SOVEREIGN HOMES LIMITED V MEURANT HC AK CIV 2006-404-7394

SOVEREIGN HOMES LIMITED V MEURANT HC AK CIV 2006-404-7394

Trustees are personally liable for debts incurred in the course of the trust and may be subject to bankruptcy remedies; a judgment entered against individuals as trustees satisfies the requirement for judgment against the person; clause 18 of the Maioro Trust deed cannot shield trustees from liability to third‑party creditors, so the application to set aside the bankruptcy notice is dismissed.

Citation
openlaw-10ba8f54_0ed0_412c_933e_319834e0d176.pdf
Parties
Judgment Creditor: Sovereign Homes Limited; Judgment Debtor: Patricia Marie Meurant
Court
High Court
Jurisdiction
New Zealand
Judgment Date
15 May 2007
Procedural Posture
Insolvency / Bankruptcy (application Under Insolvency Act) / Application to Set Aside Bankruptcy Notice; Judgment on Application
Outcome
Application to set aside bankruptcy notice dismissed.
Legal Topics
Personal Liability of Trustees, Bankruptcy Notice, Trust Deed Indemnity Clause, Judgment Entered Against Trustees
Trusts Insolvency Civil Procedure Contract Personal Liability of Trustees Bankruptcy Notice Trust Deed Indemnity Clause Judgment Entered Against Trustees

Case Brief

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Parties

Sovereign Homes Limited

Judgment Creditor

Patricia Marie Meurant

Judgment Debtor

Procedural Posture

Insolvency / Bankruptcy (application Under Insolvency Act) / Application to Set Aside Bankruptcy Notice; Judgment on Application

Legal Issues

  1. 1 Are trustees personally liable for the debts of the trust?
  2. 2 What is the effect of a judgment entered against individuals as trustees rather than personally?
  3. 3 What is the effect of a trust deed clause purporting to limit trustees' liability to the trust assets?

Ratio Decidendi

Trustees are personally liable for debts incurred in the course of the trust and may be subject to bankruptcy remedies; a judgment entered against individuals as trustees satisfies the requirement for judgment against the person; clause 18 of the Maioro Trust deed cannot shield trustees from liability to third‑party creditors, so the application to set aside the bankruptcy notice is dismissed.

Court Disposition

Application to set aside bankruptcy notice dismissed.

Orders

  • Application dismissed.
  • Applicant to pay costs to respondent on a 2B basis plus disbursements to be fixed by the Registrar.