THE OFFICIAL ASSIGNEE V O'NEILL & ORS HC AK CIV-2012-404-4198
The Official Assignee, representing the bankrupt as trustee, had the right to recover the acknowledged debt and to be indemnified from and charge the assets of the two trusts to the extent of that debt (plus interest and costs); accordingly judgment for the specified sum, interest and declaratory relief was entered...
Source-derived case information.
- Citation
- openlaw-460c77f8_8837_43f2_9fe2_b4a45d5b94e2.pdf
- Parties
- Plaintiff: The Official Assignee in the bankruptcy of J F O'Neill; First Defendant: J F O'Neill, L M O'Neill and Ed Johnston & Co Trustees Limited as trustees of the Julian O'Neill Family Trust; Second Defendant: J F O'Neill, L M O'Neill and Ed Johnston & Co Trustees Limited as trustees of the Lisa O'Neill Family Trust; Third Defendant: L M O'Neill personally of P T Chevalier
- Court
- High Court
- Jurisdiction
- New Zealand
- Judgment Date
- 5 September 2012
- Procedural Posture
- Bankruptcy / Trusts (civil) / Oral Judgment (final)
- Outcome
- Judgment for the plaintiff; declarations granted; costs awarded to plaintiff
- Legal Topics
- Indemnity, Declaration, Recovery of Debt, Charging of Trust Assets, Interest, Costs
Source-derived case record
Summary, issues, holding and outcome
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Parties
The Official Assignee in the bankruptcy of J F O'Neill
Plaintiff
J F O'Neill, L M O'Neill and Ed Johnston & Co Trustees Limited as trustees of the Julian O'Neill Family Trust
First Defendant
J F O'Neill, L M O'Neill and Ed Johnston & Co Trustees Limited as trustees of the Lisa O'Neill Family Trust
Second Defendant
L M O'Neill personally of P T Chevalier
Third Defendant
Procedural Posture
Bankruptcy / Trusts (civil) / Oral Judgment (final)
Legal Issues
- 1 Whether the Official Assignee as trustee in bankruptcy can recover a debt acknowledged by two family trusts
- 2 Whether a trustee (the bankrupt) is entitled to be indemnified out of trust assets for liabilities incurred as trustee
- 3 Whether the assets of the two trusts are charged to the extent of the debt, interest and costs
Ratio Decidendi
The Official Assignee, representing the bankrupt as trustee, had the right to recover the acknowledged debt and to be indemnified from and charge the assets of the two trusts to the extent of that debt (plus interest and costs); accordingly judgment for the specified sum, interest and declaratory relief was entered in favour of the plaintiff.
Court Disposition
Judgment for the plaintiff; declarations granted; costs awarded to plaintiff
Orders
- Judgment entered for the plaintiff against the first and second defendants jointly and severally in the sum of $233,000
- First and second defendants to pay interest of $10,710.98 calculated at the contractual rate from date of demand (8 February 2012) to 5 September 2012
Full Case Text
Judgment text and source record
1 paragraphs
THE OFFICIAL ASSIGNEE V O'NEILL & ORS HC AK CIV-2012-404-4198 [5 September 2012]IN THE HIGH COURT OF NEW ZEALANDAUCKLAND REGISTRYCIV-2012-404-4198[2012] NZHC 2439IN THE MATTER OF the bankruptcy of Julian O'NeillBETWEEN THE OFFICIAL ASSIGNEE IN THEBANKRUPTCY OF THE PROPERTY OFJ F O'NEILLPlaintiffAND J F O'NEILL, L M O'NEILL AND EDJOHNSTON & CO TRUSTEES LIMITEDAS TRUSTEES OF THE JULIANO'NEILL FAMILY TRUSTFirst DefendantsAND J F O'NEILL, L M O'NEILL AND EDJOHNSTON & CO TRUSTEES LIMITEDAS TRUSTEES OF THE LISA O'NEILLFAMILY TRUSTSecond DefendantsAND L M O'NEILL, PERSONALLY OF PTCHEVALIERThird DefendantHearing: 5 September 2012Appearances: K Wakelin for PlaintiffE Krishnan for DefendantsJudgment: 5 September 2012ORAL JUDGMENT OF ASSOCIATE JUDGE DOOGUESolicitors:Meredith Connell & Connell, P O Box 5275, Auckland – kirstin.wakelin@meredithconnell.co.nzMr Krishnan, Auckland – ekrishnan@shortlandchambers.co.nz[1] The plaintiff sues as the trustee in bankruptcy of Mr O'Neill. Mr O'Neill'sparticipation in the property arrangements is relevant in two ways. First on thetransfer of a residential property to two trusts, he became the registered proprietorbecause he is a trustee of the two trusts. So the Official Assignee first of all sues toget back the debt that arises from the acknowledgement of debt that the two trustssigned in favour of Mr O'Neill (and his wife). So far as his status of trustee isconcerned, the Official Assignee again in right of Mr O'Neill takes the position thathaving incurred a liability as a trustee of the trust he seeks to be indemnified againstthat liability out of the assets in the estate of the trust which he is a trustee of.[2] Dealing with a debt that is owed I enter judgment in the sum of $233,000 against the first and second defendants jointly and severally. Secondly I order that those defendants are to pay interest in the sum of $10,710.98 calculated at the contractual rate from the date of demand down to the present date. The actual dates are 8 February 2012 to 5 September 2012.[3] The plaintiff seeks a declaration in sub paragraph "(c)" of the prayer for reliefthat the assets of both the trusts and charged in favour of the plaintiff to the extent ofthe debt together with interest and costs and a further declaration the plaintiffsentitled to discharge the indebtedness out of the assets of both trusts. I make theorder sought in paragraph (c) of the statement of claim. It is apparent that theOfficial Assignee now representing the bankrupt as trustee of the trusts has the rightto seek such an indemnity and the order in subparagraph (c) of the prayer for reliefsimply refutes that entitlement. I also make an order in terms of sub-paragraph (d)of the prayer for relief, on the same grounds as those which I have set out thus far.[4] There will be an order that the first and second defendants are to pay costs of the proceeding on a 2B basis together with disbursements to be fixed by theRegistrar.__________________________J P DoogueAssociate Judge