Moanaroa v Ruwhiu - [2019] NZHC 1406

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-2780

[2019] NZHC 1406

BETWEEN
TAKANGAROA MOANAROA

Plaintiff

AND

VERNON PAUL RUWHIU

First Defendant

DENISE CHARLOTTE RUWHIU
Second Defendant

BONNIE RUWHIU
Third Defendant

JOHN THERON HETTIG

Fourth Defendant

Hearing: 17 April 2019

Counsel:

P M Hoskins for Plaintiff

Judgment:

19 June 2019

JUDGMENT OF WHATA J

This judgment was delivered by me on 19 June 2019 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors: Corban Revell, Auckland

MOANAROA v RUWHIU [2019] NZHC 1406 [19 June 2019]

[1] Vernon Ruwhiu promised to manage Takangaroa Moanaroa’s retirement savings for her benefit. He did not do what he promised. Instead, he took her savings and used them for his and his family’s benefit. This is an undefended claim by Mrs Moanaroa for her losses. 1

The facts

[2] Mrs Moanaroa was 65 when she met Mr Ruwhiu at a seminar about mortgagee sales in 2003. At that time, a property part owned by her in Whenuapai was to be sold under a mortgagee sale. She also had savings of about $61,000. She wanted to invest her money with the goal of buying a home in Whangarei for her retirement in 2006. She told Mr Ruwhiu this and he spoke to Mrs Moanaroa about how to manage her wealth as part of a scheme to help families who were struggling to pay their mortgages. He suggested setting up a trust to handle her money. Mrs Moanaroa was impressed. She agreed to the establishment of a trust for this purpose, assuming that her interests would be protected.

[3] Mr Ruwhiu established a trust called the Kaiawhina Family Trust (the Trust) on 22 November 2003, but not on the terms agreed with Mrs Moanaroa. Mr Ruwhiu was the named settlor of the Trust. He and Denise Ruwhiu were the named trustees. Mrs Moanaroa, her daughter, her daughter’s children, Mr Ruwhiu and any company under the control of a discretionary beneficiary were identified as discretionary beneficiaries. As trustees, Vernon and Denise Ruwhiu enjoyed broad powers to use the Trust monies, including to settle trust assets in favour of one of the discretionary beneficiaries. Denise Ruwhiu controlled the bank accounts in the Trust’s name. Mrs Moanaroa’s savings were deposited in the bank accounts.

[4] The sale proceeds came to $238,113.84. Mr Ruwhiu took $223,373.54 of these proceeds and placed them in a bank account in the name of the Trust on 9 July 2004. How these monies were dealt with was not made clear to Mrs Moanaroa at the time, though she assumed they were lent out on short term loans which would mature in time for her to buy a home in Whangarei in 2006.

1 The fourth defendant, John Hettig, is bankrupt. The claim against was him abandoned.

[5] Vernon and Denise Ruwhiu in fact bought a house in Whangarei as trustees of the Trust in May 2006. The…

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.

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Details

Case: [2019] NZHC 1406
Decision Date: 19 June 2019

CaseChat Overview and Summary

In the High Court of New Zealand, Moanaroa sued Ruwhiu and others for breaches of fiduciary duty and knowing receipt. Moanaroa alleged that Ruwhiu promised to manage her retirement savings for her benefit but instead used them for his and his family’s benefit. Moanaroa sought damages for her losses. The court found that Ruwhiu breached his fiduciary duty to Moanaroa by misusing her savings and that Denise Ruwhiu was complicit in the breach. The court also found that Bonnie Ruwhiu knowingly took an opportunity to secure the Whangarei property for her personal benefit using the Trust’s equity. Moanaroa was awarded damages for the sums misused by Ruwhiu and Denise Ruwhiu, together with interest from the date of the breach, and damages for distress. Moanaroa was also awarded damages against Bonnie Ruwhiu for the sum of $145,200 plus interest from the date of her purchase of the Whangarei property, together with damages for distress. The defendants were ordered to pay costs and disbursements.

Orders