EXPENSIVE LEGACY

Sun (Auckland), Volume IV, Issue 983, 28 May 1930, Page 12

EXPENSIVE LEGACY

ANNUAL COSTS EXCEED INCOME RIGHT TO SELL WANTED Full permission to sell a property on which rates, taxes, interest and other annual expenses are greater than the total income was refused the trustees of the property in a reserved judgment delivered by Mr. Justice Smith in the Supreme Court today. However, it was intimated that a sale might be recognised by the Court under certain conditions.

Under a deed of settlement made by the late Mr. Peter Oliphant in August, 1924, a site in High Street was vested in trust for his six children. The trustees were authorised to erect a six storey building, chiefly of offices. This was done, the property being mortgaged to the Public Trustee for £9,500 with interest at six per cent. The deed directed that the trust should be held for 21 years or until the mortgage should he paid off, and that the six benificiaries or their children should then share equally. Owing to the large number of offices offering in the city, it was found impossible to show a profit or to pay off part of the mortgage as directed in the deed. In fact, losses during the past three years amounted to nearly £4OO. Judging that there was no immediate prospect of an improvement in the financial position for some time, two of the children applied through Mr. G. P. Findlay for a judgment concerning their position, and asked if permission would be given for a sale of the property. If this were agreed to, the plaintiffs asked a ruling concerning the payment of the mortgage and the costs of the application. Mr. Justice Smith agreed that the present position could not have been foreseen by the author of the trust, and that, in order to salvage the property for the children, the Court might agree to a specific sale by the trustees. There w-as no precedent which would enable him to grant a general power of sale. He could not deal nt present with the question of the mortgage.