Kwon v Quon [2013] NZHC 1431 (14 June 2013)

Last Updated: 23 August 2013

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV 2011-404-8352 [2013] NZHC 1431

BETWEEN SUNG WOO KWON and EUN JUNG PARK

Plaintiffs

AND JO-ANN QUON Defendant

Hearing: 11, 12 and 13 March 2013

Appearances: N A Speir for the plaintiffs

H Tevita for defendant

Judgment: 14 June 2013

_{JUDGMENT OF ALLAN J}

In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 3 pm on Friday 14 June 2013

Solicitors:

Rice Craig, Papakura. Wells & Co, Auckland

KWON and PARK v JO-ANN QUON [2013] NZHC 1431 [14 June 2013]

Introduction

[1] This is a family dispute. The plaintiffs are Sung Woo Kwon (Steven) and his wife, Eun Jung Park. The defendant JoAnn Quon is Steven’s sister. Sanchul Quon (Sam) is the brother of Steven and Jo-Ann. Their mother is Jung-Ae Yi (Mrs Yi). They are all members of a Korean family who emigrated to New Zealand some years ago.

[2] The proceeding concerns a home situated at 6/2 Armoy Drive, East Tamaki, Auckland. It is registered in Jo-Ann’s sole name and is subject to a mortgage to Westpac.

[3] The plaintiffs allege that the whole of the equity in the property was advanced by them to Jo-Ann when it was purchased in 2003. Within the family, the arrangement was that Mrs Yi was to live with Jo-Ann at Armoy Drive.

[4] In 2011, Mrs Yi was trespassed from the house by Jo-Ann in self-evidently acrimonious circumstances.

[5] The plaintiffs now seek to recover in the alternative, either a 62% share in the property (alleging a constructive trust), or the sum of $150,000 comprising the equity provided by them, alleging, in the alternative, breach of contract and unjust enrichment.

[6] Jo-Ann denies that the plaintiffs are entitled to any relief. She says that the payment to her was a gift and represented her share of the family inheritance. She also advances certain affirmative defences. In respect of the plaintiffs’ claim to a constructive trust, she pleads laches and estoppel. In respect of the claim for breach of contract, she asserts that the claim is statute-barred, and in respect of the unjust enrichment claim, she pleads a change of position.

[7] It is necessary to review the factual background in some detail. Much of it is undisputed to a considerable degree. The respective cases of the parties rest upon inferences which they ask the Court to draw from undisputed material.

[8] This was formerly a close and united family. It is regrettable that a rift has developed between Jo-Ann on the one hand and the rest of the family on the other. Mrs Yi and her three children gave evidence. All except Jo-Ann had the assistance of an interpreter. All three children accept that Mrs Yi is the matriarch of the family who wields considerable moral influence over her them. She gave detailed evidence, some of which lies at the heart of the case. Her account is largely the same as that given by her sons. It was not suggested by or on behalf of Jo-Ann that her mother’s evidence was not truthful or accurate. Indeed, Jo-Ann expressly accepted that, in giving her evidence, she relied to a considerable extent on what Mrs Yi had previously told her.

[9] Against that background I turn to a review of the factual material, reaching findings on disputed matters as appropriate.

Factual background

[10] The three children were all born and raised in Korea. Mrs Yi and her husband (Mr Kwon) owned a relatively modest house in Seoul. There was also an interest in an area of unproductive land in An Dong City in Korea. Mr Kwon was well educated and held a number of important positions, both in government entities, and later in an American organisation carrying on business in Korea. He had engineering qualifications. The three children were all clever; each obtained university degrees. Educational costs were met partly by their parents and partly as a result of part-time work.

[11] For some years Steven worked for a large technology company and Sam for

Samsung Electronics.

[12] In the course of his work, Mr Kwon travelled quite extensively. He came to believe that the family would be better off by emigrating to an appropriate country. Eventually he fixed on New Zealand. After a family consultation, Steven and Sam agreed to come to New Zealand as well. By then, each was married. The family moved to New Zealand in 1996. At that time Mr Kwon was 65 years old; Mrs Yi was 59, Steven was 35, Jo-Ann 33 and Sam was 30.

[13] But prior to emigration, in 1994 Mrs Yi and Mr Kwon were involved in a serious car accident in Korea. Both suffered severe injuries which required extensive surgery and rehabilitation. I accept Mrs Yi’s evidence that the medical costs significantly exceeded the available medical insurance, and that the family finances were depleted as a result.

[14] Jo-Ann did not come to New Zealand with the rest of the family. By then she was married with a family, but she came here in 1999. Later she was joined by her husband, but after some months they separated. Steven and Sam had each built up considerable savings in Korea, and each obtained a pay out of accumulated superannuation. Steven says that he brought to New Zealand something between

$300,000 and $350,000. Sam also brought a substantial sum, although the precise figure is not in evidence. Mrs Yi says that she brought very little money. By that time the only real asset she and her husband had was the Seoul house, which was tenanted for a time.

[15] Initially, the family rented a house at Bucklands Beach, but in November

1996, they bought the first of the New Zealand properties situated at 24 Kilkenny Drive, Howick. This property was purchased in the joint names of Steven and Sam. It was mortgage-free. The sons each contributed a portion of their capital to the purchase price of $470,000.

[16] In 1998, Mr Kwon died after a period of ill health. In 1999, Jo-Anne emigrated from Korea, but at that time she did not live with the family. In December

2001, the Kilkenny Drive property was sold for $502,000, the proceeds of sale being divided between Sam and Steven.

[17] In early 2002, Steven and his wife purchased 7 Drysdale Place, Meadowlands for $319,000. There was a mortgage to the Kookmin Bank. The balance of the purchase price was financed by Steven from his share of the proceeds of the Kilkenny Drive property. Steven’s intention was that he and his wife (they were now parents) could live there with Mrs Yi. However, she felt she needed to support Jo- Ann, who was a single mother with two dependent children, and to some extent struggling to get by on her own. Mrs Yi therefore moved in with Jo-Ann. There

were reciprocal benefits of that arrangement. Mrs Yi had a place to live. Jo-Ann had her mother to look after her children as and when required, and particularly at times when she was working.

[18] A decision was soon taken that Mrs Yi and Jo-Ann should buy a house, since that was a better alternative than continuing to rent. In March 2002, Mrs Yi and Jo- Ann purchased 6 Willowbank Close, Dannemora, for $362,000. There was a mortgage to the Kookmin Bank of $182,000. Steven made up the difference by providing the equity of $180,000. Title was taken in the joint names of Jo-Ann and Mrs Yi, although the property tended to be known as “mum’s house”.

[19] Upon settlement, Mrs Yi, Jo-Ann and her two children, moved into the Willowbank Close house. For a time all was well, but friction soon developed. The problem was Jo-Ann’s friendship with a boyfriend. Over a period Jo-Ann, by now a single woman, had several relationships. Mrs Yi did not object to that, but she considered Jo-Ann’s actions in bringing boyfriends home to stay the night with her, to be offensive and contrary to Korean custom.

[20] Following serious arguments, Jo-Ann decided to leave Willowbank Close and to move elsewhere. As part of the arrangements for the purchase of Willowbank Close, Jo-Ann had been responsible for the payment of outgoings on the property, including mortgage instalments. She was able to do so because she was working full time.

[21] When she left Willowbank Close, she stopped paying the outgoings. That left Mrs Yi and Steven in a difficult position. Mrs Yi had no money, and no ability to meet the outgoings. The difficulty was resolved by Steven and his wife Angela, taking over both ownership and possession of the property, but without any payment to Mrs Yi or Jo-Ann.

[22] The transfer of the Willowbank Close property to Steven and Angela, was documented by Stephen Fowler, an Auckland solicitor, who has acted throughout for all members of the family. Two documents were executed on or about 2 September

2002. The first is an acknowledgement of debt executed by Mrs Yi and Jo-Ann in

favour of Steven and Angela, recording the indebtedness of the former to the latter in respect of the sum of $180,000 contributed to the earlier purchase of the Willowbank Close property. The second document, also dated 2 September 2002, records that in consideration for the transfer of that property to Steven and Angela, the debtors, Mrs Yi and Jo-Ann, are forgiven their debt of $180,000. This document also records the assumption by Steven and Angela of responsibility for meeting the mortgage debt secured against the property, and contains an indemnity in favour of Mrs Yi and Jo-Ann against “any future liability”.

[23] Steven, Angela and their family moved into Willowbank Close. Drysdale

Place was rented out in the meantime.

[24] By July 2003, the relationship between Mrs Yi and Jo-Ann had been repaired. It was again suggested that a property be purchased for Mrs Yi, Jo-Ann and her children to live in. Jo-Ann and Sam (who was a licensed real estate agent) identified a property at 6/2 Armoy Drive, Howick. The purchase price was $246,000. A mortgage of $100,000 was obtained from Westpac. The balance was provided by way of a further advance of $150,000 from Steven. At the time, he was in Korea and so working at a distance from New Zealand. Mr Fowler obtained Steven’s written authority to advance the sum of $150,000. His letter to Steven also asked for instructions as to how the advance was to be documented.

[25] In his letter to Steven dated 26 August 2003, Mr Fowler said:

Please advise whether you wish us to document the advance as an interest- free family loan.

[26] Steven did not respond to that request. In evidence, he said that he did not understand it. His English is somewhat limited. He assumed that the transaction would follow the same course as the earlier Willowbank Close deal. Mr Fowler did not follow the issue up with him.

[27] The funds advanced by Steven came from the sale of Drysdale Place, which was sold by Steven and Angela on 25 July 2003, for $447,000. Settlement of that

sale and the purchase of Armoy Drive were “dovetailed”, to use a word employed in

evidence.

[28] Jo-Ann and her daughter moved into the Armoy Drive house in August 2003. But Mrs Yi did not for various family reasons. In 2005, Jo-Ann and her daughter moved out of Armoy Drive and rented it to a Korean family. Jo-Ann moved in with her partner, Mr Ian Sutherland, who gave brief evidence at the trial. Mrs Yi moved in with Jo-Ann at Mr Sutherland’s house for a period of about six months. But in

2006, Jo-Ann, her daughter and Mrs Yi all moved back to the Armoy Drive property.

[29] Like other homes in the development, the Armoy Drive property proved to be a leaky home. In 2010, Jo-Ann borrowed $50,000 from Westpac to enable repairs to be effected.

[30] In May 2011, there was a serious argument involving Jo-Ann on the one hand and Mrs Yi, Steven and Sam on the other. Sam was arrested and charged with assault; Jo-Ann issued trespass notices to Sam, Steven and Mrs Yi. Once again, the problem seems to have been Mrs Yi’s objection to Jo-Ann bringing a boyfriend home to stay the night.

[31] Since May 2011, Jo-Ann, the sole registered proprietor, has been living in the

Armoy Drive property to the exclusion of Mrs Yi.

[32] This proceeding was commenced in December 2011.

[33] At the heart of Jo-Ann’s defence of this claim, is her contention that irrespective of the immediate source of the advance by Steven, it was essentially Mrs Yi’s money. Jo-Ann claims that Steven must have been directed by Mrs Yi to provide the money in order to recognise Jo-Ann’s claim to a share of the family inheritance. Jo-Ann does not accept that the money brought to New Zealand in 1996 belonged to Steven and Sam. She claims that they could not have saved hundreds of thousands of dollars from their salary in Korea, and that the money brought to New Zealand represented the accumulated savings of her parents.

[34] There is no documentary material to support Jo-Ann’s claims. Nor for that matter is there anything to support the contrary assertions of Steven, Sam and Mrs Yi, save for the fact that they are all agreed.

[35] Jo-Ann accepts that her mother is a person of integrity and a truthful witness. In evidence Jo-Anne said:

That’s the same reason as what Sam said in the witness stand the other day: we trust what mother says. Mother is not the person who can create the false story within the family.

[36] Yet Jo-Ann’s own evidence flies in the face of what her mother says about the source of the funds brought to New Zealand. Mrs Yi says that whatever resources she and her husband had accumulated in Korea were depleted and eventually extinguished in meeting various expenses, including educational costs for the three children and more particularly, in meeting very heavy medical expenses arising out of the injuries she and Mr Kwon suffered in the 1994 accident. Her evidence is that when they came to New Zealand they had very little money.

[37] I accept that evidence. Very shortly after the family came to New Zealand Kilkenny Drive was purchased. The family (excluding Jo-Ann who was still in Korea) all lived there in the early stages. It was apparently referred to as “Grandfather’s house”. Jo-Ann suggests that that provides a clue to the identity of the owner of the funds invested in the property. I disagree. I consider that the name “Grandfather’s house” could just as easily underscore the fact that he was head of the family at that time.

[38] Mrs Yi’s evidence is that upon Mr Kwon’s death in 1998, there were really only two family assets, the first was the house in Seoul and the second was the interest in conservation land in An Dong City.

[39] I am satisfied that the latter was of little, in any, value. It was laid out in woodland and was effectively unsaleable. Jo-Ann says she was asked to relinquish her right to that land in about 2009 and did so, but the unchallenged evidence is that that was really just a formality given the evidence that the property was of very limited value.

[40] That leaves for consideration the house in Seoul. Mrs Yi gave detailed evidence about that. The house proved difficult to sell. It was tenanted for a time and then occupied by Mrs Yi’s nephew. Mrs Yi went to Korea for dental treatment, and during that visit, she organised a sale of the property to the nephew who was keen to buy it but had little money. Mrs Yi’s evidence, which I accept, was that a price of 100 million won was agreed. This was “quite a cheap price” but the house had been difficult to sell. The price of 100 million won was reduced by 30 million won on the basis that her nephew would look after an adjoining family graveyard in perpetuity, and would provide accommodation to family members who visited Seoul at any time during their lives. Another 50 million won was applied in extinguishing long standing debts, mostly arising from wedding expenses for Jo-Ann some years earlier.

[41] In the end, there was a balance of about 20 million won, some of which was spent on debts relating to Mrs Yi’s mother’s funeral, some went in allowances to nieces and nephews and some was spent on the dental treatment. She says she brought some money to New Zealand “which was not that much”.

[42] There is no direct evidence as to the exchange rate at the time. In 1996 the rate was about 500 won to the New Zealand dollar. It is now about 1000 won to the New Zealand dollar.

[43] Assuming that, say, 15 million won was brought to New Zealand, the New

Zealand equivalent would be between NZD$15,000-NZD$30,000 (assuming rates of

500 and 1000 won to the New Zealand dollar respectively).

[44] Jo-Ann gave evidence that the family was relatively affluent, but her account was entirely based on assumptions derived from the family’s lifestyle as she grew up and parents’ ability to fund university studies and so forth.

[45] I am satisfied that Mrs Yi’s evidence is to be relied upon, and that the funds she brought to New Zealand were relatively modest, and certainly not at a level approaching the amount of the advance made by Steven to Jo-Ann in 2003 for the

Armoy Drive property. I am satisfied also that the amount of money brought by

Mrs Yi and Mr Kwon to New Zealand in 1996 was relatively modest.

[46] Jo-Ann says that the advance of $150,000 was intended to represent her share of her family inheritance, her two brothers having already received substantial sums from their parents.

[47] The evidence of Mrs Yi, Steven and Sam is to the contrary. They all say that there were no payments from the parents to the sons, and that the money brought to New Zealand by Steven and Sam represented their accumulated savings, including payouts from their former employers in Korea.

[48] Jo-Ann claims that she was expressly told at a family meeting in 2003 that this money would become available to her as part of her inheritance. But the evidence about such family meetings is vague at best. I do not accept that there was a formal round table meeting at which a decision was taken to provide $150,000 to Jo-Ann by way of gift.

[49] Oddly, the plaintiffs do plead that “in or about September 2003, the Plaintiffs the Defendants and their mother had a family meeting at which it was agreed ...”. But the evidence at trial did not meet that pleading. No witness gave evidence of a single formal meeting of that sort. Rather, Mrs Yi, Steven and Sam all said that the family, which got together frequently for barbecues, birthday observances and so forth, regularly talked informally about business and property matters. That said, there is no evidence of an overt discussion about the basis upon which the advance of $150,000 would be made in respect of Armoy Drive.

[50] I conclude that that sum was an advance of money owned by Steven, or alternatively by Steven and Angela. The funds are traceable from the initial purchase of the Kilkenny Drive property and thence through Drysdale Place, and eventually to Armoy Drive. (I exclude Willowbank Close because Steven eventually retrieved the advance when he took over the property from Jo-Ann and Mrs Yi.)

A gift?

[51] Jo-Ann claims that the payment of $150,000 made to her by Steven, was a gift. The burden of proof of that contention lies upon her.[1] There is no explicit evidence to suggest that Steven intended to give the money to Jo-Ann. Rather, his evidence is that he understood that the Armoy Drive funding would replicate what occurred in relation to Willowbank Close. That is, that the advance would be made by way of loan.

[52] The documents prepared by Mr Fowler in relation to the Willowbank Close property were not executed contemporaneously with the making of the advance. Instead, he prepared them and had them executed at the time at which Steven and Angela took over Willowbank Close when Jo-Ann walked out. Mr Fowler was principally concerned with the gift duty risk when he had the documents executed after the event, but in my view the documents do reflect the reality of what occurred in respect of Willowbank Close.

[53] Steven’s purpose in advancing the money to his mother and Jo-Ann on that occasion, and then later in respect of Armoy Drive was, in my view, to achieve two objectives. The first was to ensure his mother had somewhere suitable to live. The second was to assist Jo-Ann by enabling Mrs Yi to live with her daughter and provide the support that a mother can give in such circumstances. There is no satisfactory explanation as to why Armoy Drive was registered in Jo-Ann’s sole name when Willowbank Close was not.

[54] In my opinion Jo-Ann has failed by a wide margin to establish that the advance was an outright gift. At best, it was a loan for her, repayable upon demand but carrying an implied condition that demand would not be made while Mrs Yi was

_{living in the house.}

The pleaded causes of action

Constructive trust

[55] The plaintiffs seek a declaration that Jo-Ann holds 62% of the Armoy Drive property on a constructive trust for them. The 62% is calculated by reference to the proportion that the advance of $150,000 comprised of the total purchase price. The plaintiffs rely on the well established principles discussed in cases such as Lankow v Rose.[2] There, the Court of Appeal confirmed the two essential requirements for a constructive trust. The first is a contribution in more than a minor way to the acquisition, preservation or enhancement of the defendant’s assets, whether directly or indirectly. The second is that the parties must, in all the circumstances, be taken

reasonably to have expected that the plaintiff would share in the assets as a result of that contribution.

[56] I have held that the advance of $150,000 came from Steven, and not from Mrs Yi (either directly or through Steven) as Jo-Ann contends. The first element of a constructive trust has therefore been established. But there are difficulties for the plaintiffs with respect to the second element of the constructive trust cause of action. There is no express or formal agreement about the basis on which the money would be advanced. Understandably enough, finances tended to be discussed only in broad terms during the course of family gatherings. Steven acknowledges that his purpose in advancing the money to facilitate the purchase of Armoy Drive, was to provide security for his mother, who would live with Jo-Ann there, and assist by caring for the household and the children. Jo-Ann, who was working full time, would service the mortgage.

[57] Viewed in the context of the welfare of the family generally, the arrangement worked well, and would probably have continued but for the conflict over Jo-Ann’s desire to have her boyfriend stay overnight.

[58] Steven said in evidence that he understood and expected that the formal legal arrangements for Armoy Drive would be the same as for the preceding purchase and

_{later sale of Willowbank Close. There, the advance from the plaintiffs had been}

documented (belatedly) by Mr Fowler as a loan, subsequently forgiven when the plaintiffs took over Willowbank Close and assumed responsibility for mortgage payments.

[59] There is little or no evidence to suggest that the plaintiffs expected to receive a beneficial interest in the Armoy Drive property. Jo-Ann is the sole registered proprietor. That is because she was named in the agreement for sale and purchase as the sole purchaser. That agreement was prepared by Sam, who at the time was a licensed real estate agent. It was Sam who was chiefly responsible for instructing Mr Fowler, at least in part because Steven was often in Korea engaged in business interests. He was there at the time of the purchase of Armoy Drive, and it was from there that he confirmed in writing to Mr Fowler that $150,000 from the sale price of Drysdale Place was to be applied to the purchase of Armoy Drive.

[60] Sam and Steven are close and worked together in the interests of the family. It was effectively Sam’s choice to place Jo-Ann on the title as sole registered proprietor. Had the plaintiffs considered that they were acquiring an interest in Armoy Drive by reason of their financial contribution, it would have been a simple matter through Sam to record their interest on the title. I appreciate that English was not the family’s first language, and too much ought not therefore be read into the state of the title, but it is nevertheless a matter to be taken into account.

[61] In my opinion, this case does not come close to justifying the imposition of a constructive trust. I consider that the advance by the plaintiffs was intended to be a loan, as it was in relation to the preceding Willowbank Close transaction.

Breach of contract

[62] In their second cause of action the plaintiffs plead that:

(a) At a family meeting in September 2003 it was agreed that they would advance the sum of $150,000 towards the purchase of the Armoy Drive property;

(b) It was a term of the contract that Jo-Ann would allow Mrs Yi to reside with her at the Armoy Drive property;

(c) Jo-Ann had breached the contract with the plaintiffs by evicting Mrs Yi and serving her with a trespass notice. The plaintiffs seek the sum of $150,000 by way of damages, together with interest.

[63] Mr Speir accepts that the evidence did not come up to brief in that nobody spoke of a particular meeting in September 2003. Rather, these arrangements seem to have been made informally (as one would expect in a family context) over a period of time.

[64] In my view, properly analysed, the plaintiffs’ claim is for repayment of a conditional loan. The condition was that Mrs Yi would be entitled to live in the Armoy Drive property for as long as she wished, and that while she did so, the loan would not be called up. That is the tenor of the evidence of Steven, Sam and Mrs Yi.

[65] The plaintiffs’ case is not pleaded in quite that way. Rather it is claimed that Jo-Ann breached the contract by evicting Mrs Yi and damages are sought in consequence. Mr Tevita takes the point that the plaintiffs have not pleaded a conditional loan, repayable on the occurrence of the condition, and that the plaintiffs ought not therefore to recover. He is technically correct. But the real thrust of the plaintiffs’ claim is readily apparent, and Mr Tevita did not suggest that he was prejudiced or embarrassed by the state of the pleadings.

[66] I consider that this was a loan by Steven (or possibly by the plaintiffs) to Jo- Ann, repayable upon demand, but subject to the condition that demand would not be made unless and until Mrs Yi ceased to live in the Armoy Drive property with Jo- Ann. In 2011, she ceased to do so at Jo-Ann’s direction. The issue of this proceeding constituted a demand for repayment. I consider the second cause of action sufficiently embraces the true nature of the plaintiffs’ claim, and that they are entitled to judgment for the amount of the advance, subject to Jo-Ann’s affirmative defences.

Unjust enrichment

[67] The plaintiffs plead that Jo-Ann has been unjustly enriched at their expense by claiming to retain the benefit of the sum advanced by them. The plaintiffs rely on the principles discussed in such cases as National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd.[3] Given my finding that the plaintiffs are entitled to recover the sum advanced as a loan, it is unnecessary to consider this aspect of the plaintiffs’ claim.

Affirmative defences

Laches

[68] This defence is pleaded in response to the plaintiffs’ constructive trust cause of action which I have rejected. It is therefore unnecessary to consider the laches defence further.

Estoppel

[69] Likewise, this defence is pleaded in respect of the plaintiffs’ constructive trust cause of action, and falls away with the rejection of the plaintiffs’ constructive trust argument.

Limitation

[70] Jo-Ann pleads the provisions of the Limitation Act 1950. In his synopsis of argument Mr Tevita says:

The plaintiffs have pleaded that a term of the alleged agreement between the parties was that the parties were to be legal owners of Armoy Drive as tenants in common in respect to the shares in which they contributed towards the purchase price.

Counsel submits that a cause of action for breach of that alleged agreement accrued in or about September 2003 when Armoy Drive was registered in the sole name of the defendant.

_{Mr Tevita then submits that the claim is statute barred because it was filed in}

December 2011, more than two years outside the six year limitation period provided for in the Limitation Act 1950.

[71] Mr Tevita’s submission is reliant upon paras 14 and 15 of the statement of claim in which (in the course of pleading the constructive trust cause of action) the plaintiffs alleged that they instructed their solicitors to register them as joint tenants of the Armoy Drive property, along with Jo-Ann, and that Mr Fowler failed and/or neglected to register them on the title as joint owners.

[72] That allegation was not made out in evidence, and indeed, no attempt was made to support it. Mr Fowler himself said that he never received an instruction to place the plaintiffs on the title, and he was not cross-examined on the point. He dealt chiefly with Sam and Jo-Ann; Steven was in Korea at the time. But these are not issues which were included by the plaintiffs as part of their breach of contract cause of action.

[73] I have held that the strength of the plaintiffs’ claim lies in their entitlement to recover a loan made to Jo-Ann upon fulfilment of the condition as to Ms Yi’s residence in the Armoy Drive property. That condition was fulfilled in July 2011 when Ms Yi was evicted by Jo-Ann. From that time on, the loan was repayable on demand. But no cause of action arose until demand was actually made. In this case the demand must be taken to have been made by the issue and service of this proceeding. In my opinion, no question of limitation arises in this case.

Change of position

[74] This defence is pleaded in respect of the plaintiffs’ claim for unjust enrichment which I have not addressed, because in my view, the plaintiffs are entitled to succeed on their claim for repayment of the loan.

Result

[75] The plaintiffs have succeeded on their cause of action for breach of contract which, although awkwardly pleaded, has been made out. In my opinion when Ms Yi was evicted by Jo-Ann, the plaintiffs became entitled to call for repayment of the

loan. I reject the plaintiffs’ claim based on constructive trust principles and find it unnecessary to consider the unjust enrichment argument. The affirmative defences are each rejected.

[76] Accordingly, the plaintiffs are entitled to judgment against the defendant for the sum of $150,000. The statement of claim incorporates a claim for interest calculated from September 2003. Mr Speir accepts that the plaintiffs cannot be entitled to interest for such a long period. The arrangements between the parties did not call for payment of interest while Ms Yi was living at Armoy Drive. An entitlement to interest could arise only from the time at which Ms Yi was evicted in July 2011. Even then, interest runs only from the date upon which repayment of the loan was formally demanded. There is no evidence that it was demanded until this proceeding was issued on 23 December 2011. Interest will run from that date, at Judicature Act rates, on the sum of $150,000.

Costs

[77] At the request of counsel, costs are reserved for subsequent determination if they cannot be agreed. Counsel should note that consequent upon my retirement from office, any question of costs will be determined by another Judge.

C J Allan J

---

[1] Westdeutsche Landesbank Gironzentrale v Islington London Borough Council [1996] UKHL 12; [1996] AC 669 (HL).

[2] Lankow v Rose [1995] 1 NZLR 277 (CA).

[3] National Bank of New Zealand Ltd v Waitaki International Processing (NI) Ltd [1999] 2 NZLR 211 (CA).