General Finance Limited v Lau - [2023] NZHC 3417

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-001364

[2023] NZHC 3417

UNDER the Declaratory Judgments Act 1908

BETWEEN

GENERAL FINANCE LIMITED

Applicant

AND

EE KUOH (AUGUSTINE) LAU

First Respondent

LIYUN CHEN

Second Respondent

Hearing: 21 November 2023

Appearances:

M G P Martin for the Applicant E K Lau in person

Judgment:

29 November 2023

JUDGMENT OF WHATA J

This judgment was delivered by me on 29 November 2023 at 4 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:
Martelli McKegg, Auckland Copy to: E Lau, L Chen

GENERAL FINANCE LIMITED v LAU [2023] NZHC 3417 [29 November 2023]

[1] This is an application by General Finance Limited (GFL) seeking a declaration that a document alleged by Mr Lau to be a residential tenancy agreement for 9 Sunderlands Road, Half Moon Bay (the Property) is invalid and unlawful with no effect.

Background

[2] The background to this matter is set out in a number of judgments of this Court.1 I adopt the shortened account given in General Finance Limited v Lau (GFL caveat judgment):2
[9] On 4 February 2022, Ms Chen, as Trustee for the Royall Family Trust, executed as borrower / mortgagor, and personally as a guarantor, a term loan agreement comprising a loan of $2.6m and a mortgage over the Property and other properties as collateral security in favour of GFL. The funds were advanced the same day. The loan was not repaid when it fell due on 4 February 2023. A default notice was issued by GFL on 7 February 2023, requiring the principal sum of $2.6m together with interest of $112,909.36. It also advised that default had to be remedied by 2 May 2023. It was not remedied.

[10] Shortly thereafter GFL issued notices under ss 119 and 122 of the Property Law Act 2007 (PLA) in respect of the Property and the other properties. Ms Chen then sought orders in this Court effectively to injunct these notices until her claim in separate proceedings were determined. In those separate proceedings she claimed among other things that GFL had acted oppressively and that GFL owes her $9,650,000. Ms Chen’s application was dismissed, the Court finding that the interests of justice did not favour an injunction and that in any event there was no serious issue to be tried.

[11] Still further proceedings were commenced by Ms Chen claiming, among other things, that GFL did not have a caveatable interest in the Property. That claim was rejected as untenable.

[12]Leave to appeal these matters has been declined.

[13] On 11 June 2023, Mr Lau served a trespass notice, claiming that he had an interest in the property under a tenancy agreement with Ms Chen, pursuant to a separation deed executed on 9 June 2021 (“Separation Agreement”). It relevantly records the following under clause 4:

By way of settlement under negotiation with the help of family member, the following agreements reach for…

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 General Finance Limited v Lau 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: [2023] NZHC 3417
Decision Date: 29 November 2023

CaseChat Overview and Summary

General Finance Limited sought a declaration that a residential tenancy agreement executed by Ee Kuoh (Augustine) Lau and Liyun Chen was invalid and unlawful. The High Court of New Zealand heard the matter and found in favour of General Finance Limited. The primary issue before the Court was whether the document in question constituted a valid residential tenancy agreement. General Finance Limited argued that the agreement was a sham, particularly because it appeared only after the loan agreement with Chen, and it contained terms that were highly unusual and inconsistent. Lau maintained that the agreement was a legitimate part of his separation package with Chen and provided legitimate protection for his interests.

The Court found Lau's account and evidence to be not credible, noting the remarkable timing of the document's appearance, the lack of independent evidence, and the failure to take steps that could have verified the existence of the agreements. The Court also found the scheme of arrangements to be contrived and fundamentally flawed, with terms that were uncertain and likely breached Chen's fiduciary obligations as trustee. The Court concluded that the residential tenancy agreement was invalid and void. General Finance Limited was awarded its costs on a 2B basis.

The Court's decision effectively invalidates the residential tenancy agreement between Lau and Chen, removing any potential claim Lau may have had against General Finance Limited as landlord. The Court's ruling also highlights the importance of independent evidence and proper documentation in establishing the validity of such agreements.

Orders