As bankrupt creditors of their family trust, any pretence that use of a trust protected their lifestyle block from creditors quickly collapsed when Insolvency Service got a High Court order allowing sale of Nigel and Joanne Black’s north Canterbury property at Cheviot.
The High Court was told the Blacks were bankrupted in August 2020. Circumstances had conspired against them; first suffering earthquake damage to their 7.32 hectare Munro Road lifestyle property, and then losing earthquake damage compensation received when attempting to prop up their failing business. Munro Road is owned by their family trust: Mountain Meadow Trust. They are the trustees.
Insolvency Service review of Meadow Trusts financial statements identified that the Trust owed Nigel some $291,500 and Joanne a similar amount. Suggestions from Insolvency Service that the two, acting in their capacities as Meadow Trust trustees, might arrange for sale of Munro Road and repay the debts owed came to nothing.
Exercising the Blacks’ rights as creditors of Meadow Trust, Insolvency Service obtained a High Court order ordering sale of Munro Road to recover funds to pay the Blacks’ bankruptcy creditors. The right to sell Munro Road arose from the general rule that any trustee has the right to sell trust assets to meet debts owed by a trust.
The High Court was told that Munro Road is mortgaged. Net proceeds of sale are unlikely to repay in full the $583,000 owed the Blacks.
Official Assignee v. Black – High Court (30.05.23)
23.082