Make me

Connolly v Eckhout traverses the application of the little known Imprisonment for Debt Limitation Act 1908 to a person acting in a fiduciary capacity.

By way of background:

…

Ms Eckhout did not pay the judgment sum.

The High Court has limited powers to issue an arrest order where requirements that are largely drawn from the Contempt of Courts Act 2019 are met. These are set out at [21] to [24] of Connolly v Eckhout as follows:

The next question for the Court was whether Ms Eckhout’s default fell within the exception in section 2(2)(c) of the Imprisonment for Debt Limitation Act. Relevantly the exception in s 3(2)(c) has two limbs:

(first limb) the payment default must be by a “person acting in a fiduciary capacity”,

(second limb) that person must have been ordered to pay a sum in his or her “possession or control”.

While Ms Connolly was not a beneficiary of her father’s will this did not preclude the finding of a fiduciary relationship for the reasons set out at [29]:

Ms Eckhout was a named defendant of the Family Protection Act claim, and by virtue of her own declarations was in possession or control of estate funds.

In Connolly v Eckhout the Court was satisfied that it was appropriate to issue an arrest order, although it is noted that the order should lie in court for a short period to allow a final opportunity for payment.

Connolly v Eckhout is a salutary reminder of the role of a fiduciary and the attendant risk.

References:

• Connolly v Eckhout [2022] NZHC 293
• Connolly v Eckhout [2021] NZHC 727
• Connolly v Eckhout [2021] NZHC 1400
• Imprisonment for Debt Limitation Act 1908
• Family Protection Act 1955
• High Court Rues, 17.83, 17.84
• Contempt of Courts Act 2019
• Imprisonment for Debt Limitation Act 1908
• Lindsay Breach (ed) Nevill’s Law of Trusts, Wills and Administration (13th ed, LexisNexis,Wellington, 2019) at [20]
• Mackenzie v Mackenzie (1998) 16 FRNZ 487 (HC).
• Irvine v Public Trustee [1989] 1 NZLR 67 (CA) at [70]
• Sadler v Public Trust [2009] NZCA 364, [2009] NZFLR 937 at [35].