Mason v Triezenberg
[2025] NZHC 584
•20 March 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-002788
[2025] NZHC 584
IN THE MATTER of the Mamari Trust and the Mamari (No.2) Trust BETWEEN
ALEXANDER CHARLES MASON
Plaintiff
AND
VICKI ANN TRIEZENBERG
First Defendant
PAUL MORLEY DODD
Second Defendant
Hearing: 10 March 2025 Appearances:
G J Thwaite for the Plaintiff
J Cundy for the First and Second Defendants
Judgment:
20 March 2025
JUDGMENT OF ASSOCIATE JUDGE COGSWELL
This judgment was delivered by me on 20 March 2025 at 4.00 p.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
G J Thwaite, Auckland J Cundy, Auckland
V Bruton KC, Auckland
MASON v TRIEZENBERG [2025] NZHC 584 [20 March 2025]
Introduction
[1] This is an application for an order that Caveat 13168657.1 not lapse. The issue is whether the applicant has an equitable interest in two properties sufficient to maintain the caveat, or whether it should lapse.
[2]The caveat is registered over two properties. They are:
(a)a residential property at 2/12 Takutai Avenue, Pakuranga; and
(b)a commercial property at 125 Captain Springs Road, Onehunga.
[3] The Mamari Trust is the owner of both properties over which the caveat has been registered. The trustees of the Mamari Trust are the respondents.
[4] The applicant lives in the residential property. He has done so for many years, previously with his wife, who is now deceased.
[5] On 14 November 2024 the applicant lodged a caveat over both properties. The nature of the estate or interest claimed is described as:
A beneficial estate or interest as a beneficiary of an express trust in each title, pursuant to:
(a)a Deed of Trust dated 26 April 1997, under which [the applicant] is a beneficiary and [the respondents] are the trustees; and/or
(b)a Deed of Trust dated 30 May 2013, under which [the applicant] is a beneficiary and [the respondents] are the trustees;
each such Trust being recognised in the Judgment Triezenberg & Dodd v Mason [2019] NZHC 14.
[6] The respondents applied for the caveat to lapse. The applicant has applied for an order that the caveat not lapse.
[7]The applicant seeks to maintain the caveat on two grounds, being:
(a)Ground one—the applicant has an arguable claim to a beneficial estate or interest as a beneficiary of an express trust.
(b)Ground two—the respondents’ attempt to lapse the caveat is frivolous and an abuse of their duties as trustees.
[8] The notice of application includes a third ground, but that ground relates only to the respondents’ right to indemnification from the trust for costs. It is not relevant to the issue of whether a caveatable interest is demonstrated.
[9] This application is a further step in a long running dispute involving two trusts, the Mamari Trust and the Mamari (No.2) Trust. Litigation involving these two trusts and issues related to them has spanned several years. At its centre is the applicant’s desire to control the assets of the trusts.
[10]As Justice Fitzgerald put it in Triezenberg v Mason (the 2019 Decision):1
…it became clear over the course of [the applicant’s] evidence that he disputes and does not believe in the very concept of the two trusts. His view is essentially that the trust assets are his (and Mrs Mason’s) and he ought to be able to do with them as he likes. He quite candidly accepted in cross- examination that the reason he is unhappy with [the first respondent] and [the second respondent] is that they will not let him do whatever he likes with trust assets.
[11] Late last year, the applicant issued a new proceeding (CIV-2024-404-2788) relating to the trusts (the new proceeding).
[12] The respondents say that several of the claims in the new proceeding are an improper attempt to relitigate issues that have already been determined against the applicant in earlier proceedings, in particular, the decision of this Court in CIV-2017-404-1688,2 which decision was upheld in the Court of Appeal, with leave to appeal to the Supreme Court being declined.
[13] The new proceeding seeks orders, inter alia, removing the respondents as trustees of both trusts; appointing the applicant and another person to be nominated by him as trustee of both trusts; and varying the trust deeds to vest the power of appointment of new trustees in the applicant.
1 Triezenberg v Mason [2019] NZHC 14 at [125].
2 The proceeding cited above n 1.
[14] The new proceeding does not seek to have the trusts declared void, rather, the new proceeding affirms the trusts’ existence and validity and seeks orders regulating their future conduct.
Background
[15] The applicant and his late wife, Wendy Mason, settled the Mamari Trust on 26 April 1994.3 They were its trustees and were also beneficiaries. The other beneficiaries are their family.
[16] They settled the Mamari (No.2) Trust on 20 May 2013.4 Again, they were its trustees and were also beneficiaries. The respondents were also trustees of the Mamari (No.2) Trust.
[17] They signed a Memorandum of Guidance for Trustees in relation to the Mamari Trust on 30 May 2013.5
[18] The Mamari Trust is the registered proprietor of the properties. The Mamari (No.2) Trust holds funds.
[19] In this decision, unless the context requires otherwise, reference to “the trust” is a reference to the Mamari Trust and a reference to “the trusts” is a reference to both the Mamari Trust and the Mamari (No.2) Trust.
[20] The applicant is a discretionary beneficiary of both trusts. He is not a final beneficiary of either.
[21] In the 2019 Decision the High Court determined that the applicant and his wife should be removed as trustees of both of the trusts.6 The first and second respondents were appointed trustees of the Mamari Trust and remain the trustees of both trusts today.
3 Affidavit of V A Triezenberg affirmed on 4 February 2025, exhibit VAT2, page 1.
4 Affidavit of V A Triezenberg affirmed on 4 February 2025, exhibit VAT2, page 21.
5 Affidavit of V A Triezenberg affirmed on 4 February 2025, exhibit VAT2, page 36.
6 Above n 1, noting that Mrs Mason was removed due to her incapacity.
Legal principles
[22] 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)).
[23] 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.7 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.8 They need not establish the interest definitively, it is enough if they present a reasonably arguable case.
(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.9 A conflict between affidavits will generally be resolved in the caveator’s favour.10 However, the Court is not bound to accept uncritically statements in an affidavit that
7 Botany Land Development Ltd v Auckland Council [2014] NZCA 61 at [23]–[25].
8 Sims v Lowe [1988] 1 NZLR 656 (CA).
9 Re Ede (1882) 1 NZLR (SC) 258; New Zealand Limousin Cattle Breeders Society Inc v Robertson
[1984] 1 NZLR 41 (CA).
10 Bethell v Rickard [2013] NZCA 68 at [22]
are equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements by the same deponent, or inherently improbable.11
(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.12
[24] The respondents submit that a caveat may be lodged only by a person upon whom a right to lodge it has been conferred by a statute. It is not enough to show that the lodging and continued existence of the caveat would in some way be advantageous to the caveator.13
[25] Further, the respondents submit that a caveatable interest must exist at the time the caveat is lodged.14
Ground one— the applicant has a beneficial estate or interest in the properties
[26] The applicant says that he has an arguable claim to a beneficial estate or interest as a beneficiary of an express trust and that is sufficient to maintain the caveat.
[27] The respondents’ position can be simply stated. The applicant is a discretionary beneficiary of the trust. The applicant accepts that he is a discretionary beneficiary. That is a proper admission to make, as the trust deed is clear that is his status.15
11 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].
12 Pacific Homes Ltd (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at 656.
13 Guardian Trust & Executors Co of New Zealand Ltd v Hall [1938] NZLR 1020 (CA) at 1025.
14 Kilmartin v Monk (2005) 5 NZConvC 194, 122 (HC) at [13].
15 Trust deed of the Mamari Trust (affidavit of Ms Triezenberg dated 4 February 2025, exhibit VAT2, page 1).
[28] The trustees say that the applicant’s position as a discretionary beneficiary of the trust does not give him a beneficial interest in the properties. They say that it is in the best interests of the trust and the beneficiaries as a whole, for the caveat to lapse.
[29] They say that it is settled law that a discretionary beneficiary’s interest in trust property is no more than a mere expectancy, and that a discretionary beneficiary has no legal or equitable interest in the assets of the trust.16
[30] The respondents rely on two further authorities in support of their position that a discretionary beneficiary does not have an equitable interest sufficient to support a caveat. They are:
(a)Holt v Anchorage Management Ltd, where the Court of Appeal held that if a beneficiary has an interest in a trust, and real property is only an undefined part of the subject matter of the trust, the beneficiary cannot claim to be entitled to a beneficial interest in the land;17 and
(b)Patchett v Williams, where the Court held that a discretionary beneficiary lacks a proprietary interest in any particular trust asset, such that a caveat over land owned by the trust cannot be sustained, and the discretionary beneficiary’s interest is confined to the proper administration of the trust.18
[31] Both are applicable to the facts of this case where the interest claimed is that of a discretionary beneficiary. The applicant does not have an equitable interest in the properties owned by the trust.
[32] Accordingly, the first ground of the applicant’s application to prevent the lapse of the caveat fails.
16 Kain v Hutton [2008] NZSC 61, [2008] 3 NZLR 589 at [55]; Johns v Johns [2004] 3 NZLR 202 at [30]–[33].
17 Holt v Anchorage Management Ltd [1987] 1 NZLR 108 (CA) at 114.
18 Patchett v Williams (HC) Blenheim, CIV-2005-406-82, 5 October 2005 at [54].
Ground two—the trustees attempt to lapse the caveat is frivolous or an abuse of their duties
[33] The applicant says that the respondents’ opposition to the application should be struck out as an abuse of the process of the Court. The allegation is that in opposing the application that the caveat not lapse, the respondents are in breach of their duties to the applicant.
[34]The applicant does not have an equitable interest in the trust property.
[35] It is quite proper for the trustees to seek to have the caveat removed from the title so that the trustees are free to deal with the properties as they see fit. There is no breach of their duties in doing that.
[36] Of course, the respondents have to comply with the obligations imposed on them as trustees and any breach of their duties may give rise to a cause of action. Properly viewed, that is the true focus of the applicant’s complaint, the conduct of the trustees. The applicant has rights to review and enforce the trustees’ discharge of their duties under the trust.
[37] Much of the applicant’s submissions focussed on perceived failings by the trustees. Issues of their dealings with the applicant and statements made about the applicant do not advance the pleaded proposition that the trustees’ actions in challenging the caveat is an abuse of the process of the Court. They may lead to allegations of breach of the trustees’ duties, but do not advance the key issue – the equitable interest of the applicant.
Other arguments advanced
[38] At the hearing the applicant developed various arguments in addition to those set out in the notice of application. They were:
(a)The Court has power under Part 6 of the Trusts Act 2019 to order the dissolution of the trust and the applicant would have the strongest claim among all beneficiaries;
(b)The second respondent induced the applicant to establish the trusts on the basis that the applicant could bring assets into and out of the trusts; and
(c)The Memorandum of Guidance to Trustees provides a power to the applicant to require the residential property to be transferred to him.
Argument one
[39] The applicant argues that the Court has the power under Part 6 of the Trusts Act 2019 to order the dissolution of the trust, and that the applicant would have the “strongest claim” amongst the beneficiaries to be registered as the proprietor of the residential property.
[40]However, there are two reasons why that argument cannot succeed.
[41] First, a caveatable interest must exist at the time that the caveat is lodged. The applicant does not have a beneficial interest in either property at the date the caveat was lodged on the basis that he may become entitled to the properties on dissolution of the trusts.
[42] Secondly, the applicant has not applied for dissolution of the trusts under Part 6 of the Trusts Act 2019.
[43]This ground of argument fails.
Argument two
[44]The applicant says that these trusts are “unusual”. They are not.
[45] They are in all respects a straightforward mechanism to protect assets by transferring them to a trust, and by separating the legal and equitable interests to protect the trust assets from the settlors’ creditors.
[46] The background evidence establishes that the applicant ran a successful construction business and so it is unsurprising in that context that the applicant and his advisors turned their minds to asset protection issues.
[47] The applicant says that he was induced to settle the Mamari Trust, and 20 years later, the Mamari (No.2) Trust, “on the basis that [the applicant] as settlor could bring assets into the [Mamari Trust] and take them out”. This, according to the applicant, gives him the right to require the trustees to transfer the properties back to him.
[48] He says that the second respondent breached professional duties owed to him in making statements or letting him believe that transferring the assets to the trust would not affect the applicant’s right to remove the properties from the trust if he so wished. These allegations are denied by the second respondent.
[49] This argument was run by the applicant in proceedings he commenced against the second respondent, raising allegations that he breached duties to the applicant in advising him about the establishment of the trust. That proceeding was discontinued one week before a trial that was scheduled.
[50] Properly framed, the applicant’s argument must be that the transfers of the properties to the trusts are void or voidable, as a result of the conduct of the second respondent.
[51]That argument is not accepted for a number of reasons, including:
(a)The caveat relies on the validity of the trusts for the beneficial interest claimed. That is, the caveat affirms the valid existence of the trusts for the interest claimed, “[a] beneficial estate or interest as a beneficiary of an express trust in each title”.
(b)The new proceeding seeks a multitude of orders, but all rely on the validity of the trusts and do not seek to declare the trusts void or voidable.
(c)Any professional negligence by the second respondent would give an in personam claim in favour of the settlors, not a right to declare the transfers void or voidable.
(d)The Mamari Trust has existed for over 30 years without this issue being litigated. In the 2019 Decision, the Court noted that the applicant did not seek orders in that litigation in relation to the validity or termination of the trusts.19
[52] The High Court found that the trustees held the properties on the terms of the trusts and that the properties were transferred into the trust.
[53] Any misunderstanding by the applicant as to the effect of the trust arrangement, putting aside that this issue is now raised some 30 years later, is a matter between the applicant and any advisor to him when the trust was first set up. Such a claim is an in personam claim, it does not vitiate the transfers.
[54] Even assuming success on such a claim (that is, that the applicant could demonstrate professional negligence in the advice given to him and overcome any limitation issues) that does not give him a beneficial interest in the properties, nor a right to demand the transfer of the properties to him. Neither party could not point to any authority to support this argument.
[55] The applicant attempted to suggest that the trust was “impregnated” with Mr Dodd’s negligent advice to him about the effect of establishing this trust, but that takes the argument no further.
[56] The trust confers the usual powers, but no obligation on, the trustees to make distributions to beneficiaries of income and capital from the trust at their discretion. It follows that the applicant’s argument that the trustees did not have the ability, if the correct process was followed, to distribute the property to the applicant as beneficiary is not correct.
19 Above n 1, at [139].
[57] The position may now have changed as a result of the removal of the applicant as trustee, but that does not affect the position as when the trust was set up.
[58]This ground of argument fails.
Argument three
[59] The applicant argues that the Memorandum of Guidance of Trustees requires that “comfort and welfare” be the guiding principle for the respondent trustees, and that it directs that each of the applicant and his wife are entitled to “maintain a reasonable standard of living throughout their lives, having regard to the standard of living to which they had been accustomed”.
[60] That guidance, he says, meant that the applicant has a right to insist on his continuing use of the home as long as he requires it and—significantly for this application—that he may require the respondents to transfer it to him.
[61] This argument misunderstands the effect of the Memorandum of Guidance of Trustees and the effect of the transfer of the properties to the trust.
[62] The trustees are required to be cognizant of the Memorandum of Guidance of Trustees, but they are not bound to follow it.20 As the Court stated in the 2019 Decision, the respondent trustees “understand their role as trustee and are cognizant of their duty to act in accordance with the welfare of all beneficiaries, taking into account the principles contained in the Memorandum of Guidance.”21
[63] They are bound to discharge their obligations as trustees by properly performing them and any breach of those duties may give the applicant enforcement rights. But that does not mean that the applicant is entitled to “require” the respondents to transfer the residential property to him at his will to meet the guidance set out in the Memorandum.
20 Law v Law [2020] NZHC 1243 at [18]–[19]; citing S R Hamilton Corporate Trustee Ltd v White [2016] NZHC 1408 at [71]; and Chambers v S R Hamilton Corporate Trustee Ltd [2017] NZCA 131, [2017] NZAR 882 at [36].
21 Above n 1, at [157].
[64] The Memorandum of Guidance for Trustees does not confer on the applicant a proprietary interest in the properties, but rather acts to give non-binding guidance to the trustees in the exercise of their duties under the trusts.22 Those duties include to consider the comfort and welfare of the applicant, and to make distributions or provide financial assistance in a “liberal way”.
[65]This ground of argument fails.
The new proceeding
[66] As a final argument, the applicant also contends that the caveat should be maintained pending determination of the new proceeding.
[67]Two points explain why that argument is unsuccessful.
[68] First, a caveat can only be lodged where there is a statutory right to do so, and the right exists at the date the caveat is lodged. Until the new proceedings are determined, and as things stand currently, the applicant has no right to sustain a caveat on the basis that the Court may ultimately find in his favour in proceedings which are yet to be determined and where the right does not exist until the Court determines that issue.
[69] Secondly, and more persuasively, the new proceedings themselves do not seek to establish that the applicant has a current equitable interest in the trust assets. Rather, they seek to relitigate issues relating to the removal of the current trustees, and the re- appointment of the applicant and a nominee as new trustees. The proceedings (even should he be successful) will not result in the applicant having an equitable interest in the residential property sufficient to sustain this caveat.
22 Above n 1, at [21], holding that the Memorandum of Guidance to Trustees applied to both trusts.
Discretion
[70] There are no overriding circumstances that support an argument that the Court should exercise its discretion to maintain the caveat.
[71] There is some evidence of potential prejudice to the trust in that the lease of the commercial property is due to expire and the caveat is said to potentially interfere with the trustees’ efforts to secure a new lease, with the current tenant or a new tenant.
[72] I do not need to finally determine whether that is the case or not, other than to note that it is a factor that supports the argument that the caveat should lapse.
Result
[73] The applicant submits that he seeks to maintain the caveat to ensure the continuation of the “status quo”. However, as this judgment sets out, the applicant has no current legal or equitable interest in the properties owned by the trust. The status quo is that he is a discretionary beneficiary only of the Mamari Trust.
[74] As a discretionary beneficiary of the Mamari Trust, the applicant does not have a legal or equitable interest in the properties over which the caveat has been lodged.
[75] None of the ancillary arguments raised by the applicant seeking to found an equitable interest in the trust properties succeeds.
[76]I make an order that Caveat 13168657.1 lapse.
[77] The parties made submissions on costs depending on the outcome of this decision.
[78] The respondents are the successful parties. They are entitled to costs in the normal way. The determination of costs follows the event, and it is settled that the party who fails with respect to a proceeding should pay costs to the party who succeeds.
[79] As the successful party, the respondents are entitled to costs. I award scale costs on a 2B basis.
Associate Judge Cogswell
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