Crown Commercial Construction Limited v Lee - [2012] NZHC 2473

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2011-404-006063 [2012] NZHC 2473

BETWEEN CROWN COMMERCIAL CONSTRUCTION LIMITED Plaintiff

ANDWON HE LEE Defendant

Hearing: 10 September 2012

Counsel: I F Williams and E Krishnan for Plaintiff
M H Benvie for Defendant

Judgment: 25 September 2012

JUDGMENT OF MILLER J

Introduction

[1] Crown Commercial Construction Ltd transferred a commercial property at Henderson to Won He Lee in 2005, for what both parties agree was less than market value. It now asks the Court to set the agreement aside, forcing Won He Lee to re- transfer the property on repayment of the purchase price and to account for the rent she has received.

[2] The central question is one of fact: whether Won He Lee forced Crown Commercial to accept the price by threatening to tell the Immigration Service that one of Crown’s principals was in New Zealand unlawfully. If she did, I must consider what relief ought to follow in duress, undue influence or unconscionable bargain.

The protagonists

CROWN COMMERCIAL CONSTRUCTION LIMITED v WON HE LEE HC AK CIV-2011-404-006063 [25
September 2012]

[3] The principal players are members of two Korean families linked by marriage. On the plaintiff’s side, Ha Young So and her husband Byung Min Lee have two adult sons, Sang Gi Lee and Joong Ki Lee. The plaintiff itself is a company that they formed to develop the property.

[4] On the defendant’s side, Won He Lee and her husband Tae Jong Chung have a

daughter, Yee Seung Chung, who was formerly married to Sang Gi Lee.

The immigration scheme

[5] Sang Gi Lee and Yee Seung Chung married in Korea in 2000. They emigrated to New Zealand, having secured residency, in November 2001. At about the same time Ha Young So, Byung Min Lee and Joong Ki Lee also entered New Zealand.

[6] Ha Young So sought residency as a business investor but that option was not open to Byung Min Lee, who had a failed business in Korea. As a bankrupt he was not permitted to leave that country, but he managed to do so by bribing customs officials. He entered New Zealand as a visitor, using his Korean passport.

[7] Won He Lee and Tae Jong Chung entered New Zealand in 2001. They later secured residency, having been sponsored by Won He Lee’s brother, who was already in business here.

[8] Attempts were made early in 2002 to extend Byung Min Lee’s stay. Those attempts included visits to Immigration Service offices as far south as Palmerston North. On that trip by car he and Sang Gi Lee were accompanied by Won He Lee and Yee Seung Chung. These attempts failed, the Immigration Service agreeing only that Byung Min Lee could remain until Yee Seung Chung, who was pregnant, gave birth to his grandchild.

[9] So a scheme was hatched under which Byung Min Lee would gain entry using a false passport. He travelled to Ecuador, where he acquired a passport in the name of Ramiro…

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.

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Details

Case: [2012] NZHC 2473
Decision Date: 25 September 2012

CaseChat Overview and Summary

Crown Commercial Construction Limited, a property development company, sued Won He Lee for the rescission of a sale of property and for recovery of rents. The central issue was whether Won He Lee forced Crown Commercial to accept a lower price for the property by threatening to report to the Immigration Service that one of Crown’s principals was in New Zealand unlawfully. If so, the court had to determine what relief was appropriate in terms of duress, undue influence, or unconscionable bargain. The court found that the threat was made, and the price of $215,000 resulted from duress or undue influence or unconscionable use of advantage or influence. The court concluded that the entire transaction had to be rescinded to satisfy the equity arising from Won He Lee’s unconscionable dealing, and the plaintiff should be restored to beneficial ownership of the property. The court also ordered that Won He Lee must account to the plaintiff for rent earned from the property, but the quantum remained to be settled. The court set a timetable for further evidence and submissions to determine the appropriate rate of interest on the purchase price and the net rent payable.

Orders