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Status of personal records at issue in family loan dispute

14 Jun 2024

| Author: Andrea Hilton

Evidence Act 2006 ss 18 & 19–business records–hearsay documents–contract interpretation– objective approach–background information–Bathurst Resources Ltd v L & M Coal Holdings Ltd [2021] NZSC 85– Firm PI 1 Ltd v Zurich Australian Insurance Ltd [2014] NZSC 147– Marshall clause.

Dilworth v Pirie [2024] NZHC 1321


Sarah Dilworth and her brother Christopher Redpath’s father Ian Redpath bequeathed them a loan he made to their grandfather, William Redpath, in 1994.

Ian predeceased William. Dilworth unsuccessfully claimed $27,000 and unpaid interest on the loan principal for the term of the loan against William’s estate. The issue before the court was how much William’s estate owed Ian’s estate.

A loan of $127, 000 was originally made to Ian’s parents, William and Caroline Redpath. Caroline predeceased Ian.

The terms of the loan were recorded in a deed of acknowledgement of debt. This included an agreement to mortgage and granted Ian power of attorney to sign the mortgage.

The loan was on demand with 10% interest payable 14 days after the annual anniversary of the advance date. Ian never made a demand for interest but $27,000 was to be repaid on settlement of William and Caroline’s sale of their home. It was accepted that the home was sold.

William’s estate repaid the $100, 000 to Ian’s estate but Dilworth claimed that $27, 000 of the principal was still outstanding, along with accrued interest. She also claimed the interest was due because it continued to accrue, even if demand was not made. Therefore, when demand was made in December 2021 for interest, all the interest was due.

But Carol Pirie, Ian’s sister and the executor of his estate, claimed the $27,000  had been repaid, saying no interest was due because it accrued only if interest was demanded. She also said if interest was payable, only $50,000 was due because the remainder was time-barred.

Dilworth produced Ian’s will, his six preceding wills, his handwritten notes and a transcript of his notes prepared in 2022 in support of the claim.

Ian’s handwritten notes were created between 2010 and 2016. They indicated $27,000 was not repaid and compounded interest was due.

Pirie produced the deed, William’s lawyer’s reporting letter and the statement of account and bill relating to the sale of William and Caroline’s home. Pirie also produced William’s final and two preceding wills.

The final will did not refer to the loan, but the preceding wills directed that Ian be repaid “$100, 000 or such amount or part thereof as shall be owing at my death”.

It was accepted that Ian’s notes were hearsay documents and were not business records. The court had to decide whether his notes were admissible and, if so, what weight should they be given.


Applicable principles: Whether document is a business record –whether document is hearsay evidence– whether statements reliable–whether statements should be given weight– whether statements were contemporaneous with contract–whether party’s subjective views shared with other party–whether “background” information to contract is relevant–whether reasonable person considers it relevant –background information relevancy to contract interpretation colours admissibility–Re Marshall [1965] NZLR 851 (CA) – whether interest accrues without a demand.


Held: Ian’s notes were hearsay and they were not business records. But they were reliable and therefore admissible.

However, they could not be relied on to establish that $27, 000 had not been repaid when the deed and William’s lawyer’s reporting documents supported the probability that it had been repaid. Therefore, the outstanding balance of the loan was only $100,000. The deed included a Marshall clause that meant interest accrued only if an annual demand was made.


After 14 years as general counsel for a local authority, Andrea Hilton is now a sole practitioner practising local government law


Dilworth v Pirie

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