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Erni v Brooky

Erni v Brooky

Case [2020] NZHC 3116 24 November 2020

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IN THE HIGH COURT OF NEW ZEALAND HAMILTON REGISTRY

I TE KŌTI MATUA O AOTEAROA KIRIKIRIROA ROHE

CIV-2019-419-105

[2020] NZHC 3116

BETWEEN PETER MICHAEL ERNI AND BETTY MERLE ERNI
Plaintiffs

AND

KATRINA JEAN BROOKY

Defendant

Hearing: 30 June 2020

Appearances:

J K Matena & M D Branch for Plaintiffs K J Patterson for Defendant

Judgment:

24 November 2020

JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 24 November 2020 at 3:30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:
Harkness Henry, Hamilton Grantham Law, Hamilton

ERNI v BROOKY [2020] NZHC 3116 [24 November 2020]

Introduction

[1] Peter and Betty Erni (the plaintiffs) bring this action against their granddaughter, Katrina Brooky (the defendant) seeking to recover sums they claim to have advanced to the defendant as loans. The defendant does not dispute receiving the sums advanced by the plaintiffs, but she says that the sums were not loans, and were either gifts, advances on her inheritance from her grandparents, or unenforceable loans.

[2] The amounts advanced by the plaintiff can be conveniently divided into two categories: property loans and truck loans. None of the loans were governed by written contracts.

Background

[3] The plaintiffs are now both aged in their mid-late 70s. They have three children and eight grandchildren. While they are close to all of their grandchildren, they were always particularly close to the defendant, who was their first grandchild. When the defendant was an infant and young child, she was in the day-to-day care of her parents, however the plaintiffs were also closely involved in her upbringing.

[4] The plaintiffs previously owned and operated a holiday park at Pauanui on the Coromandel Peninsula. The defendant frequently spent time with them there and helped them out as required.

[5] The plaintiffs say that over the course of their lives they have often provided financial assistance to their children and grandchildren, including from time to time gifting them money for various purchases.

The house loan – Te Kuiti

[6] In 2013, the defendant’s son, K, was born. At that time the defendant was in a relationship with BP. The defendant and BP separated in April 2014, by which time K was one year old. The defendant then set about looking for a property to purchase. She and the plaintiffs together viewed several prospective residential properties,

including a property at 1007 State Highway 3, Hangatiki, Te Kuiti (the Te Kuiti property).

[7] Betty Erni (Betty) says that around August 2014, the defendant contacted her to tell her she intended to make an offer to purchase the Te Kuiti property. In discussions that followed, the defendant told Betty she did not have any money to pay the deposit, and she asked her to pay it for her. Betty says that she and the defendant then discussed how the defendant would repay the money. She says it was agreed between them that the defendant would repay the sum advanced at $250 per week with no…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Erni v Brooky

Details

AGLC: Erni v Brooky [2020] NZHC 3116
Case: [2020] NZHC 3116
Decision Date: 24 November 2020

CaseChat Overview and Summary

The plaintiffs, Peter and Betty Erni, brought this action against their granddaughter, Katrina Brooky, seeking to recover sums they claim to have advanced to the defendant as loans. The defendant does not dispute receiving the sums advanced by the plaintiffs but says that the sums were not loans and were either gifts, advances on her inheritance, or unenforceable loans. The amounts advanced by the plaintiffs can be divided into two categories: property loans and truck loans. None of the loans were governed by written contracts. The plaintiffs alleged that they advanced the house and truck loans pursuant to oral loan agreements with the defendant, pursuant to which the defendant is contractually bound to repay the sums advanced. The defendant's position was that the plaintiffs' claim must fail for three reasons: the plaintiffs have failed to prove the formation and existence of the contracts they allege were the basis on which they made loan advances to the defendant; the presumption of advancement applies with the effect that the advances are properly treated as being gifts; and the plaintiffs are estopped from recovering the sums advanced by reason of statements they made to the defendant to the effect that the money they provided was an advance on her inheritance and that she was not required to repay it. The Court held that the plaintiffs succeeded in their claim. The plaintiffs have established on the balance of probabilities that the house loan and the truck loan were advanced by them and on the terms pleaded, and that pursuant to the contractual agreement made between the plaintiffs and the defendant in respect of each loan, the defendant is contractually bound to repay the loans on demand. The defendant has failed to prove the ingredients required for the creation of contractual relations between the parties to exist. In respect of the house loan, an order for judgment for the plaintiffs against the defendant in the sum of $268,247. In respect of the truck loan, an order for judgment for the plaintiffs against the defendant in the sum of $305,762.37. The plaintiffs are entitled to interest on the judgment sum in respect of the house loan and truck loan as claimed. The question of costs is reserved.

Orders