IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE	
CIV-2021-404-000892
[2021] NZHC 1685	

BETWEEN	SALLY DIANE GOLDSTONE
Plaintiff	
AND	MAY KAM KIU SHEATH
Defendant	

Hearing:	6 July 2021	
Appearances:	D A Cowan and V K Kumar for Plaintiff
No appearance by or on behalf of the Defendant	
Judgment:	7 July 2021	

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Wednesday, 7 July 2021 at 12:30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors:	Doug Cowan, Auckland

GOLDSTONE v SHEATH [2021] NZHC 1685 [7 July 2021]

[1]	The plaintiff has issued proceedings and is claiming summary judgment against the defendant in respect of money advanced to her by way of loans over a number of years. The plaintiff is now 82 years old and has been living in a retirement village since 2019. She says she has been friends with the defendant since 2001. The defendant lived next door to her in Remuera with her husband and two young children. The defendant and her husband owned a wine bar. The defendant’s husband was usually at work, while the defendant stayed at home caring for the children.

[2]	The defendant and her husband eventually divorced, and he moved to Australia. While in Australia, her ex-husband was imprisoned, and the defendant asked the plaintiff to loan her money so that she could post his bail. This was the first of many requests for loans. From 2006, the defendant continuously asked the plaintiff if she could loan her money for various purposes. The plaintiff trusted the defendant as they had developed a good friendship over the years and the plaintiff was always led to believe that the defendant’s parents in Hong Kong were extremely wealthy (her brother was also a solicitor in Hong Kong). The plaintiff, therefore, had no concerns that the defendant would not pay back the money. Her trust has, however, been severely misplaced. The defendant has repeatedly made a variety of excuses for failing to repay the loans.

Loans

[3]	From 2009 – 2014 the plaintiff entered into various oral loan agreements with the defendant, as follows:

(a)	$50,000 in 2009; (b)	$180,000 in 2010; (c)	$25,000 in 2011; (d)	$35,000 in 2012;
(e)	$10,000 in 2013; and (f)	$100,000 in 2014.

[4]	From 2013, the defendant made sporadic loan repayments to the plaintiff amounting to $125,000. On 24 November 2015, the plaintiff agreed to re-loan the defendant the outstanding amount of $275,000 plus an additional $20,000 (the first loan agreement). The first loan agreement was subject to a monthly compounding interest rate of 10 per cent and was due for repayment on 1 November 2016.

[5]	On 1 November 2016, the plaintiff agreed to re-loan the defendant the
$295,000 (plus 10 per cent interest) plus an additional $20,000 (the second loan agreement). The second loan agreement was also subject to a monthly compounding interest rate of 10 per cent and was due for repayment on 1 October 2017.

[6]	On 1 October 2017, the defendant was required to pay $410,414 pursuant to the second loan agreement. The defendant failed to repay the $410,414 on the repayment date. This was an event of default under the second loan agreement. The plaintiff was then entitled to charge 10 per cent interest compounding monthly.

[7]	On 9 October 2017, the defendant paid $6,000 towards the second loan agreement.

[8]	On 5 November 2018, the defendant signed a Deed of Acknowledgment of Debt for the sum of $410,414 owed to the plaintiff (the first deed). This was witnessed by a Justice of the Peace. The first deed was to acknowledge the debt owed from any and all previous loans entered into between the plaintiff and the defendant.

Settlement Agreement

[9]	On 10 December 2020, after further discussions between the plaintiff and the defendant:

(a)	A further Deed of Acknowledgement of Debt was entered into by the defendant as borrower, in favour of the plaintiff as lender, to further record any and all loan agreements between the plaintiff and the defendant (the second deed).

(b)	A settlement agreement was entered into by the plaintiff and the defendant. It was agreed that the defendant would pay the plaintiff
$562,573 (the settlement amount) as full and final settlement (the Agreement).

[10]	The plaintiff and the defendant entered into the second deed and the Agreement to reach consensus on the amount owed to the plaintiff. The Agreement gave the defendant an opportunity to pay off the settlement amount over a length of time. Any previous agreements entered into by the plaintiff and the defendant were superseded by the second deed and the Agreement as it settled any disputes regarding the above loans.

[11]	The plaintiff relies solely on the second deed and the Agreement. The settlement amount under the Agreement and the second deed was to be paid in the following monthly instalments:

(a)	20 December 2020 — $10,000;

(b)	20 January 2021 — $83,762.17;

(c)	20 February 2021 — $93,762.17;

(d)	20 March 2021 — $93,762.17;

(e)	20 April 2021 — $93,762.17;

(f)	20 May 2021 — $93,762.17; and

(g)	20 June 2021 — $93,762.16.

[12]	On 20 December 2020, the first instalment was due to be paid by the defendant to the plaintiff. The defendant paid the first instalment of $10,000 to the plaintiff two days late on 22 December 2020.

[13]	On 20 January 2021, the second instalment was due to be paid by the defendant to the plaintiff. The defendant did not pay the second instalment and so she was in default under the Agreement and second deed and the outstanding amount of $552,573 became payable (the outstanding amount).

[14]	Failing to repay the second instalment on the repayment date was an event of default under cl 3.1 of the Agreement. Interest has continued to accrue on the outstanding amount from the date of default (21 January 2021) at 10 per cent per annum compounding monthly. The last instalment of the settlement amount was due to paid on 20 June 2021. To date, the defendant has not paid any further instalments beyond the $10,000 on 22 December 2020.

[15]	The plaintiff now seeks the following judgment against the defendant:

(a)	judgment in the amount of $552,573 (inclusive of GST);

(b)	interest under s 22 of the Interest on Money Claims Act 2016 at the rate of 10 per cent compounding monthly from 21 January 2021 until the date of judgment pursuant to cl 3.2 of the Agreement and cl 1.3 of the second deed;

(c)	costs on a full indemnity basis pursuant to cl 3.3 of the Agreement and cl 1.4 of the second deed; and

(d)	disbursements.

The summary judgment proceedings

[16]	On 11 May 2021, the plaintiff filed proceedings in the Auckland High Court against the defendant. On 3 June 2021, the defendant was served with the following documents:

(a)	Notice of proceeding dated 11 May 2021;

(b)	Interlocutory application on  notice  for  summary  judgment  dated  11 May 2021;

(c)	List of documents relied on dated 11 May 2021;

(d)	Affidavit of Sally Diane Goldstone dated 7 May 2021; and

(e)	Affidavit of Jonathan (Jonny) Nelson Duder dated 8 May 2021.

[17]	On 10 June 2021, the defendant was also served with the statement of claim dated April 201.

[18]	The defendant has not filed a notice of opposition or statement of defence. There is no appearance by or on behalf of her today. In those circumstances, I abridge the time for service specified in High Court Rule 12.7.

[19]	There is no arguable defence by the defendant to the plaintiff’s cause of action as pleaded in her statement of claim and supporting affidavits. This is a clear case where a settlement agreement was entered into and has been breached by the defendant by her failure to make payment.

[20]	The plaintiff also seeks solicitor costs, interest and disbursements as provided for in clauses 3.2 and 3.3 of the Agreement and 1.3 and 1.4 of the second deed.

Result

[21]	There will accordingly be judgment against the defendant in favour of the plaintiff in the amount of $589,450.65 inclusive of GST. This includes $552,573 as the outstanding amount due pursuant to the Agreement and second deed; $25,768.72 as interest under s 22 of the Interest on Money Claims Act 2016 at the rate of 10 per cent per annum compounding monthly from 21 January 2020 until 6 July 2021 pursuant to clause 3.2 of the Agreement and clause 1.3 of the second deed, which continues to accrue until date of payment; $9,339.55 as solicitor/client costs pursuant to clause 3.3 of the Agreement and clause 1.4 of the second deed; and disbursements of $1,769.38.

Woolford J