A builder selling his home to a family trust then immediately forgiving payment due when facing potential liability in a building dispute was an attempt to dissipate assets and become ‘judgment proof’ the High Court ruled, imposing a freezing order over the family home.
Auckland builder AW Builders Ltd and its sole director/shareholder Anthony Williamson is being sued for about $800,000 following a dispute over earthworks and construction of a home at Whitford for Oliver Evans. Within six months of being fired from the Whitford building contract, Mr Williamson had his Cockle Bay family home transferred to a family trust. Mr Williamson and his spouse are two of the three trustees. Their contract specified a price of $1.2 million. The debt owed by the trust to Mr Williamson was immediately forgiven.
Mr Evans asked the High Court to freeze the Williamsons’ Cockle Bay home. Justice Davison ruled there is sufficient prima facie evidence supporting Mr Evans claim for damages to justify a freezing order, pending trial. While Mr Williamson said the property transfer was simply part of an estate planning exercise underway for at least a year, Justice Davison said the timing of the transfer and the fact a transfer was made for nil consideration demonstrated it was undertaken to frustrate enforcement of any judgment against him. The court has yet to rule whether Mr Williamson is liable for damages.
Evans v. AW Builders Ltd – High Court (24.05.19)
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