TRUSTEES EXECUTORS ESTATE AND AGENCY CO V NICHOLS AND ORS HC DUN CIV 2004-412-000105

TRUSTEES EXECUTORS ESTATE AND AGENCY CO V NICHOLS AND ORS HC DUN CIV 2004-412- 000105 14 December 2005IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY CIV 2004-412-000105IN THE MATTER OF the estate of JOSEPH COWIE NICHOLS BETWEEN THE TRUSTEES EXECUTORS ESTATE AND AGENCY COMPANY OF NEW ZEALAND Plaintiff AND TIMOTHY JOSEPH COWIE NICHOLS AND ORS Defendants Hearing: 14 December 2005 Appearances: J E St John for Plaintiff L A Andersen for residuary beneficiaries D Tobin for TJC Nichols C S Withnall QC for R C Nichols Judgment: 14 December 2005ORAL JUDGMENT OF HON JUSTICE JOHN HANSEN[1] This matter involving the estate of Joseph Cowie Nichols has now been going on for some considerable time. There have been a number of conferences. There have been efforts to settle the disputes between the parties. It commenced with a number of outstanding issues that by Monday of this week had narrowed to effectively one issue, and that is whether or not the tourist venture being operated by the head of the dwelling was being undertaken in breach of trust. By today even that one remaining dispute has been overtaken. [2] It is accepted by the parties, although not consenting, that the trust collection of medals needs to be sold. The difficulty confronting the trust is the terms the settlor has imposed, coupled with the fact that effectively the trust is asset rich butincome poor. It is also agreed that following any sales of medals the financial situation should be reviewed when the residuary beneficiaries will be in a better position to ascertain their views in relation to Robin Nichols' proposal to purchase the land which he presently occupies, in which the interest remains for 21 years after his death and, in terms of the trust, the outgoings on that property are met by the trust. [3] I have already commented in the course of discussion with counsel that there is a real likelihood if this matter drags on the capital will continue to be eroded and the only people that will suffer from that will be the residuary beneficiaries. It seems to me there must be a dose of economic reality in that regard, but that cannot be advanced any further today. [4] Accordingly, without the consent of the parties but without opposition, there will be an order in terms of the draft lodged by the Plaintiff's solicitors with the following amendments: a) Clause 1 is amended to read "sell the whole or part of the Trust's medal collection, excluding all medals that have been presented or awarded to any family members". b) Clause 7 will be deleted. c) Clause 8 will be amended to read "Leave is reserved to all parties to apply to this Court for further directions on three days notice". [5] I will deal briefly with clause 5, that is that the reasonable solicitor client expenses should be met by the trust. Mr Andersen has properly raised the issue that Mr Timothy Nichols has asserted until very recently that the trust deed empowered him to operate the tourist venture. That has now gone, and that has led, amongst other things, to a great deal of the documentation and legal work that has been involved. However, in the circumstances we must look to the future and we must attempt to resolve this matter so the residuary beneficiaries do not suffer in the way they possibly could. It seems to me that order should apply to all parties and it willbe confirmed in that sense, except there will be added to clause 5 "as approved by the Court". [6] For the sake of completeness I would add to the order that any beneficiary will have the right to bid at any auction or tender sale of the medals for any items they may wish to personally obtain. The estimate for that process is that the sale will take place in June or July. [7] At that stage there should be a further telephone conference. All parties now accept that once the medals are sold there should be a further mediation to take place once all of the parties involved, particularly the residuary beneficiaries, have had the opportunity to consider the financial position of the trust. It appears to be the view of the residuary beneficiaries that the sale of the land would be of no benefit to them because an asset would be lost but the income would simply go to Mr Timothy Nichols as head of the household. That will be a matter for them to consider, but they need to consider it carefully because if there is a continuing drain on capital from the retention of that land by the trustees it seems to me the only people that will suffer financially in the long term will be the residuary beneficiaries. They need to look to the future in that regard, and perhaps seek professional advice from valuers. In that regard I have no doubt Mr Andersen will be able to advise them once the sale of the medals has been completed and the full financial position is then known.Solicitors: Anderson Lloyd Caudwell, Dunedin for Plaintiff Calvert & Co, Dunedin for residuary beneficiaries Berry & Co, Dunedin for TJC Nichols Albert Alloo & Sons, Dunedin for R C Nichols