The lawyer charged no fees. Court fees were waived. A gross injustice was corrected with the High Court ruling grandson Jared Manukia and wife Tapuaki conned his grandmother into transferring half share of her Auckland property into a family trust he controlled.
The two were ordered to compensate her estate for the value of her half share of the Ranui property: $288,800. They did not appear in court to defend the claim. The High Court was told they now live in Australia.
Taonefoou Falesima retired in 2012 at age 67. Living in the Ranui home she had purchased three decades previously, her only source of income on retirement was national superannuation.
As a single parent she had raised five children. With limited income she struggled to finance existing debts secured by mortgages over her home.
Offering salvation was grandson Jared Manukia, a member of the Mormon Church. In 2013, he moved into her Ranui property with newly-wed spouse Tapuaki. It was agreed Mrs Falesima would sell a half-interest in her Ranui home to the Manukias; in return they would pay off her mortgages.
The High Court was told this transaction proceeded as agreed. The Manukias borrowed $300,000 from Southland Building Society, secured over their newly-acquired half interest in the home, and paid off her identified debts. It later transpired that payment of one small debt was overlooked.
Extended family continued to live together at the Ranui property, with Mrs Falesima contributing $400 fortnightly towards the Manukias’ mortgage commitments.
Complications arose when the Manukias looked to refinance. Lenders required security over the entire ownership interest, not just the Manukias’ half interest.
In late 2015, the Manukias had their lawyer visit the Ranui property and have Mrs Falesima sign documentation setting up a family trust. The Manukias were named as both settlors and trustees of the trust. Mrs Falesima was settlor only. She had no say in trustee decisions.
The High Court was told Mrs Falesima was commercially inexperienced. There was evidence she was misled as to the meaning and purpose of the Trust. The following week she was presented with legal documents transferring her half share of Ranui to the Trust. Questioning what was happening, Jared stated ‘just sign – everything is in order and it will be fine.’
The Trust, controlled by Jared, then borrowed $504,000 from Kiwibank secured over Ranui.
Ranui was sold at a mortgagee sale after the Manukias left for Australia and the Trust defaulted on repayments.
The surplus remaining on sale totalled $33,400. On learning about circumstances of Mrs Falesima signing over her interest in Ranui, Kiwibank had the $33,400 paid into court.
The High Court was told that the Manukias’ loan application stated Kiwibank’s loan to the Trust would be used to refinance the existing mortgage and compensate Mrs Falesima for her half share purchased by the Trust. She was never paid. The Manukias kept her money.
Justice O’Gorman said Mrs Falesima’s age and deteriorating health coupled with the fact she was financially reliant on the Manukias meant she was in a vulnerable position, unable to appreciate the significance of documents put in front of her for signature, particularly since she received no independent legal advice.
The Manukias were ordered to pay her estate $288,000; the value of a half share in the Ranui property at time of Kiwibank’s 2018 mortgagee sale.
Estate of Taonefoou Falesima v. Manukia – High Court (14.05.24)
24.120