Fletcher v National Mutual Life Nominees Ltd - [1990] 3 NZLR 641

Tort — Negligence — Duty of care — Trustee for depositors — Directors of finance company — Auditor — Joint tortfeasors — Contributory negligence — Following the collapse of a finance company which had carried on business as a money market operator and had invited subscriptions from the public, the depositors sued, for breach of trust, the trustee which had accepted appointment under the Securities Act — Trustee admitted breach of trust, settled claim with depositors and sought to recover the amount from the directors of the finance company and the auditor — Whether directors owed duty of care to trustee and were in breach of that duty — Whether auditor owed duty of care to trustee and was in breach of that duty — Whether trustee was legally liable for amount it paid to depositors — Whether loss to depositors had been caused by negligence of directors and auditor and was reasonably foreseeable — Whether trustee was contributorily negligent — Whether directors and auditor should be relieved from liability — Companies Act 1955, s 468 — Securities Act 1978, ss 50(2) and 63.

Damages — Assessment — Interest — Trustee for depositors of money with collapsed finance company settled claim by depositors at $6.75 million and sought to recover that sum plus interest at commercial rates from directors of company and auditor — Whether claim was for interest on damages or for interest as damages — Whether trustee should recover interest at commercial rate as separate head of damages — Judicature Act 1908, s 87.

Damages — Assessment — Legal costs — Indemnity to underwriters — Trustee for depositors of money with collapsed finance company settled, before trial, claim by depositors and sought to recover as damages from directors of company and auditor its solicitor and client costs on the settled litigation and amount paid to underwriters — Whether it was reasonably foreseeable that trustee might have become involved in litigation with depositors — Whether it was reasonably foreseeable that dispute with underwriters would arise — Whether damages were recoverable by trustee.