MOUNTAIN ESTATE

Northern Advocate, 21 March 1934, Page 9

MOUNTAIN ESTATE

SALE OR CONTINUANCE? WILL PROVISIONS FOILED. DEPRECIATION OF VALTTS. (Special to “Northern Advocate.”) AUCKLAND, This Day. The depreciation of land values as a result of the economic depression led to proceedings being taken in the Supreme Court before Mr Justice Ostler, to determine the best means of administering the estate of the late Walter Clapham Mountain, runholder, of Purerua, Bay of Islands, whose death occurred in 1930.- The estate was sworn for probate purposes at £68,000 and was willed by Mr Mountain to his wife and children for life and thereafter to the grandchildren. The Public Trustee, who is administrator of the estate, was represented at yesterday’s proceedings by Mr Biomtield. Mr Bagnall appeared for the children of testator by his first marriage; Mr A. H. Johnstone, K.C.. and Mr H. H. Butler for testator’s widow and children of the second marriage; Air Findlay for testator’s only sen and a member of the second family; and Mr Meredith and Air AfcCarthy for testator’s grandchildren. Air Blomlield said the Public Trustee sought permission of the Court to utilise a. specific portion of testator’s estate in the carrying on of the business of farming. The testator started farming in the Bay of Islands district, in a very small way, lint increased his holding until he owned about 10,000 acres. He died on March 20, 1930, leaving a will dated April .14, 1927, under which ho set aside certain of his farm lands for his son, who was now a schoolboy and who would not. attain his majority for some years. Economic Slump. The remainder of the property was ultimately to be sold, said Air Blom held. Although the value of testator’s estate had been' sworn for probate purposes at £68,000, the present value was much less owing to economic, conditions and the farm was no longer a profitable or saleable proposition. It ■was desirable, however, that fanning operations should be. continued, and the Public Trustee asked the authority of the Court to carry on the farm as a whole, instead of working only part of Hie property. Mr Johnstone said he was concerned with Hie settled residuary and personal estate. Cnder the will there was a clear trust for conversion, the Public Trustee being directed to invest the proceeds from the sale or conversion of testator’s real or personal estate to form a residuary trust fund. Of the income from this fund, 24-4oth wore to be divided among the widow and second family, and the remaining 2.1-laths among the first family. The Public Trustee had power to postpone the sale of real or personal possessions as lie deemed fit and to carry on the farming business as might be advisable in the interests of the estate. The farm had been carried on for some years at a loss, continued Afr Johnstone, ami the question now arose how the losses were to be borne. If the property was considered to be personal property, having regard to testator’s will, it must he treated as “converted’’ and the beheticiaries had interest for life. What testator actually bequeathed was the income of his properly as converted or sold. Decision Reserved. fils Honour: “The depression was upon us when the testator died. Hence nr conversion could have taken place c.\cep) at a. ruinous loss.” Air Johnstone said it, .was the Public Trustee's duty to sell the laud ns •soon as lie reasonably could. It was submitted that the payment of interest to the beuellciaries, or life tenants, should not be postponed until the final ecu version of I In* property, but should he paid out of the income of the farming business, As Hie farm was not producing profits, a charge must lie made in Hie meantime on the capital of the farming business.

Mr Bagnall expressed agreement with Mr Johnstone's contentions. Mr Finlay said it was in the interests of the only son that his specific property should be farmed in conjunction with the main property. The policy of the Public Trustee in farming all the land as one farm should be adhered, to. Mr Meredith contended it was the intention of testator to preserve the estate for his grandchildren. Counsel said interest to life tenants should bo charged on the income of the farm to come out of future profits. His Honour reserved his decision.