TRUSTEES' PROBLEMS

New Zealand Herald, Volume LXXI, Issue 21844, 5 July 1934, Page 16

TRUSTEES' PROBLEMS

INCOME FROM ESTATE MAINTENANCE NOT PAID SUPREME COURT RULING Direction to the trustees of the will J of Evan Bond, who died in 1,930, was given in a judgment delivered by Mr. Justice Fair in the Supreme Court yesterday. The trustees had made application for direction as to their duties under an order made by Mr. Justice Blair in September, 1931, under tho Family Protection Act. Plaintiffs were the executors and trustees of the will of deceased, and the defendants were Victoria Irving Bond and 28 other beneficiaries under the will and eight creditors. The trustees were represented by Mr. Munro, the beneficiaries by Mr., Sullivan, Mr. Lennard and Mr. JaeUa, and tho creditors by Mr. Barrowclough, Mr. Rose and Mr. Wheaton. At tho time of the death of the testator tho estate was valued at approximately £7OOO, said His Honor. It consisted intor alia of several undivided interests in cortain real property, all of which were subject to mortgages, for the full amount of which the deceased was, and his estate after his death is, liable. The trustees had not been able to pay the whole of the maintenance of £2 10s weekly which they wore directed by the order to pay, and on February 13, 1931, arrears of maintenance were owing by the trustees, amounting to £59 lis Id. Since that date nothing further had been paid.

His Honor said it was clear, upon authority, that all debts duo at the time of tho testator's death took precedence over any rights under the orden.

"The answer to the question put by the summons, so far as its practical application to the facts of the present ease is concerned," continued His Honor, "is that the arrears of maintenance constitute a first charge on the property of the deceased which was not at the time of his death already subject to a legally enforceable charge, but in respect of property which was so subject, is postponed to those charges. With regard to the charge on the income, the trustees are entitled to expend such income in current necessary outgoings, without which the income would not be earned." His Honor adjourned the case to enable counsel to consider the effect of the judgment, and decide could come to agreement on other questions raised.