The sister of a woman jailed for fraud has won a $1.3 million damages claim against her sibling and brother-in-law in the High Court.

Michelle Roberta Innes was sentenced to four years and nine months in jail last month for using more than $1 million entrusted to her by her sister, Lesley Morresey.

Innes, who was prosecuted by the Serious Fraud Office, also used a Pauanui property owned by Ms Morresey as security for mortgages for her own benefit.

The 59-year-old officer administrator from Pukekohe was found guilty in the Auckland District Court in April of criminal charges, including theft by a person in a special relationship and theft by failing to account.


After moving to Alaska, Ms Morresey in 1999 began sending funds back to be held by her sister.

Ms Morresey also bought a property in Pauanui and nominated her sister as the buyer.

In 2010, Ms Morresey brought civil action against her sister and brother-in-law Robert Innes and the judgment in that case said Michelle Innes held $900,000 on her sibling's behalf.

"Rather than hold the money for Ms Morresey those funds were used to purchase properties and to develop a company," Justice Raynor Asher said in his September 2011 decision

After her sister was jailed, Ms Morresey went to the High Court at Auckland earlier this month seeking damages from the couple "in respect of funds that they misappropriated".

The first claim related to the $900,000 and Justice Graham Lang in his decision said the funds have "now disappeared in their entirety".

"For the most part, they appear to have been swallowed up in the liquidation of a company in which Mr and Mrs Innes had an involvement. It is clearly appropriate to enter judgment in that sum and I now make an award of damages accordingly."

The second damages claim related to the mortgage over the Pauanui property and a debt to the bank of $438,448.

"The bank had no notice that Mrs Innes was acting fraudulently. As a result, the bank is entitled to the benefit of its security over the property notwithstanding the fact that Ms Morresey did not know that Mrs Innes had encumbered the section in that way. As a result, Ms Morresey has suffered further loss in the sum of $438,448.76 being the amount presently outstanding to the bank and secured by way of mortgage against the Pauanui property. I enter judgment in favour of Ms Morresey in respect of that sum as well.

"This means that Ms Morresey has a judgment against Mr and Mrs Innes in the total sum of $1,338,448.76," Justice Lang said.

While Ms Morresey obtained the damages judgment, it is understood the defendants - who were not represented before Justice Lang - are not in position to meet the claim.