Ordered to pay $545,000 compensation, Vernon Ruwhiu had promised to manage Takangaroa Moanaroa’s retirement savings. Instead, he used her savings for his and his family’s benefit.
Facing a forced sale of property she part-owned at Whenuapai in west Auckland, Mrs Moanaroa met Mr Ruwhiu at a 2003 seminar about mortgagee sales. Aged 65, she was looking for investments enabling her to retire.
The High Court was told Mr Ruwhiu promised to manage her money for her benefit so she could retire by 2006 and buy a Whangarei retirement property. At Mr Ruwhiu’s behest, $223,300 derived from the sale of her Whenuapai property, together with $60,00 of her savings, were paid across to a trust he established: the Kaiawhina Family Trust. Mr Ruwhiu was a trustee. He and his children were named as beneficiaries, as was Mrs Moanaroa. The money was used to buy a Whangarei property, in the name of the Trust. Mrs Moanaroa was installed as tenant; she thought she was the owner. She was evicted in 2015 when the Whangarei property was sold in a mortgagee sale.
Justice Whata ruled that Mr Ruwhui breached fiduciary duties owed Mrs Moanaroa: he did not act in good faith and acted for his own benefit. He and Denise Ruwhiu were liable for ‘knowing receipt’; as trustees of the Kaiawhina Trust they both knew the money taken was meant to be used for the sole benefit of Mrs Moanaroa. Instead it was used to purchase an asset they could convert to their own use. They were ordered to repay the money misused together with interest totalling $267,300 for the fifteen year period they had wrongly deprived Mrs Moanaoroa of her money.
Mr Ruwhiu’s sister Bonnie was ordered to pay $145,200 of any shortfall Vernon and Denise Ruwhiu are unable to pay. She knew the Whangarei property was more properly an asset of Mrs Moanaroa at a time when she bailed out her brother by refinancing the Whangarei purchase.
All three were held jointly liable to pay an extra $25,000 general damages to mark the distress caused Mrs Moanaroa. They did not contest her legal action.
Moanaroa v. Ruwhiu – High Court (19.06.19)
19.115