COLIN CLASPER V DAVID STANLEY DUNS AND EDWIN POST HC CHCH CIV 2004-009-002116

COLIN CLASPER V DAVID STANLEY DUNS AND EDWIN POST HC CHCH CIV 2004-009-002116

On a strike-out application the court held that (1) express trusteeships can, in principle, be performed in the ordinary course of a firm's business or with partner authority and therefore ss13 and 14 of the Partnership Act may apply depending on factual findings; (2) 'misapplied' in s14 may encompass deliberate...

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Citation
openlaw-a269e156_caf8_44a4_8ee7_4f35518d8f88.pdf
Parties
Plaintiff: Colin Clasper; First Defendants: David Stanley Duns and Edwin Post; Second Defendant: Duns and Partners; Third Party/insurer: QBE Insurance (International) Limited
Court
High Court
Jurisdiction
New Zealand
Judgment Date
4 October 2007
Procedural Posture
Civil Breach of Trust, Partnership Vicarious Liability and Insurance Indemnity; Strike Out Applications / Hearing on Strike Out Applications and Judgment
Outcome
All strike-out applications dismissed
Legal Topics
Breach of Trust, Vicarious Liability Under Partnership Act Ss13 14 16, Misapplication of Trust Funds S14, Insurance Exclusion for Fraud/dishonesty/recklessness, Strike Out Tests and Procedural Thresholds
Trust Law Partnership Law Insurance Law Professional Negligence Equity and Fiduciary Duties Civil Procedure Breach of Trust Vicarious Liability Under Partnership Act Ss13 14 16 +3 more

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Parties

Colin Clasper

Plaintiff

David Stanley Duns and Edwin Post

First Defendants

Duns and Partners

Second Defendant

QBE Insurance (International) Limited

Third Party/insurer

Procedural Posture

Civil Breach of Trust, Partnership Vicarious Liability and Insurance Indemnity; Strike Out Applications / Hearing on Strike Out Applications and Judgment

Legal Issues

  1. 1 Whether s13 of the Partnership Act can render a firm vicariously liable for breaches by partners acting as express trustees
  2. 2 Whether s14 applies where trust funds were received and subsequently applied to commercial investments and whether 'misapplied' requires fraud
  3. 3 Whether performance of express trusteeships can be within the ordinary course of a firm's business or with partner authority (fact vs law)

Ratio Decidendi

On a strike-out application the court held that (1) express trusteeships can, in principle, be performed in the ordinary course of a firm's business or with partner authority and therefore ss13 and 14 of the Partnership Act may apply depending on factual findings; (2) 'misapplied' in s14 may encompass deliberate breaches where trustees took unauthorised risks (dishonest/fraudulent misapplication) but whether that is pleaded sufficiently is a factual question for trial; and (3) the insurer's fraud/dishonesty/recklessness exclusion does not operate on mere allegations in pleadings — actual dishonesty/fraud/recklessness causally linked to loss must be established before the exclusion applies...

Court Disposition

All strike-out applications dismissed

Orders

  • Applications by defendants and third party to strike out causes of action against Duns & Partners dismissed
  • QBE's application to strike out the indemnity claim dismissed