New Zealand Case Law: Decisions & Judgments

Topic

Trustee liability limitation

Legal area

Court

24 May 2016

FAI MONEY LIMITED v CRAWLEY AND JOHNSTON [2016] NZCA 219

Citation

[2016] NZCA 219
Court

Court of Appeal

The trustees were negligent in both giving the inaccurate financial representation and in permitting the post-loan sale at an undervalue without lender consent; limitation clauses in the guarantees (cl 18.1.1 and 18.1.2) and loan agreement (cl 14.4) must be read in context and, in their natural meaning, protect trustees from personal liability for pre-loan misrepresentations but permit personal recourse where post-loan negligent acts by trustees diminish or destroy their indemnity from trust assets. Accordingly FAI recovers the loan against the trustees to the extent of trust assets for the p…
14 Jul 2015

THE OFFICIAL ASSIGNEE v WHEELER & ANOR [2015] NZHC 1644

Citation

[2015] NZHC 1644
Court

High Court

Summary judgment was appropriate for the undisputed portion of the debt. The Official Assignee proved the debt and demand; limitation did not bar the claim; while a potential equitable set-off limited to the Transcap assets ($1,485,317) could exist, it was insufficient to defeat judgment. Accordingly judgment was entered against the defendants in their capacity as trustees for the difference ($2,279,641 less $1,485,317 = $794,324) and enforcement of judgment and costs is limited to trust assets; the claim for $1,485,317 was adjourned for further pursuit by the Official Assignee.
21 Aug 2014

BANK OF NEW ZEALAND v G A MUIR AND JUSTITIAE TRUSTEE COMPANY LIMITED [2014] NZHC 1973

Citation

[2014] NZHC 1973
Court

High Court

The withdrawals made after the facility was repaid were advances/loans in substance, not bona fide distributions; clause 17.13 refers to gross trust assets valued as at the time of the facility (around the facility date), Carbon Trust had sufficient gross assets to meet the Bank's claim, and accordingly Carbon Trust and the guarantors (Ismail Trust and Mr Muir) are liable; summary judgment was therefore granted to the Bank.
28 Sept 2009

FRIMLEY ESTATE LIMITED V STONEWALL HOMES LIMITED AND ANOR HC NAP CIV-2009-441-237

Citation

openlaw-8c581697_fa35_4a31_8784_3491d6c0fae7.pdf
Court

High Court

The alleged statements about timing of title issuance were opinions and estimates, not actionable misrepresentations; Stonewall is liable for breach of the agreement but clause 14 limits the purchaser/trustee's personal liability to the assets of the trust; Frimley did not establish a valid enforceable personal guarantee by Mr Redshaw; summary judgment as to liability against Stonewall is granted (quantum to be determined with reference to trust assets) and summary judgment against Mr Redshaw is dismissed.

New Zealand Case Law

FAI MONEY LIMITED v CRAWLEY AND JOHNSTON [2016] NZCA 219

THE OFFICIAL ASSIGNEE v WHEELER & ANOR [2015] NZHC 1644

BANK OF NEW ZEALAND v G A MUIR AND JUSTITIAE TRUSTEE COMPANY LIMITED [2014] NZHC 1973

FRIMLEY ESTATE LIMITED V STONEWALL HOMES LIMITED AND ANOR HC NAP CIV-2009-441-237