$604,000 awarded as family agreement sours

It started out as an agreement over a family dinner but it soured badly for an absentee landlord who has just been awarded more than $600,000.

Manthi Srilal Perera asked his sister and brother-in-law to look after a twoflat rental property in Orangi Kaupapa Rd, in the Wellington suburb of Northland, while Perera went to live and work in Melbourne in 1991.

For the next 24 years, brother-in-law Avninderpal Singh mingled his, his business, and his brother-in-law’s money, keeping accounts ‘‘in his head’’, a judge was told.

From 1991 to 2015, Perera left them in charge of his rental property, his bank account, and paying his life insurance policy premiums. They already had their own rental property and he thought they were up to the job.

During that time, several hundred thousand dollars of debt was secured against his rental property and money withdrawn from his life insurance.

At one point, the Singhs tried to transfer his property to their own name but that failed because Perera’s partner had lodged a caveat against the title.

Perera claimed $940,000 from the Singhs. They said they owed $57,920.85.

In a recent decision, Justice Helen Cull, in the High Court at Wellington, upheld most of Perera’s claims and awarded him $604,500. She has asked for further submissions on the complicated interest component still to be decided.

While the judge found Perera’s sister, Chamali Supriya Singh, was a party to the oral deal under which the Singhs were to get 8 per cent of the gross rental, and helped manage the property, she was not involved in making payments from her brother’s bank accounts.

They were also to manage a property in Newtown for Perera’s then-partner, and they said they were told to pool the income and pay both mortgages but the partner’s mortgage payments were more than twice Perera’s.

When Perera and his partner were having relationship problems in about 2000, Perera learned in a phone call about the pooling of income and payment. At the time he thought he had not been deliberately deceived and accepted the assurance of his brother-in-law that he would make amends for the lost rent.

Perera was also trying to position himself well for an anticipated relationship property negotiation with his partner and asked Singh to borrow the maximum against the rental property and hold the funds until he settled with his partner, and then pay the money back to restore his equity.

In 2004, he gave his brother-in-law power of attorney. Between October 2000 and April 2015, $315,388 in loan drawdowns and transfers went from Perera’s to the Singhs’ bank accounts, although the Singhs said they were all with his authority.

Perera came to Wellington in October 2014, and discovered some of what had taken place, and that $300,000 had been borrowed against his property.

The discovery ended their agreement and started his demand for repayment of all money. Perera said the property that should have been a debt-free nest egg for his retirement still had a $250,000 mortgage, he had received none of the rent surplus after expenses were paid, his life insurance premiums had not been paid and money was withdrawn from the policy without consent.

Singh said he had done everything with Perera’s authority. Either through dishonesty or ineptitude, Singh misled the court about how and why some transactions happened, the judge said.

Singh said he did not have written accounts but kept the details of his personal and business finances, and Perera’s, in his head.

An accountant described accounts as ‘‘a mess’’.

Avninderpal Singh did not have written accounts, keeping the details in his head.

Singh’s