The
High Court ordered a Timaru property sold to meet bankruptcy debts over the
objections of a Gabrielle Mathiesen who argued in vain that a husband cannot
bankrupt his spouse. Attempts to shelter
her replacement home in a family trust were not successful.
Ms Mathiesen has been
in court on multiple occasions seeking amongst other things a writ of habeas
corpus complaining bankruptcy proceedings amount to a form of imprisonment and alleging
in further proceedings contempt of court by Insolvency Service staff. None of these claims succeeded. The Insolvency Service seeks to recover $530,212;
funds used by Ms Mathiesen’s family trust to purchase a Timaru-Pareora Road property
where she lives.
The High Court was told
Ms Mathiesen separated from her husband in 2004. She then set up a family trust (Sweet Pea
Trust) naming herself, her children and grandchildren as beneficiaries. The former matrimonial home, part of a horse
stud at Bellevue Road, Cambridge, was then transferred to the Sweet Pea Trust
with a debt back to Ms Mathiesen for the value of the property. Bellevue Road was subsequently sold with Ms
Mathiesen shifting to south Canterbury. The
Trust purchased a replacement property. She
was bankrupted in 2013 by her husband to enforce a $326,000 Family Court
relationship property order. Part is
payable by Ms Mathiesen personally; the rest by Sweet Pea Trust.
Ms Mathiesen does not
own her residence in Timaru; that is owned by the Sweet Pea Trust. But she does “own” the debt back owed her by
the Trust. This debt is owed by a
trustee of the Trust who took title to the Timaru property on behalf of the
Trust. Trustees have an automatic right
of indemnity against Trust assets for debts properly incurred on behalf of any
Trust. Standing in the shoes of the
trustee, the Insolvency Service sued to have Trust assets sold to recover
payment. Justice Gendall ordered sale of
the Timaru home. It is the Trust’s only
asset of any value. The court was told
Timaru District Council is also looking to sell the property, for unpaid rates.
Official
Assignee v. Mathiesen – High Court (26.09.17)
17.123