A, B and C v D and E LIMITED AS TRUSTEES OF THE Z TRUST [2022] NZHC 172

A, B and C v D and E LIMITED AS TRUSTEES OF THE Z TRUST [2022] NZHC 172

The Court held the constructive trust was institutional and therefore arose and was effective from the date the Z Trust received the property; distributions made after that date are invalid and cannot stand; trustees are not entitled to indemnity for their costs from the Trust fund in these hostile private trust...

Source-derived case information.

Citation
[2022] NZHC 172
Parties
First Plaintiff: A; Second Plaintiff: B; Third Plaintiff: C; Defendant (trustees): D and E Limited as Trustees of the Z Trust
Court
High Court
Jurisdiction
New Zealand
Judgment Date
14 February 2022
Procedural Posture
Trusts Fiduciary Breach / Supplementary Judgment (high Court)
Outcome
Constructive trust declared institutional and effective from receipt; interim distributions set aside; trustees not entitled to indemnity for their legal costs from the trust fund.
Legal Topics
Constructive Trust, Knowing Receipt, Trustee Indemnity, Beddoe Orders, Costs, Interim Distributions, Family Protection Act
Equity Trusts Fiduciary Duty Civil Procedure Constructive Trust Knowing Receipt Trustee Indemnity Beddoe Orders +3 more

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Parties

A

First Plaintiff

B

Second Plaintiff

C

Third Plaintiff

D and E Limited as Trustees of the Z Trust

Defendant (trustees)

Procedural Posture

Trusts Fiduciary Breach / Supplementary Judgment (high Court)

Legal Issues

  1. 1 Whether the constructive trust declared is institutional or remedial and the date it becomes effective
  2. 2 Whether interim distributions made by trustees after receipt of the property are valid
  3. 3 Whether trustees are entitled to indemnity for legal costs from trust assets for defending the proceedings

Ratio Decidendi

The Court held the constructive trust was institutional and therefore arose and was effective from the date the Z Trust received the property; distributions made after that date are invalid and cannot stand; trustees are not entitled to indemnity for their costs from the Trust fund in these hostile private trust proceedings.

Court Disposition

Constructive trust declared institutional and effective from receipt; interim distributions set aside; trustees not entitled to indemnity for their legal costs from the trust fund.

Orders

  • Constructive trust declared effective from the date the Z Trust received the property
  • Interim distributions made after that date are void and cannot stand