Moke v Rehu

[2020] NZHC 3160

NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B, 11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE

https://www.justice.govt.nz/family/about/restriction-on-publishing-judgments/

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2020-409-378

[2020] NZHC 3160

BETWEEN

EDIE CARROL HUNAPO MOKE

Plaintiff

AND

MANAIA INIA REHU

Defendant

Hearing:

23 November 2020

Appearances:

B G Walker for the Plaintiff

D J Ballantyne for the Defendant

Judgment:

1 December 2020

JUDGMENT OF ASSOCIATE JUDGE LESTER

This judgment was delivered by me on 1 December 2020 at 4.00 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar 1 December 2020

MOKE v REHU [2020] NZHC 3160 [1 December 2020]

[1]                 The plaintiff, Edie Moke (Ms Moke), seeks summary judgment against Manaia Rehu (Mr Rehu) for a debt she says is owed to her by Mr Rehu along with interest and costs. The debt arises from loans made by Ms Moke to Mr Rehu in 2008, prior to them commencing a de facto relationship in June 2008.

[2]                 The fact that Ms Moke loaned the money to Mr Rehu  and  the  date of  the  de facto relationship has been the subject of two judgments; one of the Family Court released 21 January 2019,1 and a judgment of Dobson J on appeal from that judgment (the appeal judgment).2

[3]                 On the strength of the papers filed in opposition, the starting point appeared to be that Mr Rehu is indebted to Ms Moke in the sum of $350,000. The notice of opposition did not dispute that starting position, instead it asserts that Mr Rehu has in substance repaid the 2008 advance, as during the relationship he paid some $513,000 into Ms Moke’s account. However, in his written submission, counsel for Mr Rehu maintained his position that the sums paid to him by Ms Moke were not loans.

[4]                 Mr Rehu says, in the alternative, that as a result of the calculations set out in the appeal judgment, he is entitled to a credit against any indebtedness he might have to Ms Moke in the sum of $48,975.

[5]                 Further, Mr Rehu disputes Ms Moke’s entitlement to interest, relying on the judgment in the Family Court which declared the provision of funds by Ms Moke to Mr Rehu to be interest free loans and not gifts. There was no cross appeal on this point and that position was not altered on appeal.

Context

[6]                 As I have said, it has been determined that the parties’ de facto relationship began in June 2008. The parties met because Mr Rehu had sections of land at Moeraki that he was considering selling and Ms Moke was a potential buyer. They first met at the end of 2007 and their relationship developed to the point of a de facto relationship

1      Rehu v Moke [2019] NZFC 339.

2      Rehu v Moke [2020] NZHC 254.

beginning in June 2008. The parties married in August 2010. Ms Moke had her own residential property, as did Mr Rehu.

[7]                 One item of evidence that was relevant to the findings that the funds were advanced  by  Ms Moke  was   an   email   sent   by   Mr Rehu   to   Ms Moke   on   20 February 2008 as follows:3

Thanks for offering to help me pay, Shirley her money, really really appreciated it Edie ... I’ve got it all covered Edie. Once I sell Moeraki the money will come back girl ...

[8]                 Moeraki being the land that led to the parties meeting in the first place. However, this email was only one element in the findings in the Family Court and the Court held the payments were loans not gifts.

[9]                 Mr Rehu’s land at Moeraki is Māori land in terms of the Te Ture Whenua Maori Act 1993 (the Act), and thus was not within the jurisdiction of the Family Court.

[10]              The parties’ relationship came to an end in November 2014 and a document was signed by them that month. That document included the following passage:

I Manaia Rehu will deposit three hundred & fifty thousand dollars’ $350,000 into Edie Moke’s nominated account, before the end of November 2014.

[11]              Mr Rehu worked offshore in relation to an oil rig and had a substantial income. As recorded in Dobson J’s judgment, from about the end of July 2008:4

Mr Rehu transferred at least substantial portions of his salary into an account controlled by Ms Moke and thereafter she had prime responsibility for the couple’s finances until their separation.

[12]              During the parties’ relationship, Mr Rehu was made redundant from his offshore job and as a result received substantial severance and other payments.

[13]              As I have said, the challenge on appeal to the Family Court finding that the payments by Ms Moke were a loan, was dismissed. Dobson J, in the appeal judgment, made a declaration that Ms Moke’s claim for repayment of the $350,000 was a valid

3 At [35].

one “for which, on the state of the evidence in these proceedings, there appears to be no possible defence.”5

[14]Dobson J then said:

[51] If the Family Court finding of Mr Rehu’s liability to repay the

$350,000 characterised as loans was upheld, then Mr Ormsby’s fall-back submission was that the extent of that liability should be taken into account in determining the division of relationship property. He submitted that the circumstances would then arise for an exception to equal sharing under s 13 of the Act. This was advanced on the basis that during the course of their relationship, Mr Rehu had contributed some $1.2 million to the relationship, contrasted with Ms Moke’s income over the same period of $288,000. Such  a significant disparity of contribution in a relationship where the finances were controlled by Ms Moke was arguably sufficiently extraordinary to make equal sharing of relationship property repugnant to justice.

Status of payments

[15]              Before turning to the primary pleaded ground of opposition, it is necessary to deal with the further ground only raised in counsel’s written submission.

[16]              Mr Walker, counsel for Ms Moke, took issue with the non-pleaded ground being raised, but went on to say that it was not open to Mr Rehu to now argue the payments to him were not loans when such had been determined against him in     the Family Court, and confirmed in the High Court. I agree.

[17] Mr Ballantyne, counsel for Mr Rehu, submitted that it appeared from the fact that Ms Moke was arguing that the loan fell due at the end of November 2014, relying on the document referred to at [10] above, and because she also sought interest when it had been determined that the advance was interest free, such opened the door for Mr Rehu to revisit the earlier findings.

[18]              During the hearing I made it clear it was not open to either party to now seek to revisit the earlier determinations in the Family Court and in this Court as to the nature of the payments by Ms Moke to Mr Rehu, that is, they were advances interest free payable on demand. The status of the payments has been determined in proceedings between the parties and they are bound by those findings.

[19]Accordingly, I find that Mr Rehu is indebted to Ms Moke in the sum of

$350,000 as pleaded.

The repayment defence

[20]Included in the $1.2 million contributed to the relationship by Mr Rehu, is the

$513,000 he says was (at least arguably) for repayment of the advances. The notice of opposition, as its primary ground of opposition, states as follows:

The respondent has a complete defence to the summary judgment claim in that he made payments to the applicant totalling (not less than) $513,232.97 between 10 July 2008 and 12 December 2012, which have not been accounted for by the applicant.

[21]The notice of opposition asserts that the appeal decision does not substantively

account for the $513,232.97. I do not accept that submission.

[22]Neither in the Family Court nor in the High Court was it suggested that the

$513,000 was repayment of the loan. Mr Ballantyne referred me to a number of passages in the cross-examination where Mr Rehu says that the payments of his salary into Ms Moke’s account of $513,000 included repayment of her advance of $350,000. However, that evidence was squarely rejected in the Family Court when Judge Moran concluded, “I find that the $350,000 was a loan, repayable on demand. Mr Rehu should now repay it.”6 Accordingly, whatever claims of repayment of the $350,000 Mr Rehu made under cross-examination were not accepted by the Court.

[23] Similarly, the appeal was not run on the basis that the $513,000 was for loan repayments. Such is clear from Mr Rehu’s alternative argument, set out at [14] above, which was relied on in the event that the primary appeal ground that there was not a loan, was not accepted.

[24]              Counsel for Mr Rehu submitted before Dobson J that if the Court upheld the Family Court  finding that  Mr Rehu owed Ms Moke  $350,000, it  would  result  in  a sufficiently unequal or unfair division of relationship property so as to warrant relief under s 13 of the Property (Relationships) Act 1976 (PRA).7

6      Rehu v Moke, above n 1, at [24].

[25]In discussing this proposition, Dobson J said:8

Mr Rehu would presumptively be required to discharge the balance of his debt owed for the advances in the first half of 2008 by payment of approximately a further $300,000 after allowing for the credit to him for overpayment in the interim distribution.

[26]Further, Dobson J said:9

On this argument, the feature of the couple’s financial affairs relied on most heavily by Mr Ormsby was the disproportionate contribution of salary made by Mr Rehu relative to Ms Moke’s income. Mr Rehu contributed some $1.2 million compared with Ms Moke’s contribution of $288,000, in a relationship where Ms Moke took control of all their finances during that period.

[27]              His Honour then referred to the parties maintaining a high standard of living influenced by the size of Ms Rehu’s salary. Both parties enjoyed the advantages of that income. The $1.2 million referred to includes the $513,000 relied on as repayments by Mr Rehu. His Honour found, in the circumstances, that the substantial disproportion between the parties’ respective contributions of their disposable income, was not repugnant to justice and his Honour denied relief under s 13 of the PRA.

[28]              It is clear from this aspect of the appeal judgment that Mr Rehu did not contend that the loan had been repaid through the $513,000 paid into the joint account, rather, he relied on that payment as part of his argument under s 13 PRA that he had made an overall larger contribution to relationship income.

[29] As I have said, any suggestion that the loan had been repaid was rejected by the learned Family Court Judge. Her conclusion “I find that the $350,000 was a loan, repayable on demand. Mr Rehu should now repay it”,10 was not subject to the appeal. The appeal was not run on the basis that the loan had been repaid by the $513,000, but on the basis of a s 13 PRA argument. The passage set out at [25] above shows Dobson J starting from the position that the loan had not been repaid. It is not now open to Mr Rehu to assert that the loan had been repaid, given that background. Nor is the idea that the loan had been repaid, consistent with the November 2014 document. Mr Rehu says he did not have legal advice when signing that document, but that is not

8 At [79].

9 At [80].

the point. Mr Rehu drew up and signed a document that recorded his understanding that he owed Ms Moke $350,000. The significance of the November 2014 document is not whether it is enforceable as a contract or otherwise, but what it says about    Mr Rehu’s understanding as to the $350,000 being repayable.

[30]I find Mr Rehu has not repaid the advance.

Is Mr Rehu entitled to a credit?

[31] The credit relied on by Mr Rehu is referred to briefly at [25] above, in the passage quoted from Dobson J’s judgment.

[32]              One of the issues on appeal was how the increase in value of the parties’ respective residential properties was to be dealt with. Dobson J concluded:11

[59] On all the evidence, I consider that there is a compelling case for each party to be acknowledged as having an interest in the increase in value during the period of the relationship of the properties retained as their separate property, and that interest would be relationship property. However, settling orders in this appeal on that basis is precluded by the uncertainty of outcome in the Māori Land Court of Ms Moke’s reciprocal claim in relation to the Omaru Road property [owned by Mr Rehu].

[33]              There was not before the Court, sufficient evidence to allow final indicative figures to be given by the Court, but Dobson J endorsed as an appropriate resolution that each party recognise that the other retains their properties as separate property, subject to the reciprocal claims each would have to the increase in value of the other’s property during their relationship. On that basis, it appeared that Mr Rehu would pay to Ms Moke a sum in the vicinity of $40,000 - $45,000 as one-half of the likely difference in the increase in values of the respective properties. The Court urged the parties to accept that resolution as a means to prevent further litigation.

[34]              As Mr Rehu’s property was not subject to the PRA, the Court in the appeal judgment was unable to make a determination in respect of his property, but the Court ruled that Mr Rehu was not entitled to enforce any order in relation to the interests the Court recognised that he had in that property:12

11     Rehu v Moke, above n 2.

… unless and until the position in relation to the increase in value of the Omaru Road property is resolved consistently with the indication I have provided, or on other terms acceptable to Ms Moke.

[35]              Accordingly, on the material I have, it appears that Ms Moke will be entitled to a further payment in the region of $40,000 to $45,000 once her proceeding in the Māori Land Court is resolved. However, that proceeding has not yet been commenced, notwithstanding the appeal judgment was released in February 2020.

[36]              Dobson J then went on to reconcile the other relationship property issues, including chattels, bank accounts and items of separate property, to determine a total relationship property pool. Taking into account  an  interim  distribution  made  to Ms Moke, the Court concluded that:13

The current extent of overpayment [to Ms Moke] is accordingly $48,975, which is appropriately treated as a credit owed by Ms Moke to Mr Rehu, subject to resolution of the outstanding issues.

(emphasis added)

[37]              Accordingly, Mr Rehu is entitled to a credit of $48,975, being the amount he has overpaid Ms Moke.

[38]              I remind myself this is a summary judgment application and Mr Rehu need only show an arguable defence. That said, the strong indicators from Dobson J’s judgment is that the credit of $48,975 will substantially, if not totally, be eroded if Ms Moke is successful in the Māori Land Court. However, as I have said, Ms Moke’s proceedings in the Māori Land Court have not yet been issued. Mr Rehu has a present right to a credit by virtue of the appeal judgment. Had the Māori Land Court proceedings been underway and a hearing imminent, a different approach aimed at avoiding the need for further litigation may have been called for, but that is not the case.

[39]              I find Mr Rehu has an arguable set-off in respect of the loan indebtedness in the sum of $48,975.

[40]There will be judgment for the plaintiff in the sum of $301,025.

Interest

[41] The Family Court held that no interest was payable in respect of the sums advanced by Ms Moke to Mr Rehu in the first half of 2008.14 That finding was not disturbed on appeal.15 It is not open to Ms Moke to argue that interest should run from the end of November 2014, as noted at [17] and [18] above. Mr Rehu says there has been no demand for payment. However, when the Family Court judgment was released on 21 January 2019, Mr Rehu knew the advance had to be repaid. Judge Moran said as much, as set out at [29] above.

[42]              Accordingly, Ms Moke is entitled to interest on the judgment sum of $301,025 from the date of Judge Moran’s judgment (21 January 2019) to the date of payment, pursuant to s 10 of the Interest on Money Claims Act 2016.

[43]Interest on the debt accrues in terms of s 12 of the Act.

Costs

[44]              The plaintiff has substantially succeeded. The plaintiff is entitled to costs on  a 2B basis plus disbursements as fixed by the Registrar.

Associate Judge Lester

Solicitors:

Cunningham Taylor Law, Christchurch

Copy to counsel: B G Walker, Barrister, Christchurch

Kaiapoi Legal Limited, Kaiapoi
Copy to counsel: D J Ballantyne, Barrister, Christchurch

14     Rehu v Moke, above n 2, at [29].

15     Rehu v Moke, above n 1, at [83].