following circumstances:
(i)an impasse or serious dysfunction between trustees and/or beneficiaries prevents the trust from being administered;16
(ii)the trust assets are in jeopardy;17
(iii)there is disagreement over who to deal with a specific trust asset that needs to be sold;18
(iv)there is disagreement or problems relating to trust liability;19
(v)the trust’s purpose has come to an end or is to be wound up and independent assistance is required;20 and
16 Lockhart Trustee Services No 56 Ltd v Ryan [2020] NZHC 1823 at [30]; Clarkson v Clarkson [2020] NZHC 3382 at [14]; Samnic Forest Management Limited v Samnic Forest Waingaromia (No 1) Ltd [2025] NZHC 253.
17 PH Trustee Ltd v HJ [2024] NZHC 603, (2024) 25 NZCPR 183; Lockhart Trustee Services No 56 Ltd v Ryan, above n 16; Clarkson v Clarkson, above n 16; and Re Cameron, above n 11.
18 Lockhart Trustee Services No 56 Ltd v Ryan, above n 16; and Clarkson v Clarkson, above n 16, at [14].
19 Lockhart Trustee Services No 56 Ltd v Ryan, above n 16; and Clarkson v Clarkson, above n 16.
20 Samnic Forest Management Limited v Samnic Forest Waingaromia (No 1) Ltd, above n 16;
Clarkson v Clarkson, above n 16, at [15].
(vi)litigation has already determined the parties’ respective rights in relation to the trust property but receivers are required to aid enforcement.21
(b)The circumstances of the Quinoa Settlement do not reveal any urgent or extraordinary need to appoint receivers of the above kind. The trust is merely the subject of a legal claim. Trusts are frequently involved in litigation with competing claims to the trust assets without receivers being appointed to “protect” the trust’s assets. If the threshold for appointing receivers to administer a trust was merely the existence of a claim by individuals asserting an interest in the trust assets, it would significantly broaden the scope for such appointments in a way inconsistent with the established legal tests.
(c)Moreover, the law provides a further protection for claimants in trust litigation. A trustee may be liable when it deals with trust assets when on notice of an adverse claim.22
(d)QTL is a professional trustee. Its director, Mr Brush, is a chartered accountant with considerable experience. Mr Brush says in his evidence that he is cognisant of a trustee’s obligation when faced with an adverse claim. He says that QTL is willing to not distribute the capital of the trust while the proceedings are on foot. It simply wishes to continue to pay its legal, trustee and operating expenses. QTL has offered to provide an undertaking to this effect, but it has been rejected by the plaintiffs.
[98] I do not accept these arguments. I agree with the plaintiffs that appointment of receivers is reasonably necessary in the case of QTL. It is necessary to secure the Quinoa Settlement’s assets pending the outcome of the plaintiffs’ substantive claims.
21 Body Corporate 81,012 v Memelink (ato Link Trust) (No 1) [2022] NZHC 1244.
22 Guardian Trust and Executors Company of New Zealand Ltd v Public Trust of New Zealand
[1942] AC 115 (PC).
[99] I do not agree that the present situation is unremarkable. The situation is plainly different to the usual situation where a trust is subject to a legal claim. Here, the claim goes right to the heart of the trust. It relates to all the assets of the trust. It concerns the whole basis on which the trust assets are held by QTL. The claim concerns whether the trust assets are held subject to the terms of the trust deed for the benefit of Mr Campbell and his companies or whether they are held on resulting trust for the Riga Settlement.
[100] If the plaintiffs’ claims succeed, then the assets are not held subject to the Quinoa Settlement. Mr Campbell and his companies have no beneficial interest in them. QTL has no right to deal with the assets. And, as I have said, based on the evidence before the Court, the plaintiffs’ claims appear to have a good prospect of success.
[101] It is of course correct that a trustee may be liable when it deals with trust assets while on notice of an adverse claim. But there is no evidence as to the assets QTL would have to meet such a claim. It seems likely it has no assets of its own.
[102] Mr Brush is a professional and he does have experience, but he is not independent. It is clear from his affidavits that he is very much on Mr Campbell’s side of the dispute.
[103] In my view, the plaintiffs’ refusal to accept the undertakings QTL has proposed is reasonable in the circumstances.
[104] The exact form of the undertakings was revisited by QTL after the hearing. It filed a memorandum after the hearing proposing that it undertakes not to make “any capital distributions” from the trust pending further order of the Court in this proceeding, subject to it being able to pay the “reasonable operating expenses” of the trust, including for investment advice, trustee expenses and fees, and legal fees and disbursements including fees in connection with the proceeding.
[105] During the hearing, I pointed out that, even if Mr Brush were independent, Mr Campbell (as the 100 per cent shareholder of QTL) could easily replace him with
someone who is clearly not independent. For example, Mr Campbell could appoint himself. To address this point, in the memorandum it filed after the hearing, QTL also proposed that Mr Brush provides an undertaking that he will immediately notify the plaintiffs’ lawyers if he is removed as a director or any further directors are appointed.
[106] But I see issues with the proposed undertakings. First, the prohibition on capital distributions does not prevent income of the trust assets from being distributed.
[107] Second, while it is reasonable for the trust assets to be used to pay for third party investment advice, it is less clear that, in this context, they should be used to pay the other categories of expenses. I say this because, if the plaintiffs’ claims are well-founded, QTL has no right to deal with the trust assets at all. Ordinarily, trustees are indemnified from the assets of the trust for costs properly and reasonably incurred for the benefit of the trust.23 But, if the plaintiffs’ substantive claim is successful, then the Quinoa Settlement was never valid. And, as I have said, the claims appear to have a good prospect of success. Further, a trustee’s right to indemnity from the assets of a trust is more likely to be displaced where there is a greater degree of self-interest in a trustee defending a proceeding.24 QTL’s defence of the plaintiffs’ claims is self-interested because its 100 per cent shareholder is Mr Campbell and the position it is taking in the proceeding is that he and his companies are the beneficiaries of the trust assets.
[108] Third, the remaining trust assets are held in accounts in Monaco. If Mr Brush were to inform the plaintiffs that he had been removed as a director, then the plaintiff would need to make an urgent application to the Court to appoint receivers. By the time such orders were made, the trust funds could easily have been transferred out of the control of QTL.
[109]For these reasons, my conclusion is that the orders are reasonably necessary.
23 McLaughlin v McLaughlin [2018] NZHC 3198, [2019] NZAR 286 at [18].
24 Jessica Gorman and others McGechan on Procedure (online ed, Thomson Reuters) at [HR19.4A.01].
It is just and equitable to appoint receivers?
[110] As I have concluded that appointment of receivers is not reasonably necessary in the case of the Riga Settlement (NZ), I do not need to consider whether it is just and equitable to appoint receivers to the trust. But the issue remains to be decided with regard to the Quinoa Settlement.
[111]QTL says that it is not just and equitable for the following reasons:
(a)The plaintiffs’ claims lack merit.
(b)The plaintiffs have “sat on their alleged rights” for nine years (from 2015 to 2024). The plaintiffs had full knowledge that the Quinoa Settlement documents did not record them as either settlor or beneficiaries and yet, until recently, they did nothing about this.
(c)Appointment of receivers will adversely impact QTL and the Quinoa Settlement as:
(i)it will unfairly prejudice QTL’s ability to defend the plaintiffs’ claims, including conducting and funding a defence;
(ii)it will be difficult for New Zealand receivers to administer the trust’s assets, which are being actively managed by QTL in accounts in Monaco;
(iii)there is a significant risk that the banks will freeze QTL’s accounts; and
(iv)it will adversely impact QTL, Mr Brush, and Mr Campbell’s relationships and reputations in the international financial markets.
(d)The undertakings as to damages provided by the plaintiffs are insufficient.
[112]Again, I do not accept these arguments.
[113] As I have already indicated, on the basis of the evidence before the Court, the plaintiffs’ claims appear to have a good prospect of success.
[114] I also do not see the nine-year period that QTL refers to as being significant. Giacomo’s evidence explains why the plaintiffs did not take action earlier. He did not have any concerns until 2019. His concerns increased from then, but matters did not come to a head until 2024, when the relationship completely broke down. Importantly, until February 2025, the plaintiffs thought they were beneficiaries of the trust.
[115] In addition, I do not accept that appointment of receivers will adversely impact QTL or the Quinoa Settlement. Prejudice to QTL’s ability to defend the claim can be avoided by the terms on which the receivers are appointed (discussed below). Further, as I have said, I consider it to be doubtful whether the defence of the plaintiffs’ claims should be funded from the trust assets. In addition, I cannot see any good reason why the receivers would be unable to administer the trust’s assets, why the banks would freeze QTL’s accounts, or why the mere appointment of receivers would cause any significant damage to the relationships or reputations of QTL, Mr Brush or Mr Campbell.
[116] Finally, in my view, the undertakings as to damages the plaintiffs have provided are sufficient. There is no rule requiring a plaintiff seeking appointment of interim receivers to provide an undertaking as to damages. But, in Armani v Armani, the Court considered that an undertaking as to damages should be provided.25
[117] The lack of an undertaking as to damages was raised by Fideis NZ in its submissions. To remedy this, subsequent to the hearing, each of the plaintiffs provided an undertaking as to damages. But QTL says the undertakings are inadequate because they were provided after the hearing, the plaintiffs are based in Italy and the UAE, there is limited evidence about the plaintiffs’ assets, and the plaintiffs have not offered to provide security in support of the undertakings. However, I do not accept these arguments. I have explained why the undertakings were provided after the hearing,
25 Armani v Armani, above n 12, at [59].
and there is no reason to think that QTL will suffer significant losses as a result of appointment of receivers.
[118] For these reasons, I conclude that it is just and equitable that receivers are appointed in relation to the Quinoa Settlement.
If receivers are to be appointed, what terms should apply?
[119] I agree with the plaintiffs that Jeff Meltzer and Clive Bish should be appointed as interim receivers of the Quinoa Settlement.
[120] As I have said, when appointing a receiver under s 138, the Court must also determine the extent of the receiver’s duties and powers, the duration of the receivership, the principles the receiver is to apply in determining priorities, and whether the receiver is to be paid from the trust assets.26
[121] I also need to determine whether the receivers should be required to give security in accordance with r 7.61 of the HCR.
[122]I consider each of these matters below.
The receiver’s duties and powers
[123] To determine the duties and powers of the receivers, it is necessary to consider the purpose of the receivership. I agree with the plaintiffs that the purposes of the receivership here are:
(a)to secure and preserve the assets that were received by QTL as trustee of the Quinoa Settlement; and
(b)to administer the trust assets as reasonably necessary to secure and preserve the assets pending determination of the plaintiffs’ substantive claims.
26 Trusts Act, s 138(4).
[124] The receivers should owe the usual duties of receivers but only to the extent necessary to fulfil the purposes of the receivership. Similarly, they should have all powers and authorities necessary to fulfil the purposes of the receivership. For the avoidance of doubt, the receivers should, insofar as it is necessary to fulfil the purposes of the receivership, be able to:
(a)take possession and/or control of the trust assets;
(b)exercise and enforce any powers, rights, remedies and authorities that QTL might exercise over or in relation to the trust assets; and
(c)act in the name of QTL.
[125] Importantly, it is not part of the purposes of the receivership that the receivers defend or otherwise take a position in relation to the plaintiffs’ substantive claims in this proceeding. The receivers should have no duties or powers in this regard.
[126] QTL must fully co-operate with the receivers to allow them to fulfil the purposes of the receivership and exercise their powers.
[127] QTL says that the powers the plaintiffs are seeking for the receivers are “extraordinary and far reaching”. But there will be limits on the receivers’ powers because they will only go so far as is necessary to fulfil the purposes of the receivership to which I have referred.
Duration of the receivership
[128] The receivership is an interim one. Therefore, it should only remain in place pending determination of the plaintiffs’ substantive claims.
Principles for determining priorities
[129]As the Quinoa Settlement is not insolvent, I do not need to determine this issue.
Should the receivers be paid from the trust assets?
[130] The plaintiffs propose that the receivers’ remuneration be set at $650 per hour plus GST (but $400 per hour plus GST for administrative tasks) and reasonable costs and disbursements be met out of the trust assets.
[131] The proposed charge out rates are reasonable and, as the receivers will only be able to charge for work that is reasonably required to fulfil the purposes of the receivership, it is also reasonable that the remuneration and costs and disbursements be met from the assets of the trust.
Should the receivers provide security?
[132] Where the receiver to be appointed is of professional standing, the provision of security under r 7.61 of the HCR is likely to be dispensed with.27
[133] Jeff Meltzer and Clive Bish are chartered accountants and licenced insolvency practitioners. Security is not required in this case.
Applications for security for costs
[134] The defendants apply for security for costs totalling $292,556 — Fideis NZ seeks security of $100,000 and QTL seeks security of $192,556.
Legal principles — security for costs
[135] Assessment of an application for security for costs generally involves the following questions:28
(a)Has the applicant met the threshold in r 5.45(1) of the HCR?
(b)If the threshold test is met, is it just in all circumstances to make an order for security for costs under r 5.45(2)?
27 Laura O’Gorman (ed) Sim’s Court Practice (online ed, LexisNexis) at [HCR7.61.1].
28 Jindal v Kamal [2023] NZHC 2820 at [9].
(c)If so, what is the nature of the order that should be made?
[136] It is common ground that the threshold under r 5.45(1) is satisfied in this case because the plaintiffs are resident out of New Zealand.29
[137] Once the threshold test in r 5.45(1) is met, establishing whether, in terms of r 5.45(2), it is just in all the circumstances to order the giving of security for costs is highly discretionary.30 What is required is a broad overall assessment.31 Balancing the interests of the plaintiff and defendant is the overriding consideration.32
[138] Where a plaintiff does not reside in New Zealand, the difficulty and costs of enforcement is a primary consideration.33 Making an order for security for costs helps to avoid these inevitable costs and difficulties.34
[139] As far as possible, bearing in mind the early stage of the proceeding, the Court will endeavour to assess the merits and prospects of the claim.35
[140] Under r 5.45(3)(a), the Court must determine the amount of security that is sufficient. This generally represents some discount on the likely award of scale costs.36 Determining the amount of security involves exercising a discretion rather than being mathematical.37 It is an assessment in the round.38 Ultimately, it is what the Court thinks fit in all the circumstances.39
29 High Court Rules 2016, r 5.45(1)(a)(i).
30 McLachlan v MEL Network Ltd (2002) 16 PRNZ 747 (CA).
31 Hamilton v Papakura District Council (1997) 11 PRNZ 333 (HC) at 335; Wishart v Murray
[2016] NZHC 3132 at [9].
32 Highgate on Broadway Ltd v Devine [2012] NZHC 2288, [2013] NZAR 1017 at [24(c)].
33 Aquaculture Corp v McFarlane Laboratories (1984) Ltd (1987) PRNZ 467 (HC) at 470.
34 Klimenko v Klimenko [2022] NZHC 2684 at [11] and [31].
35 Ambrose v Pickard [2009] NZCA 502 at [32].
36 Westpac New Zealand Ltd v Adams [2013] NZHC 3112 at [35]; Sisson v IAG New Zealand Ltd [2014] NZHC 616 at [77]; and Purau Moorings Association Inc v Canterbury Regional Council [2018] NZHC 462 at [48].
37 Sharp v Pillay [2017] NZHC 647 at [17].
38 Red 9 Ltd v Learning Ladder Ltd (in liq) [2021] NZCA 284, (2021) 25 PRNZ 780 at [30].
39 McLachlan Ltd v MEL Network, above n 30, at [13].
The issues in relation to the applications for security for costs
[141] As I have said, it is common ground that the threshold under r 5.45(1) is satisfied in this case because the plaintiffs are resident out of New Zealand.40 I must therefore determine:
(a)Is it just to order security for costs?
(b)If so, what orders should be made?
Is it just to order security for costs?
[142] As I have said, the plaintiffs are located in Italy and the UAE. The defendants say that security for costs should be ordered because enforcement of a costs award in these jurisdictions will be complex, costly and time-consuming, and the plaintiffs’ claims lack merit.
[143] In contrast, the plaintiffs say that they should not be ordered to pay security for costs because:
(a)the defendants have not filed statements of defence;
(b)the plaintiffs’ claims have a very strong prospect of success;
(c)the defendants should have applied for directions regarding the validity of the trusts and, had they done so, the plaintiffs would not have had to commence proceedings, and therefore they would not be facing the applications for security for costs; and
(d)the plaintiffs are impecunious due to the defendants’ conduct.
[144] I accept that enforcement of a costs award in Italy or the UAE would be relatively complex, costly and time-consuming because they are non-common law jurisdictions and English is not the primary spoken language.41
40 Ambrose v Pickard, above n 35, at [32].
41 McEvedy v McEvedy [2023] NZHC 3875 at [47].
[145] The plaintiffs rely on Ren v Pan to support their submissions that I should not order them to pay security for costs because the defendants have not filed statements of defence.42 In that case, the defendants had not only not filed a defence, but also had not provided details of a defence.43 In contrast, while the defendants here have not yet filed statements of defence, they have made it clear that they will be defending the claims strongly and they have raised a number of defences to the claims in their submissions. I therefore do not accept this submission.
[146] As noted above, the merits of the claims are relevant to the exercise of the discretion. I have said that, based on the material before the Court, I consider the plaintiffs’ claims have a good prospect of success. But I do not consider that the merits are so strong that I should decline to award security.
[147] I do not accept the plaintiffs’ submission that they should not have to pay security for costs because the defendants should have applied for directions as to the validity of the trusts. I do not think this is realistic, particularly because, as discussed above, the plaintiffs only contended for the first time that the trusts were invalid just before they issued proceedings in February 2025.
[148] Finally, the plaintiffs’ evidence is insufficient to establish that they are impecunious and cannot afford to pay the security for costs sought. Some information has been provided about the financial positions of the plaintiffs, but the information is incomplete. They have not provided full statements of their financial positions.
[149]For these reasons, I conclude that it is just to order security for costs.
What orders should be made?
[150] QTL has calculated that scale costs, on the assumption of one interlocutory application and a three-week trial, are $142,205. To this, it adds court fees of $351 and expert witness costs of $50,000 to arrive at $192,556. QTL intends to call experts on financial matters and Nevis law.
42 Ren v Pan [2025] NZHC 184 at [22].
43 At [23].
[151] Fideis NZ has prepared an alternative scale costs calculation, which assumes no interlocutory application and a two-week trial, of $84,606. It notes that it will also incur expert witness expenses and seeks the round figure of $100,000.
[152] The plaintiffs say that these figures are excessive. They submit that only a five-day trial will be required, and QTL’s expert costs estimate of $50,000 is too high. They also say that a discount should be applied to the scale costs figures.
[153] Taking that into account, my conclusion is that the plaintiffs should provide security for costs to the defendants as follows:
(a)Fideis NZ — $55,000. $55,000 is roughly two-thirds of $85,000, which is the approximate amount of the scale costs estimate for a two-week trial.
(b)QTL — $80,000. $80,000 is roughly two-thirds of $120,000, which is
$85,000 plus $35,000 for expert costs.
[154] I have not allowed anything for expert costs in my calculation of security for Fideis NZ because I do not think it will need to instruct experts. It can rely on the expert evidence called by QTL.
[155]The provision of the security should be staged with:
(a)25 per cent being provided within 20 working days;
(b)25 per cent being provided 20 working days before discovery is due; and
(c)the remaining 50 per cent being provided 60 working days before trial.
[156] The defendants seek a stay pending provision of security. I agree that the proceeding should be stayed if the plaintiffs fail to provide any of the stages of security by the required time.
Result
Appointment of receivers
[157] I decline the plaintiffs’ application for appointment of receivers to manage the Riga Settlement (NZ).
[158] I grant the plaintiffs’ application for appointment of receivers to manage the Quinoa Settlement on the following terms:
(a)Jeff Meltzer and Clive Bish are appointed as receivers.
(b)The purposes of the receivership are:
(i)to secure and preserve the assets that were received by QTL as trustee of the Quinoa Settlement; and
(ii)to administer the trust assets as reasonably necessary to secure and preserve the assets pending determination of the plaintiffs’ substantive claims.
(c)For the avoidance of doubt, it is not part of the purposes of the receivership that the receivers defend or otherwise take a position in relation to the plaintiffs’ substantive claims in this proceeding.
(d)The receivers owe the usual duties of receivers to the extent necessary to fulfil the purposes of the receivership.
(e)The receivers have all powers and authorities necessary to fulfil the purposes of the receivership.
(f)For the avoidance of doubt, the receivers are, insofar as it is necessary to fulfil the purposes of the receivership, able to:
(i)take possession and/or control of the trust assets;
(ii)exercise and enforce any powers, rights, remedies and authorities that QTL might exercise over or in relation to the trust assets; and
(iii)act in the name of QTL.
(g)QTL must fully co-operate with the receivers to allow them to fulfil the purposes of the receivership and exercise their powers.
(h)The receivership is to remain in effect until the resolution of the plaintiffs’ substantive claims in this proceeding.
(i)The receivers’ remuneration at $650 per hour plus GST (but $400 per hour plus GST for administrative tasks) and reasonable costs and disbursements are to be met out of the trust assets.
(j)Leave is reserved for the parties and the receivers to seek further directions if required by filing and serving a memorandum of counsel.
Security for costs
[159]I grant the defendants’ applications for security for costs.
[160] The plaintiffs are to provide security for costs to Fideis NZ of $55,000 and to QTL of $80,000.
[161]The provision of the security is to be staged as follows:
(a)25 per cent is to be provided within 20 working days;
(b)25 per cent is to be provided 20 working days before discovery is due; and
(c)the remaining 50 per cent is to be provided 60 working days before trial.
[162] The proceeding will be stayed if the plaintiffs fail to provide any of the stages of security by the required time.
Costs
[163] If agreement cannot be reached on costs, the parties should file brief memoranda and I will resolve matters on the papers.
Blanchard J
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