NUKUMARU ESTATE

Wanganui Chronicle, Volume 89, Issue 265, 9 November 1945, Page 7

NUKUMARU ESTATE

PAYMENT OF DEATH DUES AFPORTO.MENT QUESTION ISSUES FOR SUPREME COURT The Question of which portions of th a estate of William Henry Reid, farmer. Nukumaru. who died in 1942, should contribute to a deficiency in the assets originally thought to be . ulficient to meet death duties and other charges, was argued before Mr. Justice Finlay in the Supreme Court, Wanganui, yesterday. Submissions shoxvd that the principal asset was pioperty in the Waikato district, but because of unforeseen circumstances there was a substantial deficiency in the residuary of the estate set aside to pay death duties. The case was subsequently brought on an originating summons and the Court was asked to determine certain questions, one of them being whether duty amounting to £4500, assessed on a gift of a mortgage for £15,000 made by the testator to his eldest son, Lionel Reid, was payable by the estate or the donee. It was submitted that this gift was made within three years of death.

Another question was what amount of the deficiency, if any, should be contributed by another son, Charles Kenneth Reid, and how the amount of his contribution was to be raised or repaid. After hearing submissions by the six counsel engaged in the case, His Honour reserved his decision. Plaintiffs were the Guardian Trust and Executors Co. of New Zealand, L.d., and Lionel William Reid, farmer, Nukumaru, for whom Mr. A. G. Horsley appeared, and defendants were Margaret Mary Reid, widow. Wanganui (Mr. G. W. Currie), Lionel Roy William Reid, farmer. Nukumaru (Mr. M. J. Burns, Hawera), V'.da Victoria Higgins, married, Wanganui (Mr. C. P. Brown), Muriel Racie Wheeler, married, Wanganui (Mr. Brown). Gladys Elaney Robinson, married, Wangaitii (Mr. Brown), Charles Kenneth Reid, farmer, Wanganui (Mr. Currie), John Leslie Higgins, farmer, Walton (Mr. J. M. Hus. sey), William Hastings Moore, farmer, Nukumaru (Mr. Hussey), and Emslie Blatchford Reid, farmer, Auckland (Mr. C. F. TreadwelL.

OUTLINE OF CASE Outlining the case, Mr. Horsley said in his opening that the plaintiffs were executors and trustees of the estate of William Henry Reid, farmer, Nukumaru, who died at Wanganui on October 30. 1942. The defendants were beneficiaries under the will. For the determination of certain questions arising in the course of administering the estate, the attitude of the trustees must be neutrai and they would abide by the ruling of the Court, Mr. Horsley added. The testator left a substantial estate and made detailed provisions for its disposal. He was survived by his widow. Margaret Mary Reid, two sons, Lionel Roy William Reid and Charles Kenneth Reid, and three daughters, Vida Victoria Higgins. Muriel Racie Wheeler and Gladys Elaney Robinson. There were also four grandchildren whose father. Emslie Henry Reid, a son of the testator, was deceased. John Leslie Higgins was a son-in-law of the testator, and William Hastings Moore was the son of Mrs. Wheeler. Emslie Blatchford Reid, named as a defendant, was one of the four grandchildren to whom reference had already been made.

On February 17, 1943. protection orders were made by the SupremeCourt in respect of the widow and the invalid son, Charles Kenneth Reid, and managers were appointed for each O: there estates. When the testator died his main freehold property consisted of the farm at Nukumaru, known as “Marahau’’. and comprising 4009 acres. In addition there were 63 small sections, containing 15 acres, which was held to be portion of “Marahau.” There were also 90 acres on Maxwell Road, adjacent to “Marahau,” and known as the 90-acre block. Testator also held a mortgage for £19,006 from Charles Ken je h Reid over a property in his name and consisting of 497 acres.

Replying to a question by His Honour, counsel said this mortgage represented the total purchase price of that property. It also represented provision for this particular son and in point of fact the property was farmed by the testator, not the son.

Also part of the estate was a farm property at Walton, Waikato, consisting of 2020 acres and known as Paratu, Ltd., the capital of which was £ll,OOO, divided into 220 shares of £5O each. Of these the testator held 216 shares in his own name, three were in his wife’s name, and one was in the name of Lionel Roy William Reid. In addition, there was the livestock, plant and implements on these properties, the furniture and household effects at “Marahau” being bequeathed to the widow. PRINCIPAL BEQUESTS Summarising the main bequests under the will, Mr. Horsley said that the will provided that, the mortgage of £19,006 be retained in its present form, as long as C. K. Reid farmed the property, but that no interest be charged. This represented a gift of the interest on the £19,006 for life. Associated with this was a direction to the trustees to provide sufficient stock to farm the proper.y. The will also provided for J. L. Higgins and W. 11. Moore each having a half share in the 90-acre block, while annuities were made available for each of the three daughters and the widow. The testator's stock and implements on “Marahau” were bequeathed to Lionel William Roy Reid, and bequests of household furniture Lind effects were made to the widow. Mr. Horsley submitted that the principal asset was the Waikato property and at one time it was believed that this would be sufficient to pay death duties and debts, but owing to circumstances beyond control there wa a substantial deficiency in the residuary of the estate set aside to pay these charges. It was felt that this was a case to which Section 16 of tiie Administration Act applied, but because of the piovisiom. of the will a dilliculty arose. The Court was asked to determine which portions of the estate should contribute toward the deficiency required for the payment of death duties and debts. The actual amount of the deficiency could only b? estimated, and al the present time was believed to be £11.740. The annuities payable Io the widow and Ihe three (laughte.s were exempt. Intere Is available for i.on!ribuliun included the mortgage of Ll'J.ooG. the bailment of Ih»* slock, valued al £2225 10.;. bequeathed to U. K. Reid, the interests of .1. L. Higgins and W. 11. Moor.- in th - 90acie block, the “Marahau” propeily. which applied Io William Roy Reid, consisting of stock and implements valued at £15.769, and plant, etc., valued al £BOB. and the bequest to the widow of furniture and effects valued at £165 10s 6d. Mr. Currie submitted that when making his will the testator realised his duty to an Invalid son and had

according!? made special provision. “Whatever contribution is made it must result in the will of the testator being altered,” counsel added. “My suggestion is that the best way of doing it is through the stock fund which is already held.* Counsel submitted also that it would be wrong m principle for the whole of the deficiency to be financed by the mortgage in question. Mr. Hussey submitted that the mortgage of £19,009 must make its contribution under Section 16 of the Act. After hearing legal argument on the points involved, His Honour reserved his decision.