John Smith was ordered to leave a south Auckland home where he had been living rent free for thirty years with the High Court dismissing his claim to have a right of first refusal to buy the Conifer Grove property; a claim which Mr Smith justified by producing invoices which he said required the Japanese owners to pay him $31,000 for the privilege of selling their property to him.
The High Court was told Mr Smith met the Washikitas during a trip to Japan in 1991. One year later he sold to them a nearly finished home in Perotti Place, Conifer Grove, for $250,000 which he said at the time was a deal at ‘no profit’ to him. They intended to use the property as a holiday home, but never lived there. At time of sale, it was agreed Mr Smith could continue to live in the property, rent free, until asked to vacate. He was to pay all outgoings and maintenance costs. By 2020, Mr Washikita was impaired by dementia. His family was looking to sell. They did not intend to come to New Zealand. Plans to sell accelerated when Mr Smith stopped paying rates and insurance. Perotti Place was valued in February 2021 at $1.06 million.
Evidence was given that plans for sale and requests Mr Smith leave the property then bogged down with Mr Smith claiming Mr Washikita had previously agreed that he had the right to buy, subject to ‘conditions.’ Mr Smith never specified what were these conditions but produced invoices for work done on the property, saying these costs had to be set off against the price of $1.06 million. The invoices came under close scrutiny in the High Court. There was evidence that invoices dating back to 1993 had been produced on an excel spreadsheet that was not commercially available until 2007 and that the supposed invoices were modified on the same spreadsheet in early 2021. The total of these invoices had the effect of Mr Smith being owed $31,000 after resuming ownership of the house. Included as an invoice was a cost of more than $150,000 for ‘property management.’
Associate judge Paulsen ruled there was no evidence to support Mr Smith’s claims to a right of first refusal and to reimbursement of expenses.
The court was told that when Mr Smith got into financial difficulty in 2003, he borrowed $110,000 from Mr Waskikita promising to repay him $120,000 the following month. Some part-payments were made over subsequent years. By 2021 Mr Smith was claiming the initial $110,000 was in fact reimbursement for expenses he had incurred.
The Wahikita’s were entitled to possession of their property, Judge Paulsen ruled. Mr Smith’s licence to occupy had been terminated by notice in February 2022.
Washikita v. Smith – High Court (19.12.22)
23.104