Bei v Wang - [2020] NZHC 897

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1164

[2020] NZHC 897

BETWEEN
DUOYU BEI

Plaintiff

AND

CHAO WANG

First Defendant

AND

WILSON MCKAY TRUSTEE COMPANY (228904-10) LIMITED

Second Defendant

AND

MYST TRUSTEE LIMITED

First Third Party

AND

WEI KONG

Second Third Party

Hearing: 3 February 2020

Appearances:

DPH Jones QC and D-M Cross for Plaintiff, First Third Party and Second Third Party

D J Clark, J Clark and J Corlett for Defendant

Judgment:

5 May 2020

JUDGMENT OF WALKER J

This judgment was delivered by me on 5 May 2020 at 10.00 am Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

BEI v WANG & ORS [2020] NZHC 897 [5 May 2020]

Introduction

[1] The plaintiff, Duoyu Bei, alleges the first defendant, Chao Wang, is liable to him for misrepresentation, in deceit, and for breach of fiduciary duty. According to the pleadings, Mr Bei advanced money to Mr Wang. The advances were of two kinds. The first was in return for a 50 percent shareholding of Wang C Ltd. The second was to pay for a renovation of the nightclub business operated by Wang C Ltd. The payment to Mr Wang was to be attributed to the company. Wang C Ltd was placed in liquidation on 13 April 2017.

[2] The plaintiff’s case is that the majority of the money was not utilised by Mr Wang for loan purposes but for personal purposes, including on a property on Paritai Drive, Orakei. The registered proprietor of the Orakei property was the Wang C Trust. The second defendant is the trustee of the Wang C Trust.

[3] Mr Wang left New Zealand in early 2017. He has no known assets in New Zealand. The net proceeds from the sale of the Orakei property are held in the trust account of Wilson McKay pursuant to a freezing order. The freezing order was made by consent in December 2017. Among other things, Mr Bei alleges that the Wang C Trust is a sham such that the Trust assets are in fact Mr Wang’s assets. The pleading asserts that those Trust assets are held on constructive trust. Mr Bei claims a total of
$1.28M. The amount held on trust is around $975,000.

[4] Mr Wang denies the allegations. He has filed a counterclaim. He asserts, among other things, that the trustees of the Olympians Trust (for whom Mr Bei is said to have acted at all times) breached the shareholder agreement; that Mr Bei and others took control of the company’s affairs from January 2017, locking Mr Wang out of the management and affairs of the company and securing for their own benefit all income received by the business. Mr Wang also seeks relief under s 174(2)(b) of the Companies Act 1993. Mr Wang seeks damages for $1.1M representing the value of his lost shareholding, $400,000 for lost income, and general damages.

[5] The substantive trial was to commence on 12 August 2019.…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Bei v Wang

Details

AGLC: Bei v Wang [2020] NZHC 897
Case: [2020] NZHC 897
Decision Date: 5 May 2020

CaseChat Overview and Summary

In Bei v Wang, the plaintiff, Duoyu Bei, sought to recover a sum of money from the first defendant, Chao Wang, for misrepresentation, deceit, and breach of fiduciary duty. The trial was vacated when Mr Wang, who was required to be present, was unable to return to New Zealand due to visa issues. The Court found that the primary cause of the trial being vacated was Mr Wang's inadequately explained absence from New Zealand. The plaintiff was awarded wasted costs of $23,466 plus disbursements of $500. The Court also found that the plaintiff was entitled to costs on a 2B basis for the application for non-party discovery and the application for wasted costs. The application for the taking of evidence by audio visual link was adjourned and the application to vary the freezing order was dismissed. The freezing order was varied to increase the sum permitted to be deducted from the funds held by Wilson McKay to $245,000. The first defendant was ordered to pay the plaintiff's costs of $23,466 plus costs on a 2B basis for the application for wasted costs and the application for non-party discovery.

Orders