Haddon

[2012] NZHC 1918

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

CIV-2012-409-000841 [2012] NZHC 1918

IN THE MATTER OF     the Trustee Act 1956

AND

IN THE MATTER OF     an application by ANDREW DEREK HADDON and KATRINA JANE BOWMAN as trustees of the estate of Karyn Teresa Haddon

Hearing:         1 August 2012

Appearances: A L Sumner for the Applicants

P J Egden as Litigation Guardian for Infant Beneficiaries

Judgment:      1 August 2012

ORAL JUDGMENT OF HON. JUSTICE FRENCH

[1]      The applicants are the trustees of the estate of the late Karyn Teresa Haddon.

[2]      They seek Court orders relating to a residential property which forms part of the estate.

[3]      Under Ms Haddon’s will, the property was to be held by the trustees to permit her  four  daughters  occupation  and  enjoyment  of  it  until  the  youngest  of  them attained the age of 25.

[4]      The trustees are empowered to substitute the existing residence with another. In addition, on sale and at the request of the daughters, the trustees are empowered to distribute the sale proceeds, one quarter to each daughter as each attained 25 years of

age.

RE HADDON AND BOWMAN HC CHCH CIV-2012-409-000841 [1 August 2012]

[5]      Mrs  Haddon  died  on  20  November  2009,  and  the  property  was  then transferred to the trustees.

[6]      Unfortunately, the property which is now unencumbered suffered significant damage in the Christchurch earthquake of September 2010.  Since then, it has been zoned red and is the subject of a government offer to acquire the land.  That has left the trustees with a number of options, the chief competing options being:

(a)      Accept the government offer for the land and take a cash settlement for the house, reflecting its present value, from the insurer.  That is projected by the trustees to produce a total of some $319,850.

(b)Accept the government offer for the land and accept an offer from the insurer to fund the purchase of an alternative existing property.  The trustees value this option at some $470,500.

[7]      None of the four daughters reside in Christchurch, and it is the understanding of the trustees that none of them wish to return to reside in this city.

[8]      Two are minors, aged 16 and 14 years respectively.  They are represented by a litigation guardian, Mr Egden.

[9]      Initially,  the  two  eldest  daughters  preferred  the  cash  settlement  option. However, after reading the provisional views expressed by Dobson J[1] in his minute of 25 July 2012, they reflected on the situation and now accept that purchase of a replacement property is the better choice. As noted in Dobson J’s minute, the second option is significantly more attractive and is likely to secure a net gain of at least

$100,000, even allowing for costs of resale of the replacement property and the prospect that resale might not be achieved at quite the price paid in the first place.

[1] Re Haddon and Bowman (HC) CHCH CIV 2012-409-841 [25 July 2012]

[10]     Mr Egden also supports the second option.  He has attempted to consult with the two minors directly.  One of them, the 14 year old, is supportive of the proposed

course of action.  Unfortunately, despite strenuous attempts by Mr Egden to contact the 16 year old daughter, she has not made contact and he has not been able to ascertain her views.   Mr Egden, however, submitted that the proposed course of action was so clearly in the benefit of all the beneficiaries that it was appropriate for me to proceed to make the orders requested.

[11]     I therefore confirm that the trustees are to be directed to pursue the option of sale of the land to the New Zealand Government via CERA and accept the insurance company’s offer in relation to the purchase of an existing home in accordance with the requirements of the offer that has been made, contemplating that thereafter a resale of that property would occur.

[12]     Orders  are  made  in  terms  of  the  draft  order  filed  and  as  amended  in

Ms Sumner’s memorandum of 31 July 2012.

[13]     I would just like to conclude by thanking counsel for their assistance in this important matter.

Solicitors:

Cameron & Company, Christchurch

Counsel:

P J Egden, Christchurch