Arthur Whatman was very generous bequeathing his Masterton property for use as a convalescent home, but like many charitable gifts, lack of funding to cover ongoing costs has caused financial headaches. Application for High Court approval to sell the land met with strong local opposition.
Beneficiaries do sometimes decline non-cash bequests. Immediate repair costs and ongoing maintenance coupled with onerous terms of a bequest means a bequeathed asset can have a negative economic value.
On his 1938 death, Arthur Whatman bequeathed to the local hospital board land he owned on Ngaumutawa Road in Masterton. He specified the land and homestead on it were to be used as a ‘convalescent or rest home’ for the ‘sick, aged or needy.’ His will specified that no part of the land was to be ‘sold, let or leased.’
The homestead came to be used primarily as a rest home for permanent residents, rather than providing short-term stay for convalescents. By 1965, the hospital board was finding increasing costs made use of the homestead uneconomic. Financial losses were incurred for each of the previous five years.
High Court application under the Charitable Trusts Act saw control pass to the local council. It built pensioner units on part of the land, leaving the rest vacant.
Nearly sixty years later, Masterton Council was again back before the High Court seeking to vary terms of Mr Whatman’s bequest.
Council said there is a desperate shortage of social housing in the Wairarapa.
It was seeking to build further housing, but did not have sufficient cash to subdivide the remaining Whatman land without first raising rates; a further burden on ratepayers, it said.
Adding a further 25 units to the site would cost in excess of ten million dollars, Council said.
It sought approval to sell the remaining land, subject to a covenant that it be used solely for ‘public housing.’ Proceeds of sale would be used to build roading and utilities needed to support any proposed devlopment.
Community support for the proposal was divided.
Close neighbours objected.
A wording change from provision of housing for the ‘sick, aged and needy’ to provision of ‘public housing’ was an extravagant departure from the intent of Mr Whatman’s bequest they said. The new wording did not properly reflect his wishes to help solely the aged and indigent, they claimed.
Justice Radich ruled the phrase ‘public housing’ as proposed by Council merely modernised wording in Mr Whatman’s bequest and was synonymous with the word ‘needy.’
Objectors said Council could instead lease the land, rather than sell outright. Council said leasing alone would raise insufficient cash to cover infrastructure costs for development of any housing project.
Charitable Trusts Act approval was given to changed wording allowing Masterton Council to sell the bequeathed land, subject to covenants being registered to have the land used only for ‘public housing.’
Estate of Arthur Whatman v. Masterton District Council – High Court (1.08.24)
24.181