S A MORRISON and THE AUDAINE TRUST TRUSTEES LTD v AUTUMNAL INVESTMENTS LTD [2020] NZHC 3189

S A MORRISON and THE AUDAINE TRUST TRUSTEES LTD v AUTUMNAL INVESTMENTS LTD [2020] NZHC 3189

On the balance of probabilities the Court found that Morrison and O'Reilly discussed and agreed a 'no cost trustee' arrangement in early April 2013 and at the 12 April 2013 meeting; Morrison was induced by O'Reilly's oral undertaking to transfer the properties and would not have done so otherwise; denial of the common intention would be fraudulent in equity; accordingly Autumnal holds the properties as trustee of an institutional constructive trust for the Audaine Trust and equitable relief (declaration and vesting subject to payment of mortgage, agreed trustee remuneration and reimbursement) and an account of subdivision proceeds and income less bona fide expenses is appropriate.

Citation
[2020] NZHC 3189
Parties
Plaintiff: S A Morrison; Plaintiff: The Audaine Trust Trustees Limited; First Defendant: Autumnal Investments Limited; Second Defendant: Maurice O'Reilly; Second Defendant: Anne O'Reilly
Court
High Court
Jurisdiction
New Zealand
Judgment Date
3 December 2020
Procedural Posture
Civil (trust/property) / Judgment (trial)
Outcome
Judgment for plaintiffs: declaration that Autumnal holds title as trustee of an institutional constructive trust for the Audaine Trust; orders for transfer/vesting subject to conditions; accounting and other equitable relief
Legal Topics
Institutional Constructive Trust, Promissory Estoppel, Express Trust, Torrens Title/in Personam Claims, Leases, Accounting for Profits, Subdivision Proceeds, Remedies (declaration, Vesting, Accounting)
Equity Trusts Property Law Conveyancing Commercial Law Bankruptcy Law Institutional Constructive Trust Promissory Estoppel +6 more

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Parties

S A Morrison

Plaintiff

The Audaine Trust Trustees Limited

Plaintiff

Autumnal Investments Limited

First Defendant

Maurice O'Reilly

Second Defendant

Anne O'Reilly

Second Defendant

Procedural Posture

Civil (trust/property) / Judgment (trial)

Legal Issues

  1. 1 Whether Autumnal holds the properties on an institutional constructive trust for the Audaine Trust
  2. 2 Whether an oral 'no cost trustee' or 'buy and hold' agreement existed between Morrison and the O'Reillys
  3. 3 Whether promissory estoppel prevents Autumnal denying the beneficial interest of the Trust

Ratio Decidendi

On the balance of probabilities the Court found that Morrison and O'Reilly discussed and agreed a 'no cost trustee' arrangement in early April 2013 and at the 12 April 2013 meeting; Morrison was induced by O'Reilly's oral undertaking to transfer the properties and would not have done so otherwise; denial of the common intention would be fraudulent in equity; accordingly Autumnal holds the properties as trustee of an institutional constructive trust for the Audaine Trust and equitable relief (declaration and vesting subject to payment of mortgage, agreed trustee remuneration and reimbursement) and an account of subdivision proceeds and income less bona fide expenses is appropriate.

Court Disposition

Judgment for plaintiffs: declaration that Autumnal holds title as trustee of an institutional constructive trust for the Audaine Trust; orders for transfer/vesting subject to conditions; accounting and other equitable relief

Orders

  • Declaration that Autumnal Investments Limited holds Lot 2 DP 491219 (CT Identifier No 711317) as trustee of an institutional constructive trust for the trustees of the Audaine Trust
  • Order that Autumnal transfer and vest the property in the trustees of the Audaine Trust subject to payment by the trustees of: (a) the mortgage balance outstanding on the title; (b) NZD 50,000 as agreed remuneration for holding the property as trustee; (c) NZD 55,509.22 being the cash contribution made by Maurice...