Moriah War Memorial College Association v Augustine Robert Nosti

In the case of Moriah War Memorial College Association v Augustine Robert Nosti, the plaintiff, a school, alleged that the first defendant, who was their financial controller, had breached his fiduciary duties by dishonestly transferring money from the school’s bank account and diverting the school’s tax refunds into various bank accounts in his and the second defendant’s name. The plaintiff sought to hold the second defendant liable under the first limb of Barnes v Addy for knowingly receiving trust property and also brought an alternative restitutionary claim for the benefit of the misappropriations received by the second defendant as a volunteer and retained after notice of the plaintiff’s claim.

The legal issues the court was required to decide were whether the second defendant was a recipient of trust property, whether she had sufficient knowledge of the trust and its breach to render her personally liable under the first limb of Barnes v Addy, and whether she was liable for the alternative restitutionary claim. The court had to assess whether the second defendant was a volunteer who had received the misappropriations with knowledge of the plaintiff’s claim and whether she had retained the benefit of the misappropriations after being notified of the plaintiff’s claim.

The court found that the first defendant had breached his fiduciary duties to the plaintiff and was liable to the plaintiff for damages in the amount he stole. The court determined that it had not been established that the second defendant had sufficient knowledge for the purposes of the Barnes v Addy claim. However, the court held that the second defendant was liable for the alternative restitutionary claim. The court found that the second defendant had received the misappropriations as a volunteer and had retained the benefit of the misappropriations after being notified of the plaintiff’s claim. The court ordered the second defendant to pay restitution to the plaintiff for the amount of the misappropriations received and retained.