Short of cash and under pressure to sell his home in order to pay some $306,000 to his second wife following separation, Keith Hingston turned to son David for financial assistance. Over a decade later, the High Court ruled David both exercised undue influence over his father in the benefits he extracted and then did not honour terms of their agreement.
A story of pressured bargaining, father and son subsequently falling out and then bizarre behaviour by the son filming his father’s every activity were told to the High Court.
Keith Hingston had worked for the local power board. He designed and built his retirement home in Welcome Bay, Tauranga. When in his early seventies, his second marriage came to an end. Keith was desperate to stay in his Welcome Bay home and spoke to son David about ways to get cash needed to pay out his second wife. David is the child of his first marriage. He is a doctor. Justice Gwyn described David as being more financially sophisticated than his father.
Initial discussions centred on Welcome Bay being sold to a family trust set up by David with David his partner and child as beneficiaries, freeing up cash. The trust in turn would grant Keith the right to occupy Welcome Bay for life. The deal saw Keith not only selling Welcome Bay to David’s family trust but also transferring his boat, trailer, car and all household chattels to the trust and in addition assigning pension payments from his power board superannuation across to the trust. Keith remained responsible for rates, insurance, power and phone. Justice Gwyn ruled the contract evidenced undue influence over Keith by his son. Welcome Bay was undervalued at the price nominated for transfer to the trust. The financial benefit from the Welcome Bay undervaluation and the extra value obtained from including chattels and pension rights meant Keith overpaid for the actuarial value of occupation rights given in return. Son David exploited a relationship of trust and confidence between himself and his father, Justice Gwyn ruled.
After his second marriage ended, Keith reconciled with David’s mother Gwen. A further agreement was signed by David’s family trust also giving Gwen rights to occupy Welcome Bay. Three years later, Gwen left Welcome Bay and a woman named Petra came to live with Keith. David took exception. Evidence was given of David on one occasion hiding in a cupboard at Welcome Bay, leaping out and surprising them when they returned home. He remained in the house, uninvited, filming their daily lives. He attempted to change the locks. He issued multiple trespass notices. Keith eventually left, after being served with an eviction notice. David, as trustee of his family trust, was ruled to be in breach of the ‘occupation for life’ agreement with his father. Having Petra come and live at Welcome Bay was not a breach of Keith’s occupation agreement. David failed to provide alternative accommodation for his father on eviction, as required by the occupation agreement.
The court was not asked to rule on the level of damages due Keith from his son.
Hingston v. Hingston – High Court (23.12.21)
22.028
Post judgment note: The Court of Appeal subsequently ruled there had been no undue influence. There was a valid explanation for terms of the financial arrangement between Keith Hingston and his son David. See post dated 22 November 2022 for details.