MCCARTHY v MCMANAMON [2021] NZHC 294

MCCARTHY v MCMANAMON [2021] NZHC 294

The HOA constituted a nuptial settlement but its terms were not incorporated as express terms of the formal trust deeds; plaintiff breached his fiduciary and contractual obligations by failing to vest approximately $100,000 of agreed assets into his trust, which disentitled him to specific performance; however the court exercised its broad remedial discretion under s 182 Family Proceedings Act 1980 to remedy the failure of the marriage premise and ordered monetary adjustment: Elizabeth Street Trust to make a further payment of $400,000 to the plaintiff (totaling $542,000 including prior distribution) and directed variation of trustees/beneficiaries to resolve deadlock.

Citation
[2021] NZHC 294
Parties
Plaintiff: Christopher Wayne McCarthy; First Defendant: Catherine McManamon; Second Defendant: Impact Legal Trustee Ltd
Court
High Court
Jurisdiction
New Zealand
Judgment Date
26 February 2021
Procedural Posture
Trusts and Family Proceedings / High Court Judgment Following Trial
Outcome
Partial relief granted to plaintiff under s 182 Family Proceedings Act 1980; claims for specific performance and enforcement of HOA as trust terms dismissed; other equitable claims rejected or resolved via s 182 remedy.
Legal Topics
Nuptial Settlement, Prenuptial Agreement, Specific Performance, Undue Influence, Unconscionable Bargain, Constructive Trust, Proprietary Estoppel, Section 182 Family Proceedings Act 1980, Breach of Fiduciary Duty
Trusts Family Law Equity Contract Property Law Nuptial Settlement Prenuptial Agreement Specific Performance +6 more

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Parties

Christopher Wayne McCarthy

Plaintiff

Catherine McManamon

First Defendant

Impact Legal Trustee Ltd

Second Defendant

Procedural Posture

Trusts and Family Proceedings / High Court Judgment Following Trial

Legal Issues

  1. 1 Whether the Heads of Agreement (HOA) formed enforceable trust terms or a contract
  2. 2 Whether HOA was entered into under undue influence or was an unconscionable bargain
  3. 3 Whether plaintiff performed obligations to vest agreed assets in his trust

Ratio Decidendi

The HOA constituted a nuptial settlement but its terms were not incorporated as express terms of the formal trust deeds; plaintiff breached his fiduciary and contractual obligations by failing to vest approximately $100,000 of agreed assets into his trust, which disentitled him to specific performance; however the court exercised its broad remedial discretion under s 182 Family Proceedings Act 1980 to remedy the failure of the marriage premise and ordered monetary adjustment: Elizabeth Street Trust to make a further payment of $400,000 to the plaintiff (totaling $542,000 including prior distribution) and directed variation of trustees/beneficiaries to resolve deadlock.

Court Disposition

Partial relief granted to plaintiff under s 182 Family Proceedings Act 1980; claims for specific performance and enforcement of HOA as trust terms dismissed; other equitable claims rejected or resolved via s 182 remedy.

Orders

  • Elizabeth Street Trust to pay $400000 NZD to the plaintiff or an entity to be nominated by him (this payment together with prior distribution of $142043.68 results in $542043.68 to plaintiff)
  • Trusts to be varied to remove each party and their children from the other's trust as directed and to resolve trustee deadlock (subject to mortgagee consent where required)