Elders Pastoral Limited v Bank of New Zealand

Elders Pastoral Limited v Bank of New Zealand [1990] NZPC 3; [1990] UKPC 29; [1990] 3 NZLR 129; [1990] 1 WLR 1090; (1990) 2 PRNZ 333 is a cited case in New Zealand case law regarding constructive trusts.

Elders Pastoral Limited v Bank of New Zealand
Court	Privy Council
Full case name	Elders Pastoral Limited v Bank of New Zealand
Decided	18 June 1990
Citation(s)	[1990] NZPC 3; [1990] UKPC 29; [1990] 3 NZLR 129; [1990] 1 WLR 1090; (1990) 2 PRNZ 333
Transcript(s)	judgment
Court membership
Judge(s) sitting	Lord Bridge of Harwich, Lord Templeman, Lord Griffiths, Lord Ackner, Lord Goff of Chieveley

Background

In 1987, farmer William Gunn granted the Bank of New Zealand a security over his livestock, making all proceeds of any livestock sales to be payable to the bank. However, the security did allow the farmer to sell livestock during "ordinary course of business".

The following year however, Gunn sold 3,081 lambs via his livestock agent Elders Pastoral, later not only deducting their normal commission for the sale, also deducted the bulk of the remaining proceeds to offset other monies owed by the farmer to Elders.

On discovery of this development, the bank advised Elders that these monies were payable to them under their security, adding that the money from the sale should be held as a constructive trust for the bank.

Held

The court held that the money was to be held as a constructive trust for the Bank of New Zealand.