Estate of Lu - [2021] NZHC 2740

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-1817

[2021] NZHC 2740

UNDER the Insolvency Act 2006

IN THE MATTER

AND

The deceased estate of JIHONG LU

IN THE MATTER

of an application by DENNIS CLIFFORD PARSONS, the appointee in the deceased estate of JIHONG LU, for a search and seizure warrant under s 150 of the Insolvency Act 2006

Hearing: On the papers

Counsel:

D Nielsen for the Applicant

Judgment:

13 October 2021

JUDGMENT OF GORDON J

This judgment was delivered by me
on 13 October 2021 at 3.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Nielsen Law, Hamilton Counsel: P Cornegé, Hamilton

Re Estate of JIHONG LU [2021] NZHC 2740 [13 October 2021]

Introduction

[1] The applicant, Dennis Parsons, by application dated 8 September 2021, seeks leave to commence a proceeding under the Insolvency Act 2006 (the Act) by way of an originating application and applies for a search warrant under s 150 of the Act. Mr Parsons has filed an affidavit sworn 8 September 2021 in support of the application.

Background

[2] On 6 August 2019, Jianping Wang obtained summary judgment against Jihong Lu1 in the sum of $1.5 million. Mr Wang subsequently commenced bankruptcy proceedings against Jihong Lu in relation to the judgment debt.

[3] On 7 January 2020, Jihong Lu made a Will which appointed his brother, Bin Lu, as his executor and trustee in the event of his death. On 22 January 2020, Jihong Lu died in Taiwan.

[4] On 29 April 2021, following protracted proceedings brought by Mr Wang seeking an order that the deceased estate of Jihong Lu be administered by an appointee under Part 6 of the Act, an order was made to that effect and Mr Parsons was appointed to administer the deceased estate of Jihong Lu pursuant to s 385(2)(b) of the Act. In the course of those proceedings, Bin Lu deposed that he was familiar with Jihong Lu’s assets and liabilities.

[5] Jihong Lu’s Will indicates that he had assets including real estate, securities, stock, an art collection and jewellery. The Will also refers to shares in “UXTRATA”, jewellery stored in Shanghai, China, property in Shanghai and Changsha, China and a valuable yacht.

[6] Since Mr Parsons’ appointment, Bin Lu has denied that there are any substantial assets in the estate and that assets specifically identified in Jihong Lu’s Will

1 I will continue to refer to Jihong Lu using his first name to avoid confusion with his brother, Bin Lu, who is also mentioned in this judgment.

are in fact “family assets”. Mr Parsons deposes that his investigation to date has established that:

(a)Jihong Lu freely received and transferred material amounts from and to the bank accounts of related companies, Templar Fund Ltd, Templar Investments Ltd and MY Templar Ltd;

(b)Jihong Lu had access to material funds from overseas;

(c)In 2019, Jihong Lu indicated in his application for mortgage funds…

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: [2021] NZHC 2740
Decision Date: 13 October 2021

CaseChat Overview and Summary

The High Court of New Zealand considered an application by Dennis Parsons, the appointee in the deceased estate of Jihong Lu, for a search and seizure warrant under section 150 of the Insolvency Act 2006. Mr Parsons sought the warrant to access two email accounts of Jihong Lu, hosted by Microsoft, to investigate the estate's assets, conduct, and dealings. The primary legal issue was whether Mr Parsons had established that there was a reason to believe that property or documents related to Jihong Lu's estate were concealed in the specified email accounts. The court examined whether the statutory provisions and case law on search warrants and document requisitions supported Mr Parsons' application. The court found that Mr Parsons had provided sufficient information to satisfy the "reason to believe" test under section 150 of the Act, and that the information sought was necessary for administering the estate. The court also noted the importance of protecting privacy and legal privilege, and included provisions in the warrant to address these concerns. The court granted Mr Parsons leave to commence the proceeding by way of an originating application and issued the search warrant in the terms of the draft warrant provided.

Orders