Warin v Warin
[2017] NZHC 786
•26 April 2017
IN THE HIGH COURT OF NEW ZEALAND WELLINGTON REGISTRY
CIV-2016-485-293 [2017] NZHC 786
BETWEEN MARIAN RUTH WARIN AND
TREVOR SELWYN WARIN (by his attorney Wayne Warin)
First plaintiffs
MARIAN RUTH WARIN and
NIGEL TREVOR WARIN as trustees of the Marian R Warin Trust
Second plaintiffs
MARIAN RUTH WARIN and
NIGEL TREVOR WARIN as trustees of the Trevor S Warin Trust
Third plaintiffs
AND
COLLEEN ANNE WARIN Defendant
Hearing: 9 November 2016 Appearances:
D Vincent and P McKenzie-Bridle for the plaintiffs
M E Hubble for the defendantJudgment:
26 April 2017
JUDGMENT OF ASSOCIATE JUDGE SMITH
TABLE OF CONTENTS
Procedural matters............................................................................................................................... 4
Background......................................................................................................................................... 16
Colleen’s notice of opposition ............................................................................................................ 26
Legal principles applying to plaintiffs’ applications for summary judgment ............................... 29
The issues ............................................................................................................................................ 33
The evidence ....................................................................................................................................... 35
Mrs Warin’s first affidavit ................................................................................................................ 36
WARIN v WARIN [2017] NZHC 786 [26 April 2017]
Mr Roy-Gapper’s affirmation .......................................................................................................... 52
Colleen’s first affidavit .................................................................................................................... 55
Mrs Warin’s second affidavit ........................................................................................................... 61
Colleen’s second affidavit ................................................................................................................ 69
Submissions on issue (1).................................................................................................................. 71
Discussion and conclusions on issue (1) ......................................................................................... 81
Discussion and conclusions on issue (2) ......................................................................................... 97
Submissions on issue (3)................................................................................................................ 101
Discussion and conclusions on issue (3) ....................................................................................... 114
Discussion and conclusions on issue (4) ....................................................................................... 127
Interest .............................................................................................................................................. 128
Orders ............................................................................................................................................... 130
Schedule
[1] The first plaintiffs (Mr and Mrs Warin) are the elderly parents of the defendant Ms Colleen Warin (Colleen). They say that they lent Colleen a total of
$367,903.90 (plus interest), repayable upon demand, and that she has failed to meet demands for repayment made on 3 May 2012 and on 7 August 2015. They have issued this proceeding to recover the advances, and, because they believe Colleen has no arguable defence, they have applied for summary judgment on their claims.
[2] The second and third plaintiffs are the trustees of the family Trusts established respectively by Mrs Marian Warin and Mr Trevor Warin. Mr and Mrs Warin say that they made the advances to their daughter in their personal capacities, but Colleen, who acknowledges that the advances were made, says that they were made by the Trusts. The trustees of the two Trusts have accordingly joined Mr and Mrs Warin as plaintiffs in the proceeding, in case the court should find that the lenders were the trustees of the Trusts, and not Mr and Mrs Warin in their personal capacities.
[3] The terms of the advances to Colleen were never recorded in writing, and Colleen argues that there was no agreement that they would be repayable upon demand. She says that the understanding with her parents was that she would only
be required to repay the advances when her personal and financial position enabled her to do so. She also challenges the validity of the demands made on 3 May 2012 and on 7 August 2015.
Procedural matters
[4] Mr and Mrs Warin originally commenced the claim as sole plaintiffs, without the assistance of solicitors. At that stage, Mrs Marian Warin was named as the first plaintiff and Mr Trevor Warin was named as second plaintiff. Mr and Mrs Warin filed an application for summary judgment with their statement of claim on
5 May 2016.
[5] Shortly before the first call of the summary judgment application, Mrs Warin sensibly decided to instruct solicitors. With the consent of Colleen, an amended statement of claim was filed by those solicitors on 3 August 2016, and by agreement between the parties, the summary judgment application proceeded on the basis of the amended statement of claim.
[6] Since Mrs Warin engaged the solicitors, the parties have also agreed that certain affidavits originally filed in support of the summary judgment application would not be read, and that agreed redactions would be made to the affidavit of one witness, Mr Roy-Gapper. The parties agreed that the affidavits to be read would be an affidavit of Mrs Marian Warin sworn on 27 July 2016, the redacted form of the affidavit sworn by Mr Roy-Gapper on 15 March 2016, and an affidavit sworn by Colleen on 22 June 2016.
[7] A further affidavit by Mrs Marian Warin was filed for the plaintiffs, purportedly in reply, on 22 September 2016. Ms Hubble objected to the admission of this affidavit, which had been filed out of time. After hearing brief argument from counsel at the hearing I gave the plaintiffs leave to file this affidavit out of time, on the basis that Colleen could file any affidavit she might wish to file strictly in reply to Mrs Warin’s September affidavit, by 30 November 2016. I then made directions for the filing of supplementary written submissions directed to any further affidavit Colleen might file, with leave reserved to either party to apply by memorandum for leave to make supplementary oral submissions if considered necessary. Counsel
agreed that, in the meantime, the hearing should continue on the basis of the pleadings and the other affidavits.
[8] Colleen subsequently filed a further affidavit pursuant to the leave reserved at the hearing, and I have received supplementary written submissions from counsel directed to that affidavit. Neither counsel sought to make further oral submissions.
[9] There are two other procedural matters I should mention. First, at the hearing on 9 November 2016 Mr Vincent applied to further amend the amended statement of claim filed on 3 August 2016. As the amended statement of claim stood at the beginning of the hearing, the claim for relief included a claim for judgment for the single sum of $367,903.90. At the hearing, Mr Vincent asked for leave to further amend the statement of claim to divide the claim for judgment into two separate claims: a claim for judgment for $177,470.63 in favour of Mrs Warin, and a separate claim for judgment for $190,433.27 in favour of Mr Warin. Ms Hubble did not object to those further amendments, and they were allowed accordingly.
[10] The second issue relates to the representation and party status of Mr Trevor Warin. The amended statement of claim did not name Mr Trevor Warin as a plaintiff. The omission of Mr Warin as a named party was explained by the plaintiffs’ solicitors in a memorandum dated 2 August 2016. They had come to the view that Mr Trevor Warin lacked mental capacity to institute court proceedings, and that he had improperly been named as a party in his own right. He was certainly considered to be an appropriate plaintiff, but if he were to participate in the proceeding he would need to do so by a litigation guardian appointed under r 4.30 of the High Court Rules. Orders were sought appointing a Tauranga solicitor, Mr Douglas John Lyon, litigation guardian for Mr Warin, and further amending the statement of claim by adding Mr Warin back in as second-named first plaintiff. Those applications were not opposed by Ms Hubble, and I made orders at the hearing appointing Mr Lyon litigation guardian for Mr Trevor Warin and amending the intituling of the proceeding to include Mr Warin as second-named first plaintiff.
[11] After the hearing, a question was raised over the propriety of the appointment of Mr Lyon as litigation guardian. Mr Vincent drew to my attention the existence of
an enduring power of attorney which had been granted by Mr Trevor Warin to his son Mr Wayne Warin, on 7 January 2007. Counsel had been unaware of the existence of this power of attorney at the date of the hearing, and only became aware of it on 23 November 2016 in the course of certain Family Court proceedings.
[12] On 12 December 2016 I issued a minute revoking the appointment of Mr Lyon as litigation guardian, and staying the claims of Mr Trevor Warin pending further order of the court. I did so on the basis that jurisdiction to appoint a litigation guardian is subject to there being no person already holding power to take the necessary actions on behalf of the incapacitated person.1 I directed that the application seeking the appointment of Mr Lyon as litigation guardian be served on Mr Wayne Warin, and be listed for hearing on 7 February 2017.
[13] Mr Wayne Warin did not appear at the hearing on 7 February 2017. The application to appoint Mr Lyon as litigation guardian was further adjourned to
20 March 2017. The application to appoint Mr Lyon was litigation guardian was further adjourned to 20 March 2017.
[14] When the case was called on 20 March 2017, the parties had successfully resolved the issue of Mr Trevor Warin’s representation. Mr Wayne Warin had signed a formal consent to Mr Trevor Warin’s continued participation as a plaintiff in this proceeding. I accordingly made orders lifting the stay of Mr Trevor Warin’s claims in the summary judgment proceeding, and dismissing the application to appoint Mr Lyon as litigation guardian for Mr Trevor Warin.
[15] Mr Warin’s status as a plaintiff having been resolved, I now give judgment on
the summary judgment application made by Mr and Mrs Warin.
Background
[16] The transactions which are at issue go back as far as November 1996, when
Mr and Mrs Warin transferred a half share of the property they owned jointly at
1 Mr Wayne Warin was appointed attorney for the purpose of Part 1X of the Protection of Personal and Property Rights Act 1988 on 7 January 2007, and it appeared that he qualified as a “litigation guardian” within the meaning of the High Court Rules, r 4.29: B v Waitemata District Health Board [2013] NZHC 852.
86 Te Puna Road, Te Puke (the Te Puke property) to Colleen. The following March, they transferred their remaining share of the Te Puke property to Colleen, in return for an acknowledged debt back to them of $100,000 and a promise given to them by Colleen (apparently orally) to build them a “home for life” on the Te Puke property. The debt of $100,000 was secured by way of a mortgage over the Te Puke property in favour of Mr and Mrs Warin.
[17] Colleen arranged for the “home for life” to be built on the Te Puke property, and Mr and Mrs Warin say that its value was approximately $200,000. With the debt back from Colleen of $100,000, they had effectively sold the Te Puke property to Colleen for a consideration of $100,000 plus the value of their rent-free occupation of the Te Puke property.
[18] In or about November 2011 Colleen completed a sub-division of the Te Puke property. Two new certificates of title were issued, for properties at 86A Te Puna Road and 86B Te Puna Road. For convenience, I will refer to the new properties as “86A” and “86B”. The mortgage to Mr and Mrs Warin was brought down onto the titles for 86A and 86B.
[19] Mr and Mrs Warin had been living in the part of the Te Puke property which, after the subdivision, became 86B. On 29 November 2011 Colleen transferred 86B to a third party, and Mr and Mrs Warin moved to live in the house on 86A.
[20] On 13 March 2012, Colleen sold 86A to a third party. For reasons which have not been made clear by the evidence, Mr and Mrs Warin agreed to provide a release of their mortgage over the titles to both 86A and 86B. When 86A was sold, they moved to a property owned by them in Te Puke which had previously been rented, and had provided them with a source of income in their retirement years. A consequence of the move was that they lost the rental income they had previously received.
[21] When Colleen sold 86A, the consideration she received was not solely cash. In addition to some cash, she agreed to take three units situated at Tui Street, Taupo (the Taupo properties). Mr and Mrs Warin say that the transaction resulted in a GST
liability for Colleen of $141,749.70, which Colleen could not pay. They say, and Colleen does not dispute, that Colleen asked them to lend the money to her. Mr and Mrs Warin contend that Colleen told them she would repay the $141,749.70 when she received a GST refund, which she expected to receive within a few months of the transaction being completed.
[22] The loan was made, but Colleen did not repay the $141,749.70. Nor has she repaid the $100,000.00 which was the subject of the mortgage in favour of Mr and Mrs Warin registered over the Te Puke property and (later) over 86A and 86B. These two sums are now claimed by Mr and Mrs Warin in their application for summary judgment.
[23] In addition to those sums, Mr and Mrs Warin say that between them they lent
Colleen a total of $126,154.20, by 23 separate advances, over the period 2010 to
2014. Details of these advances, as pleaded in the amended statement of claim, are set out in the schedule to this judgment.
[24] Mr and Mrs Warin’s case is that all of the advances were repayable on demand. They say that they made demand for the money they had by then advanced, on 3 May 2012. No payment was made in response to that demand. Eventually they consulted solicitors, and on 7 August 2015 their then solicitors, Harkness Henry, send a further letter of demand to Colleen. The further demand referred to Harkness Henry acting for Mr and Mrs Warin in their personal capacities and in their capacities as trustees of the two Trusts. It referred to advances made by Mr Trevor Warin totalling $190,433.27, and advances made by Mrs Marian Warin totalling
$177,470.63. The letter demanded repayment of the total sum of $367,903.90 by
21 August 2015.
[25] Colleen has not paid any part of the amount demanded.
Colleen’s notice of opposition
[26] As noted above, Colleen does not deny that she received the monies now claimed by her parents. Nor does she deny that the money was lent to her (as opposed to being gifted to her). What she does say is:
(a) the loans were not made by Mr and Mrs Warin, but by their respective family Trusts (ie by the second and third plaintiffs); and
(b) the loans were not repayable on demand; and
(c) even if the loans were repayable on demand, no valid demands have been made for repayment.
[27] As for the terms of repayment, Colleen says that the advances were made in the context of her and her former husband (Mr Roy-Gapper) reorganising their finances and living arrangements, and that repayment was to be contingent on “the borrowers’ situation”. Since the advances were made, that “situation” is said to have been that Colleen has been under significant financial and other stress, which has prevented her from making any payment. Mr Roy-Gapper’s “situation”, to which I refer below, is also said to have been such that the advances have not fallen due for repayment.
[28] Colleen also challenges the bona fides and correctness of the demand made in August 2015 by Harkness Henry. At the hearing, it emerged that the argument on this point is that Harkness Henry only had authority from Mr and Mrs Warin. It did not have or claim to have any authority from the second trustee (of both Trusts), who at that time was Mr Dey, a chartered accountant.
Legal principles applying to plaintiffs’ applications for summary judgment
[29] The Court may enter summary judgment against a defendant if the plaintiff satisfies the Court that the defendant has no defence to a cause of action in the plaintiff’s statement of claim, or to a particular part of any such cause of action.2 An application for summary judgment is made by interlocutory application, with supporting affidavits. There is not normally any cross-examination of deponents at the hearing of a summary judgment application – the issue is whether the plaintiff has produced sufficient evidence in the affidavits to show that the defendant has no
reasonably arguable defence which should be allowed to go forward to trial.
2 High Court Rules, r 12.2.
[30] In Pram Enterprises Limited (in liq) v Mansfield I summarised the relevant principles in the following terms: 3
[31] The principles to be applied in considering an application for summary judgment have been clearly established through decisions of the Court of Appeal such as Pemberton v Chappell, Grant v NZMC Ltd and Westpac Banking Corporation v M M Kembla New Zealand Ltd. The following broad principles are to be applied:
(a) The plaintiff must satisfy the Court that the defendant has no arguable defence to the claim brought against it. The issue is whether there is a real question to be tried.
(b) It is generally not possible to determine disputed issues of fact based on affidavit evidence alone, particularly when issues of credibility arise. Issues of law, even though they may be complex, can, however, be determined in an application for summary judgment.
(c) Although the Court should adopt a robust approach, summary judgment may be inappropriate where the ultimate determination turns on a judgment that can only properly be reached after a full hearing of all the evidence.
[32] In Pemberton v Chappell, the Court of Appeal held:
Where the defence raises questions of fact upon which the outcome of the case may turn it will not often be right to enter summary judgment. There may however be cases in which the Court can be confident – that is to say satisfied – that the defendant’s statements as to matters of fact are baseless. The need to scrutinise affidavits, to see that they pass the threshold of credibility, is referred to in Eng Mee Yong v Letchumanan.
[33] In Eng Mee Yong, the Privy Council said:
Although in the normal way it is not appropriate for a Judge to resolve conflicts of evidence on affidavit, this does not mean that he is bound to accept uncritically as raising a dispute of fact which calls for further investigation, every statement on an affidavit however equivocal, lacking in precision, inconsistent with undisputed contemporary documents or other statements made by the same deponent, or inherently improbable in itself it may be.
[31] The Court of Appeal’s comments in Australian Guarantee Corporation (NZ) Ltd v McBeth are relevant to this case:4
Although the onus is upon the plaintiff there is upon the defendant a need to provide some evidential foundation for the defences which are raised. If not,
3 Pram Enterprises Limited (in liq) v Mansfield [2015] NZHC 230 (footnotes omitted).
4 Australian Guarantee Corporation (NZ) Ltd v McBeth [1992] 3 NZLR 54 (CA) at 548.
the plaintiff’s verification stands unchallenged and ought to be accepted
unless it is patently wrong.
[32] In Haines v Carter, the Court of Appeal reiterated the general principle associated with summary judgment that:5
A bald assertion that there is a defence but without any elaboration or detail is unlikely to be seen as raising an arguable defence for the purposes of resisting summary judgment.
The issues
[33] The following issues have to be decided:
(1)Is it reasonably arguable for Colleen that one or more of the various advances were made by the trustees of the two Trusts, and not by Mr and Mrs Warin personally?
(2)If the advances were made personally by Mr and Mrs Warin (and not by the Trusts), were the advances made jointly by Mr and Mrs Warin, or were there separate advances made by them which can only be recovered by the maker of the particular advance?
(3)Is it reasonably arguable for Colleen that no repayment could be demanded by Mr and Mrs Warin (or by the trustees of the two Trusts) while the personal and financial situations of Colleen and/or Mr Roy-Gapper were such that they were unable to repay?
(4)If the advances were made by the trustees of the Trusts, is it reasonably arguable for Colleen that the demand for repayment made by Harkness Henry on 7 August 2015 was made without the authority of all of the trustees, and for that reason was invalid?
[34] I will first outline the key features of the evidence. I will then address the issues in the order listed above.
5 Haines v Carter [2001] 2 NZLR 167 (CA) at [97(2)].
The evidence
[35] The plaintiffs rely on two affidavits sworn by Mrs Marian Warin (on
27 July 2016 and on 15 September 2016), and the redacted version of
Mr Roy-Gapper’s affidavit affirmed on 15 March 2016.
Mrs Warin’s first affidavit
[36] Mrs Warin explained that Colleen is a qualified chartered accountant, and that she had acted for Mr and Mrs Warin in that capacity, preparing their tax statements and giving them financial advice, since 1996.
[37] Mrs Warin produced with her first affidavit copies of financial statements which Colleen had prepared for the tax year ended 31 March 2012, for the Marian R Warin Trust and the Trevor S Warin Trust. The statement of financial position for the Marian R Warin Trust showed as an asset advances totalling $164,196 from the Trust to Colleen and Mr Roy-Gapper. The same amount was shown in the “Beneficiary Current Accounts” section of the financial statements for the trust, as an “advance during 2011/12” (to Colleen and Mr Roy-Gapper). The entries in the accounts for the Trevor S Warin Trust were similar: the statement of financial position showed as an asset advances totalling $182,683 to Colleen and Mr Roy-Gapper. That amount was also recorded as advances made during 2011/12 year in the “Beneficiary Current Accounts” page of the financial statements.
[38] Mrs Warin says that Colleen failed to include in the March 2012 financial statements for the Trusts a debt from 2010 of $13,275, which had been advanced by Mrs Warin to Colleen in the course of that year.
[39] Mrs Warin confirms that she and Mr Warin paid Colleen’s GST debt on the swap transaction involving the Taupo properties (total $141,243.56). Mr Trevor Warin paid $71,243.56 of that sum and she paid $70,506.14.
[40] Mr and Mrs Warin took legal advice on the situation in April 2012. With the help of their then-solicitor they drafted a letter to Colleen and Mr Roy-Gapper. The letter, which is dated 3 May 2012, was addressed to both Colleen and
Mr Roy-Gapper, and it referred to “our loans to you.” Mr and Mrs Warin “require[d]” Colleen and Mr Roy-Gapper to “start paying interest on the loans”. The letter then said “[w]e want this to be manageable, so suggest $500 per month”. The
3 May 2012 letter also requested Colleen and Mr Roy-Gapper to provide certain other information, including “your current financial situation (including the Trusts).” Mr and Mrs Warin referred to the fact that they had given up their mortgage over
86A and 86B, but they still needed to be repaid. The letter said: “… we need to have a clear timeframe around this and better understand your current situation. We also need to be fair to [Colleen’s brothers] Wayne and Nigel.” Mr and Mrs Warin said they needed a plan for repayment. They asked Colleen to come back to them within two weeks.
[41] Mrs Warin says she received no reply to the 3 May 2012 letter.
[42] Mrs Warin later denied that the money was lent to Mr Roy-Gapper as well as Colleen. Mr and Mrs Warin wrote to Colleen on 22 February 2013, saying that they were wondering why Colleen had “put [Mr Roy-Gapper’s] name on the Trust Document ‘Loan’’’. Mr and Mrs Warin asserted in this letter that they had lent the money to Colleen for the subdivision of the Te Puke property and sale, and for farm water costs and GST on Colleen’s properties.
[43] Mrs Warin says that she and Mr Warin instructed new lawyers, Harkness
Henry, in 2015. Harkness Henry wrote to McCaw Lewis, solicitors, on
27 May 2015. The letter was headed “Loan from Trevor and Marian Warin to Colleen Warin”, and it set out a number of questions, including whether any of the loans were documented, and to which persons or entities the loans had been made.
[44] Mrs Warin says that McCaw Lewis were Colleen’s solicitors, but the nature of the Harkness Henry letter of 27 May 2015, and the McCaw Lewis reply dated
11 June 2015, appears to suggest that McCaw Lewis may in fact have been acting at an earlier time for Mr and Mrs Warin, and not for Colleen. In their 11 June 2015 letter McCaw Lewis said that it was their firm who received an email from Mrs Warin on 20 April 2012 instructing them to prepare the letter to Colleen and Mr Roy-Gapper which was sent on 3 May 2012.
[45] McCaw Lewis confirmed that they did not hold any documentation recording the loans, but to the best of their knowledge the funds were lent to Colleen.
[46] Mrs Warin produced a copy of a letter sent by Colleen to the Inland Revenue Department (IRD) on 24 August 2015. The context of the letter is not of concern in this proceeding, but the letter itself is relevant to the extent that it referred in some detail to Colleen’s financial position, including her liabilities.
[47] Colleen referred in the letter to “the loan between my parents and [Mr] Roy-Gapper and me”. She went on to advise the IRD that Mr and Mrs Warin had “now asked for the loan to be repaid.” She said she had received a letter in early August 2015 asking for the loan to be repaid, but she had been so busy that she had not had time to consider the matter fully. She referred at this point in the letter to an “Attachment (D)”, but that attachment was not produced in evidence.
[48] In a section of the letter summarising various loan balances and fortnightly interest payments, Colleen included the following:
Particulars Outstanding/ due for payment
Fortnightly interest to Aug 15
Fortnightly interest from
Sept 15
Interest rate
Age
Support
Family loan to C Warin and K Roy- Gapper
$367,904
—
—
On demand
June-
12
(D)
[49] Colleen wrote a detailed letter to her parents on 30 June 2016. By then this court proceeding had been commenced. She said she had always acknowledged that the funds had been lent, not given, and that she would “dearly like to be in a position to make some repayment.” She referred to various financial and personal difficulties which she said had precluded her from making payment. One of the main problems appears to have been difficulties encountered in selling the Taupo properties. Colleen said she had no funds to offer a part repayment.
[50] In her 30 June 2016 letter Colleen stated that she had always understood the arrangement was that the money was owed to the two Trusts, on the understanding that she (Colleen) should receive nothing further from either trust, or from her parents’ deceased estates, until at least half of each of the debts was repaid. Colleen said she clearly remembered that both of her parents agreed to the advances when they were made, and that they were not to be time-limited. Colleen also said that Mrs Warin had told her to “put [the advances] against the Trusts — in the same way as had been done with [Colleen’s brother] Wayne and, before him, [Colleen’s brother] Nigel”.
[51] Mrs Warin gives a number of reasons why the loans were made with no or insufficient security. First, she says that she and Mr Warin trusted Colleen, who is their daughter and a qualified chartered accountant. Although she and Mr Warin had built up some wealth through their farming activities, they were naive in financial matters. And in the 2010-2012 period Colleen and Mr and Mrs Warin used the same firm of solicitors for all of the property transactions that occurred. As she put it, “we often paid money into our solicitors’ trust account which was then used for Colleen’s benefit.” She says that her solicitors are looking into any conflict issues which may have arisen from Mr and Mrs Warin not receiving independent legal advice on the various advances.
Mr Roy-Gapper’s affirmation
[52] Mr Roy-Gapper says that in February 2012 Colleen told her parents that she needed them to lend her a further $142,000 for GST relating to the trade of 86A for the Taupo properties. He says that Colleen told him that this was “to tide her over until the IRD returned it to her.”
[53] Mr Roy-Gapper says that this was an incorrect statement on Colleen’s behalf
— there would be no money coming back from the IRD. He deposes that Colleen in fact knew that there would be no refund by the IRD.
[54] Mr Roy-Gapper confirms Mrs Warin’s evidence that, although Colleen put his name down as a borrower on the trust tax documents, the loans were made solely to Colleen or her trust, and not to him.
Colleen’s first affidavit
[55] Colleen’s first affidavit was sworn on 22 June 2016. In it, she asserts that the various advances were made by her parents’ respective Trusts, and not by her parents personally. She also states that it was not contemplated that the loans would be required to be repaid in one payment, nor that repayment would be demanded if to make the repayment would involve her in financial hardship.
[56] Colleen refers to what she describes as massive stress in her life since her marriage to Mr Roy-Gapper ended in 2012. She says that her parents were made aware of her position, and she believes her father accepted that it was always her intention to repay as and when she was in a position to do so.
[57] Colleen says that when she received the August 2015 letter of demand from Harkness Henry she was busy with other matters and did not appreciate that the demand might be a precursor to court action against her for recovery of the loans. She disputes the accuracy of the demand.
[58] First, she questions whether Harkness Henry had sufficient information about the advances, and whether proper instruction could be taken from her father and her mother to demand repayment. She notes that Mr Dey, another trustee of each of the Trusts, does not appear to have been involved in any way in the decision to demand repayment.
[59] Colleen says that Mr Roy-Gapper was correctly shown as a borrower from the Trusts. Both she and Mr Roy-Gapper (while he was married to her) were discretionary beneficiaries of each of her parents’ Trusts. She says also that part of the lending was to accommodate Mr Roy-Gapper’s then wish to move to the Hawkes Bay area.
[60] Colleen summarises the position on when the loans were to be repaid, by stating that, when the advances were made, it was understood that any balances not repaid by the time of winding up the Trusts (which could be any time up to 2062) would be offset against any other entitlement Colleen may have had as a final beneficiary of each Trust.
Mrs Warin’s second affidavit
[61] Mrs Warin’s second affidavit was sworn on 15 September 2016.
[62] In reply to Colleen’s contention that repayment was not to be demanded if to make repayment would involve Colleen in financial hardship, Mrs Warin states that the advances were always repayable, and that she regularly asked Colleen to repay them. She produced copies of five letters she said she had sent to Colleen between
19 May 2012 and 17 November 2015, in which she demanded repayment.
[63] The letter of 19 May 2012 asked: “Where is our money from our house for life?”, and “How can an accountant lose money like this”. The letter accused Colleen of “keeping everything secret” from her parents, and advised that Colleen needed to pay Mr and Mrs Warin back on the sale of 86A. The second letter, dated
28 July 2012, asked Colleen to “give us our money back you borrowed… Now we have to wait for your divorce settlement. Also when will you pay us back. Very urgent at our age.”
[64] The next letter, dated “January 2013”, commenced: “Since you are fighting a divorce, you need to pay [Mr Warin] and myself a cheque every month… or can you hand us over the [Taupo properties] as payment of your debts. You also owe us about $142,000 GST we paid for you…”.
[65] The fourth letter, said to have been sent on 19 September 2013, said that Mr and Mrs Warin could not wait any longer. Mrs Warin said: “Just borrow from the bank and get us paid out.”
[66] The last of the five letters was dated 17 November 2015. In it, Mrs Warin said she had heard Colleen had bought a house in Wellington, and asked why she had lied and said the Taupo properties would not sell. Mrs Warin said “Give us the apartments equivalent to what you owe us thanks!”
[67] Mrs Warin deposes in her second affidavit that she had not found these letters at the time she swore her first affidavit, and had accordingly not been able to give
them to her solicitors for consideration. She says that she had found the letters when her son Nigel recently helped her to go through her documents.
[68] Mrs Warin says that Colleen did not acknowledge these letters, but she would have received them as they were sent to the address at which Colleen was living with her son (Mrs Warin’s grandson) at the time, and birthday cards and gifts Mrs Warin sent to her grandson were sent to the same address.
Colleen’s second affidavit
[69] The last affidavit was that of Colleen, sworn on 18 November 2016. Colleen says that Mrs Warin is confusing her inability to repay for an intention not to repay. As for the letters produced by Mrs Warin with her second affidavit, Colleen denies seeing any of them before she received Mrs Warin’s second affidavit. She acknowledges that a letter was received by Mr Roy-Gapper and herself around May
2012, as she recalls discussing the letter with Mr Roy-Gapper (Mr Roy-Gapper was then dealing with all of their correspondence, and he would have opened the letter). While Colleen says she did not see this letter itself, she recalls that both she and Mr Roy-Gapper thought it was too early for them to be expected to repay the loans. They had only just finalised the sale of 86A and had received the Taupo properties in return. Selling the Taupo properties was proving difficult. Colleen says that she left it to Mr Roy-Gapper to talk to Mrs Warin about the letter, and to explain their situation to her.
[70] Colleen is adamant she did not receive the other letters. She acknowledges that the handwriting appears to be that of Mrs Warin, but notes that none of the letters has any address for her on it. Colleen says that she was talking to both of her parents and explaining the situation as it developed. Mr and Mrs Warin were told about the efforts to sell the Taupo properties (which were marketed for a full two years, without success).
Issue (1): Is it reasonably arguable for Colleen that one or more of the various advances were made by the trustees of the two Trusts, and not by Mr and Mrs Warin personally?
Submissions on issue (1)
[71] Mr Vincent submits that the debts are owed personally to Mr and Mrs Warin, and not to the Trusts. He refers to the following evidence which he says makes it clear the debts are owed to Mr and Mrs Warin in their personal capacities.
[72] First, the debt of $100,000 which was secured by the mortgage is not disputed. The Te Puke property certificate of title refers only to a “mortgage to Trevor Selwyn Warin and Marian Ruth Warin” lodged on 26 March 1997. However, the relevant Trust Deeds named Mr Kenneth Dey as a trustee of each of the Trusts. There is no authority for one trustee to act independently under the Trust Deeds, and any decision to lend would have required unanimity. Accordingly, Mr Vincent submits that the court should infer that neither Trust was involved in any of the loans to Colleen.
[73] Secondly, there are no resolutions indicating involvement of the Trusts.
[74] Thirdly, Mr Vincent points to various documents which in his submission show the debts were owed to Mr and Mrs Warin in their individual capacities. The first piece of evidence relied on in this respect is a draft letter of demand dated
20 April 2012 emailed by Mrs Marian Warin to her solicitor Mr Gibbons. In that email it was said that the loans are currently:
· Trevor: $182, 683.27
· Marian: $164,195.63
[75] The letter demanded payment into two separate bank accounts, one being Mr Warin’s and the other being Mrs Warin’s. The division of the loans as between “Trevor” and “Marian” was subsequently incorporated into the letter which was sent to Mr Roy-Gapper and Colleen on 3 May 2012. Mr Vincent submits that this clearly
indicates that the Trusts had no involvement in the loan arrangements and that the various advances were made by Mr and Mrs Warin personally.
[76] Another document relied on is the letter written by Colleen to the IRD in August 2015, where Colleen referred to “the loan between my parents and [Mr] Roy- Gapper and me”. Mr Vincent submits that it is significant that Colleen made no reference in this letter to Mr Dey or to either of the Trusts. The table at para [48] of this judgment further suggests the loans were made on a personal basis.
[77] Fourthly, Mr Vincent refers to Mrs Warin’s first affidavit, and the language
used by Mrs Warin in it. In particular, Mrs Warin makes the following statements:
(a) “The money we paid to Colleen”…
(b) “My solicitor has asked me to explain why Trevor and I both lent such significant amounts of money to Colleen without any real security or even documentation…”
(c) “During the period of loans (2010-2012), Colleen and Trevor and I used the
same firm of solicitors…”
(emphasis added)
[78] Fifthly, Mr Vincent refers to the Income and Expenditure Statements for the
Trevor S Warin Trust and the Marian R Warin Trust for the year ended 31 March
2012. The statements refer to “Tauranga Rental” and “Te Puke Rental”. Mr Vincent submits that the references show that the Trusts were set up for the specific purpose of property investment, and not for the purpose of lending to family members.
[79] For Colleen, Ms Hubble submits that the loans were made to Colleen and her then-husband Mr Roy-Gapper jointly, on the basis that any balances not repaid by the time the Trusts were eventually wound up would be offset against any other entitlement Colleen had as a final beneficiary of each Trust.
[80] Ms Hubble further submits that there is insufficient evidence to show that the various advances were made to Colleen by Mr and Mrs Warin personally. There is no documentation of the loans themselves from the period in which they were made. She submits that the existence of the Trusts, and Colleen’s position as a beneficiary, make it reasonably arguable that the money could have been advanced by the Trusts. She submits that the evidence on this issue is not clear enough for the issue to be resolved on a summary judgment application.
Discussion and conclusions on issue (1)
[81] I accept Mr Vincent’s submission that the loans were originally advanced by
Mr and Mrs Warin personally.
[82] Relevant to the original advance of $100,000, the certificates of title named the mortgagees as Mr and Mrs Warin. On the evidence, Mr Dey was a trustee of each of the Trusts, and if the lending had been from one or both Trusts one would have expected to see him named as a mortgagee. He was not.
[83] The second point is that the $100,000 advance was originally made back in
1997. It had not been repaid by 31 March 2011, so if the lending had been from one or both of the Trusts one would have expected to see the $100,000 loan to Colleen listed as an asset in the balance sheet of one or both of the Trusts as at that date. It was not. While the balance sheet for the Trusts as at 31 March 2012 does show as an asset of the Marian R Warin Trust an advance of $184,196 to “C A Warin and Kelvin Roy-Gapper”, the corresponding figure for the year ended 31 March 2011 is nil ie as at the earlier date, nothing was owed by Colleen and Mr Roy-Gapper to the Marian R Warin Trust. There is a similar story with the Trevor S Warin Trust. Nothing is shown as owing to the trust by Colleen and/ or Mr Roy-Gapper as at 31 March 2011 (but advances totalling $182,683 are shown as owing by Colleen and Mr Roy- Gapper as at 31 March 2012).
[84] The third point is that Mr and Mrs Warin’s request for a repayment plan made in their letter to Colleen dated 3 May 2012 was made by them personally – the letter was signed by Mr and Mrs Warin personally and there was no mention of the Trusts. I note that this letter was sent with the assistance of Mr and Mrs Warin’s legal
advisers, and it seems more likely than not that the legal advisers would have been aware of whether the lending was from Mr and Mrs Warin personally, or from one or both of the Trusts.
[85] Colleen did not question any part of the letter of 3 May 2012, in particular she did not challenge the assertion that the debts were owed to Mr and Mrs Warin personally. Colleen says that she was aware of the May 2012 letter, and discussed it with Mr Roy-Gapper, but that she never saw the letter itself. I find that explanation difficult to accept – the letter was from Colleen’s parents, and it was personally directed to her affairs (and her relationship with her parents). In any event, the fact that she did not at the time challenge the assertion in the letter that the debts were owed to Mr and Mrs Warin personally is another factor which points to the conclusion that the $100,000 was not lent by the Trusts.
[86] The fourth point is that Colleen’s letter to the IRD dated 24 August 2015 referred only to “the loan between my parents and Kelvin Roy-Gapper and me. As a result my parents have now asked for the loan to be repaid…” and “Family loan to C Warin and K Roy-Gapper”. It did not suggest that the lending had been from the Trusts. It is true that attachment “D” to this letter was not produced but it was in Colleen’s power to have done that if she considered it would have assisted her case that the lending was from the Trusts. I infer that attachment “D” would not have advanced that part of her case.
[87] The fifth point is that the letter of demand from Harkness Henry dated
7 August 2015 (referred to by Colleen in her letter to the IRD dated 24 August 2015) referred to loans “from Mr Trevor Warin and Mrs Marian Warin to you”. Again, the letter was never challenged by Colleen, at least until 30 June 2016 (after this proceeding had been issued) when she raised the “trust argument” for the first time.
[88] The only support there is for Colleen’s “trust argument” appears to be in the financial statements for the two Trusts as at 31 March 2012, where the bulk of the advances to Colleen (and according to the statements, to Mr Roy-Gapper) were shown as assets of the two Trusts. But there are problems with the financial statements. First, Mrs Warin produced with her first affidavit a schedule showing
that a number of the advances (in addition to the $100,000 mortgage advance to which I have referred) were made before 31 March 2011. In particular, the schedules show advances by Mrs Warin of $13,275 made in 2010, $29,150 made on
7 January 2011, $1,636 made on 30 February 2011, $3680, $275 and $1096.59 made in March 2011, and $1,000 made on 28 March 2011. If all of these advances had been made by the Marian R Warin Trust I would have expected to see them listed in the balance sheet as an asset of that Trust as at 31 March 2011. They were not.
[89] The only apparent explanation is that, in the course of the year to
31 March 2012, Mr and Mrs Warin transferred the debts owed to them personally to their respective Trusts. That would at least be consistent with the substantial increase (from March 2011 to March 2012) in the debts shown as owing by the two Trusts to Mr and Mrs Warin personally. Taking Mr Warin as an example, the accounts show that the Trevor S Warin Trust owed Mr Warin $33,932 as at
31 March 2011. By 31 March 2012 that figure had risen to $216,615. The increase appears at least consistent with Mr Warin having lent the Trevor S Warin Trust a further $182,000 approximately for the purpose of acquiring (from him) the debts owed to him by Colleen and Mr Roy-Gapper.
[90] But that is not what Colleen says occurred. In her affidavit dated
22 June 2016 she says:
When the advances were first made by the respective trusts (not by my partents in person, contrary to the assertions in the proceeding and the “demand”) …
[91] At least in respect of the advances made before 31 March 2011 that statement does not accord with the statements of financial position for the Trusts as at
31 March 2011, where the advances were not included as assets of the Trusts.
[92] There is no evidence of any sale of the debts to the Trusts beyond the accounts themselves, and as I have pointed out those accounts appear to be inconsistent with Colleen’s contention in this proceeding that all of the advances were (originally) made by the Trusts. Against that, all of the five factors I have detailed above point to the loans having been made by Mr and Mrs Warin personally.
[93] In those circumstances I think it was incumbent on Colleen to come forward with any evidence that Mr and Mrs Warin agreed to transfer the debts to the Trusts and that the trustees of the Trusts agreed to purchase the debts. That evidence, if it existed, must have been available to Colleen, as it was she, a chartered accountant, who prepared the accounts. She presumably could have produced any resolutions or transfer documents if they existed but did not do so.
[94] I also bear in mind that many of the advances were only made in early 2012, and it appears that some of the decisions made at the time (including the decision to lend the sum of $142,000 for the GST liability, and the decision apparently made that the $100,000 would not be repaid to Mr and Mrs Warin on the sale of 86A) were made under some pressure – it seems unlikely that anyone would have turned their minds at that stage to transferring the loans from Mr and Mrs Warin into their respective Trusts. And the likelihood is that the 2012 accounts were probably prepared some weeks or months after the end of the March 2012 financial year, at a time when Mr and Mrs Warin had lost their security for the $100,000 loan and were obviously concerned about recovering the balance of the moneys owing to them. Mr and Mrs Warin had already taken legal advice by 20 April 2012. It seems improbable that they would at that stage have been prepared to accept any advice from Colleen about transferring the debts into their respective Trusts.
[95] For completeness, I note that there does not appear to be any dispute that the funds were in fact advanced from Mr and Mrs Warins’ bank accounts. Taking the GST loans as an example, Mrs Warin’s uncontradicted evidence is that the payments were made by Mr and Mrs Warin to the solicitors then acting for both Colleen and themselves, with $70,506.14 paid by Mrs Warin from her National Bank and Westpac Trust accounts, and $71,243.56 paid by Mr Warin from his accounts with Southern Cross Tauranga and BNZ Tauranga.
[96] Considering this evidence as a whole, the overwhelming conclusion is that the lending was from Mr and Mrs Warin personally, and not from the Trusts. If any of the money had actually been paid to or for the benefit of Colleen from a bank account operated by one of the Trusts I have little doubt that she would have said so. She was, after all, an accountant who at the time was advising Mr and Mrs Warin
and she would have had access to that sort of information. And if there had in fact been a transfer of the loans from Mr and Mrs Warin to their respective Trusts, she would have had access to, and would have produced, any record showing that Mr and Mrs Warin allowed or adopted the transfers, and that the trustees of the Trusts agreed to purchase the loans. Colleen has made the bold assertion that the money was advanced by the Trusts, but she has provided no elaboration, detail or
supporting evidence.6 In my view this is one of those cases where a robust approach
to the evidence is appropriate. The plaintiffs produced sufficient evidence that a rebuttal was required from Colleen, sufficient to show that there exists at least an arguable defence. It was for Colleen to provide a reasonable level of circumstantial detail to support her case on this issue, and in my judgment that required her to provide some answers to the material put forward by Mr and Mrs Warin in Mrs Warin’s first affidavit (particularly on the effect of the 24 August 2015 letter to the IRD, and the reason the statements of financial position for the Trusts did not show at least some of the advances as assets of the Trusts as at 31 March 2011). In the circumstances of this case, it was not sufficient for Colleen to simply elect not to respond on those matters. In my judgment, Colleen’s evidence does not reach the arguable defence threshold. I accordingly find for Mr and Mrs Warin on issue (1).
Issue (2): If the advances were made personally by Mr and Mrs Warin (and not by the Trusts), were the advances made jointly by Mr and Mrs Warin, or were there separate advances made by them which can only be recovered by the maker of the particular advance?
Discussion and conclusions on issue (2)
[97] The documents suggest that the advances were made on a separate basis. The letter dated 20 April 2012 from Mrs Warin to her solicitors refers to the loans as separate payments by “Trevor” and “Marian”, and the letter addressed to “Kelvin and Colleen” on 3 May 2012 also refers to the loans as being split between “Trevor” and “Marian”, with repayment to be made to their separate accounts. The demand
for payment made by Harkness Henry on 7 August 2015 also attributes the advances
6 Refer to Haines v Carter, above n 5 and Dent v Herbert CA243/02, 18 June 2003. In accordance with the first of those cases, what was required of Colleen was that she provide a “reasonable level of circumstantial detail” to support her position.
to separate accounts as between Mr and Mrs Warin. The financial statements attached to that letter refer to the mortgage advance for the Te Puke property being split 50/50 as between Mr and Mrs Warin.
[98] In the further amended statement of claim, the respective amounts claimed are $177,470.63 (Mrs Warin) and $190,433.27 (Mr Warin).
[99] The advances made to Colleen to cover the GST liability confirm that position. Mrs Warin paid $70,506.14 from two bank accounts operated by her, and the balance ($71,243.56) was paid from two of Mr Warin’s accounts.
[100] I am satisfied that the advances were made individually, and that each payment can be recovered by the maker of the particular payment.
Issue (3): Is it reasonably arguable for Colleen that no repayment could be demanded by Mr and Mrs Warin (or by the trustees of the two Trusts) while the personal and financial situations of Colleen and/or Mr Roy-Gapper were such that they were unable to repay?
Submissions on issue (3)
[101] For Mr and Mrs Warin, Mr Vincent submits the loans were made on an “on demand” basis. He submits that Colleen’s suggestion that she only had to pay the loans when the personal and financial situations of herself and Mr Roy-Gapper was/were such that she was able to repay is untenable and inconsistent with the evidence, in particular the letter sent by Colleen to the IRD and the demands made by Mr and Mrs Warin.
[102] In relation to the IRD letter, Mr Vincent submits that Colleen’s letter shows: (a) that the loans were repayable on demand (and Colleen accepted that); (b) that Mr and Mrs Warin had demanded repayment;
(c) that Colleen had received that demand; and
(d)that Colleen was relying on the demand in support of a case of financial hardship.
[103] Mr Vincent also submits that the demands made on 3 May 2012 and on
7 August 2015 both speak of loans payable on demand.
[104] Mrs Warin’s second affidavit, filed on 22 September 2016, is also relevant. Even if the Court accepts that Colleen did not receive the letters attached to that affidavit, they are still evidence of Mr and Mrs Warin’s perception that the debts were repayable in 2012 and following.
[105] Mr Vincent notes there is no documentary evidence to support Colleen’s assertions. He submits that if her defence was valid, it would have been reasonable to expect her to have written promptly to Mr and Mrs Warin rejecting their claims. Her failure to do so until after this proceeding had been issued supports Mr and Mrs Warin’s claim that the loans were repayable on demand.
[106] Mr Vincent also submits that Colleen has not provided the Court with any evidence of her inability to repay the loans at this time.
[107] For Colleen, Ms Hubble submits that there is insufficient evidence for the court to find that the loans were repayable upon demand. Colleen states in her affidavit that the advances were not required to be repaid in one amount, and that repayment would not be demanded if repayment would involve financial hardship. Colleen also says she is unable to pay at the present time.
[108] Colleen’s position on this issue is linked with her contention that the money was advanced by the Trusts. She says that the intention was that any unpaid advances would be debited against any entitlement she might have as a final beneficiary of each Trust.
[109] More generally, Ms Hubble submits that family situations are often complex. Obligations and understandings are often expressed orally (as in this case), or even left unexpressed. She submits that the lack of any proper records in this case is
consistent with the arrangements being open-ended, with payment to occur on an “as and when” basis. The fact no payment has been made is also reflective of the financial difficulties Colleen is currently experiencing.
[110] Ms Hubble submits that the evidence relied on by Mr Vincent does not prove that the advances were repayable upon demand. Referring to the table in Colleen’s letter to the IRD, in which the various loan balances were summarised, Ms Hubble says that only the interest rate was expressed to be payable “on demand” (and in any event Colleen’s understanding was that interest was not payable). Ms Hubble points to the section of Colleen’s letter to the IRD entitled “Family Matters”. Although the “loan between [Colleen’s] parents and Kelvin Roy-Gapper and [Colleen]” is described in that section, Colleen stated (in the same section of the letter) that she had been so busy she had not had time to fully consider her parents’ demand for payment. Colleen also referred to “attachment D” to the letter, which was not produced in evidence. Ms Hubble submits that the missing attachment is indicative of an incomplete picture, which requires further exploration. Any such exploration is beyond the scope of a summary judgment application.
[111] In her oral submissions Ms Hubble referred to the part Nigel Warin has played in the preparation of this proceeding. She notes that the exhibits attached to Mrs Warin’s first affidavit outlining the amounts of money advanced were “prepared by NT Warin”. Although Ms Hubble acknowledges that there is little to be made of this point, she submits that Colleen’s brother’s involvement does go to the issue of the credibility of Mr and Mrs Warin’s case. Nigel Warin is not impartial, and his involvement is a further indication that the case is not suitable for summary judgment.
[112] Ms Hubble submits that there is a lack of evidence showing that the loans were advanced on an on demand basis. There is only evidence of Mrs Warin having demanded payment (even though the demands were expressed to have been made on behalf of both Mr and Mrs Warin). Ms Hubble refers also to Colleen’s belief that her father accepted that it was always her intention to repay the advances as and when she was in a position to do so.
[113] In relation to the second affidavit filed by Mrs Warin, Ms Hubble submits that it is “disingenuous” for Mr and Mrs Warin to suggest that the attached letters constitute relevant evidence. She submits that the letters should be disregarded. In addition, she submits that Colleen was not required to provide evidence of her inability to repay. The key issues, namely the basis on which the loans were to be repaid and whether a valid demand has been made, would not be clarified by reference to any explanation Colleen might provide as to her reasons for not paying.
Discussion and conclusions on issue (3)
[114] I do not think it is reasonably arguable for Colleen that the loans were to be repaid only when the personal situations of Mr Roy-Gapper and herself allowed them to make repayment.
[115] Addressing first the advances made to help Colleen meet her GST obligation on the swap transaction ($141,749.70), the amount was paid to Colleen’s solicitors on 31 January 2012. Mr Roy-Gapper’s evidence is that Colleen told her parents that she needed them to lend her a further $142,000 GST, for the trade of 86A for the Taupo properties. He says that Colleen said this was “to tide her over until the IRD returned it to her”. Mr Roy-Gapper went on to say that “This was a tax error by Colleen Warin and there was no money coming back from the IRD. I am very sorry to say she knew this.”
[116] Although Mr Roy-Gapper’s affidavit is dated 15 March 2016, Colleen did not
dispute this evidence in either of the two affidavits she subsequently filed.
[117] Mr Roy-Gapper’s evidence is entirely inconsistent with any view that the
$141,749.70 would only have to be repaid as and when the financial positions of
Colleen and/or Mr Roy-Gapper permitted.
[118] It is also entirely consistent with Colleen listing all of the advances made by Mr and Mrs Warin, including the GST advances, as “outstanding/due for repayment” in the letter she wrote to the IRD on 24 August 2015.
[119] While Mr and Mrs Warin’s letter of 3 May 2012 did not demand immediate repayment of the advances, it told Colleen that “… We have given up our mortgage over Te Puna, but we still want to be and need to be repaid, and we need to have a clear timeframe around this.” Mr and Mrs Warin said they “[needed] to have a plan for repayment”, and that the amounts of the advances were “meant for our retirement”. They sought details of Colleen’s financial position, and an update on what she was doing by way of selling various assets (including the Taupo properties and a Hawkes Bay farm property then owned by Colleen).
[120] It appears that Colleen was aware of the letter of 3 May 2012, but did not respond to it.
[121] Turning to the original advance of $100,000 made in 1997, I think the high likelihood is that the advance would have been repayable on the sale of the Te Puke property. It is understandable that Mr and Mrs Warin made no demand for repayment while they were living in 86B or 86A, but the situation must have changed dramatically for them when Colleen found that she could not repay the
$100,000 from the proceeds of sale of 86B and 86A. They were forced to live in another property they owned which had previously provided them with a rental income, and being in their eighties, they must have been very concerned. Given that background, I think it would have made very little sense for them to have agreed that the $100,000 would only have to be repaid as and when Colleen considered that she could afford to do so (it appears that Mr Roy-Gapper was never likely to be a contributor – he appears to have been a full time carer for his and Colleen’s son and apparently without substantial assets). The high probability is that Mr and Mrs Warin, probably reluctantly, agreed to release their mortgage in the expectation that Colleen would reasonably promptly repay the advance.
[122] As for the other advances, Colleen accepted in her letter to the IRD dated
24 August 2015 that all of the amounts now claimed were “outstanding/due for payment”. Ms Hubble is correct in pointing out that the words “on demand” appeared in the relevant table in the letter under the heading “interest rate”, but I do not think that detracts at all from the clear statement in the same table, that Colleen regarded the total amount advanced as being “outstanding”, and “due for payment”.
[123] There is no evidence supporting Colleen’s contention that any agreement was reached which provided for repayment of the advances as and when Colleen could afford to repay. In this respect, Colleen faces the same barrier as in issue (1), in that she failed to put forward a sufficient evidential basis for her assertion that the money was advanced on an “as and when” basis to be at the least, arguable. The letter of
3 May 2012 does show that Mr and Mrs Warin were prepared to consider a repayment plan over time (with payment of interest in the meantime), given Colleen’s apparently difficult circumstances. But it does not suggest that any agreement of the kind for which Colleen now contends was then in place.
[124] The 3 May 2012 letter obviously called for a reply from Colleen, particularly if she considered that anything her parents had stated in the letter did not reflect earlier discussions, or was otherwise wrong. Instead of replying, Colleen appears to have simply ignored the letter.
[125] Colleen never put forward any repayment plan, and she did not provide answers to any of the questions asked in the 3 May 2012 letter. By August 2015, I consider that Mr and Mrs Warin were well within their rights to demand repayment of the advances, regardless of whether Colleen received the letters Mrs Warin produced with her second affidavit.
[126] For the foregoing reasons I consider that there can be no reasonable argument that, by the time of the August 2015 demand by Harkness Henry, the amounts claimed were not due and payable by Colleen. I accordingly find for Mr and Mrs Warin on issue (3).
Issue (4): If the advances were made by the trustees of the Trusts, is it reasonably arguable for Colleen that the demand for repayment made by Harkness Henry on 7 August 2015 was made without the authority of all of the trustees, and for that reason was invalid?
Discussion and conclusions on issue (4)
[127] The result of my finding on issue (1) is that there is no need to make any findings on this issue. Mr and Mrs Warin are accordingly entitled to summary
judgment for the amounts respectively claimed by them in their further amended statement of claim.
Interest
[128] Mr and Mrs Warin claim interest at the rate of 5% per annum from
3 May 2012. Colleen disputes that there was any agreement to pay interest.
[129] I agree that there is no evidence of any agreement to pay interest – as far as the evidence shows, Colleen did not accept the proposal for paying interest set out in the letter of 3 May 2012. However the court retains a discretion to award interest under s 87 of the Judicature Act 1908, at a rate of up to 5% per annum. In the circumstances of this case, Mr and Mrs Warin should have received the amount claimed within a reasonable time after Harkness Henry made demand for the money on 7 August 2015. I think the justice of the case will be met if I award interest at the rate of 5% per annum on the respective judgments to be given for Mr and Mrs Warin, running from 7 September 2015, being the date which is one month after the demand was made, down to the date of this judgment.
Orders
[130] I enter summary judgment in favour of Mr and Mrs Warin as follows: (1) in the sum of $177,470.63 in favour of Mrs Marian Warin;
(2) in the sum of $190,433.27 in favour of Mr Trevor Warin;
(3)interest is awarded on each of the judgment sums referred to at paras (1) and (2) of this paragraph, at the rate of 5% per annum calculated from the 7th day of September 2015 down to the date of this judgment.
(4)Mr and Mrs Warin are entitled to costs on a 2B basis, and they are also entitled to their disbursements, which are to be fixed by the Registrar. But it may be that no costs should be awarded in respect of
the various hearings and attendances which were required as a result of the appointment of Mr Lyon as litigation guardian and the subsequent revocation of that appointment (including the hearings in February and March of 2017). There may also be issues over the steps taken by Mrs Warin before counsel was retained for her and Mr Warin, and whether those steps unnecessarily contributed to the costs of the proceeding. If counsel cannot agree on costs, memoranda may be filed. Any memorandum for Mr and Mrs Warin is to be filed and served within 15 working days of this judgment. Any reply memorandum for Colleen is to be filed within 15 working days of service on her of Mr and Mrs Warin’s memorandum.
(5)In view of the agreed redactions from certain affidavits as originally filed, and the parties’ agreement that some evidence should not be read, I direct that the court file is not to be searched by anyone other than the parties and their solicitors and counsel, without the leave of a
Judge.
Solicitors:
Thomas Dewar Sziranyi Letts, Lower Hutt for the plaintiffs
O’Regan Arndt Peters and Evans, Wellington for the defendants
Associate Judge Smith
Schedule
Additional Payments
Payment (Property)
Date
Amount
Cash Advance from Term Deposit 2010 $13,275.00 Farm Water (Hastings Farm) 2011 $30,000.00 Lysaght Surveyors (Te Puna)
30 February 2011
$1,636.00
ABC (Te Puna) March 2011 $275.00 Mark Shepherd, Solicitor (Te Puna) March 2011 $1,096.59 Lysaght Surveyors (Te Puna) 16 March 2011 $3,680.00 AC Prentice (Te Puna) 28 March 2011 $1,000.00 Lysaght Surveyors (Te Puna) 20 May 2011 $3,394.80 Western BOP Council (Te Puna)
20 May 2011
$1,716.00
Lysaght Surveyors (Te Puna) 14 June 2011 $1,741.10 Lower House Subdivision (Te Puna) 28 June 2011 $10,100.00 Repayment of loan for farm water (Te Puna) 10 October 2011 -$34,000.00 Eastern BOP Council (Te Puna) 11 October 2011 $32,356.42 Eastern BOP Council (Te Puna) November 2011 $3,856.00 Mark Shepherd, Legal Bill (Te Puna)
8 November 2011
$4,971.00
Bay of Plenty Council 21 December 2011 $10,000.00 AC Prentice (Te Puna) 7 January 2012 $29,150.00 Hastings Council (Hastings) 20 January 2012 $820.00 Conroys Shifting (Hastings) 27 January 2012 $2,420.00 Mark Shepherd, Lawyer (Hastings) 20 December 2012 $916.29 Mark Shepherd, Lawyer
2013
$3,000.00
Mark Shepherd, Lawyer 2013 $3,000.00 Mark Shepherd, Lawyer 2014 $1,750.00 Subtotal
$126,154.20
4
2
0