Members of the west Auckland Nobilo wine dynasty are back in court. Having agreed to bail out brother Steve with a short term loan in 2016, Mark Nobilo was forced to sue Steve’s family trust to recover $670,500 principal and interest unpaid.
Bringing their wine-making tradition with them from Croatia, the Nobilo families’ vineyards at Huapai are now prime residential real estate. Winding down the family trust established by patriarch Nikola has seen sons Nick, Steve and Mark at daggers drawn.
Sale of the former family homestead on Station Road opened a can of worms. Both Nick and Steve had used the homestead, a family trust asset, as security for their borrowing to pursue separate personal business interests. At a family meeting in 2015 following their mother’s death, the three sons thrashed out an agreement to wind up their father’s family trust. The trust specified each would share equally on final distribution. They mutually agreed to a different formula, recognising that Mark had not enjoyed the economic benefit of using trust assets for personal borrowing. The new 30:30:40 formula saw Mark getting a larger share.
That was not the only issue. Nick and Steve needed to agree on allocation of loan costs for the $2.3 million borrowings secured over the homestead. The two also needed to refinance these loans when the homestead was sold.
The High Court was told Steve was having trouble refinancing. Mark assisted with a short term eight-week loan funded with his share from sale of the homestead plus another $100,000 from personal savings. These funds were loaned to Steve’s family trust; repayment due in April 2016. Steve’s family trust defaulted. Steve died in 2019. Mark sued in 2022.
Steve’s family trust denied it had borrowed the money. It had been a loan to Steve personally it claimed and was a debt of Steve’s estate. The Trust further claimed interest was due only on the $100,000 component of the money advanced.
Associate judge Gardiner ruled the written record of emails, minutes of family meetings and cash distributions made on sale of the homestead were clear; Steve’s family trust was the borrower and interest was due on all the money advanced. The S Nobilo Family Trust was ordered to pay $670,500.
Separately, Steve’s family trust claimed the 30:30:40 division formula no longer applies. It alleges there was never any proper agreement regarding allocation of loan costs on the $2.3 million between Steve and brother Nick. Judge Gardiner said this dispute is of no relevance to the debt due Mark.
Nobilo v. S Nobilo Family Trust – High Court (13.06.23)
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