Will: Broadbent v. Broadbent-Matete

 

Michael Broadbent died in 2023, leaving unfinished: attempts to finalise a divorce from spouse Iris, with whom he had not been living for the last seven years, and; also leaving unfinished, a new will intended to leave all assets to his four children from an earlier marriage.  Iris claimed in the High Court that his 2003 will signed two decades previously should stand, leaving her sole beneficiary of his estate.

His assets pass to his four children after Justice Wilkinson-Smith approved a later incomplete and unsigned will together with his lawyer’s file notes be admitted to probate as Mr Broadbent’s final testamentary statement.

With court approval, the Wills Act allows a combination of written documents, which do not comply with Wills Act formalities, to be treated as if they were a coherent will, provided they clearly record a deceased person’s testamentary wishes.

The High Court was told the major assets in Mr Broadbent’s estate are a half share in each of two residential properties in Auckland suburb Manurewa.  The other half shares are owned by his estranged spouse Iris.

After separation from Iris, he lived at one of the Manurewa properties, she at the other.  It was not an amicable separation.

No agreement was reached at that time over division of relationship property.

No further steps were taken over the next seven years to dissolve their marriage or to sort out relationship property issues until the final weeks of Mr Broadbent’s life, when his impending death from prostate cancer caused his children to prompt a need for some resolution.

His application to file for dissolution of his marriage was not finalised; he did not have an available copy of his marriage certificate.

A meeting with his lawyer to draft a new will stalled when he indicated that he would instead use an online template and prepare his own will, preferring a do-it-yourself option to save legal costs.

It was file notes taken by his lawyer at this meeting which were later to form part of the court-constructed will evidencing a wish to leave all assets to his children.

Evidence was given that Iris was not told of Mr Broadbent’s death until after the funeral.

Three months after his death, those of Mr Broadbent’s children living at the Manurewa property where he lived prior to his death were told to pay rent, or leave.

At this point, the property was half-owned by Mr Broadbent’s estranged spouse Iris and half-owned by his estate, with the beneficiaries of his estate unclear.

The effect of Justice Wilkinson-Smith’s ruling is that now both Manurewa properties are half owned by Mr Broadbent’s children and half owned by Iris.

Sensing there is going to be ongoing difficulties between these co-owners, she recommended agreement be reached over division of the assets, rather than incurring legal costs of returning to court.

Earlier, evidence had been given of unresolved discussions prior to Mr Broadbent’s death to have he and Iris buy out the other’s ownership interest in each of the houses they lived in, with a cash adjustment to reflect the differing property values.

Broadbent v. Broadbent-Matete – High Court (4.12.24)

25.044

Building Covenant: Repotane Trust v. Hart

 

When Andrea Waddell subdivided sections off her ten acre block at Tamahere near Hamilton, she specified purchasers needed her consent prior to any house construction.  While this gave her some control over aesthetics of any planned dwelling, she could not unreasonably withhold consent, the High Court ruled, approving plans by the Hart family to continue their construction over Ms Waddell’s complaints their build was ‘too boxy.’ 

In 2015, Ms Waddell completed subdivision of what remained of the old family farm on Pencarrow Road.  Registered on title to the two subdivided sections is a requirement that purchasers not construct any dwelling without first obtaining her written approval as to plans and exterior colours.

The High Court was told a dwelling built following sale of one section in 2017 went ahead with no difficulties.  Ms Waddell approved what she called a ‘contemporary but still country’ design.

No such approval following the Harts’ 2022 purchase of the remaining section for $1.3 million.

Evidence was given of the Harts making enquiries before their purchase as to what style of architecture Ms Waddell was likely to approve.  They learnt she preferred a ‘country style.’  She listed examples of nearby houses she did not like as being too ‘boxy,’ with everything at right angles.  She particularly detested dwellings with a flat roof.

After their purchase, architects preparing drawings for the Harts provided Ms Waddell with their concept drawings; highlighting a front façade with roof pitches described as ‘a modern twist on the traditional gable roof.’

This design did not find favour with Ms Waddell.  Attempts to negotiate an agreed compromise were not successful.

The Harts started construction regardless.  Ms Waddell sued to stop work, demanding the site be cleared.  

Three days evidence in the High Court heard conflicting professional evidence as to what an architect might consider to be ‘boxy.’

Justice Robinson said Ms Waddell had refused consent to the Harts’ plans essentially because she did not like the design.  While she is entitled to her opinion, she cannot unreasonably withhold consent, he ruled.

The house has been carefully and skilfully designed, he said.  It has architectural merit and will be constructed with high-quality materials.

Making a Property Law Act order permitting the Harts construction to continue in accordance with their plans, Justice Robinson said the construction may not be to Ms Waddell’s taste, but there is no suggestion it is inherently objectionable.

Separately, the Harts counter-claimed against Ms Waddell for $1.1 million damages; expected increased costs because of construction delays.  Justice Robinson dismissed this counter-claim.  There was insufficient evidence these losses had arisen.

Repotane Trust Ltd v. Hart – High Court (3.12.24)

25.043

Romance Scam: Westpac v. Renner

 

Dealing in cryptocurrency, Tim Renner was not responsible for customer losses incurred purchasing bitcoin from him then lost as victims of a romance scam.  He took steps to ensure customers were purchasing bitcoin on their own account and warned them not to allow anyone else access to their digital wallet.

Mr Renner bought and sold bitcoin, using a Westpac bank account as a trading account. Westpac froze his bank account after receiving complaints from several of Mr Renner’s customers that they were victims of a romance scheme orchestrated by a person known to them as Mr Wilkinson.

Funds frozen totalled $777,200.  Scam victims claiming total losses of some $565,000 contacted Westpac demanding repayment from Mr Renner’s bank account.

Westpac put the disputed $565,000 into a suspense account, returning the balance to Mr Renner; leaving the two sides to argue in court over who was entitled to the suspended funds.

The High Court was told the scam victims had been conned online, willingly purchasing bitcoin from Mr Renner and then passing on digital wallet passwords to the persuasive Mr Wilkinson; with him promising he would be moving to New Zealand shortly and could then repay the money borrowed.  The money disappeared.  As did Mr Wilkinson.   

The victims argued Mr Renner must have been in on the scam. The fictitious Mr Wilkinson had directed then to Mr Renner’s bitcoin marketplace and had coached them on what to say and do. 

Justice O’Gorman ruled Mr Renner had acted in good faith, without knowledge of the frauds being perpetrated.

Being in the business of selling cryptocurrency, he was entitled to keep proceeds for what to him were bona fide bitcoin sales.

Evidence was given of Mr Renner requiring customer verification, to confirm their identity, and also carrying out due diligence to identify the reason for each purchase.

The script provided by Mr Wilkinson had his victims saying their bitcoin purchases were speculative personal investments, with the possibility of making a profit on sale.

Mr Renner said he had refused to make bitcoin sales to customers who said they were making payment to a boyfriend overseas they had never met.

Westpac v. Renner – High Court (2.12.24)

25.042

Constructive Trust: Hitchcock v. Murphy

 

A brother’s claim to part ownership of his sister’s land near Coatesville in Auckland was dismissed by the High Court, but Stephen Hitchcock was entitled to $575,000 for his financial assistance in paying off her mortgage and helping pay costs of subdividing her rural residential property.

The court was told of Susan Murphy’s on again-off again plans for subdivision, complicated by her objections to brother Stephen growing cannabis on site which led to a prison sentence on conviction for his first offence and home detention for a second later offence.

Ms Murphy came to own the four hectare Coatesville property in her own right after buying out her then husband’s share.

The High Court was told brother Stephen assisted financially in 2003, paying off the balance of her $147,000 mortgage at a time when she was diagnosed with a potentially dangerous cancer.  He subsequently lived on site, staying for extended periods in a Portacom cabin at back of the property.

Plans for subdivision waxed and waned over many years, with various proposals discussed between the two.

Sister Susan always made it clear that her brother could take ownership of part of any subdivision with the money she owed him deducted from the market price.

Ultimately, what could not be agreed was the form any subdivision would take and how much Stephen was in fact owed.  They wound up in court.

Whilst original discussions centred on Stephen taking title to part of a subdivided back half of the property, Susan eventually sold off the back half without further subdividing it; sold in May 2022 at $2.65 million.

Justice Johnstone ruled Stephen had a valid claim to part proceeds of this sale.

Correspondence between the two made it clear Stephen would be reimbursed following any subdivision.  A constructive trust existed, with compensation from sale proceeds.  This carried out the effect of their prior common understanding, with previously agreed terms no longer able to be implemented since the subdivided land had been sold.

The two siblings could not agree on how much Stephen was owed.  There was limited written evidence.  Other evidence was contradictory, or inconclusive.

Susan said much of what Stephen was claiming as compensation for work done around the property amounted to expenses incurred for his own benefit, growing cannabis.

Justice Johnstone ruled Susan was required to pay at least $500,000; the amount she stated in correspondence through 2016/17 as being the credit she would give her brother on his purchase of a then intended subdivided section.

Payment of a further $75,000 was ordered; money she borrowed from her brother in 2017.

Hitchcock v. Murphy – High Court (29.11.24)

25.041

Family Trust: re Maungaiti Commercial Trust

 

New Zealand born Alex Brown died in 2019 a very rich man, primarily the result of mining and processing zirconium in China though licences held by his ASX listed company Astron.  After his death, battle was joined between three children of his first marriage on one side and his second wife Kang Rong on the other, over assets held in name of his New Zealand family trust: Maungaiti Commercial Trust.  Over $100 million was at stake: bank term deposits and a commercial property in central Auckland.   

On his death, no will could be found.  Estate litigation followed, after belated discovery in 2021 of a will in Hong Kong.  This will names Kang Rong as executrix.

Beneficiaries of Maungaiti Trust could not agree on how Mr Brown’s New Zealand family trust assets should be split.

Negotiations were complicated by two substantial claims: Kang Rong’s claim to some fifty percent of trust assets in a relationship property claim; and status of a $67.5 million gift Mr Brown made to one of his daughters, Natalie, in 2017 – money then lent by her to pay for Maungaiti Trust’s asset purchases.

Mediation was unsuccessful.

The High Court was told subsequent negotiations lawyer-to-lawyer on behalf of all interested parties reached agreement.  All signed, except a son from Mr Brown’s first marriage.  With the dispute about to head to court, he informally agreed.

High Court Trusts Act approval was needed because potential trust beneficiaries included minors.

Justice Lang approved the negotiated settlement.

Settlement sees Kang Rong receiving $20 million and the three children of Mr Brown’s first marriage receiving $10 million each from cash currently held.

The Auckland commercial property is to be sold.

Net sale proceeds are to be divided equally between daughter Natalie and second wife Kang Rong with a proviso that Tiger, the son and only child from Mr Brown’s second marriage, receives a payout if net proceeds exceed a set figure.

The net half share received by Natalie is to be divided by agreement between herself and her two siblings; the three children of Mr Brown’s first marriage.

Tiger Brown has succeeded his father as managing director of Astron.

The court-approved settlement also dealt with family shareholdings in Astron.

Some of the Astron shares held by Mr Brown at his death will be transferred to family trusts for the benefit of Natalie and her sister, Julia.  And it was agreed there would be no challenge to Tiger’s Astron shareholding.

Still left hanging, is distribution of several properties in New Zealand owned by Mr Brown personally and now part of his deceased estate.

Natalie and Julia agreed any benefit they might receive from these properties would be given to Tiger.     

re Maungaiti Commercial Trust – High Court (29.11.24)

25.040

Joint Venture: Venkataramanujam v. Ramasubramanian

 

It was a breach of duties owed a joint venture partner to make a personal profit out of sale of joint venture assets, the High Court ruled, after one side pocketed a secret benefit by taking full ownership of an Auckland joint investment property with a profitable on-sale already inked generating an $87,500 profit.

Two families with ties to India were in court arguing over the manner in which their three year Auckland property syndicate was wound down.

Mr Ramasubramanian and Ms Narayanaraja alleged they were hoodwinked by erstwhile business partners Mr Venkataramanujam and Ms Preumalsamy.

The High Court was told that in 2015 the two families collectively purchased two Auckland properties; one in Glen Eden, the other in Blockhouse Bay.

Their business relationship broke down three years later in a dispute over Mr Venkataramanujam’s family’s continued occupation of the Blockhouse Bay property.

With litigation threatened, a compromise was reached.

The Glen Eden property was put up for sale in a private auction; the only bidders being the two families, bidding against each other.

Mr Ramasubramanian’s family was the higher bidder.  They took full ownership; the net proceeds were divided between the two families.

The Blockhouse Bay property was listed on the market for sale, later withdrawn with no offers matching the original price paid.  It was then agreed to also sell this property by private auction between the two families.

Mr Venkataramanujam’s family was the higher bidder with the High Court later told he had on-sold the property prior to auction, subject to him winning at auction.  His family was ordered to surrender half the profit made from this on-sale: $43,750.

Justice Becroft ruled their relationship as joint venture partners continued through the sale process.  Mr Venkataramanujam was obliged to disclose any deal struck prior to sale of their jointly owned Blockhouse Bay property.

Venkataramanujam v. Ramasubramanian – High Court (28.11.24)

25.039

Fraud: Wikeley v. Kea Investments

 

The noose is tightening around Ken Wikeley, having lost control of his family trust and being called to account for a USD 123 million fraud allegedly perpetrated in league with entrepreneur Eric Watson.

This fraud arose from Mr Wikeley’s involvement in obtaining default judgment against Kea Investments Ltd from a US court, with a Kentucky court upholding a supposed 2012 joint venture coal mining agreement; an agreement subsequently ruled a forgery by the New Zealand courts.

Kea is the investment vehicle established by Sir Owen Glenn to manage USD 350 million proceeds following sale of his transport logistics company.   

The first Kea Investments heard it supposedly owed USD 123 million was after attempts were made to seize Kea assets in the US in satisfaction of the Kentucky court judgment.

Kea’s legal agents in the British Virgin Islands had failed to forward notice of the pending Kentucky case. 

Sir Owen moved smartly, having the New Zealand High Court issue a world-wide order blocking enforcement of the Kentucky court order.

Global anti-enforcement orders are controversial.  To what extent should a court in one country interfere in the judicial processes of another?  To do so suggests the other country is a vassal state, subservient to the orders of another.

The Court of Appeal ruled it was a step too far in this case for the New Zealand High Court to injunct the orders of a Kentucky court.  It discharged the injunction.

But Mr Wikeley is no longer in a position to pick up the reins and carry on with enforcement of the disputed USD 123 million Kentucky court ruling.

After the High Court imposed its anti-enforcement order, interim liquidators were appointed at Kea Investment’s request to take control of Mr Wikeley’s family trust.  This trust is the lead litigant in the disputed Kentucky litigation.

The Court of Appeal signalled it would be sympathetic to any plans by Trust interim liquidators to put on hold further attempts to enforce the Kentucky judgment.

The court was told interim liquidators have obtained US Bankruptcy Court recognition as being in control of Mr Wikeley’s family trust.  The liquidators, not Mr Wikeley, now exercise all rights of his family trust as litigant in the US.

In New Zealand, the Court of Appeal confirmed the supposed 2012 joint venture agreement is a fabrication and further confirmed Mr Wikeleys’ family trust, now controlled by interim liquidators, is liable on earlier court orders to pay 75 per cent of Kea Investment’s legal costs incurred in legal action taken in England, the US, and Australia.

The court was told a Queensland court ordered confiscation of Mr Wikeley’s passport.

Part of his legal argument in New Zealand courts seeking to regain control of the Kentucky litigation was tossed out after his legal submissions were identified as being created by generative artificial intelligence.  References to non-existent cases were the giveaway.

Wikeley v. Kea Investments Ltd – Court of Appeal (21.11.24)

25.038

Estate: van den Boogart v. van den Boogart

 

Gerard van den Bogaart lived with his parents at their Auckland Opaheke home, near Papakura, for many years prior to their deaths five years ago.  Now in dispute with his siblings over rights to the two million dollar property, the High Court learnt of legal hiccoughs which saw his parents bequeathing their home and other assets to a family trust which no longer existed.

With the Trust as the only named beneficiary having been wound up and no longer in existence, their wills were of no effect; their parents’ estates are wound up as an intestacy, with assets to be divided according to statutory rules in the Administration Act.   

The High Court was told patriarch Wilhelmus set up a family trust in 1975.  The Trust had a stated distribution date of March 2000.  That date slipped past unnoticed.  In 2018, the essence of the original Trust was revived with a deed of family arrangement agreeing that trust assets would be distributed between family members on an agreed formula and the Trust wound up.  All beneficiaries signed.

The family home was never a Trust asset.

In an oversight, there was a failure to amend wills signed by Wilhelmus and spouse Anna stating that the family home and surrounding land would pass to the Trust on their deaths.

On their deaths, there was no longer in existence any family trust to take ownership of the family home.

This resulted in proposals for yet another deed of family arrangement.  A 2021 draft agreement proposed adjusting inheritance rights that would otherwise apply through the Administration Act; an agreement intended to give effect to their parents’ intentions.  All those affected signed, except Gerard.

He claims their father promised him the Opaheke property in return for years of work he spent maintaining the property.  He claims there have been secret deals between family members dealing in Trust assets to his disadvantage.

He departed the property, where he had been living rent free, only after a Tenancy Tribunal hearing ordered his eviction.  His siblings complain the property was left in a mess, requiring substantial work in preparation for sale.

Justice Anderson dismissed Gerard’s request for an injunction blocking a sale.

Gerard’s primary demand is for a forensic audit of Trust activities, Justice Anderson said.  That is a separate issue from sale of the Opaheke property, which is an estate asset, not a trust asset.

Should Gerard decide to carry on with a claim against his parents’ estates, compensation for any successful claim is the better remedy, he said.  Sale of the Opaheke property could go ahead.

The court was told Gerard would receive a one-seventh interest in his parents’ estates if divided according to Administration Act rules, a one-eighth share if he signed the 2021 proposed deed of family arrangement.

van den Bogaart v. van den Bogaart – High Court (21.11.24)

25.037

Tax Evasion: Shah & Naseeb v. Inland Revenue

 

Rehana Shah and Mohammed Naseeb were each sentenced to three year’s imprisonment for tax evasion, complicit in deliberately understating taxes due of some $800,000 over a six year period ending 2016.  Their claim to have no knowledge of tax requirements, having left this work to their tax agent, was dismissed.

They unsuccessfully appealed their conviction and sentence to the High Court, stating there were no grounds for criminal liability; it was simply a case of muddled accounting in their poorly run and chaotic business, they said.

Tax convictions followed failures to properly account for GST, PAYE deductions and income for their company: Supreme Constructions Civil & Drainage Works Co Ltd.  Their company stopped trading in 2015 and was wound up, insolvent.  They also understated taxable income in their personal tax returns.

Conviction for tax evasion requires proof of intent; the taxpayer knew tax was due, but deliberately evaded payment.   

Ms Shah and Mr Naseeb said they left all tax filings to their tax agent.  Any errors were not their responsibility, they said.  In addition, Ms Shah said she was no more than a ‘simple housewife who helped with some of the paperwork.’

Justice Jagose said there was clear evidence of the two concealing information from their tax agent in what amounted to deliberate efforts to evade tax.  Their tax agent was given limited information.  Relevant bank accounts were kept hidden.

Ms Shah’s claim to limited involvement in company business did not tally with evidence of her having an employment contract with Supreme Constructions and being involved in coding bank account statements delivered to their tax agent.

The two provided no assistance to Inland Revenue’s investigation.  Their sustained attempt to deceive and mislead Inland Revenue by delaying and obfuscating inquiries was further evidence of intent to evade tax, Justice Jagose ruled.

Shah v. Inland Revenue & Naseeb v. Inland Revenue – High Court (20.11.24)

25.036

Marriage: re Estate Mark Watson

 

One year into their relationship Mark Watson signed a will leaving all to his de facto partner Esther Vrieze.  Six years on, they married; each unaware that this marriage invalidated his earlier will, causing estate complications when Mark died nearly two decades later. 

The rule that marriage invalidates prior wills is well-known to lawyers; not widely known by the general public.

Mark Watson’s estate was left holding a Hastings residential property on his 2024 death with widow Esther and their children left with no immediate right to continued occupation.

A change in legal status from de facto partners to married, meant Esther could not enforce terms of her late spouse’s earlier, now invalid, will.

The Wills Act recognises this problem. Wills made ‘in contemplation of marriage’ remain valid after a subsequent marriage. 

The High Court was told Mr Watson’s will had no express wording stating it was made in contemplation of their marriage.

Justice McHerron ruled circumstance of their relationship implied Mr Watson’s will was signed in contemplation of a marriage, even though the marriage did not take place for six years.

Both Mr Watson and Ms Vrieze signed wills at the same time, on similar terms; each being a major beneficiary of the other’s estate.  Ms Vrieze told the court this was done with the understanding they would later marry, confirming the solidity of their relationship.

Mr Watson’s invalid will was declared valid.

re Estate Mark Watson – High Court (18.11.24)

25.034

Construction: CPB Contractors v. FZ Group

 

Infighting between contractors building a new prison at Waikeria in the Waikato saw Australian-owned lead contractor CPB demanding $3.5 million from Auckland fit-out contractor FZ Group with FZ claiming a letter it signed at CPB’s request mentioning the $3.5 million was simply a stratagem to get compensation from Corrections for project cost-overuns.

Waikeria prison’s extension has been blighted by delays and cost over-runs, particularly because of covid-19 lockdowns and subsequent shortages of building materials.

CPB Contractors Pty Ltd is lead contractor.  Hamish Storey’s FZ Group Ltd was involved as sub-contracter; his company specialises in commercial carpentry and fitouts.      

The High Court was told the two companies’ working relationship deteriorated through 2022.  CPB said more staff were needed on the job and some of the work done was defective.  FZ Group said it was held up by CPB’s failure to get the site ready for work.

This led to what was stated to be a ‘walk away’ agreement with FZ Group abandoning its contract.

Terms of this agreement came under scrutiny after FZ Group put in a Construction Contracts Act claim for what it said was work completed for CPB but not yet paid; a claim for just over $443,000.  Three weeks later, CPB demanded FZ Group pay it $3.5 million.

Associate judge Skelton ordered CPB pay FZ Group’s $443,000 Construction Contracts claim; applying the Act’s ‘pay now, argue later’ principles.  CPB was given two weeks to pay, or face winding up.

In turn, Judge Skelton blocked CPB’s attempts to wind up FZ Group for non-payment of $3.5 million, ruling a full court hearing is needed to determine circumstances surrounding FZ Group’s signature to the ‘walk away’ letter promising to pay $3.5 million.

CPB says the July 2022 letter blocks FZ Group from claiming any further contract payments and holds FZ Group liable for additional costs incurred bringing in another contractor to finish its work.

FZ Group says the letter was intended to support CPB’s claim against Corrections for project cost overruns and that it absolves FZ Group from any further liability.

CPB Contractors Pty Ltd v. FZ Group NZ Ltd – High Court (18.11.24)

25.035

Missappropriation: Industrial and Commercial Enterprises v. Howes

 

Dereck Howes, director of Auckland-based Industrial and Commercial in the business of refurbishing and leasing out shipping containers, was ordered to pay just on $600,000 after liquidation of his company.  He pocketed all cash coming into the business and on-sold containers not owned by his company. 

After Industrial and Commercial Enterprises Ltd went into liquidation in September 2023, liquidators could find no company records.

The High Court was told the company had no bank account; all cash was paid into Mr Howes personal bank account, used to pay a mix of company and personal expenses.

The GST number used on company invoices was Mr Howes personal tax number.

Evidence was given that Industrial and Commercial on-sold, without permission, leased containers sitting in its yard.  This money also went into Mr Howes personal account.

The Companies Office file shows no record of Mr Howes formally accepting any role as an appointed director.

Liquidators did not sue Mr Howes for Companies Act breaches as a director.  They sued him for ‘money had and received’ and ‘knowing receipt.’  He did not defend the liquidators’ claim.  He was ordered to refund $599,800 to the company.

Justice O’Gorman ruled liquidators had proved Mr Howes wrongly misappropriated funds while in control of the company.

Industrial and Commercial Enterprises Ltd v. Howes – High Court (14.11.24)

25.033

Trust: re Ron and Joan Gillatt Charitable Trust

 

One person’s treasure may be another’s junk.  The High Court was asked to amend terms of a charitable trust tasked with an obligation to store and maintain what turned out to be primarily household junk.

In 2001, Ron and Joan Gillatt established a charitable trust naming as beneficiaries local charities plus a model railway club and a cat protection organisation, all based in Christchurch.

Ten years later, the trust deed was amended to have the Trust take possession on their deaths all ‘books, magazines, papers, paintings, video tapes, philatelic items and DVDs’ that they owned.  These items were to be preserved, with the paintings gifted to a publicly owned gallery.

The High Court was told estate solicitors were shocked to find on the 2024 death of widowed Mr Gillatt that most of these items were no more than junk of no enduring importance.

His stamp collection was valued at some $3000; the 73 pieces of artwork at no more than $20,000.  Art experts advised none of the artwork was suitable for inclusion in any New Zealand public collection.

A requirement to use trust funds to store and maintain items of personal property ran the risk of disqualifying the trust’s charitable status, and with it, tax benefits that follow.

To save the Trust’s charitable status, the High Court approved amendments to the trust deed allowing trustees to dispose of all the unwanted personal property, with any proceeds of sale to be added to the trust fund where it may be used to benefit the Trust’s named charities.

The current size of this trust fund was not disclosed.

re Ron and Joan Gillatt Charitable Trust – High Court (13.11.24)

25.032

Costs: CNP Holdings v. Central Park Property

 

Painting himself as a disinterested bystander seeking compensation for investors in Maat Consulting’s disastrous Nido department store syndication, Craig Priscott was primarily driven by attempts to hoover up Maat’s assets, the High Court ruled, ordering Priscott pay Maat $187,000 of its costs spent fending off his legal action.  

Priscott sued Maat Consulting Ltd, its directors Neil Tuffin and Mark Hughson, plus members of their families trying to hammer them into selling up.

Any pretence that he went into battle for the benefit of Nido investors was negated by evidence that he sued only after failed negotiations to buy out Maat assets, Associate Judge Brittain said.

Maat Consulting establishes investment syndicates for purchase of commercial properties.

Considerable negative publicity followed a failed 2021 syndication in Henderson, West Auckland.  Retail investors lost some four million dollars after a planned big-box retail store branded as Nido failed following a mix of construction delays, funding problems and covid-19 restrictions.

Mr Priscott complains that financial information provided by Maat to the last tranche of Nido investors prior to their investment did not disclose that the project was already in default.

This breached the Financial Markets Conduct Act, he alleged.

The High Court was told he threatened Maat and its owners with legal action over not only the alleged Nido non-disclosure but also allegations they had overcharged management fees in respect of other property syndicates.

This threat was held over their heads as detailed proposals were put forward through 2022 for all Maat syndicates to be rolled up into one entity under the ultimate control of Mr Priscott.  He was offering $1.7 million compensation to Maat.

A September 2022 email presented an ultimatum: agree, or I sue as threatened.

Subsequent legal action by Mr Priscott’s company, CNP Holdings Ltd, was thrown out.  Neither Mr Priscott nor CNP had any direct interest in the outcome.

Associate Judge Brittain ruled litigation was launched for an improper purpose; the intention of forcing Maat Consulting to sell up.

Both Mr Priscott and CNP Holdings were held jointly liable to pay $187,000 of the $594,000 litigation costs incurred by Maat.

While Mr Priscott personally was not party to the litigation, he was liable to pay costs as the ‘real party’ who drove the proceeding, Judge Brittain said.

CNP Holdings Ltd v. Central Park Property Investment Ltd – High Court (5.9.24 & 12.11.24)

25.031

Property: Willems v. Willems

 

What started as a mutually beneficial family arrangement with parents Robert and Joscelyn Willems helping son Daniel and his then partner Georgia get a foot on the property ladder turned into a nightmare, with Daniel later strong-arming his parents into gifting him a greater share of their jointly owned Nelson purchase and then forcing a sale.

In 2019, Daniel’s parents agreed to financially support his plans to buy a home.

Discussions jelled into a proposal where they would jointly buy a house where all could live.

The arrangement saw Daniel’s parents putting up some $158,000 cash as the downpayment on a home at Turner Place in Wakefield.  Daniel provided no cash.

At the last minute, his parents had to contribute a further $55,000 to clear personal debts incurred primarily by Daniel’s then partner Georgia; the bank would not advance any mortgage finance unless these personal debts were first cleared.

The deal saw Daniel and Georgia registered as owners of Turner Place as to a one-quarter share; Daniel’s parents a three-quarter share.  All four were liable on the mortgage.

Turner Place has two separate living areas, enabling the two generations to live close together, but separately.  Property outgoings were shared equally between each generation.

The High Court was told this mutually beneficial family arrangement fell apart within a year, after Georgia left, going to Australia.

Georgia’s departure frustrated subsequent attempts to refinance the bank loan at a lower interest rate and to draw down a further $40,000 when Daniel’s parents sought to buy a new car.  She was no longer around as part-owner to sign the required variation of mortgage.

She willingly signed over her ownership interest on being released from the mortgage, with family agreeing Daniel’s ownership share would increase to one third, his parents’ share reducing to two thirds.

Evidence was given that Daniel’s share instead was increased to one half; this after he refused to sign off on any new financing arrangement which included a $40,000 advance to his parents unless his share was increased. 

Within a year, Daniel and his new partner had left Turner Place and he was demanding the property be sold.

He sued for a Property Law Act forced sale.  His parents’ failure to file a statement of defence meant they were barred from defending the case.

Justice Boldt ordered a sale, stating a forced sale was inevitable, given the circumstances.

With the wisdom of Solomon, he set out a formula for progressing a sale given the fact each side no longer talked to the other.

Daniel has two weeks to obtain a registered valuation of Turner Place, with his parents given the chance to buy out his half interest at that valuation less the outstanding mortgage debt.

If they do not accept this valuation, they have a further two weeks to obtain their own valuation with Daniel given the opportunity to sell his half share to them at an average of the two valuations.

If this fails, Turner Place is to be listed for sale.

In the final wash-up, Daniel’s parents are to be given credit for both their original $158,000 cash contribution and the extra $55,000 put in from the start to clear Daniel’s and Georgia’s personal debts, Justice Boldt ruled.

He dismissed Daniel’s claim that the $40,000 borrowed by his parents to buy a car should be excluded as their personal debt when calculating net equity in the property.  It is part of the mortgage debt secured over the home, Justice Boldt said.

Willems v. Willems – High Court (12.11.24)

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