Trustees seek to strike out fraud charges

Friday 20 August 2010, 10:40AM
By John Creser

A novel case between executors and beneficiaries of a Wellington trust came before Justice Alan Mackenzie in Wellington earlier this week.

It involves an application to have the trustees removed and ordered to account for their expenditure over the past ten years. It is alleged that the trustees, Janine & Marion Creser, have failed to account and acted contrary to the purpose of the trust.

Prior to gaining the administrative rights over an estate, the trustees took legal action to recover a five thousand dollar costs award against the plaintiff; which in turn led to bankruptcy proceedings and several hundred thousand dollars in costs over and above the original claim.

Evidence the defendants had agreed to inflate a 2002 maintenance account by one thousand dollars was presented and disclosure of the bank records for the corresponding period was sought

Counsel for the trustees, Marcello Rodriguez Ferrere, made an application for a hearing to have the proceedings struck out and advised the court that the trustees had no power to act on behalf of the estate prior to probate, therefore were not liable to disclose any financials relating to allegations they’d misused an enduring power of attorney. He also argued that a 2005 decision of Justice Ron Young adequately addressed the issues between the parties.

The plaintiff agreed with Mr Ferrere on this point of law, which confirmed the defendants, had no power to act on behalf of the estate until the Court’s award of probate. His Honour was asked to consider the paradox disclosed by the defendant’s action to take bankruptcy action before probate, while seemingly possessing no corresponding power to act transparently.

The plaintiff applied for discovery of the relevant financials and the Court heard that; under the present regime the defendants have only been required to produce accounts once in the last decade and have provided no defence in reply the new matters identified in the statement of claim.

Justice Mackenzie advised that he had not read the statement of claim nor was he familiar with the plaintiff’s pleadings in this matter. The plaintiff then referred the Judge to a synopsis of the relevant points in written submissions filed on the morning of the hearing, but it was evident that the Judge had not familiarised himself with the contents of this document either.

The proceedings concluded with the Judge refusing to order disclosure or make an interim ruling on the points of law discussed at the hearing. He ordered the defendants to proceed with an application to strike out the plaintiffs claim on the grounds that it constituted as abuse of process.

The plaintiff said today that; “the Courts willingness to allow lawyers to indulge in this kind of procedural pettifoggery only serves to chokes up the justice system with groundless applications, leaving the substantive legal issues unresolved. In this case the law is very clear concerning the defendants inability to act before probate. Both parties were in agreement on this point and Justice Mackenzie was obviously in a position to make a ruling that there were no grounds to strike out the plaintiffs claim”

A recent poll of lawyer’s views on the effectiveness of the judiciary has similar concerns about the performance of Justice Mackenzie, who was generally described as lacking skills and unfair. Comments indicate lawyers believe Justice Mackenzie has focused more on protecting special interests and the status quo rather than promoting the rule of law or the interests of justice.