FMI Building Innovation Limited v Li - [2025] NZHC 754

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2366

[2025] NZHC 754

BETWEEN
FMI BUILDING INNOVATION LIMITED

Plaintiff

AND

LIN LI

First Defendant

XI SHEN
Second Defendant

LIN LI and XI SHEN as Trustees of the Oka Tree Family Trust

Third Defendants

Hearing: 27 March 2025

Appearances:

R Selby for Plaintiff

K Sun and T Jones for Third Defendants

Judgment:

2 April 2025

JUDGMENT OF VENNING J

This judgment was delivered by me on 2 April 2024 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Capstone Law Ltd, Auckland
Russell van Hout Ltd, Auckland

FMI BUILDING INNOVATION LTD v LI [2025] NZHC 754 [2 April 2025]

Introduction

[1] FMI Building Innovation Limited (FMI) has brought summary judgment proceedings against Mr Li as guarantor of a debt. Mr Li and his wife, Ms Shen, are trustees of the Oka Tree Family Trust (the Trust). FMI has obtained freezing orders over the assets of Mr Li, Ms Shen and the Trust. The summary judgment application, which also seeks to set aside certain dispositions of property, is due to be heard on 28 April 2025.

[2] In the meantime, the Trust seeks directions varying the freezing order, specifically by releasing $37,896.73 from the funds that are frozen to pay the ordinary living costs of Ms Shen and her and Mr Li’s children for the months of January, February, March and April 2025, and an additional $37,000 for the legal fees of the Trust.1

[3] FMI opposes the application. The debt which it is seeking to enforce is in excess of $1.2 million. The frozen funds in New Zealand at present are $151,747.54. If the application is successful, then Ms Selby says that would leave just $86,851.54 to settle FMI’s claim.

[4] The frozen moneys are assets of the Trust. On previous occasions, 3 October 2024, 8 February 2024, and 28 February 2025, the Court has made orders approving payment out of the frozen funds to meet the ordinary living costs of Mr Li and Ms Shen and for legal fees.

Background

[5] Mr Li had provided FMI with a guarantee related to the trading of a company he was involved in. The company failed. FMI sought to pursue Mr Li in reliance on the guarantee.

[6] Mr Li and Ms Shen owned two properties, one at Morewa Place and one at Emmerdale Avenue. On 6 September 2024, 10 days after Mr Li was served with a

1 The amount sought is actually $47,896.73 but the applicant accepts $10,000 was released by Muir J in his minute of 28 February 2025 to meet these expenses pending this hearing.

notice of demand under the guarantee, Mr Li and Ms Shen transferred the Emmerdale property to the Trust. On 19 September 2024 Mr Li and Ms Shen entered into a property agreement under the Property (Relationships) Act 1976 which acknowledged the Morewa and Emmerdale properties were Ms…

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.

Keep reading for free

Create a free CaseChat account to read FMI Building Innovation Limited v Li and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2025] NZHC 754
Decision Date: 2 April 2025

CaseChat Overview and Summary

In the High Court of New Zealand, FMI Building Innovation Limited initiated summary judgment proceedings against Li, who is a guarantor of a debt, and Li’s wife, Ms Shen, as well as the Oka Tree Family Trust of which they are trustees. FMI is seeking to enforce a debt of over $1.2 million, which led to the issuance of freezing orders over the assets of Li, Ms Shen, and the Trust. The Trust has applied for directions to vary the freezing order to release funds to cover the living expenses of Ms Shen and their children for four months, as well as an additional amount for the Trust’s legal fees. The court had to decide whether the freezing order should be varied to allow these payments.

The court considered the principles governing freezing orders, which permit defendants to deal with assets for ordinary living expenses and legal costs related to the freezing order. The court noted that the Trust has no living expenses and questioned whether Ms Shen could not meet her own living costs given the $200,000 transferred to her mother in China. However, the court found that the Trust’s funds should be available to meet the living expenses of Ms Shen and her children, as there was no other source available. The court also considered the legal fees, ruling that the funds could be used for legal expenses related to the substantive claim, but not for unrelated matters or excessive amounts. The court concluded that the Trust’s funds could be varied to release $8,328.51 for January and $8,275.57 for each of February, March, and April 2025, together with $37,000 for the Trust’s legal fees, totaling $60,155.22.

The court varied the freezing order to allow the specified payments from the frozen funds. The issue of costs was reserved for later determination. This decision balances the need to protect the plaintiff's interests with the necessity to allow the defendants reasonable living expenses and legal costs.

Orders