CORNERSTONE GROUP LTD V EDISON LTD HC AK CIV-2006-404-2025

Parties

Procedural Posture

Declaratory Judgment Under Declaratory Judgments Act 1908 / Interim Application for Declaratory and Proprietary Relief Prior to Substantive Trial

Legal Issues

1. 1 Whether clause 5(o) of the sale agreement constituted an agency appointment of Cornerstone to procure the Glover agreement for Edison
2. 2 Whether Cornerstone breached clause 5(o) by contracting in its own name
3. 3 Whether Cornerstone's breach was fiduciary in nature and gave rise to a constructive trust in Edison's favour

Ratio Decidendi

Clause 5(o) constituted an appointment of Cornerstone as Edison's agent (or at minimum an agreement that any procured purchase would be in Edison's name); Cornerstone breached that obligation by entering into and completing the Glover agreement in its own name; the breach was fiduciary in nature and equity imposes a constructive trust over Cornerstone's equitable interest in the Glover land in favour of Edison; the appropriate relief is to require nomination of Edison as purchaser, indemnity for short-term liabilities and leave to apply for further orders.

Court Disposition

Edison granted proprietary relief: Cornerstone held equitable interest subject to constructive trust in favour of Edison and ordered to nominate Edison as purchaser; application otherwise resolved as per orders

Orders

• Cornerstone shall forthwith nominate Edison as purchaser under the agreement for sale and purchase between Cornerstone and James and Marlene Glover dated 27 February 2006 and give notice accordingly
• Cornerstone shall indemnify Edison for all liabilities, including interest consequent upon late settlement, arising under the agreement with the Glovers for a period of 14 days from the date of nomination