Deng v Ye

[2018] NZHC 391

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-1022 CIV-2016-404-1005 [2018] NZHC 391

BETWEEN  JIE DENG

Plaintiff in 2016-404-1022
Defendant in 2016-404-1005

AND  HUIFANG YE

Defendant in 2016-404-1022
Plaintiff in 2016-404-1005

AND  PUBLIC TRUST

Second defendant in 2016-404-1005

Hearing:                   13 October 2017

Appearances:           N W Woods and P Amaranathan for Ms Deng

R Reed and A Manuson for Ms Ye No Appearance for Public Trust

Judgment:                12 March 2018

JUDGMENT OF PALMER J

This judgment is delivered by me on 12 March 2018 at 2.00pm pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

DENG v YE [2018] NZHC 391 [12 March 2018]

Solicitors:

Rice Craig, Papakura

Prestige Lawyers, Auckland

Summary

[1]    Ms Jie Deng married Mr Jun Xie in China in 1985. They divorced in New Zealand in 1998. Ms Huifang Ye married Mr Xie in Las Vegas in the United States in March 2013. Mr Xie died without a will in August 2013. Ms Ye was appointed administrator of Mr Xie’s estate in New Zealand. Ms Deng applies for summary judgment to recall Ms Ye’s appointment as administrator. Ms Deng says her own New Zealand divorce from Mr Xie was a sham and they continued their relationship following the divorce. She also says the New Zealand divorce is not recognised in Chinese law so Mr Xie did not have the legal capacity to marry Ms Ye in Las Vegas. Ms Ye says it is and he did. The estate is worth more than $5 million.

[2]    I grant summary judgment recalling the appointment on the basis of the public interest in ensuring the integrity of the Court’s processes. Ms Ye applied without notice to the New Zealand High Court for letters of administration in July 2014. She knew, but did not advise the Court, that Mr Xie’s capacity to marry Ms Ye had been disputed in a Chinese court by Ms Deng in January 2014. I appoint an independent administrator to allow the substantive dispute to be sorted out. I also grant Ms Ye’s application for asset preservation orders against Ms Deng, which are not opposed. I make directions regarding preparation for trial.

Context

[3]    The factual context is set out in my previous interlocutory judgment of February 2017 which I draw on, and update, below.1

Mr Xie and Ms Deng

[4]    Ms Jie Deng married Mr Jun Xie in China in 1985. In April 1991, their daughter, Ms Shelley Deng, was born. In 1995 they moved to New Zealand. Their

1      Ye v Deng [2017] NZHC 227.

marriage was dissolved in New Zealand by the Family Court in July 1998. The dissolution has not been registered in China nor recognised by a Chinese court.

[5]    Ms Deng says the dissolution was part of a business tactic, the non-registration was intentional and she continued to have a de facto relationship with Mr Xie in New Zealand. She says the New Zealand dissolution was based on Mr Xie being domiciled in New Zealand and living apart from her, which was not correct.

[6]    In April 1999 Ms Deng and Shelley were granted New Zealand citizenship. They remained in New Zealand. Mr Xie remained a Chinese citizen with permanent residence status in New Zealand. His mother, Mrs Jinhau Xie, still lives in China.

[7]    In 2000, Mr Xie incorporated Sincessta International Corporation (NZ) Ltd (Sincessta NZ) in New Zealand as a holding company for a Chinese cotton manufacturing company. Sincessta International Corporation Limited (Sincessta BVI) is a related company incorporated in the British Virgin Islands.

[8]    Ms Deng pleads that, on 13 April 2003, she and Mr Xie jointly purchased a property in Warren Avenue, Three Kings, Auckland, for her and their daughter, Shelley, to live in. On 24 March 2009 Ms Deng and Mr Xie asked the Public Trust to transfer the property to a trust for the benefit of Shelley at the then market value of

$540,000. The Public Trust understood Ms Deng and Mr Xie were married. Trust documents were signed in June 2009 and the transfer was effected in February 2010. The debt was forgiven by the trustees in June 2012. Mr Xie executed the Deeds of Forgiveness of Debt at the Consulate-General in Shanghai.

Mr Xie and Ms Ye

[9]    Ms Ye met Mr Xie in 1999. Ms Ye started working with Mr Xie in 2001 at Sincessta. Ms Ye says she started a de facto relationship with Mr Xie in China in 2004. They had a wedding celebration in China in May 2011. Their son, Bowen Xie, was born in the United States in January 2013. They married in Las Vegas in March 2013. The parties dispute whether Mr Xie had the capacity to marry at this time and, therefore, whether the Las Vegas marriage is valid.

Mr Xie’s death and aftermath

[10]   Mr Xie died in a car accident in China on 10 August 2013. He died intestate. Some of Mr Xie’s estate is in New Zealand, including 65 per cent of the shares in Sincessta NZ and 70 per cent of the shares in Sincessta BVI. Ms Deng holds the other 30 per cent of the Sincessta BVI shares. Some of the estate is in China, including several properties.

[11]   In November 2013, the Wuzhong District People’s Court, Suzhou City, China received an application by Ms Ye and her son Bowen claiming property owned by Mr Xie was joint relationship property and Bowen was legal successor.² The Court agreed to an application by Ms Deng and Shelley to intervene. They opposed the application, on the basis Ms Deng is the only legitimate spouse of Mr Xie and the property was joint property of Mr Xie and Ms Deng. The Court noted Ms Ye’s intention to apply to have the New Zealand dissolution order recognised in China. On 13 January 2014, the Court held:

This court found that this case in nature is a dispute of legal succession. The intestate’s spouse, child/children and parents are the first rank of successors and are entitled to participate in the distribution of the estate. Plaintiff Huifang YE alleges she married Jun XIE after Jun XIE and the third party Jie DENG divorced overseas and the document in relation to the dissolution of marriage in the New Zealand is not recognized by the Chinese court. Under these circumstances, the plaintiff Huifang YE has yet been able to establish that she has direst [sic] interest in this case. In the course of the hearing the plaintiff stated that she will lodge the application for recognition in the court according to law. Plaintiff Huifang YE’s status is not defined at this stage, accordingly the portion of the estate plaintiff Bowen XIE cannot be confirmed either. Based on the above, in accordance with the Article 119 of the Civil Procedure Law of the People’s Republic of China, the court determines that the claim lodged by plaintiff Huifang YE and Bowen XIE is dismissed.

[12]   Sometime after his death, Ms Deng transferred Mr Xie’s shareholding in Sincessta BVI into her own name and transferred the signing authority with the bank, in the British Virgin Islands, from Mr Xie’s name into her own name. The bank account had balances of over $5 million as at 31 July 2013. Ms Ye alleges Mr Xie’s signature on the share transfer authorisation form discovered by Ms Deng may be false.

2      Ye v Xie Wuzhong District People’s Court Suzhou City, (2013) Wu Minchu No 1411, 13 January 2014 (translation provided by applicant in Affidavit of Ms Deng, 18 July 2017 at Exhibit R). Two alternative translations were provided, one in the Affidavit of Ms Ye, 23 August 2017 at Exhibit D and one in the Affidavit of Ms Deng, 18 July 2017 at [56]. These translations are substantively similar.

[13]   Ms Ye alleges Ms Deng also took possession of two Chinese properties which belonged to Mr Xie. Ms Deng alleges Ms Ye unlawfully removed chattels worth $500,000 from Ms Deng’s family home with Mr Xie in China and unlawfully purported to remove seven directors of Sincessta and to appoint herself and her brother as directors under a new constitution.

[14]   On 13 March 2014, Ms Ye signed a notice of choice of option by surviving spouse under s 61 of the Property (Relationships) Act 1976 to the effect that she was the spouse of Mr Xie, having married in Las Vegas on 10 March 2013. On 26 May 2014, Ms Ye swore an affidavit for obtaining a grant of letters of administration in New Zealand in relation to Mr Xie’s estate. Ms Ye’s affidavit attested to:

5       The deceased has been a New Zealand permanent resident for many years and has always maintained his domicile in New Zealand.

…

7        I am the surviving spouse of the deceased. Attached and marked “B” is a certified true copy of our [Nevada] marriage certificate. I am entitled to succeed on the intestacy. My beneficial interest in the estate is not affected by [s 12(2) of the Matrimonial Property Act 1963, s 26(1) of the Family Proceedings Act 1980 or s 61 of the Property (Relationships) Act 1976]

8        The deceased was not survived by a de facto partner entitled to succeed on the intestacy.

…

13     The result of my inquiries was that I did not discover any such parent or child [in addition to Shelley Deng and Bowen Xie].

[15]   Ms Ye acknowledges she failed to identify that Mr Xie’s mother was still alive and says that was an honest mistake. The application for letters of administration was advanced on a without notice basis on 9 July 2014, including on the ground “[t]he applicant is the wife of the deceased and has a beneficial interest in the estate of the deceased and therefore is entitled to the grant of administration”. The application was granted on 4 August 2014.

[16]   On 15 December 2014 Ms Ye applied in China for recognition of the dissolution of Mr Xie’s marriage to Ms Deng. The Intermediate People’s Court of Suzhou City,

Jiangsu Province, China, put the case on file on 27 January 2015. On 28 February 2017, the Intermediate People’s Court issued a Civil Order dismissing the application, stating:³

Our court believes through review that Applicants Huifang Ye and Bowen Xie are not the persons concerned of the Dissolution of Marriage Order F.P No 048/598/98 by the Auckland District Court of New Zealand and that in their lodgement of the case applying for recognition, the subjects of the procedure are unsuitable.

[17]   Ms Reed now advises, from the bar, that Ms Ye has made a further application as an interested third party.

Current New Zealand proceedings

[18]   On 16 May 2016, as administrator of the estate, Ms Ye filed an application (the property application) seeking Ms Deng return to the estate any estate assets she received including the Sincessta BVI shares, any funds removed from Sincessta BVI’s bank accounts, the signing authority (or damages) and, in the fourth cause of action against the Public Trust as well, an order the Warren Avenue property is held on resulting trust for the estate. There are four causes of action: fraudulently obtaining part of the estate; knowing receipt; the tort of conversion; and unconscionability in the transfer of the Warren Avenue property.

[19]   On 20 May 2016, Ms Deng filed an application (the recall application) to recall Ms Ye’s appointment as administrator. She challenges the validity of Ms Ye’s marriage to Mr Xie arguing that, at Chinese law, Ms Deng was still married to him. Ms Deng says the Chinese courts have jurisdiction to determine the marriage in relation to intestate succession. She contends Ms Ye misled the High Court of New Zealand in applying for letters of administration. Ms Deng seeks Ms Ye’s replacement by an independent administrator.

[20]   In February 2017, I declined Ms Deng’s application to strike out, or for summary judgment in, Ms Ye’s property application.4 I granted Ms Deng’s application to stay Ms Ye’s property application, pending application of the recall application. I

3      Re Ye Intermediate People’s Court Suzhou City,  (2015) Code  Su Zhong Min  Chu No  00027, 18 February 2017 (translation provided by applicant in Affidavit of Jie Deng, 18 July 2017 at Exhibit B).

4      Ye v Deng, above n 1.

declined Ms Ye’s application for discovery from Ms Deng in Ms Ye’s property application.

[21]   As an interim measure, Ms Deng undertook not to deal with the Sincessta shares, or to withdraw or otherwise deal with funds held in Sincessta’s bank accounts other than on the terms set out in the undertakings.

[22]   A two-week trial was set down for Ms Deng’s recall application on 1 May 2017 but did not proceed due to Ms Deng not complying with court directions to apply for audio-visual links (AVLs) to China for five witnesses by the required deadline.5 A new three-week hearing has been set down for 16 July 2018.

[23]Now:

(a)Ms Deng applies for summary judgment in her application for recall and/or removal of Ms Ye’s letters of administration and appointment of an independent legal practitioner, Ms Alison Gilbert, expert in estates administration and succession.

(b)Ms Ye applies for orders to preserve Sincessta BVI’s funds in the High Court trust account.

[24]   At the beginning of the hearing Mr Woods, for Ms Deng, sought name suppression of the parties, without having “delved” into the relevant rules.   I noted   r 7.35 provides particulars of the hearing may be published unless a judge otherwise directs. I stated I would need good reason to limit the principle of open justice, and I could see no such reason here. Mr Woods did not pursue the point.

Law of recall of appointment as administrator

[25]   Section 21(1) of the Administration Act 1969 provides the court may discharge or remove an administrator “[w]here an administrator is absent from New Zealand for 12 months without leaving a lawful attorney, or desires to be discharged from the office

5      Ye v Deng [2017] NZHC 2764.

of administrator, or becomes incapable of acting as administrator or unfit to so act, or where it becomes expedient to discharge or remove an administrator”. The court may appoint any person to be administrator in his or her place on such terms and conditions as the court thinks fit.

[26]   The Court of Appeal has adopted Heath J’s statement in Farquhar v Nunns of the principles which should guide a court in applying s 21, which I paraphrase in relation to situations of intestacy:6

(a)The starting point is the court’s duty to see estates properly administered and trusts properly executed.

(b)The jurisdiction involves a large discretion which is heavily fact- dependent.

(c)Ultimately the question is what is expedient in the interests of the beneficiaries.

(d)“Expedience is a lower threshold than necessity, and imports considerations of suitability, practicality and efficiency. Misconduct, breach of trust, dishonesty, or unfitness need not be established.”7

(e)Hostility between administrators and beneficiaries is not, of itself, a reason for removal but will be relevant if and when it risks prejudicing the interests of the beneficiaries.

[27]   In Lee v Archer, on a summary judgment application, Associate Judge Matthews found, independent of s 21, the Court has jurisdiction to recall the grant of letters of administration “on the basis of a false suggestion, if established”.8 He found the administrator, the deceased’s daughter, had sworn an affidavit which, based on the evidence examined on a summary judgment basis, was false in a material respect: the

6      Farquhar v Nunns [2013] NZHC 1670 endorsed by the Court of Appeal in Tod v Tod [2015] NZCA 501, [2017] 2 NZLR 145 at [22] and Frickleton v Frickleton [2016] NZCA 408, [2017] 2 NZLR 154 at [29].

7      Farquhar v Nunns, above n 6, at [13](d).

8      Lee v Archer [2012] NZHC 3308 at [14].

affidavit stated the deceased was not in a de facto relationship when he was. So, there was a person who would be entitled to apply for letters of administration in priority to the applicant and “the Court [had] been led (even if unintentionally) into making an order which it would not have made had the position, now established, been known to it at the time”.9 The Judge issued summary judgment recalling a grant of letters of administration.

[28]   In declining to stay enforcement of that judgment the Judge noted “at the very least”, the previous administrator’s statement was carelessly made and “turning a blind eye to the facts which were squarely before her” did not entitle her to swear the affidavit.10 He stated:11

There is in my view an element of public interest in this case, the protection of [the Court’s] due processes from the consequences of the provision of false information, on which its officers will rely. Ms Lee has taken proceedings to establish that position and in my opinion the Court should be slow to accede to leaving in place the decision made by this Court on the basis of Ms Archer’s false statement.

Should Ms Deng be granted summary judgment in her recall application?

Law of summary judgment

[29]   Rule 12.2(1) of the High Court Rules 2016 provides the court “may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action”. One of the exceptions is an application for administration in common form. But this proceeding is not such an application; as in Lee v Archer, it is the inverse.12 I paraphrase the Court of Appeal’s summary of the legal principles in Krukziener v Hanover Finance Ltd:13

(a)The question is whether there is no real question to be tried. The court must be left without any real doubt or uncertainty.14

9 At [66].

10     Lee v Archer [2012] NZHC 3551 at [24].

11 At [26].

12     Lee v Archer, above n 8, at [7].

13     Krukziener v Hanover Finance Ltd [2008] NZCA 187, (2008) 19 PRNZ 162 at [26].

14     Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA).

(b)The onus is on the plaintiff but where its evidence is sufficient to show there is no defence, the defendant will have to respond to defeat the application.15

(c)The court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence inherently lacking in credibility, for example evidence that is inconsistent with undisputed contemporary documents or other statements by the same deponent or that is inherently improbable.16

(d)The court’s assessment of the evidence is a matter of judgment. The court may take a robust and realistic approach where the facts warrant it.17

Submissions on recall

[30]   Ms Deng applies for summary judgment on her application for recall of the grant of letters of administration to Ms Ye and a new grant of letters of administration to Ms Alison Gilbert, a partner in a law firm. Alternatively, she applies for removal of Ms Ye under s 21 of the Administration Act 1969.

[31]   Mr Woods, for Ms Deng, accepts Ms Ye’s absence from New Zealand for more than 12 months and failure to appoint an attorney is unlikely to be sufficient, in itself, for the application to be successful. He says he accepts the defendant’s chronology and adopts only undisputed facts. He submits:

(a)China was the place of Mr Xie’s domicile at the time of the Las Vegas marriage, under s 9 of the Domicile Act 1976. Chinese law therefore determined Mr Xie’s capacity to marry at that time.18 On the basis of expert evidence and the Chinese court orders, the New Zealand dissolution order was not recognised in China at the time of the Las

15     MacLean v Stewart (1997) 11 PRNZ 66 (CA).

16     Eng Mee Young v Letchumanan [1980] AC 331 at 341 (PC).

17     Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).

18     Shaw v Gould (1868) LR 3 HL 55.

Vegas marriage, and will not be. On application of conflict of laws principles, Ms Ye was not validly married to Mr Xie in Las Vegas.

(b)Ms Ye obtained grant of letters of administration upon false suggestions, that she was legally married to Mr Xie and no one else was, and that Mr Xie was domiciled in New Zealand. Mr Woods states he does not assert the statement was intentionally false and that is not necessary. He also states his argument is not premised on the New Zealand dissolution being a sham. He does say I need to make a finding about Mr Xie’s domicile. He says that matter is clear on the evidence and submits Ms Reed’s argument to the contrary has no legs.

(c)The falsity of the statement is no longer reasonably arguable in light of the final determination of the People’s Court of 28 February 2017 on Ms Ye’s lack of standing and Ms Deng’s intention not to apply for the dissolution to be recognised in China.

(d)There is a duty of full disclosure of all relevant facts in a without notice application under r 7.23 of the High Court Rules 2016. The Court’s supervisory role in relation to probate requires swift action following proof of the falsity of a statement.

(e)The pleaded affirmative defence of estoppel is not available at law and is a red herring.

[32]Ms Reed, for Ms Ye, submits summary judgment is not appropriate because:

(a)Ms Ye has arguable defences which raise issues of fact, particularly about whether there was a de facto relationship between Ms Deng and Mr Xie, whether Mr Xie was domiciled in New Zealand and, on the basis of expert evidence, the effect in Chinese law of the New Zealand dissolution.

(b)The application for grant of the letters of administration was not materially false or misleading because Mr Xie was domiciled in New Zealand and Ms Ye was married to him and not to Ms Deng. Ms Ye was not required to disclose the 2014 Chinese judgment as it had no bearing on the application because the New Zealand court had to recognise the New Zealand dissolution and the Chinese judgment did not determine whether or not the New Zealand dissolution was valid in China. The non-disclosed existence of Mr Xie’s mother was not a material fact.

(c)The defences of estoppel by representation and estoppel by record are available to Ms Ye.19

(d)Ms Deng has no standing to make the application for recall.

Decision on summary judgment

[33]   At common law, the formal validity of a marriage is governed by the law of the place of its celebration.20 Capacity to marry is governed by the law of the parties’ domicile at the time of the marriage.21

[34]   Whether Ms Ye’s marriage to Mr Xie in Las Vegas in 2013 was valid depends on whether Mr Xie had the capacity to marry then. That, in turn, depends on where he was domiciled and on what the law of that country said about his capacity. Mr Woods, for Ms Deng, submits Mr Xie was domiciled in China in 2013 and, on the basis of expert evidence, Chinese law did not recognise his divorce from Ms Deng in New Zealand. Ms Reed, for Ms Ye, submits Mr Xie was domiciled in New Zealand in 2013 and New Zealand law does recognise the New Zealand divorce. She also submits, on the basis of expert evidence, Chinese law does recognise Mr Xie’s divorce from Ms Deng in New Zealand.

19     Relying on Gaffney v Gaffney [1975] IR 133.

20     Berthiaume v Dastous [1930] AC 79 (PC).

21     Brook v Brook (1861) 9 HLC 193 (HL).

[35]   The questions of where Mr Xie was domiciled at the time of his Las Vegas marriage to Ms Ye and what Chinese law says about his capacity to marry if he was domiciled in China are disputed questions about which evidence is required for them to be determined properly.22 I do not consider I can or should attempt to resolve those questions on the evidentiary basis of a summary judgment application. However, I do not need to resolve those questions in order to decide the application for recall of the letters of administration.

[36]   At the time she applied for the grant of letters in July 2014, Ms Ye was aware of Ms Deng and Shelley Deng’s opposition to her own application that Mr Xie’s Chinese property was their relationship property. The Wuzhong District People’s Court’s determination that it was not, on the basis the New Zealand dissolution was not recognised in China, was made on 13 January 2014.

[37]   Ms Ye’s without notice application for letters of administration in July 2014 was governed by r 27.4 of the High Court Rules 2016 which, at that time, invoked the usual r 7.23 process regarding interlocutory applications without notice.23 Rule 7.23, at the time, required a lawyer who signs the certificate to be “personally satisfied” that the application and supporting affidavit complies with the rules, ought to be made and “there is a proper basis for seeking the order in an application without notice”. Ms Ye was aware of and should have disclosed to her counsel and the Court the dispute over the validity of her marriage to Mr Xie.

[38]   If Mr Xie had capacity to marry Ms Ye in Las Vegas, she would have qualified for the grant of letters. If not, Ms Ye would not have been entitled to the grant. Ms Deng may or may not also have qualified in either circumstance if she established she was Mr Xie’s de facto partner. In either case, the New Zealand High Court needed to know the dispute existed. Had the Court known of the dispute I consider it would not have made the grant to either party to the dispute. That is so even though it would not have been clear, as it still is not, who took priority for the grant of letters.

22     In relation to the desirability of expert evidence to determine the content of foreign law, see

Dymocks Franchise Systems (NSW) Pty Ltd v Todd [2004] 1 NZLR 289 (PC) at [54].

23 Rule 27.4(8) at that time, as at 3 June 2014, provided “the procedure for dealing with the  application is the same as for an application without notice under rules 7.19 and 7.23, subject to this Part”. The regime was subsequently changed so that r 27.4 provides its own regime and the current r 7.23 does not apply to applications for letters of administration.

[39]   Accordingly, I consider the Court was “led (even if unintentionally) into making an order which it would not have made had the position, now established, been known to it at the time”.24 Like Associate Judge Matthews, I grant the application for recall on the basis of the public interest in ensuring the integrity of the Court’s processes in granting Letters of Administration. This decision does not depend on my view on the validity of Mr Xie’s marriage to Ms Ye in Las Vegas, which is still at large. It depends on the existence of a dispute about that, of which Ms Ye knew but to which she did not alert the Court.

[40]   Ms Ye pleads, as an affirmative defence, Ms Deng is estopped from relying on her marriage in China due to the New Zealand dissolution. Ms Deng’s position is unattractive to a New Zealand court. But her conduct does not alter the legal position as to which marriage was valid. Nor does it alter the existence of the dispute over that, which is the basis for recall. The court will not be prevented by estoppel arguments against one party or another from supervising the integrity of its processes of administration of estates.

[41]   Finally, Ms Ye questions Ms Deng’s standing to bring the application for recall, based on questions of fact about Ms Deng’s own relationship with Mr Xie. The legal status of both Ms Deng and Ms Ye will obviously be at issue in deciding succession as well as the application for recall. And, technically, Ms Deng’s status may affect the prior question of standing to apply for recall. But courts strive to avoid Catch-22 situations. To invoke their inverse, such situations will not exist because courts will say they do not. Here, I do not consider standing being outstanding should prevent the Court deciding on whether to remove Ms Ye as administrator in order to protect the integrity of its own processes. Such a power can be exercised by the Court on its own motion under its inherent supervisory jurisdiction, as it can be in recalling probate.25

24     Lee v Archer, above n 8, at [66].

25     Re Jones (Deceased) [1973] 2 NZLR 402 (SC).

Should Ms Ye be granted asset preservation orders?

[42]   In the other proceeding between these parties, Ms Ye seeks a declaration that Ms Deng holds the Sincessta BVI shares on constructive trust for the estate and must return them, and the funds in the Sincessta BVI account, to the estate. As an interim measure, Ms Deng undertook not to deal with the Sincessta shares, or to withdraw or otherwise deal with funds held in Sincessta’s bank accounts other than on the terms set out in the undertakings.

[43]   Now, Ms Ye seeks an order that Ms Deng transfer all the Sincessta BVI funds to a New Zealand trust account for the preservation of the property. Rule 7.55 of the Rules empowers me to make orders for the preservation of any property, including that a fund be paid into court. Ms Reed submits, for Ms Ye, there is a risk Ms Deng will dissipate the funds and remove them from the estate’s control. She refers to evidence being disclosed just before the aborted trial pointing to the possibility of false signatures of Mr Xie being used and shares being transferred from him to Ms Deng after his death. She submits there is no prejudice in orders being made and doing so will expedite administration of the estate after determination of the proceedings.

[44]   In relation to this application Ms Deng filed a Notice of Appearance regarding the practicalities of transferring funds from Chinese bank accounts to New Zealand and whether all the funds could and should be transferred. But she filed no Notice of Opposition. Mr Woods, for Ms Deng, does not oppose the transfer of funds that may be called in as part of the administration in New Zealand of Mr Xie’s estate. He acknowledges the funds held in two Sincessta BVI bank accounts are owned by that company. He says it is reasonable to assume the estate may receive some distribution but notes there would still be relationship property issues to work through. He submits the Court does not have jurisdiction over Sincessta BVI shares which are subject to the jurisdiction of the British Virgin Islands. While Ms Deng does not oppose the application, Mr Woods submits the existing orders are sufficient to preserve the funds without forcing a resolution of company distributions and the order sought is impracticable and adds nothing.

[45]   In order to guard against any dissipation of the assets, and in the absence of opposition, I grant the application.

Next steps

[46]   There is currently a three-week fixture set down from 16 July 2018 to deal with Ms Deng’s application to recall letters of administration on which I have just delivered summary judgment, and Ms Ye’s application in relation to the Sincessta BVI shares and funds. While the second of these is still live, the first is not.

[47]   I expect the question of whether Ms Ye, Ms Deng, or neither of them, was Mr Xie’s lawful or de facto spouse will loom large in the administration of the estate. The parties have been prepared to litigate those questions in the 16 July hearing. I invite the parties, and Ms Gilbert as the new administrator of the estate, to file and serve memoranda of counsel about whether such outstanding legal issues related to the administration of Mr Xie’s estate would be usefully litigated at the three-week hearing from the 16 July 2018 and whether the administrator applies for directions under s 66 of the Trustee Act 1956

Result

[48]I grant Ms Deng’s application for summary judgment:

(a)I recall the grant of letters of administration (CIV-2014-485-3439) to Ms Huifang Ye.

(b)I appoint Ms Alison Gilbert, partner in Brookfields Lawyers, as administrator of Mr Jun Xie’s estate.

(c)I award costs of this application on a 2B basis to Ms Deng, against Ms Ye.

[49]   I grant Ms Ye’s application to order Ms Deng to transfer the funds in Sincessta International Corporation Ltd’s bank accounts at Standard Chartered Bank, with

account numbers 48522704189 and 4852270411 to the trust account of the High Court of New Zealand at Auckland, to be held there until determination of this proceeding.

[50]   If there are issues as to costs that cannot be agreed between the parties, each party has leave to file brief submissions (of no more than five pages) within 10 working days of the date of this judgment, and reply submissions (of no more than five pages) within five working days of the other party’s submissions.

[51]   The parties, and Ms Gilbert as the new administrator, are to file and serve memoranda of counsel with 15 working days of this judgment as to whether any outstanding legal issues related to the administration of Mr Xie’s estate would be usefully litigated at the three-week hearing from the 16 July 2018 and whether the administrator applies for directions under s 66 of the Trustee Act 1956. There will be a case management teleconference in the week of 9 April 2018.

..................................................................

Palmer J