Defamation: Memelink v. Grindlay

Facebook postings after a commercial contract went sour stating that the vendor  “rips people off” is “a liar” and “that people should not enter into business with him” were defamatory.  Nominal damages of $100 were awarded.

Robyn Grindlay aired her views on facebook about Harry Memelink following the 2013 purchase of Mr Memelink’s Lower Hutt scrap metal and recycling business: DM Recyclink Ltd.  Mrs Grindlay and husband Malcolm agreed to buy DMR for $200,000 with payment by instalments.  Mr Memelink alleges they sold off scrap belonging to him which was not part of the deal.  They allege he failed to deliver up plant and equipment in working order as promised.  Mr Memelink took the pair to court getting judgement against both for about $176,700 being the unpaid balance of the DMR purchase price over protestations by Mrs Grindlay that she was not a party to the contract.  Damages awarded were reduced by $8200 to reflect the book value of DMR vehicles not put into a roadworthy state as promised.  The court was told Mr Grindlay is bankrupt.  Liability for payment falls on his spouse.

There was evidence the Grindlays have onsold their business to a Mr Chung.

Mrs Grindlay was also held liable in defamation.  She said her facebook postings belittling Mr Memelink’s character were true.  It is not enough to allege they are true.  Justice Collins said she had not proved them to be true.  There was no evidence that anyone had actually read the facebook postings containing her defamatory views on Mr Memelink.  Nominal damages only were awarded.       

Memelink v. Grindlay – High Court (31.10.16)

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Relationship Property: Potter v. Horsfall

Having deliberately registered a commercial property in their joint names to avoid tax, Wellington property developer Mark Horsfall could not later argue that it was not relationship property to be shared with his then wife Diana Potter.

Mr Horsfall paid $560,000 in May 2003 to buy out the half share his property company 168 Group Ltd did not already own in a commercial building in College Street, Wellington.  This money came from the sale of shares owned by Mr Horsfall as separate property together with funds from another company: Riddiford Holdings.  Ms Potter did not contribute any cash.  Ownership was then registered in their joint names.  The College Street building was sold one year later for $1.57 million.  The Court of Appeal was told personal ownership was taken to avoid an income tax liability which would arise on resale if ownership remained with Mr Horsfall’s property companies.  There was correspondence with lawyers acting on the transaction stating College Street was intended to be the new matrimonial home, though as a commercial property it was patently unsuited as a home.

When College Street was later sold, Mr Horsfall gave $50,000 cash to his spouse from the proceeds transferring the balance to 168 Group Ltd.  When their relationship came to an end, Ms Potter argued she was entitled to a half share in the sale proceeds.  Mr Horsfall said while they were registered as owners, they held title as trustees for 168 Group Ltd.

The Court of Appeal said removal of any potential tax liability from his property companies required Mr Horsfall and Ms Potter to become the beneficial owners of College Street.  Having chosen this course, Mr Horsfall could not later argue that it was a tax dodge and that his spouse instead held title as trustee only and had no beneficial interest in the property.  The courts will not allow someone to avoid the consequences of actions deliberately taken.  Having been registered as the beneficial owner of a half share, Ms Potter was entitled to a half share of the sale proceeds regardless of how the initial purchase was funded.      

Potter v. Horsfall – Court of Appeal (25.10.16)

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Insolvency: Robert Jones Holdings v. McCullagh

Robert Jones Holdings alleges liquidators of Northern Crest are more interested in collecting their liquidation fees than properly carrying out the liquidation.  Liquidators Anthony McCullagh and Steve Lawrence from PKF Corporate Recovery complain RJH is just stalling on demands for repayment of rentals totalling $751,930 they claim are a voidable preference.

A later iteration of failed property developer Blue Chip, Northern Crest Investments Ltd leased office space from RJH in Auckland before shifting operations to Sydney.  In 2008 Northern Crest rent payments were in arrears.  RJH issued statutory demands for payment as a precursor to forcing Northern Crest into liquidation, retaking possession in August 2008 after Northern Crest abandoned its lease.  The three years preceding Northern Crest’s subsequent liquidation in June 2011 saw move and countermove as RJH threatened to force its former tenant into liquidation for unpaid rent only to hold off while promises were made of payment by instalments.  Payment came in dribs and drabs, invariably late.  In the 18 months prior to Northern Crest’s liquidation RJH received a total of $751,930.  Payments were sourced from legal entities associated with Northern Crest.  The liquidators demanded repayment from RJH, alleging these payments were made when Northern Crest was insolvent.  RJH went on the attack, saying payment was not made by Northern Crest itself but by other companies covering Northern Crest’s debts.  In the High Court, RJH claims these other companies were under no obligation to meet Northern Crest’s debts and consequently it was not obliged to refund Northern Crest.  Claims to an offset between the various Northern Crest companies are nothing but a sham, it claims.  A company called Columbus Property Marketing Pty Ltd paid $489,180 to RJH (being monies due to Northern Crest under a licensing agreement the liquidators say); MSH No.2 Ltd paid $262,750 to RJH (repayment of a loan from Northern Crest according to the liquidators).  RJH demanded the right to see documents held by the liquidators to check the validity of these claimed offsets.

In a parallel attack on the liquidators’ claim, RJH says Northern Crest was not insolvent at the time payments of $751,930 were made.  At a preliminary court hearing, Associate judge Bell was moved to say RJH cannot seriously argue Northern Crest was solvent given that RJH’s own behaviour in chasing payment show unmistakeably that Northern Crest could not pay its debts.

As a parting shot, RJH is attacking the liquidators’ motives alleging demands for repayment of $751,930 is driven by their desire to recover funds to pay their liquidation fees and that they have failed to properly investigate validity of the claimed offset payments.  As evidence, RJH wanted access to the transcript of a 2011 meeting between Steve Lawrence as liquidator of Northern Crest and representatives of another Northern Crest creditor.  This meeting was recorded without Mr Lawrence’s knowledge.  It led to allegations that Mr Lawrence offered to go easy on any investigation into Northern Crest’s affairs in return for a fee payment of $850,000.  Justice Downs ruled the transcript was not admissable.  It was part of privileged “without prejudice” negotiations.  This privileged status stood; the discussions were not in the advancement of any dishonest purpose, he said.

Justice Downs approved limited disclosure to RJH of some correspondence between Northern Crest and its lawyers held by the liquidators where it related to disputed questions of fact.  Whether RJH has to repay $751,930 is yet to be resolved.  Court proceedings were started in 2013 and should have been concluded by now, Justice Downs said.     

Robert Jones Holdings v. McCullagh – High Court (21.10.16)

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Eviction: Matamu v. Si'itia

Vituperative emails, threats of violence and a fist fight accompanied an attempted takeover of west Auckland presbyterian church St Ninians by a discontented group within its Samoan congregation.  The High Court upheld a parish council ruling banning them from the premises.

St Ninians in Avondale has been a place of worship since the late 1800s.  Together with neighbouring protestant churches it now forms part of the Avondale United Parish. 

The High Court was told St Ninians adapted to increasing Pacific Island membership in the 1970s by holding two services each Sunday: one in English; the other in Samoan.  Problems arose from 2013 when a ten year term as officiating minister ended for the Reverend Asora Amosa.  There had been some dislike within the congregation of what was described as his “personality-driven leadership style.” By accident or design, some parishioners were led to believe that his tenure had been terminated by the Auckland presbytery.  In fact, church rules did not allow ministers to officiate in one parish for more than ten years.  Evidence was given of Reverend Amosa continuing to hold services in Samoan at St Ninians after the end of his ten year term and soliciting contributions for a new church, supported by his own donation of $10,000.  The Samoan congregation was split: the majority remained with a new minister at the traditional Samoan service; others joined Reverend Amosa at an unapproved afternoon service.  Attempts to have St Ninians join a new Pacific Islands’ synod within the Presbyterian Church failed, twice, when put to parishioners for a vote.  Evidence was given that the Amosa faction then gained control of St Ninians’ bank accounts and stopped contributing to presbytery expenses, engineering a de facto schism.  Attempts at reconciliation failed.  At one meeting of the separate factions a fight almost broke out; at a second a fist fight ensued.  One email sent by a member of the Amosa faction warned the presbytery not to “dip [its] nose in areas [it knows] nothing about.”  Court orders froze church bank accounts and allowed the renegade afternoon service to continue pending a full court hearing.  

Justice Moore later ruled the Amosa faction’s behaviour demonstrated these members were not to be bound by rules governing St Ninians.  They had repudiated their membership. Faction members were no longer members of the Avondale United Parish and were no longer eligible to serve on the parish council.  A council ruling banning the Amosa faction from using church premises was valid.           

Matamu v. Si’itia – High Court (21.10.16)

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Fraud: Tangitu v. Police

Already on home detention for fraud offences, Matekitawhiti Tangitu then proceeded to con $6500 out of another three victims from the comfort of her home.  Unmoved by pleas for another sentence of home detention, the High Court upheld a twelve month prison sentence for the further three offences.

Justice Palmer said Tangitu has demonstrated by her own actions that home detention is not likely to promote a sense of responsibility for, or acknowledgement of, the harm done.

While on twelve month’s home detention for prior offending, Tangitu talked three victims out of money in return for unfulfilled promises of big returns.  One paid up $1000 following a promise to double their money in two days.  Two other victims were told an old woman had left $500,000 to the Catholic Church for the poor and needy.  Payment up front could unlock a share of this money.  One victim paid $1500; another $4000.  

Tangitu v. Police – High Court (18.10.16)

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