Trustees of a family trust could not be sued for building defects following sale of an Auckland apartment. The trust has no assets; legitimately distributed to a beneficiary following sale of the apartment. Trustees themselves were not personally liable.
Paula Jacobsen sued trustees of the AT & MA Wilkie Family Trust five years after her $990,000 purchase alleging the Trust as vendor failed to disclose building defects, causing her to overpay by some $835,000 she claims.
This apartment is part of a 92 unit building on New North Road in Kingsland; a mixture of residential, commercial and retail units.
Her claim against the Trust was struck out after a preliminary High Court hearing.
The sale agreement excused any trustees signing the contract on behalf of the Trust from personal liability for any breach of contract.
The contract used wording commonly found in real estate contracts limiting trustee’s exposure ‘to the actual amount recoverable from assets of the trust.’
There was no evidence that trustees had acted in breach of trust, which would otherwise have seen potential personal liability arise, Associate Judge Taylor said.
Even if the Wilkie Family Trust were held liable, it no longer has any assets.
The High Court was told the Trust had been in existence for many years, set up to insulate Wilkie family assets from potential claims against the late Mr Wilkie’s then architecture practice.
Ten months after the Trust’s sale of its Kingsland apartment to Ms Jacobsen, the Trust was wound up and all assets distributed to Mr Wilkie’s widow as trust beneficiary.
There was no evidence that the Trust was wound up prematurely to defeat any claim against the Trust by Ms Jacobsen, Judge Taylor said.
Any claim Ms Jacobsen may have against the Wilkie Family Trust as vendor cannot succeed since the Trust has no assets Judge Taylor said.
Separately, Ms Jacobsen has ongoing legal claims against her former lawyer and a real estate agent acting for the Trust.
Jacobsen v. Wilkie – High Court (19.06.26)
26.187