EDEN REFUGE TRUST AND ORS V HOHEPA AND ANOR HC AK CIV-2003-404-000539

EDEN REFUGE TRUST AND ORS V HOHEPA AND ANOR HC AK CIV-2003-404-000539

The court found the PWFM trust is best characterised as a poorly drafted charitable trust whose principal asset was sold and proceeds were misapplied by the sole trustee (Charles Hohepa), who is liable for breach of trust, fiduciary breach and conversion; the solicitor (Charles Fletcher) knowingly assisted and received trust funds and breached fiduciary duties (objectively dishonest conduct and knowing receipt proven); restitutionary relief is available though quantification is reserved and parties given leave to address amounts.

Citation
openlaw-5be5e0d8_d6d1_4b46_8907_7b7173bb5504.pdf
Parties
First Plaintiff (charitable Trust Board): Eden Refuge Trust; Second Plaintiff (court Appointed Representative of Congregation): Joanne Lydia Maletino; Third Plaintiff (court Appointed Trustee): Callum MacDonald; Fourth Plaintiff (protector of Charitable Trusts): Attorney-General; First Defendant (former Sole Trustee): Charles Hohepa; Second Defendant (solicitor): Charles Fletcher
Court
High Court
Jurisdiction
New Zealand
Judgment Date
17 March 2010
Procedural Posture
Civil Trust, Equity and Professional Liability / Judgment on Liability Delivered; Quantification and Remedies Reserved; Timetable Directions to Be Made
Outcome
Judgment for plaintiffs on liability: default judgment on liability entered against Charles Hohepa (first defendant); liability established against Charles Fletcher (second defendant) for breach of fiduciary duty, knowing receipt and dishonest assistance; quantification of monetary relief, interest and any exemplary...
Legal Topics
Breach of Trust, Breach of Fiduciary Duty, Dishonest Assistance, Knowing Receipt, Conversion, Construction of Charitable Trust Deed, S145 Land Transfer Act Procedure, Mortgage Secured on Trust Property, Remedies and Quantification
Trusts Equity Charities Law Fiduciary Duty Property/land Transfer Professional Negligence/solicitor Conduct Civil Remedies (restitution, Equitable Compensation) Breach of Trust +8 more

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Parties

Eden Refuge Trust

First Plaintiff (charitable Trust Board)

Joanne Lydia Maletino

Second Plaintiff (court Appointed Representative of Congregation)

Callum MacDonald

Third Plaintiff (court Appointed Trustee)

Attorney-General

Fourth Plaintiff (protector of Charitable Trusts)

Charles Hohepa

First Defendant (former Sole Trustee)

Charles Fletcher

Second Defendant (solicitor)

Procedural Posture

Civil Trust, Equity and Professional Liability / Judgment on Liability Delivered; Quantification and Remedies Reserved; Timetable Directions to Be Made

Legal Issues

  1. 1 Characterisation of the 1962 PWFM trust (charitable or private)
  2. 2 Whether sole trustee Hohepa misapplied trust property and is liable for breach of trust, fiduciary breach and conversion
  3. 3 Whether solicitor Fletcher is liable for breach of fiduciary duty, knowing receipt and dishonest assistance

Ratio Decidendi

The court found the PWFM trust is best characterised as a poorly drafted charitable trust whose principal asset was sold and proceeds were misapplied by the sole trustee (Charles Hohepa), who is liable for breach of trust, fiduciary breach and conversion; the solicitor (Charles Fletcher) knowingly assisted and received trust funds and breached fiduciary duties (objectively dishonest conduct and knowing receipt proven); restitutionary relief is available though quantification is reserved and parties given leave to address amounts.

Court Disposition

Judgment for plaintiffs on liability: default judgment on liability entered against Charles Hohepa (first defendant); liability established against Charles Fletcher (second defendant) for breach of fiduciary duty, knowing receipt and dishonest assistance; quantification of monetary relief, interest and any exemplary...

Orders

  • Defence of first defendant (Charles Hohepa) struck out and judgment entered by default on liability (earlier order formalised)
  • Findings of liability against Charles Hohepa for breach of trust, breach of fiduciary duty and conversion