Brothers’ money row ruling upheld
It wasn’t the first time that money had changed hands between Wellington brothers Mark and Mike Garnham, but it may be the last.
When businessman and lawyer Mike Garnham was short of money in 2015 to pay tax debts, he borrowed $250,000 from his brother without any formal written record of the deal. The first $150,000 plus interest was repaid, but Mark Garnham’s pleas for the remaining $100,000 came to nothing.
‘‘For a while Mark was willing, although not necessarily happy, to wait for Mike to sort out his difficulties through realisation of his property interests,’’ Justice Jill Mallon wrote in a recent judgment from the High Court at Wellington.
‘‘He became less willing to do so when he saw that Mike had purchased a new car and learned that Mike and his family had been on overseas holidays."
There was evidence that a few years earlier, Mike Garnham had given Mark $50,000, and in 2003 there had been other family loans.
Over the period of the more recent family loan, Mike Garnham was involved in a series of property deals, including the sale of land at Awaroa Bay in Abel Tasman National Park with his father-in-law Michael Spackman. The sale gained national attention, with the beach eventually purchased by the Government after Kiwis crowdfunded more than $2 million in 2016.
The ASB Tower in Wellington, in which Mike Garnham had an interest, was also sold.
Mark Garnham ended up suing his brother for $100,000 in the District Court, where the judge found that Mike Garnham did not have a reasonably arguable defence to the demand for repayment of the $100,000 plus interest.
Mike Garnham appealed the decision, saying he did not have to pay back the money until he had funds from a Wanaka property development.
Mark’s view was that the money was repayable after a year, or earlier if he and his partner needed it to buy a house. By March 2016, Mark Garnham told his brother they had not found a house to buy, but if something popped up, the situation would change, and that he had a tax debt to pay in early April, ‘‘and then to have a few pennies to live off for the rest of the year’’.
Later that year, Mark noticed that Mike had bought a new car, and said: ‘‘Obviously money not an issue now so how about sending me my 100K.’’
In early 2017, Mark was asking for the money ‘‘ASAP’’, but Mike Garnham said he was waiting on a resource consent before $4 million worth of section sales in the Wanaka development could be settled.
By early 2018, Mark Garnham’s lawyers had made a formal demand for the money within 10 days. The case then went to court.
Justice Mallon agreed with the District Court judge that it was not reasonably arguable that the $100,000 did not need to be repaid until the Wanaka subdivision was complete. If that had been the agreement, Mike Garnham would have been expected to mention it in emails between the pair earlier than he did.
The informal nature of the loans was consistent with there being no firm agreement for repayment, the judge said. If there was no firm agreement for when the loan was to be repaid, it was repayable on demand, she said.
The judge ruled that the District Court judgment against Mike Garnham was correct.
It was not the first time Mike Garnham’s money woes had led to court action.
In 2017, real estate agent Paula Muollo attempted to bankrupt Garnham after Inland Revenue (IRD) settled its claims against him.
Muollo claimed Garnham would not hand over 2000 luxury tiles that belonged to her. But the High Court ruled that Muollo could not be substituted for the IRD, and quashed her proceedings.
‘‘Obviously money not an issue now so how about sending me my 100K.’’
Mark Garnham, to brother Mike