IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-1385
CIV-2020-404-1247 [2025] NZHC 2581
BETWEEN GREEN & McCAHILL HOLDINGS LIMITED
PlaintiffAND
EVAN CHRISTOPHER WILLIAMS
First Defendant
ARA WEITI DEVELOPMENT LIMITED
Second Defendant
Hearing: 6, 7, 8 May; 13-17 May; 20-24 May; 27-31 May 2024
4-7 June; 10-14 June; 17-21 June; 24-27 June 2024; 1-4 July 2024
Appearances:
B Dickey, K Morrison, A Manuson, K Tubbs and M Tan for the Plaintiff
D Chisholm KC, MHL Morrison, CJH Fraser, M Sun and SE Tindale for First to Fourth Defendants
RJ Gordon and EB Maw for Fifth Defendant
DT Broadmore and C Tataru for Sixth DefendantJudgment:
5 September 2025
Reissued:
25 September 2025
JUDGMENT OF BECROFT J
This judgment was delivered by me on 5 September 2025 at 4pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
……………………………………
GREEN & McCAHILL HOLDINGS LIMITED v WILLIAMS & ORS [2025] NZHC 2581 [5 September 2025]
ARA WEITI BAY DEVELOPMENT LIMITED
Third Defendant
ARA WEITI INVESTMENTS LIMITED
Fourth Defendant
LAMBTON QUAY PROPERTIES NOMINEES LIMITED
Fifth Defendant
CLEARWATER CAPITAL PARTNERS DIRECT LENDING OPPORTUNITIES FUND LP and CLEARWATER NZ1 SMA LIMITED
Sixth Defendants
OVERVIEW: WHAT IS THIS CASE ABOUT? [8]
WHO ARE THE PARTIES?[29]
The plaintiff: Green & McCahill Holdings Ltd [29]
First defendant: Mr Evan Williams [36]
Second, third and fourth defendants: Ara Weiti Development Ltd,
Ara Weiti Bay Development Ltd, and Ara Weiti Investments Ltd [42]
Fifth defendant: Lambton Quay Properties Nominees Ltd [45] Sixth defendants: Clearwater Capital Partners Direct Lending
Opportunities Fund LP; Clearwater NZ1 SMA Ltd [49]
Counterclaim plaintiff: Ara Weiti Investments Ltd [55]
THE WEITI LAND[56]
CHRONOLOGY[75]
CREDIBILITY FINDINGS [79]
General observations [79]
Mr Liu [88]
Mr Williams [122]
Mr Liu v Mr Williams [143]
Other witnesses [147]
THE BUSINESS AND LEGAL RELATIONSHIP BETWEEN GMHL/MR LIU AND MR WILLIAMS: HOW AND WHY IT
DEEPENED AND THEN COLLAPSED[150]
Original business proposal to the Liu family [153] “Option” to purchase agreement and parallel “Put” agreement [159] Master sales agreement—21 September 2010 [174] Development agreement—28 February 2011 and subsequent progress [179]
The Weiti Development Limited Partnership agreement
(WDLP agreement)—26 June 2012 [184]
Amendment of the development agreement [188]
Significance of these 2012 agreements and the deepening
business relationship [189]
Who controlled WDLP? [190]
Mr Liu’s significantly changed (and deepened) legal involvement [198] Mr Williams’ legal involvement [200]
Their deepening relationship [201]
GMHL loan [205]
The aborted Manson loan offer [206]
The Spinnaker tripartite deed and loan facility [207]
2014 Killarney tripartite deed and loan facility [208]
Further mortgage security and the emerging paradox [210] First quadripartite loan—BNZ/Capital Group/GMHL/WDLP [214] Second quadripartite loan—BNZ/Pacific Dawn/GMHL/WDLP [219] Third quadripartite loan—BNZ/Lambton Quay/GMHL/WDLP [221] The business relationship collapses [226]
The state of the development as at early 2019 [229]
FIRST CAUSE OF ACTION: NEGLIGENT MISTATEMENT BY
MR WILLIAMS?[238]
Summary of the cause of action and the importance of context [238]
First preliminary issue: concerns about the pleadings[244]
Second preliminary issue: the Limitation Act argument[273]
Elements of tort of negligent misstatement.[284]
An important factor that covers all the elements to be proved[285]
1.Did Mr Williams make a false or misleading statement?[295]
Law[295]
Some introductory comments[302]
Overall conclusions in respect of first element [306]
Opinions and forecasts[307]
Honesty?[311]
Reasonable basis?[312]
GMHL/Mr Liu knew that the forecasts/estimates were updated
and changing[314]
Forecasted dates for payments often postponed and never eventuated [322] Little or no risk to GMHL in mortgaging some of its land to secure loans [337] GMHL to be paid when title passed and before any payment to the lenders?[341]
Specific alleged misstatements [352]
Misstatements in 2012[353]
Misstatements in 2013[357]
The “blue sky” projection[360]
Misstatements in 2014 regarding the Killarney loan/mortgage[365]
The Auckland and Taiwan meeting misstatements[370]
The April 2015 “angry meeting”[375]
April/May 2015 misstatements[389]
The sacrosanct principles[401]
Recharges[408]
July 2015 misstatements[420]
August 2015 misstatements[425]
December 2015 misstatements[465]
December 2017 misstatements[469]
The financial/accounting information [474] The “unparticularised” misrepresentations/misstatements [493] A comment about the second quadripartite agreements and mortgages [504] Conclusion as to first element of negligent misstatement tort. [507]
2. Did Mr Williams make the alleged misstatements in circumstances
where he owed a personal duty of care to GMHL?[509]
Law[509]
Five introductory comments[512]
The nature and importance of the legal structures adopted—particularly
WDLP[521]
Did Mr Williams (clearly) step outside the formal legal structure?[543]
Mr Dempsey as Mr Williams’ agent?[553]
WDLP communicated through its own lawyers[556]
The statement of claim (at times) is at odds with the allegation of
personal liability[557]
Did Mr Liu treat Mr Williams as his personal adviser?[559]
Conclusion as to imposition of personal duty of care owed by
Mr Williams to GMHL[565]
3. Was there reasonable reliance by GMHL on the statements
made by Mr Williams[568]
Were the statements reasonably capable of being relied upon?[569]
Reliance in fact?[590]
4. Was there resulting loss to GMHL? [601]
Did GMHL break the chain of causation?[606]
Claim for reliance loss?[617]
Conclusion as to fourth element of negligent misstatement[639]
Conclusion as to negligent misstatement [641]
SECOND CAUSE OF ACTION: MISLEADING OR DECEPTIVE
CONDUCT BY MR WILLIAMS UNDER THE FTA?[642]
Preliminary point: limitation argument[644]
Elements to be proved[655]
Did Mr Williams engage in conduct that was misleading or deceptive?[657]
The claim[657]
The law[661]
Analysis and application[670]
Conclusion as to misleading or deceptive conduct[697]
Should Mr Williams be found personally liable? [700]
Causation of damage/loss?[708]
Relevance or otherwise of third parties?[712]
Quantum of damages/loss[719]
Conclusion as to misleading or deceptive conduct [724]
THE FIRST AND SECOND CAUSES OF ACTION: CONCLUSIONS SUMMARISED[725]
THIRD CAUSE OF ACTION: DID LAMBTON QUAY BREACH ITS
MORTGAGEE’S DUTIES?[741]
GMHL’s general allegations about the mortgagee sale?[741]
Summary of specific pleaded allegations[757] Failed to exercise reasonable care to obtain the best price reasonably obtainable at the time of sale.[758]
Failed to act in good faith for the predominant purpose of obtaining
repayment of the secured debt.[762]
Acted in a manner which unfairly prejudiced or wilfully and recklessly
sacrificed the interests of the mortgagor, GMHL.[764]
Breached its duty to enter into an independent and “arms-length”
bargain with the purchaser, AWDL.[765]
Relief sought[768]
Key developments in the mortgagee sale process and findings as to
the parties’ “strategies” and intentions[773]
Lead-up to, and aftermath of, 4 February 2019 meeting[776]
The February “ultimatum”[789]
The development “stalls”[796]
Further fruitless attempts to resolve the impasse[799]
GMHL/Mr Liu’s emerging strategy[803]
Mr Liu and GMHL play “No ball”[810]
Further attempts at resolution[813]
Mr Williams’ strategy[818]
Mr Liu repudiates WDLP agreement; GMHL breaches 2018
quadripartite deed[826]
Lambton Quay’s strategy[834]
Clearwater’s involvement and “strategy”[849] “Machinations” everywhere and by everyone, but to no effect[864] “Straw man”[871]
The “Shed 5 meeting”[885]
Lambton Quay commences and undertakes mortgagee sale process[898]
Aftermath of the failed “advertised” mortgagee sale[932]
Valuations[944]
Concluded mortgagee sale and its structure[960]
Key factual findings about the mortgagee sale [1002]
Mortgagee’s statutory and equitable duties generally[1007]
Preliminary issues[1012]
Default notices all properly served[1012]
Onus of proof reversed?[1014]
Breach of s 176 of PLA? [1040]
Preliminary point: three separate but related transactions—but only
one attracts mortgagee’s duties[1040]
Law: s 176 is an extremely well litigated statutory provision[1043] GMHL’s pleaded complaints/flaws regarding the mortgagee sale process [1052] Best price reasonably obtainable at the time of sale?[1088]
Conclusion as to s 176 failings[1109]
Equitable duty to act in good faith for the predominant purpose of
obtaining repayment of the secured debt[1112]
Breach of equitable duty – failure of mortgagee to reach an independent “arm’s-length” agreement on the mortgagee sale[1122]
Breach of equitable duty acted in a manner which unfairly prejudiced or wilfully and recklessly sacrificed the interests of the mortgagor, GMHL [1127]
A problem with the equity of redemption?[1129]
Conclusion as to breach of mortgagee sale duties[1143]
Relief[1151]
Conclusion as to mortgagee sale cause of action [1159]
FOURTH CAUSE OF ACTION: EQUITABLE CONTRIBUTION
BY MR WILLIAMS[1161]
The claim[1161]
Factual background[1165]
Subsequent events[1172]
Legal principles[1177]
The essential arguments [1183]
GMHL[1183]
Mr Williams[1186]
Analysis[1190]
Dirty hands?[1190]
Contribution not yet arisen?[1201]
Proportionality[1207]
Conclusion[1217]
COUNTERCLAIM BY AWIL FOR THE RESIDUAL DEBT [1218]
Summary of claim[1219]
GMHL’s defences[1225]
Facts[1231]
Competing arguments[1235]
GMHL[1236]
Clearwater[1247]
Lambton Quay[1254]
AWIL[1261]
Analysis[1276]
Declaratory relief[1298]
Result of counterclaim[1300]
SUMMARY OF OVERALL RESULT [1302]
The causes of action[1302]
Costs[1304]
APPENDIX 1 - CHRONOLOGY OF RELEVANT EVENTS
OVERVIEW: WHAT IS THIS CASE ABOUT?
[1] Large scale property development is not for the faint-hearted. It is a risky business.
[2] Complications can easily arise. This is especially so where, as here, the landowner and the developer of a huge subdivision project are different entities.
[3] The complications to navigate include, for instance, to what extent and on what basis will the developer and landowner work together? How will money for the development (here tens of millions of dollars) be raised in advance? Will the landowner agree to mortgage its land to secure the developer’s loans? Will the developer sell enough of the developed subdivided land fast enough to enable repayment of the loans, and reap a profit for both the landowner and developer?
[4] The risk/reward outcome is finely balanced. Landowners, as here, who mortgage their land to support a development are at significant risk if loans are not repaid. Developers constantly walk a tight rope. This case is an object lesson about all those risks and more.
[5] Here, the overseas owned landowner company (which is the plaintiff) maintains it has suffered a massive loss because of a botched subdivision development and the subsequent unfair and sham mortgagee sale of part of its land. It says it mortgaged part of its land in good faith to secure huge loans to assist the developer, on the strength of negligent misstatements and/or misleading conduct by the director of the development entity in his personal capacity (who is the first defendant). The following is an overview of how this all unfolded.
[6] In 2005, the landowner gave the developer an option to purchase its land. This was renewed several times. If any lots were developed and sold during the life of the option, this was built into the sale price. However, nothing came of the development over the next five or so years.
[7] The developer at this stage was a group of companies effectively “owned” by an individual—the first defendant. He was the driving force for the development. The landowner company was represented by a senior, overseas based director who regularly visited New Zealand. These two individuals were effectively the main protagonists in this case, although their involvement was primarily through various corporate entities.
[8] In around 2011, the parties entered into a development agreement. Importantly, in 2012, they also formed a “limited partnership” for up to 18 years. A limited partnership is a complex animal. Here, it cemented the involvement of the two main protagonists into the development.
[9] The general partner of the limited partnership was an entity controlled by the first defendant. The general partner had responsibility for the management of the development. It contracted that responsibility to a management company to oversee the development. The director of that management company was also the first defendant.1 There were two other entities which were limited partners.2 Each limited partner was controlled by one of the protagonists. The limited partner controlled by the plaintiff’s senior director3 had a 60 per cent share in the limited partnership. The limited partner controlled by the first defendant had a 40 per cent share.
[10] From 2012, the development was in the hands of the limited partnership. And for many years the legal structures adopted by the two protagonists functioned smoothly. The two apparently enjoyed a relatively constructive business relationship.
[11] The development (managed by the general partner) could not commence without upfront finance. Potential lenders, in the normal way, required security. Eventually, the landowner agreed (it says most reluctantly) to provide some of its land as security for a series of ever-increasing loans over the next five years.
1 From this point on in the overview I will call this person the first defendant.
2 “Limited partner” is the language of the relevant Act (to be discussed in more detail later). However, counsel often differentiated between them by using the term “senior limited partner” and “junior limited partner.” I use the terms interchangeably in this judgment.
3 From this point on in the overview I will call this person the plaintiff’s senior director.
[12] Two separate loan facilities were obtained (about a year apart) by the limited partnership for the planning and consent stage of the subdivision. These loans were both relatively small and supported by a sophisticated mosaic of documents. Both were tripartite agreements4 with mortgage security over a part of the land. The second loan paid off the first loan, but it went into default.
[13] A vastly larger loan, and a lesser junior or “mezzanine” loan, were then obtained for the first construction phase of the subdivision. They were secured over the same land. The documents relating to this included a quadripartite deed.5 The associated loan facilities and obligations went through two further iterations, with the junior lenders being replaced at various times, on each occasion supported by a new quadripartite agreement. The second quadripartite arrangement resulted in even more of the land being mortgaged, which was continued in the third quadripartite agreement.
[14]The development began in earnest during this time.
[15] The landowner now claims it was induced into signing the mortgages by misrepresentations, not by the limited partnership nor any other corporate entity, but by the first defendant personally. These misrepresentations included that there was little or no risk to the landowner; that, on the basis of forecasts provided, the development would be profitable; and that the landowner would be progressively paid the agreed price for its land by set dates, in priority over the secured lenders.
[16] In early 2019, after the set dates had passed, but well before likely completion of the development, and with slow section sales, the landowner demanded some payment in priority to the mortgagees from the limited partnership (it had received nothing so far). This proved legally impossible. The relationship between the landowner (and its senior director) and the first defendant (and his companies) rapidly and irretrievably broke down.
4 The three-way agreement was between the landowner, the limited partnership and a commercial lender.
5 The four-way agreement was between the landowner, the limited partnership, a “senior” commercial lender, and a “junior” or “mezzanine” lender.
[17] The first defendant and the then-mortgagee put various “salvage packages” to the landowner. They were rejected. The landowner wanted, but predictably did not obtain, an alteration to the mortgage agreements so that it would begin to receive some of the sale proceeds in priority to the secured loan repayments. It said it would not release any titles for sale completion without this payment. No further money was advanced by the lenders. The development stalled and became distressed.
[18] The landowner, the first defendant, and the mortgagees each pursued their own strategies, with their own advisers.
[19] Mortgagee sales resulted. The secured land was eventually sold (for less than the amount owing under the loans). The purchasers were new companies formed by the first defendant, funded with the assistance of a new, overseas financier. Separately, but at the same time, another new company formed by the first defendant received an assignment of the residual debt owed by the landowner under the loan agreements.
[20] Unsurprisingly, the landowner “smelt a rat”. It strongly suspected the developer acquired ownership of the land, and the residual debt, by subterfuge.
[21] The first defendant maintains that the landowner deliberately “tanked” the development and then refused to co-operate, in the cynical assessment that there would be no other willing purchasers at any mortgagee sale. The landowner, it is said, wanted the mortgagees to “take a haircut”, with the ultimate strategy of redeeming its own land at a discount as it would be the only realistic purchaser. The mortgagee maintains the orthodoxy of the sale process. The new companies argue that their acquisition of the mortgaged land and the assigned residual debt was entirely above board. And the overseas financier wants to protect its registered mortgage interests, securing the new loans to the new companies.
[22]There are five major issues, which reflect the five causes of action:
(a)Was the landowner induced to provide its land as security by various alleged misrepresentations/misstatements made about the development
by the first defendant, for which he is said to have assumed personal responsibility?
(b)Alternatively, was the conduct of the first defendant misleading or deceptive under the Fair Trading Act 1986 (FTA)?
(c)Was the mortgagee sale process carried out in accordance with the mortgagee’s statutory duties and in good faith for repayment of the loan, and was it used by the mortgagee (with assistance from the first defendant) for the improper purpose of depriving the landowner of its land?
(d)Can the landowner enforce a personal guarantee against the first defendant originally given to the senior lender as part of the first quadripartite arrangement?
(e)As a counterclaim, can the company created by the first defendant enforce the residual debt assigned to it against the landowner? And if so, what interest is payable by virtue of certain problematic provisions in the Credit Contracts and Consumer Finance Act 2003 (CCCFA)?
[23] These five issues form the essence of the case, although there are many other issues and sub-issues. This decision is structured around these five causes of action.6
[24] The previous overview is intended to provide a way into understanding this complicated case. The facts span 15 years. I am told the case relates to as many as 55,000 documents. It needed 40 court sitting days to hear and it generated 2,822 pages of evidence.
6 The discussion in respect of each cause of action, other than the first two, is largely self-contained. They are written so they can be read separately. However, some overlap and repetition of the facts and themes cannot be avoided.
[25] I record my clear initial advice to counsel that realistically I would only be able to consider those documents to which I was specifically referred. The documents were all digitised and easily accessible with an in-court technology system expertly “driven” by the junior counsel for each of the parties. It was of enormous assistance.
[26] I acknowledge all lead counsel, and their teams, for their helpful assistance and the care taken in the presentation of their evidence and in their comprehensive subsequent submissions.
[27] For the record, I remind myself that the plaintiff (and counterclaim plaintiff) bears the onus to prove its case on the balance of probabilities. However, in respect of the mortgagee sale cause of action, there is an argument, dealt with later, that the onus shifts to the mortgagee fifth defendant.
[28] Before addressing the five key issues identified above, I address some key introductory matters:
(a)a description of the parties;
(b)a description of the land;
(c)a detailed chronology—which provides the context for this case, which is contained in an appendix to this judgment;
(d)my credibility findings, mainly in respect of the two key protagonists; and
(e)my analysis of the deepening business relationship between the plaintiff’s senior director and the first defendant.
WHO ARE THE PARTIES?
The plaintiff: Green & McCahill Holdings Ltd
[29] In 1956, Green & McCahill Holdings Ltd (GMHL) was incorporated. It was a holding company for a large block of undeveloped land at Weiti Bay (called in this
judgment “the Weiti land”). It borders the Hauraki Gulf, just north of suburban Auckland. It is described in more detail in the next part of this judgment.
[30] In 1991, the Liu family, from Taiwan, acquired GMHL and, in so doing, acquired the Weiti land.7 As I understand it, the Liu family purchased the land for about $4 million. The Weiti land was first brought to the attention of Mr Tong Kuang Liu (Mr Liu) by a New Zealander known to Mr Liu. GMHL is effectively owned by Orere Farms Ltd which, in turn, is owned by the Liu family.
[31] Mr Liu is a senior director of GMHL. He is one of the two key protagonists in this case I referred to in the overview.
[32] Mr Liu does not live in New Zealand. I understand he ordinarily resides in Taiwan. As a director of GMHL, he was authorised by the company to enter all transactions and dealings with the land. Mr Liu is the principal witness for the plaintiff. His father, the very respected Dr Jieh Jow Liou (Dr Liou), was, until his death in the mid-2010s, effectively the patriarch of the Liu family. He played a part in the early negotiations.
[33] The Liu family consists of apparently very wealthy, extremely capable, and internationally educated businesspeople. They are fluent in English and highly experienced in property matters. They have extensive property investments around the world including in Taiwan, Canada, France, the United Kingdom (particularly Scotland) and Japan. Mr Liu now runs the family business interests.
[34] Mr Liu has two sons in their early forties, Zoltan and Justin, and at least one sibling—a sister, Dr Linda Liu (Dr Liu). They all gave evidence.
[35]Mr Dickey and Ms Morrison and their team act for GMHL.
7 Green & McCahill (a well-known Auckland construction company until 2002), now apparently part of the Hugh Green Group, has no part in this case at all. The original name of the company was simply retained by the Liu family.
First defendant: Mr Evan Williams
[36] Mr Evan Christoper Williams is the first defendant. He is the other protagonist described in the overview. He is sued in his personal capacity.
[37] Mr Williams is qualified as a lawyer. He practiced as a commercial solicitor, including as a partner in Chapman Tripp from 1985 to 1995. He was managing partner of that firm from 1987 to 1993.
[38] Since the late 1990s, Mr Williams has effectively been a property developer, with developments in New Zealand and Fiji.
[39] Mr Williams was a shareholder and director of various development companies originally established to manage the proposed development of the Weiti land. In a practical sense, they are all his companies and they are his “creations” for the development. He was intimately involved in the limited partnership agreement with Mr Liu. He was also originally the sole director of the second and third defendant companies which now own some of the Weiti land as a result of the mortgagee sale. Those companies were effectively also his creations. The same is true for the fourth defendant company.
[40] The essence of GMHL’s claim against Mr Williams is that, in reliance on representations he made personally, not as director and/or CEO of the various development entities, GMHL was induced to mortgage some of its land as security for various loans necessary to subdivide the land. It seeks very considerable damages.
[41] Mr Chisholm KC and Mr Morrison and their team act for Mr Williams and for the second, third and fourth defendants, described next.
Second, third and fourth defendants: Ara Weiti Development Ltd, Ara Weiti Bay Development Ltd, and Ara Weiti Investments Ltd
[42] Mr Williams is directly “associated” with a number of companies involved with the development at various stages (I understand at least 12), of which the second, third and fourth defendants are examples. Those three companies were all incorporated in 2020—much later than the others.
[43] As I understand it, the first two companies (the second and third defendants, Ara Weiti Development Ltd (AWDL) and Ara Weiti Bay Development Ltd (AWBDL)) were established by Mr Williams8 for the sole purpose of acquiring, through the mortgagee sale, all the land (in two parts) that GMHL had mortgaged.9 They are implicated, at least indirectly, by their part in the alleged unfair and unlawful mortgagee sale by which they acquired the mortgaged land. They are the entities in respect of which the plaintiff seeks an order for return of the land it previously owned and lost as a result of the mortgagee sale.
[44] The fourth defendant company, Ara Weiti Investments Ltd (AWIL), was incorporated to receive the assignment of the residual debt owing after the mortgagee sale. It is sued because of its alleged role as part of the same flawed mortgagee sale. It is AWIL that brings the counterclaim, referred to below.
Fifth defendant: Lambton Quay Properties Nominees Ltd
[45] Lambton Quay Properties Nominees Ltd (Lambton Quay) is the fifth defendant. It is a Wellington-based finance and lending company in respect of property and commercial development. It is headed by the well-known Wellington businessman and philanthropist, Sir Mark Dunajtschik (Sir Mark).
[46] Lambton Quay was the second mortgagee in the third and final quadripartite deed, concluded in July 2018. In June 2019, it eventually exercised its right to “buy out” the first mortgagee, the Bank of New Zealand (the BNZ), and is said, by novation,10 to have acquired all the Bank’s rights. Lambton Quay then exercised its rights, as mortgagee, to sell all the mortgaged land owned by GMHL by way of mortgagee sale. The proceeds of sale were insufficient to satisfy the secured debt.
8 Mr Williams’ evidence, which I accept, is that he was initially the sole director of the three Ara Weiti companies. His son, Asher Williams, was appointed as a director on 2 June 2020. At the time of the hearing, Mr Williams had no interest in the three companies, which are all ultimately beneficially owned, through trust structures, by Williams family members—not including Mr Williams.
9 As I understand it, AWBDL became the registered proprietor of almost all the Weiti Bay lots (28 out of 33) and AWDL became the registered proprietor of the remaining Weiti Bay lots and Village
1. The names for different parts of the development will be discussed shortly.
10 I record that when it came to argue the counterclaim, there was a dispute between the parties as to whether this transaction was properly characterised as a novation or an assignment. I have not found it necessary to determine that dispute. For simplicity, I will refer to it as a novation throughout the judgment. That is not intended to indicate my view on that dispute.
[47] GMHL claims the mortgagee sale process was in breach of Lambton Quay’s statutory duties and was otherwise unfair. It wants all the mortgagee sale transactions set aside. It wants the current registered proprietors, and the current, new mortgages, removed from the titles and seeks the restoration of itself as registered proprietor. Further, or alternatively, it seeks damages against Lambton Quay.
[48]Mr Gordon and his team act for Lambton Quay.
Sixth defendants: Clearwater Capital Partners Direct Lending Opportunities Fund LP; Clearwater NZ1 SMA Ltd
[49]For convenience, I describe the sixth defendants as Clearwater.
[50] As I understand it, Clearwater, and many of the Clearwater companies, are now subsidiaries of, or controlled by, Fiera Capital (Asia) Hong Kong Limited (Fiera HK). Fiera HK is a subsidiary of the Canadian asset management company Fiera Capital Corporation. Fiera HK is involved in the management of various funds and investment vehicles, many of which have the descriptor “Clearwater” in their names. Those include, relevantly, one of the two sixth defendants in this proceeding, Clearwater Capital Partners Direct Lending Opportunities Fund LP (Clearwater Direct Lending). This company specialises in senior secured debt financing in the real estate sector in Asia, focussed on Australia and New Zealand.
[51] Clearwater are not the subject of any direct claim by the plaintiff. However, Clearwater, in one of its guises, provided finance to the second and third defendants to enable them to purchase the mortgaged land during the alleged unfair “sham” mortgagee sale process. It is claimed that Clearwater had knowledge of Lambton Quay’s alleged breaches of its mortgagee duties.
[52] Clearwater is involved in the proceedings because, amongst other things, the plaintiff seeks to unwind the mortgagee sale process. This will have significant ramifications for Clearwater as the registered mortgagee over the land now owned by the second and third defendants. In other words, Clearwater wishes to protect and maintain its mortgage security. Unsurprisingly, it is adamant the mortgagee sale process was proper and lawful, was not a sham, and should not be set aside.
[53] The managing director and portfolio manager of Clearwater Direct Lending is Mr Joshua Bartlow. He was the sole witness for the sixth defendants. He manages Clearwater Direct Lending’s loan portfolio in Australia and New Zealand.
[54]Mr Broadmore and his team act for Clearwater.
Counterclaim plaintiff: Ara Weiti Investments Ltd
[55] As well as being the fourth defendant, AWIL is the counterclaim plaintiff against GMHL (the overall plaintiff). As described, this company was incorporated for the purpose of obtaining the assignment of debt from Lambton Quay constituting the shortfall of the mortgage loan (the residual debt) after the mortgagee sale. AWIL seeks to enforce this assignment as against GMHL, together with interest. Amongst other issues, GMHL disputes the amount of interest that can be properly claimed as part of the alleged residual debt.
THE WEITI LAND
[56] The Weiti land is about 30 minutes’ drive north of Auckland, between Long Bay to the south and the Whangaparāoa Peninsula to the north. It partly borders the Hauraki Gulf. It is near Stillwater. It is said to be well suited to subdivision.
[57] The land is a very large block of coastal land (909 hectares); the size of many Auckland suburbs. It is slightly larger than the Devonport and Bayswater suburbs combined, and is equivalent in size to the Te Atatū Peninsula. It is surrounded by a marine reserve on its northern, eastern, and southern boundaries.
[58] The Weiti land was then comprised of a rotational pine forest, native forest and a small area of bare land on the coast. It is largely still covered by densely planted pine trees.
[59] In 2005, it was zoned to allow only 150 dwellings on the entirety of the land. In 2013, planning permission was finally obtained for up to 550 lots. Approval was then sought (later in 2013) for up to 1200 lots. By early 2019, it seems that process was well down the track, but certainly not finalised. I accept that the indications as to
approval were positive. At various stages, there was even talk of approval for up to 1600 lots being attainable. However, at the time of this hearing, consent for more than 550 lots had not been finally granted. This was because the development had stalled, and the application could not be progressed.
[60] Significant construction work was carried out during 2016 and 2017 to develop what was originally known as the “Karepiro” component of the Weiti land but which came to be known as Weiti Bay. It was to be developed in two stages. This consisted of 80 lots and 70 closely associated lots—150 lots in total—comprising approximately
77.28 hectares.
[61] The construction work included a major access road from State Highway 1 (SH1) to the development, in addition to establishing connections to water, sewage and other utilities and services. This brought to finalisation the first 150 bare lots which were available for sale/transfer of title to purchasers and then the construction of residential homes. There was also a connection established from the finalised access road to the significant Peninsula Link Highway (Penlink), which was built later, connecting SH1 to the Whangaparāoa Peninsula. This link was, and will be, of considerable benefit to all the eventually subdivided Weiti land by improving access to SH1.
[62] The first 150 bare lots were finalised between 2017—2019. Most were sold. They were relatively larger lots than the remaining planned 400 lots. They were in the subdivision’s prime position. These lots were intended to be, and are, part of an exclusive gated community.
[63] The remaining 400 lots were to be incorporated into what became known as the Village 1 (36 hectares) and Village 2 (25.46 hectares) developments. This has not yet occurred. However, these bare lots, when finally completed, will have the considerable benefit of all the access roading and services/utilities construction work already carried out.
[64] The rest of the Weiti land, most of which is forested or covered in scrub, is termed the “balance land”, comprising 734.79 hectares. It is largely unfit for subdivision development. It is planned to be slightly developed for recreational purposes, including mountain biking and walking tracks.
[65] It is worth noting that it was only the Weiti Bay lots, and later Village 1, that were specifically mortgaged by GMHL.11 Therefore, at the time of the hearing, GMHL retains the ownership of Village 2 and all the balance land. However, as a result of the mortgagee sale processes, AWDL became the registered proprietor of the Village 1 land, and AWBDL owned most of the remaining unsold titles (28 lots) in Weiti Bay.12
[66] Thus arises an “inconvenient reality”. Contiguous land within the overall Weiti land—that is Village 1 and Weiti Bay on the one hand, and Village 2 and the balance land on the other—is owned by different entities. These entities are effectively the key “warring parties” in this case.
[67] Self-evidently, this will make future subdivision development problematic. For instance, I am told that any further development of Village 1 will necessitate entry onto the Village 2 land and therefore require the consent of GMHL. But these are all matters for the future and are outside the scope of this judgment.
[68] The following maps will be of assistance to locate the Weiti land and its component parts (including the newly constructed road) already described:
11 I note there is ongoing argument as to the effect of various covenants that were entered into by GMHL at the time of executing the relevant mortgages. The defendants argue those covenants also create rights over Village 2 and the balance land. This is disputed by the plaintiff.
12 I understand from the parties that some of those titles may have been sold since the hearing.
Map 1
Map 2
[69] The following photographs show parts of the Weiti land and the progress of the subdivision work over many years. They depict the sheer size and magnitude of the development—an understanding of which is important in terms of resolving the plaintiff’s claims.
[70] The first photo was taken in 2005. It shows (in the foreground) that part of the Weiti land (then completely undeveloped) that is easternmost and closest to the Hauraki Gulf. It is this land (still in pine trees) that mainly became the 150-lot Weiti Bay subdivision. A large strip of land, closest to the water, was retained as a green space for recreational and community use. In about 2005, removal of the pine trees for the Weiti Bay subdivision began.
Photo 1
[71] The second photo is an aerial view taken in 2011–2012. It shows initial preparatory work on the Weiti land with most of the trees in the proposed subdivision areas having been felled.
Photo 2
[72] The third photo shows the development in progress of the 150 Weiti Bay lots to the middle and right.
Photo 3
[73]The fourth photo shows the completed access road.
Photo 4
[74] The fifth photo, taken in 2018, shows in the foreground the area of the finalised bare lots of the Weiti Bay 150-lot development, (on some of which houses have already built). It also shows part of the land, to the left centre, for the Village 1 and Village 2 lots.
Photo 5
CHRONOLOGY
[75] The dates of the relevant agreements between the parties and the dates of the mortgagee sale and related significant events are set out in a detailed table, attached to this judgment as Appendix 1.
[76] The relevant dates span over 20 years. This is only the “bare bones” of the saga surrounding this subdivision development. Even bearing in mind the need for a skeletal summary at this stage, the chronology is necessarily long and detailed. It is important to understand the complicated development process. However, more detail will be provided, when relevant, as each of the issues addressed in this judgment are analysed.
[77] This chronology requires me to extract what I generally understand to be accepted relevant dates. Counsel will likely think that much more could be included, even at this stage of the judgment.
[78] For ease of understanding, the most important legal agreements and their dates (not in dispute) are highlighted in bold, and those emboldened events should be briefly consulted now. Consulting the chronology now will also be important because it references all the relevant entities and the times when they first become involved. Also, there is some detail in the chronology that may not appear in the rest of the judgment.
CREDIBILITY FINDINGS
General observations
[79] At this point, it is necessary to address the credibility of two key witnesses, Mr Liu—speaking for GMHL, and Mr Williams—who gave evidence on his own behalf and on behalf of his many companies. Their evidence bestrides this case.
[80] Credibility findings are crucial. These findings, to a significant degree, explain much of the reasoning underpinning my conclusions about the plaintiff’s causes of action.
[81] I expressly recognise that credibility findings are not central to all the issues in this case. There are many issues which must be resolved by close analysis of the documentary evidence, including accounting spreadsheets, financial statements, and the various complex agreements between the parties, to name but a few. But for many other issues, credibility findings are vital. These include, whether Mr Williams represented to Mr Liu that GMHL would receive payment for its land in priority over the secured lenders, and also the extent to which Mr Liu (for GMHL) relied on Mr Williams, personally, for advice. Both involve credibility findings.
[82] In respect of those and several other issues, Mr Liu’s and Mr Williams’ evidence about key events cannot both be right. Their explanations for the development of their business relationship; their evidence about what Mr Liu/GMHL knew of the plans for, and progress of, the development; and the risks involved, are all at variance. Much of what they say on these, and many other issues, is mutually exclusive. Indeed, much of Mr Liu’s and Mr Williams’ evidence is effectively at polar opposites. For instance, they disagree on whether Mr Liu knew from a relatively early stage that large-scale subdivisional development of his land would need significant commercial loans, which would have to be secured by mortgages over GMHL’s land, to which the lenders’ security would take priority over GMHL.
[83] This is why credibility findings about Mr Liu and Mr Williams are so important.
[84] It is important for me to set out my conclusions and the reasons for them because they provide the platform for the rest of the judgment.
[85] This is one of those cases where I need to say there is considerable advantage in seeing and hearing the key witnesses give evidence. I had prolonged opportunity to observe how they gave their evidence. As a result, I have reached some very clear conclusions.
[86] Mr Liu gave evidence for eleven-and-a-half days. Two days were his evidence- in-chief; and nine were cross-examination. He was re-examined for a half-day. The notes of his evidence stretch to 1,064 pages.
[87] Mr Williams gave evidence for eight-and-a-half days. Three-and-a-half days were taken up with his evidence-in-chief; and three-and-a-half days in cross- examination. He was re-examined for one-and-a-half days. The notes of his evidence stretch to 654 pages.
Mr Liu
[88] I conclude that Mr Liu’s evidence is neither reliable nor credible. Given that Mr Liu is apparently a man of some standing in his own country (and in the Asia and Pacific Economic Council (APEC) community), I know that this finding will be a blow to him. He will find it hard to accept. Therefore, I owe it to him to carefully and respectfully set out my reasons.
[89] From an early point in his evidence-in-chief, Mr Liu sought to contrast himself to Mr Williams. He said that Mr Williams had not been the managing partner of Chapman Tripp “for nothing”, and he was someone who obviously knew what he was doing. As for himself, he said he and his family “were some stupid foreigners who came to New Zealand”. This, and variations on this theme, became a continuing refrain.
[90] A short time later in his evidence, when there was a natural break while counsel located relevant documents, I asked Mr Liu about his background because he was giving his evidence in a polished and urbane way, with what appeared to be something of a USA accent. He answered that he went to high school in New Hampshire and was educated on the east coast of the USA, in Boston. He said he gained a master’s degree in business administration from Boston University. He also completed postgraduate marketing courses, amongst other things, at Harvard University. The courses were all taught in English.
[91] Mr Liu much later accepted in cross-examination that at various times he has been head of the Chamber of Commerce in Taiwan, has occupied a responsible economics role in Taiwan-Japanese cooperative bodies, and since 2006 has been a standing representative on behalf of the Taiwanese government at all APEC meetings. He had also been involved in significant business ventures in countries outside of Taiwan.
[92] The one thing that can be said with certainty is that Mr Liu is not “some stupid foreigner”. In my assessment, he is a charming, engaging, highly qualified and intelligent professional man, despite his attempts to paint a different picture of himself.
[93] Against this background, Mr Liu’s evidence and particularly his answers in cross-examination, were strange, unconvincing, and became quite unbelievable.
[94] As his cross-examination developed, he resorted to a series of stock, and much- repeated answers that, in my view, given his intelligence, ability, education and experience, were simply not credible. I highlight four examples:
(a)At an early stage in his evidence, Mr Liu indicated that he was effectively a “puppet” in Mr Williams’ hands and/or that Mr Williams was like a “puppeteer”, or variations on that theme. On my count, Mr Liu used this explanation as being manipulated by Mr Williams on tens of separate occasions. It was a continuing refrain in his evidence. Furthermore, he said that Mr Williams was “brainwashing” him. These responses, in my view, became almost standard to explain why he had signed documents that he now clearly regrets executing, particularly the loan and mortgage documentation. But I do not accept them.
(b)Mr Liu frequently referred to himself as a “70-year-old man”, who was “stupid” or had a poor memory. Again, on my count, he said this well over ten times, referring to many different occasions. He used the word “stupid” about himself, or that he “stupidly signed the document” on 14 occasions. Of course, Mr Liu, in my judgement, is far from stupid. (And his evidence was often about events when he would have then been in his late fifties or early sixties assuming he is now a 70-year-old man). He is astute, quick-minded and very analytical. Several times when he read a document put to him in cross-examination, he was able to grasp its import and meaning very quickly. Often his response was then to say “I was stupid to sign it” or “I stupidly signed it” or words to that effect. He also used the word “duped”. Again, I find these explanations unbelievable.
(c)In response as to why he had signed certain agreements, he frequently resorted to describing himself as responding like “Pavlov’s dog”. Again, on my count, he said this on at least six occasions and maybe more. However, while giving evidence and challenged with certain documents, he demonstrated a real ability to see mistakes in some of the documentation on the spot, such as when a loan offer at the time mistakenly only referred to the 150 Weiti Bay lots and did not include Village 1.
(d)In contrast to himself, Mr Liu consistently described Mr Williams as “brilliant” (23 times); a “genius” (11 times); or a man of “great eloquence and charm”. In my view, he consistently over-estimated, to a degree that became quite unconvincing, Mr Williams’ intelligence and his own stupidity. For instance, he said at one point, “he was like a God to me”.
[95] Overall, it seemed to me that Mr Liu simply could not be trusted in his evidence. I say that with great respect to him. In my assessment, many of his answers were designed to save face, to paint himself in the best possible light, and to blame others for his actions rather than taking self-responsibility.
[96] A glaring example was Mr Liu’s repeated evidence that Mr Williams and his companies offered GMHL $300 million outright as a sale price for all the Weiti land. I am quite satisfied that was never the case. What was offered, by way of an agreed option to purchase, was a price where $300 million was used as the base price for a mathematical formula. The actual price was entirely dependent on a calculation being applied to that base price, depending on the number of lots approved by the Council. He perpetuated his view of this matter, which he must know was plainly incorrect, on at least 20 occasions during his evidence, even when this error was pointed out to him.
[97] I was initially confused when Mr Liu first gave this evidence. I checked with him as to the formula and how the actual price would seldom reach anywhere near
$300 million if the formula was applied. He very quickly grasped the formula and understood the point, but said that he must have not understood this at the time or
missed it. Yet he continued in his evidence, fixated on the belief that the original offers from the Williams’ companies were always a standard $300 million. This was simply not the case, and it frustrated all cross-examining counsel.
[98] Mr Liu maintained that his facility with the English language was at times not sufficient for a proper understanding of how the subdivision project was developing. Again, this is a contention I reject. His facility with the English language was excellent. For instance, on one occasion, when cross-examined by Mr Gordon, he said of Sir Mark that he was “not a neophyte baby like me, who doesn’t know his head from his tail”. Mr Gordon responded, “I don’t think anyone will ever accuse you of being a neophyte baby Mr Liu”. I agree. A neophyte, to avoid resort to the Oxford Dictionary, is a beginner. Anybody who uses that word so adroitly in response to rigorous cross-examination, can hardly be said to be struggling with the English language. Moreover, in matters of business and accounting, Mr Liu is certainly no “neophyte baby”.
[99] The evidence shows Mr Liu could also be very decisive in his business dealing when that was required. That was plainly obvious. For instance, in a 16 June 2016 email to Mr Williams, he said:
In all instances of important or pertinent [sic] issues, you need to email me the documents first, talked [sic] to me first and then I will talk to my advisors.
not the other way around.
[100] That could hardly be said to be comments from a man who was passive, indecisive, with poor command of the English language, and who was vulnerable and easily manipulated.
[101] I also note Mr Liu’s comment that he did not like trusts and his request to Mr Williams to use a limited partnership instead of a trust. This would seem to indicate Mr Liu had an advanced understanding of legal structures.
[102] I also record that it emerged, during cross-examination, that by virtue of his property purchase in Scotland, Mr Liu acquired the title of Baron. When Sir Mark was referred to by his full title, Mr Liu made clear that he could have insisted that he be always called “Baron” in the Court hearing. This is not to be critical of Mr Liu. It
is not disputed that he has a right to that title. It just indicates that Mr Liu is not a shrinking violet and that he is more than capable of asserting himself when and if he chooses to do so. This is in stark contrast to how he tried to paint himself to the Court.
[103] Putting Mr Liu’s evidence in the best light I can, it may be that he simply wanted to emphasise how much he felt manipulated and eventually betrayed by Mr Williams. At their most favourable interpretation, the answers I have set out may, in Mr Liu’s mind, give weight to his allegations of negligent misstatement. If so, Mr Liu grossly “over-egged the pudding”. He did himself a significant disservice. His whole construct of being a naïve, passive and easily manipulated Taiwanese national manipulated by Mr Williams, his brilliant New Zealand puppet master, borders on farcical. I do not accept it.
[104] But I need to go further. Not only did Mr Liu consistently resort to these frankly unconvincing and unbelievable answers, but also, he often said when confronted with documents, particularly documents that were contrary to his case, that he “doesn’t read documents”. He said that so many times, that in terms of his claims of negligent misstatement, it made it very difficult to understand what alleged written representations he had actually relied upon. He cannot have it both ways. It cannot be that he relied on documents allegedly constituting negligent misstatements while at the same time saying he never read them.
[105] The profound frustration that all cross-examining counsel experienced with Mr Liu was palpable. Frequently, Mr Liu simply would not answer the question until I directed him to do so. Interestingly, when I rephrased a question, he had absolutely no difficulty in answering it. Mr Liu showed great respect and deference to the bench but not to defence counsel.
[106] Mr Chisholm’s frustration got to the point that he eventually sought a formal ruling that I hold Mr Liu in contempt. Given the significance of the case for Mr Liu and GMHL, this was something I was most reluctant to do (as set out in the detailed
ruling I gave at the time).13 However, I did put Mr Liu on notice for the final time that he was required to listen carefully to the questions and answer them accurately.
[107] Furthermore, Mr Liu seemed to sense a “fishhook” or a “hand grenade” in virtually every question in cross-examination. He immediately tried to answer what he thought was the underlying question. Often, he was simply being asked to acknowledge that he had signed a document and recognised it. As a Judge, I have never witnessed a more difficult and frustrating cross-examination.
[108] For several days I gave Mr Liu the benefit of the doubt, particularly given his different cultural background. I thought he might understand cross-examination in a quite different way than is part of the common law adversarial model. In the end, I concluded that Mr Liu well understood what was happening and was simply determined not to answer any question that included the slightest degree of criticism of him or his business approach—or which he considered might be detrimental to his case, even indirectly.
[109] Regrettably, if that were not concerning enough, I need to record that Mr Liu has previously filed an affidavit in these proceedings which seems now to be clearly untrue.
[110] As previously mentioned, in the chronology, GMHL’s original (discontinued) claim included causes of action alleging breach of fiduciary relationship—in the context of the business relationship between GMHL and Mr Williams and his companies. This is all recorded in the Court of Appeal judgment.14 In an affidavit, dated 19 August 2020, prepared for that caveat case, he affirmed that he has no interest in Weiti Trustee Ltd (WTL) the 60 per cent limited partner in the Weiti Development Limited Partnership (WDLP)15 and little or no involvement in ownership of WDLP. Specifically, he said:
13 Green & McCahill Holdings Ltd v Williams HC Auckland CIV-2020-404-001385, 29 May 2024 (Minute).
14 Green & McCahill Holdings Ltd v Ara Weiti Development Ltd [2022] NZCA 218.
15 These two entities play an important role in this case. They are referred to in the Chronology and in particular in the next section about the business relationship between Mr Liu and Mr Williams under the heading “The Weiti Development Limited Partnership agreement”.
3.31. In or around 2013 I sold the shares in [Peninsula Development Ltd]16 to Mr Lee Mao Pin. Since that time, I have had little or no involvement with the ownership of WDLP …
3.32. I believe that Mr Williams knew that I had sold my interests in WTL (via PDL). I told Mr Williams, and Mr Williams, and Michael Anderson, many times that I did not have an interest in WTL.
…
4.23. The WDLP agreement also provided for fees to be paid to a person appointed by WTL. As I have not been involved with WDLP, WTL or PDL for a number of years, I do not know as to how much of these fees were ever paid.
[111] This is clearly not the case. It has now emerged that, behind the scenes in a series of documented deeds and agreements, Mr Liu retained a beneficial interest in WTL. This is beyond dispute. Yet he had effectively affirmed the opposite in proceedings in the High Court and Court of Appeal to support his application to sustain a caveat. It is very hard not to conclude that Mr Liu deliberately lied—although I step back from that finding.
[112] At the hearing, Mr Liu was clearly uncomfortable when all this was put to him and he was most unimpressive in the manner and content of his answers. In cross- examination, when it was suggested to him that when he affirms an affidavit he would read it carefully to ensure that it was truthful, he answered that it was a loaded question and suggested that he did not read affidavits very carefully. During this exchange, he was most reluctant to answer the questions. He noted that these were documents that his lawyers required him to sign which were necessary to support his case. He denied responsibility and effectively blamed his lawyers. The inference being he had not understood them or their importance. I cannot accept that. Mr Liu has clearly demonstrated himself to be man of great intelligence. I can only conclude that, on occasions, he uses the truth as relative concept. When necessary, he clearly accepts that it is something he can “shape” to suit his case. Frankly, and I cannot shrink from this conclusion, I gained the clear impression during his evidence, that he was prepared to do so in respect of his current claims also.
16 I refer to this entity in the judgment as PDL.
[113] Another example of Mr Liu’s willingness to bend the truth, from the aforementioned affidavit, is Mr Liu’s evidence that he was unaware as to what fees had been paid to a person nominated by WTL. As he readily admitted in this case, he was the nominated person. And the fees were payable in respect of his role as a member of the Advisory Committee established as part of the WDLP structure. He remembered that this fee was $1 million. It was to be increased to $1.2 million. This is hardly a trivial sum. It is simply not credible that he did not remember receiving any of those payments which, it is accepted by counsel, amounted to at least $4.3 million.
[114] On this point, it is noteworthy that Mr Broadmore asked Dr Liu in cross- examination, whether she was aware that since 2013 her brother had received over $4 million personally in “advisory fees” for his advice to WDLP. She said “no”. I asked her, “Would it surprise you if he had?” She answered, “Yeah, I suppose so. It is surprising to hear”.
[115] I think it perfectly appropriate to infer that Mr Liu had chosen to keep his significant personal remuneration a secret from his family. In my view, this is quite consistent with how he approached business dealings.
[116] Overall, I conclude that bright and intelligent as Mr Liu is, he showed a near desperation to prove his case. I say this with great respect to Mr Liu who is obviously a man of great standing in his own country. I have to record that I do not consider him a reliable witness. I cannot trust him on essential details. I conclude that he was someone who would feel able to compromise the truth if he felt it was justified in the interests of his case.
[117] It may be that one of Mr Liu’s strengths lies in being an “instinctive” big picture businessman. Indeed, this is how he portrayed himself. But his oft repeated explanations that he did not understand all the details of the important documentation he signed on behalf of GMHL became hollow. When he needs to understand detail, he is clearly very quick in assessing and absorbing it. As I discuss further, he knew much more about the subdivision of the Weiti land, the need for a mortgage to support the development loans, the long-term risks associated with the development, and the
risks to some of GMHL’s land when it was provided as mortgage security, than he was ever prepared to concede to the Court.
[118] I also conclude that when the development project did not progress as Mr Liu had anticipated, and particularly when he received what I expect would have been the bombshell news that Mr Williams’ companies had purchased the mortgaged land, he blamed everybody but himself. Mr Liu was quick to find a scapegoat. He was committed to saving his own face, and I doubt whether this side of heaven he will ever come to accept his part in the collapse of this subdivision development.
[119] For the sake of completeness, I address one specific part of his evidence. Significant cross-examination was devoted to Mr Liu’s and his family’s involvement in what seems to be a large commercial redevelopment of a hotel and golf course in Scotland. Aspects of a legal case about this project had reached the Supreme Court of the United Kingdom. There were various allegations and counter-allegations that Mr Liu had been struck-off as a director of the development company for a period; that the striking-off was either justified (or unjustified); that at some stage he may have been restored as having the right to be a director, and that he had been described as a trustworthy witness by at least some of the courts he had appeared before.
[120] I found it impossible to understand the nature and detail of that case and, specifically, what findings had, or had not, been made against him. In any case, my task in this case is to analyse Mr Liu’s evidence and his credibility before this court. It would be wrong of me to refer to any findings by other courts. To make it perfectly plain, I put all this evidence to one side and out of my mind. It plays no role in this judgment. All that can be said, by way of observation, is that Mr Liu is apparently not a complete stranger to commercial court cases.
[121] Finally, I have to record that the way that Mr Liu responded to cross- examination significantly elongated and prolonged it, by several days. Some counsel estimated that it added an extra week to the court hearing. Mr Broadmore observed that, in his view (shared by other defence counsel), Mr Liu held the Court to ransom in the way he gave his evidence.
Mr Williams
[122] On the other hand, I unhesitatingly conclude that Mr Williams is a reliable and credible witness.
[123] As with Mr Liu, he is also a highly intelligent and well-educated man. He holds LLB and LLM (Honours) degrees. He was a law lecturer at Victoria University for three years. He practiced as a commercial solicitor, and, as already noted, he was the managing partner of Chapman Tripp from 1987 to 1993. In that capacity, Mr Williams advised a substantial number of major companies, governments and government corporations, on mergers, takeovers, projects and financing.
[124] Mr Williams has had a variety of governance roles both local and overseas. These include, for instance, roles with Auckland City Mission from 1993 to 1997, and the Museum of New Zealand—Te Papa Tongarewa from 2011 to 2019, where he was chairman between July 2013 and 2019.
[125] Mr Williams has particular experience in large-scale coastal property developments. He was the chair of Tabua Investments Ltd, the developer of the main development at Denarau Island, Fiji, which Mr Williams described as the mainstay of Fiji’s tourism interests. He was a shareholder and subsequently chair of that company from 1996 to 2002.
[126] In New Zealand, Mr Williams was involved in the development of Mataka Station, a 30-lot development on an approximately 1200-hectare property in the Bay of Islands. He was also involved in “Bream Tail”, a 40-lot development on approximately 470 hectares of property near Mangawhai. Both of these were residential developments on large coastal properties.
[127] Mr Williams regarded the development of the Weiti land as a similar challenge but, I observe, on a much greater and more significant scale.
[128] One thing became clear about Mr Williams during his evidence: he is a very intelligent and apparently gifted lawyer. At times he strayed between giving evidence and explaining the legal implications of the documents that he drafted or had signed.
He was reminded in cross-examination, with respect, to stay in his lane. When his legal expertise was challenged in evidence or cross-examination, he was respectful and balanced.
[129] Mr Williams also had the advantage, when giving his evidence, of relying on copious records, file notes and letters all of which he had indexed and filed. In Mr Williams’ view, over the course of the development, the communications between Mr Liu, GMHL, Mr Williams and their respective advisers, totalled over 2,500 emails and 4,600 documents. He referred to many of them in his evidence. His reference to detailed file notes, made at the time, lent significant strength to his reliability and credibility.
[130]I assessed Mr Williams’ record keeping as meticulous. It was also impressive.
[131] His evidence relied heavily not on his recollection, but on the documentary evidence and notes that were kept at the time. In this respect, his evidence was qualitatively more impressive than Mr Liu. His record keeping put him at a significant advantage over Mr Liu—whose reliance on documents was not so pronounced, and who often spoke mainly in terms of generalities and impressions.
[132] That is not to say that Mr Williams’ evidence was flawless. On one occasion at least, he was also a little disingenuous—in his analysis of who had effective control of WDLP which I describe in the next section. But I understood what he was attempting to explain, even though I felt he exaggerated the position.
[133] Mr Williams was also subjected to searching, comprehensive and expert cross- examination by the very skilled Mr Dickey. He was pressed on many points. In my view, Mr Williams answered those questions carefully, thoughtfully, and honestly. His answers were consistent with the documentary evidence. What he said made sense and was plausible and persuasive. He made concessions where necessary. He did not overstate the position. I assess him to have been largely unshaken by the cross- examination.
[134] I have given careful consideration to one aspect of Mr Williams’ cross- examination by Mr Dickey. On 23 August 2015 at 7.02 pm, Mr Dempsey (the CFO of Williams Land Ltd (WLL)) emailed Mr Williams (copy to Simon Matthews—the external project manager for WDLP). That email re-attached information Mr Dempsey recorded had been previously forwarded to Mike (Anderson) and Paul (Wigglesworth).17 It contained a summary of cash flow and a development return analysis. Mr Williams forwarded that email to Mr Liu and Mr Anderson and Mr Wigglesworth at 7.28 pm on the same day.
[135] Mr Dickey pointed out the two emails (but not the detailed attachments) were slightly different. Amongst other things, the original email from Mr Dempsey stated that as at December 2018 GMHL would receive all its $60 million for the land whereas the “forwarded-on” email said that payment would be made between December 2017 (earliest) and December 2018 (latest) and added “and there is a margin”. The difference was well spotted by Mr Dickey. He suggested to Mr Williams that he altered it to provide a more optimistic outlook—a more positive outlook, than Mr Dempsey had forecasted.
[136] Mr Williams accepted the two emails were different. He accepted that it would have been possible for him to change the email in the way suggested. He said he could not account for the change. He suggested there may be another email. He said it would be a very surprising thing for him to do. I must say it would appear that in the 26 minutes between receipt and forwarding on, it would be hard to imagine how anyone else except Mr Williams could alter it—assuming (reasonably, in my view) that there was not another email from Mr Dempsey at exactly the same time.
[137] I think it likely that Mr Williams did alter it. However, it was certainly designed to present what Mr Williams, as director of WLL, understood would be the best and worst outlook as to payment. And, I have to say, both emails were sent to Mr Anderson and Mr Wigglesworth—so the difference would have been obvious to them. And they may have forwarded it on to Mr Liu. All the other information was identical.
17 Mr Anderson was one of GMHL’s lawyers and acted as a director of GMHL from October 2015 to July 2020. Mr Wigglesworth had introduced Mr Liu to the Weiti land and was an advisor for GMHL.
There was no material error. Only the more optimistic outlook was inserted. If Mr Williams did alter it, it was wrong of him. He should have simply said that his view differed from Mr Dempsey and that the December 2017 earliest repayment was realistic—which was clearly his view and it was not the only time he said it.
[138] This is the only documented example drawn to my attention where Mr Williams may have been less than truthful and fully candid in his dealings with GMHL. I regard it as an isolated lapse over 15 years of dealing with GMHL and Mr Liu. It does not reflect well on him. But I do not see that it affects my overall impression of him.
[139] In general, Mr Williams impressed me as a witness who was reliable, accurate, and honest. I regard him as completely credible. Clearly, he was deeply, if not obsessively, committed to the subdivision project. In Mr Williams’ own words, he “invested the better part of the last two decades and millions of dollars into the Weiti land development”. It is obviously something that he believed in, and still believes in. He is of the view that the project, in spite of all its crises, can be resuscitated.
[140] Undeniably, this commitment and optimism “colours” Mr Williams’ evidence. His unshakeable belief that the subdivision was and will be profitable and can still be completed is honestly and genuinely held. But all that, in my view, has not led him to twist his evidence or mislead the Court. And I assess his view about the subdivision and its prospects throughout the development as essentially reasonable.
[141] One example of Mr Williams’ commitment to this project, and a very human one, was his email to his family when Mr Liu, on behalf of GMHL, finally confirmed that he would sign the mortgage documentation to secure the major loans to develop the property in earnest (the first quadripartite deed and the suite of documents). Mr Williams wrote to his family, very humanly, indicating his relief and excitement. This was not the reaction of a “puppeteer”, or a “manipulator”. It was simply understandable relief that a major milestone in the project had been successfully reached.
[142] Another example is Mr Williams’ keen sense of moral duty to still try to ensure that Lambton Quay receives some (if not all) of the money it lost as a result of the mortgagee sale. I cannot say if this will ever happen. But Mr Williams was credible in expressing his commitment to try to compensate Lambton Quay for at least some of its losses.
Mr Liu v Mr Williams
[143] I record that in all areas of the evidence given by Mr Liu and Mr Williams, and certainly where there is any conflict between their evidence, I unhesitatingly prefer and accept the evidence of Mr Williams and reject that of Mr Liu.
[144] I also observe that Mr Liu and Mr Williams’ relationship (before it disintegrated) was always conducted very formally. The two always referred to each other as “Mr” in all their correspondence and meetings. This was obviously important to Mr Liu. He expected and demanded respect and deference. If Mr Williams’ employees ever became too informal in their interactions with Mr Liu, he quickly corrected them.
[145] I conclude that Mr Liu is something of an enigma. He is urbane, polished in his delivery, charming and witty. Yet at the same time, he is a big picture man, reluctant (at his own cost in this case) to become involved in detail (but nevertheless well able to do so if required). He is also instinctive, and as the evidence shows, at times volatile.
[146] In my assessment, Mr Liu would have been difficult to work with. Mr Williams interacted with him with considerable patience. During the trial, I reached the view that it was a challenging relationship for Mr Williams which he had to manage and cope with as best as he could. For instance, on one occasion, I accept Mr Williams’ evidence that during phone calls involving himself, Mr Liu and some of his advisers, it became clear that Mr Liu “had become offended during a terse negotiation with me as he required a written letter of apology.” Such apology letter was duly proffered by Mr Williams in July 2013. He explained that his comments were directed at the issues arising from dealing with the banks and no personal offence was intended.
Other witnesses
[147] At this stage it is not necessary to set out in detail my credibility findings in respect of the other witnesses. That will emerge as I discuss the relevant issues for which their evidence is important.
[148] It is, however, important to say at this stage that in respect of Sir Mark in particular, I assess him to be an absolutely reliable, honest and trustworthy witness. He came under significant attack. Frankly, on my assessment of Sir Mark and the way he gave his evidence, it would be hard to imagine someone less likely than he to be involved in the Machiavellian scheming that is alleged by GMHL. In my view, he is just not that sort of person. He is cut from different cloth.
[149] I found the evidence of Sir Mark’s legal adviser, Mr Anthony Staples; Mr Williams’ lawyer, Mr Paterson; and that of Mr Bartlow, who gave evidence for the sixth defendant, Clearwater, to be impressive, trustworthy, and reliable. They had a clear recollection of the detail. In my view, they answered questions fairly, thoughtfully, and clearly. I signal that I accept their evidence. Their evidence was in respect of the third cause of action in this case—the validity of the mortgagee sale. The evidence called by GMHL/Mr Liu in this respect, particularly from Mr Stiassny, an expert insolvency practitioner and advisor to GMHL, was not significantly at variance with the defendants’ key evidence although presenting a different perspective of the events that took place.
THE BUSINESS AND LEGAL RELATIONSHIP BETWEEN GMHL/MR LIU AND MR WILLIAMS: HOW AND WHY IT DEEPENED AND THEN COLLAPSED
[150] The chronology in Appendix 1 requires fleshing out. It does not explain why and how the business relationship between GMHL and Mr Liu on the one hand, and Mr Williams on the other, developed and deepened over the years. An assessment of that business relationship is essential in determining this case. This section provides the context and backdrop against which all the five causes of action fall to be decided.
[151] That assessment is best carried out by reference to the significant agreements that entities associated with Mr Liu and Mr Williams progressively entered into with each other and their reasons for doing so. This led to a series of commercial loans to WDLP which were secured by mortgages over some of GMHL’s land. It is also necessary to briefly refer to the progress of the development; why the parties’ business relationship collapsed; and why and how the subsequent mortgagee sale procedures ensued.
[152]Some of my findings depend on the credibility assessments already made.
Original business proposal to the Liu family
[153] In 2005, Mr Liu was introduced to Mr Williams through Mr Paul Wigglesworth, a New Zealander well known to Mr Liu. Mr Liu recalls that Mr Williams offered (orally) to pay $300 million for the Weiti land which obviously piqued the interest of the Liu family. In my view, Mr Williams never made such an absolute offer. The subsequent proposal was much more nuanced, as I now set out.
[154] Later that year, Mr Williams presented a written proposal to the Liu family. The proposal offered a maximum purchase price for the Weiti land of $300 million. It was based on consents for between 2,000 to 3,000 lots being achieved, with provision for an adjusted purchase price if such consents were not achieved within two years. There was a proposed pricing formula dependent on the extent of consents for lots to be developed. The proposal was built on the fundamental feature that the value of the land would increase as consent approvals and the subdivision development advanced.
[155] Mr Liu and his family members, including his mother and father, and his sister Dr Liu, met with Mr Williams. I understand that Mr Liu’s father, Dr Liou, who passed away in 2016, was a prominent international businessman and senior political figure in Taiwan. At that stage, Dr Liou was the family patriarch and influential in decision making. The family was clearly impressed with Mr Williams, and vice versa.
[156] At this stage, GMHL faced something of a dilemma. It did not want to develop the land itself, nor apparently enter a joint venture to do so. Presumably, GMHL did not wish to pay tax on profits from the development. But, equally, it wanted to maximise its return on its investment in the land, and there were obvious possibilities for commercial development and significant profit.
[157] It will be recalled that prior to this point, various parties had approached the Liu family to purchase the Weiti land. Indeed, a number of offers were made. One of these offers was about $80 million in cash for the land as is. Clearly, the Liu family saw long-term value in the Weiti land and did not want to sell it at that level. This was Mr Liu’s evidence and I accept it.
[158] My assessment of GMHL/Mr Liu’s thinking at this time is that he was attracted to the opportunity for a massive increase in profit from the sort of development proposed by Mr Williams. Land purchased for $4 million, 14 years later could have been sold for $80 million. But GMHL/Mr Liu were clearly (and understandably) enticed by the lure of a much greater post-development return.
“Option” to purchase agreement and parallel “Put” agreement
[159] On 7 December 2005, GMHL and WLL (then named Williams Capital Ltd), executed “Call” and “Put” option agreements which were subsequently extended as set out in the chronology.
[160] WLL was granted an option to purchase the Weiti land for a non-refundable “option fee” of $5 million.
[161] Central to these agreements was a price formula which provided for a purchase price not less than $155 million and not exceeding $295 million, tied to the number of lots for which final consent was granted:
New Base Price = B
B is (
x_ 2000
x $300,000,000) less $4,995,000
x is the number of residential lots for which final consent is granted
— provided that the Base Price may not in any circumstances be more than $295,000,000 nor less than $155,000,000.
[162] The “Put” agreement meant that if GMHL gave notice that it wished to sell, WLL was required to buy the Weiti land.
[163] The “Option” and “Put” agreements were variously extended and re-entered into several times on slightly different terms. As part of the second fresh agreement, GMHL was paid a further $1 million. These agreements governed the business relationship between GMHL and the Williams’ companies between December 2005 and June 2010.
[164] In his evidence, Mr Liu’s continuing refrain was that the original arrangement was always for a payment of $300 million. I do not accept that. Mr Liu knew exactly what the price setting formula was, even if he could not bring himself to admit it in the witness box.
[165] In 2007, the Williams’ companies obtained consents for 150 lots for what was then known as Karepiro Bay and what came to be known as the Weiti Bay part of the development. Although appealed, the consent issue was resolved in June 2008.
[166] At this stage, there was also approval in principle with the Council for three zone precincts within the Weiti land:
(a)Precinct A—Karepiro (Weiti Bay) for 150 lots.
(b)Precinct B—Villages 1 and 2 with 400 lots, plus up to 100,000 square metres gross floor area of commercial buildings.
(c)Precinct C—Green belt and conservation policy areas known as the “balance land”.
[167] At any time, during the period of the option, had the “Put” agreement been exercised by GMHL, theoretically it would have received $155 million together with the $5 million already received as the deposit.
[168] However, I accept that WLL was not able to exercise its option, partially at least because of the repercussions of the global financial crisis, the collapse of many other property developments and the difficulties in obtaining loans. Neither did GMHL wish to exercise its “Put” option. As I understand it, this was because it knew that WLL was not in a financial position to be able to make the required payment.
[169] During this period, the parties held meetings and discussed matters including financial models, business plans and a potential financing option involving a first- ranked mortgage and a deferred payment. However, none of these eventuated. In August 2010, the option agreements had come to an end. Mr Williams (both personally and through his companies and associates) had contributed up to $20 million in pre-development work for the Weiti land. Including the “Option” fees, the spending was at least $26 million.
Notwithstanding any other provision of this mortgage, GMHL's liability under this mortgage may only be discharged from any proceeds or other amounts arising out of the land, the road land, the land proceeds, the village 1 proceeds and/or the Assigned Property and the mortgagee agrees that it has no rights in relation to any other property of the mortgagor.
[1299] Making the declaration would therefore appear to have a protective advantage to GMHL as it prevents recourse to assets outside of those specified in cl 3. Presumably for that reason, this relief (if the Court got to this stage) was not opposed by Mr Dickey. Accordingly, I am willing to make, and do make, the declaration.
Result of counterclaim
[1300] AWIL’s counterclaim succeeds. I award judgment against GMHL in the sum of $20,133,278. I award interest in full from 7 July 2020 up to the date of payment on the sum of $20,133,278 at the rate of 21 per cent per annum, compounding monthly in accordance with the Lambton Quay Term Loan Agreement dated 20 July 2018.
[1301] I also declare that the plaintiff’s liability may only be discharged from the assets of GMHL specified in clause 3 of the Lambton Quay mortgages, now being any proceeds or other amounts arising out of the Village 2 land, the balance land, and the “Assigned Property”.
SUMMARY OF OVERALL RESULT
The causes of action
[1302] The first, second, third, and fourth causes of action do not succeed and are dismissed.
[1303] AWIL’s counterclaim succeeds.
Costs
[1304] Costs are reserved.
[1305] The parties should provide succinct memoranda (no more than ten pages) as to costs. The defendants should file within 15 working days from the date of final delivery of this judgment. The plaintiff has 15 working days from receipt of all the defendants’ memoranda in which to respond. If necessary, the defendants have a further 5 working days to respond the plaintiff’s memorandum.
[1306] Upon receipt of all memoranda, I will decide costs on the papers.
Becroft J
APPENDIX 1
CHRONOLOGY OF RELEVANT EVENTS
In this chronology the most important events appear in bold.
DATE EVENT
BACKGROUND HISTORY
1956
Green & McCahill Holdings Ltd (GMHL) incorporated. It is a holding company for the Weiti land.
1991
The Liu family acquired GMHL, and Weiti land, for approximately $4 million. It was brought to its attention by Mr Paul Wigglesworth, a New Zealander known to Mr Liu.
2004
Various parties approached Mr Liu and his family to purchase the Weiti land. Several offers were made—one of these was a cash offer of approximately $80 million. The Liu family saw significant long-term value in Weiti land and did not want to sell it, at least as bare land, at that stage.
DEALINGS WITH MR WILLIAMS
Mid-2005
Mr Liu met Mr Williams, introduced by Mr Wigglesworth.
Mr Williams told the Liu family about his previous property developments such as in the Bay of Islands and Fiji. He said he had represented the New Zealand Government in negotiations regarding oil rights. He is said to have held himself out as someone who could be trusted and reliable.
September 2005
Williams Capital Ltd, now called William Land Ltd (WLL), offers to pay GMHL
$300 million for the Weiti land, conditional upon planning consent for not less than 2,000 residential units and up to a maximum of 3,000.WLL provides a “Development Report” about development prospects of the Weiti land, with a high-end residential subdivision envisaged.
“OPTION” AND “PUT” AGREEMENTS
7 December 2005
First “Option” and “Put” agreements signed, giving WLL an option to purchase all the Weiti land at a base price of $295 million.
The agreement had a two-year time span.
WLL paid $5 million to GMHL for the option to purchase.The purchase price in the agreement was “pegged”, according to a complicated formula, to the number of residential consents that were obtained for the land. The price was to be no more than $295 million and no
less than $155 million.
7 December 2007 Delays had occurred in obtaining subdivision consent.
First extension of “Option” and “Put” Agreement (to 7 May 2008).17 December 2007
Rodney District Council (as it then was) granted consent for a 150-lot subdivision. The decision was appealed by objectors.
31 January 2008
WLL suggests a vendor finance proposal to Mr Liu. GMHL to receive
$80 million as first part of payment, on account of purchase price, with mortgage securities. Offer rejected.
8 May 2008
Second “Option” and “Put” Agreements. WLL paid $1 million as consideration. Agreement to expire 6 November 2009 with a slightly adjusted price formula.
16 June 2008
WLL advised Mr Liu that the appeal had been resolved and that final consent had been granted for the 150 lot Stage 1 development of the Weiti land.
30 October 2009
Extension of second “Option” and “Put” Agreements until 30 June 2010. As consideration, WLL agreed to transfer two lots of land in Fiji to GMHL. But transfer was expressly conditional on South Canterbury Finance releasing mortgage securities over those lots. That release was never granted and the transfer of those two properties was never completed.
FORMATION OF WEITI DEVELOPMENT LIMITED PARTNERSHIP (WDLP)
26 May 2010
Consent order issued by the Environment Court increasing development capacity of Weiti land to 550 lots—well above the 150-lot cap then in place. Precinct A—Weiti Bay: 150 lots
Precinct B—Villages 1 and 2: 400 lots and up to 100,000m2 gross floor area for commercial buildings.
Precinct C—Balance land: greenbelt and conservation policy areas.
Development potential for the Weiti land had significantly increased.
28 May 2010
“Option” and “Put” agreements at an end. No legal obligations arose between the parties. Until now, no significant development of Weiti land had occurred.
31 May 2010
The Williams Group of companies transferred a half share of the intellectual property it had developed to GMHL.
21 September 2010
Master Sales Agreement executed. GMHL would sell land in stages as titles for each stage were released. WLL would not receive a return on capital until GMHL had received $180 million.
28 February 2011
Development Agreement between GMHL and Williams Capital No. 1 Ltd (WCNL) for land areas then defined as Village 1A, Village 1B, Village 1C,
Weiti Bay, and Village 2.
Adjustments made as to how GMHL to be paid. Village 1A and 1B: $25 million (Stage 1).
Village 1C: $35 million.
Karepiro Bay (Weiti Bay): $80 million: first 80 lots (Stage 2). Village 2: $80 million (Stage 3).
Total purchase price $220 million. Adjusted dates for payment set out. The purchase price was reduced due to no “balance land” being included.
WCNL to pay $190 million (as an early payment discount) for the described land but only if payment made by 28 April 2011. WCNL did not meet terms of Development Agreement. Options expired but Development Agreement continued.
26 June 2012
First subdivision development feasibility summary (land only) provided to GMHL. Revenue and costs for Weiti, Village 1 and Village 2 set out.
26 June 2012
Weiti Development Limited Partnership (WDLP) formed.
General partner was Weiti Development General Partner Ltd (WDGPL), of which Mr Williams was the sole director.
Two limited partners:(i) Mr Liu: 60 per cent interest. Mr Liu’s interest was in the form of Weiti Trustee Ltd (WTL) (now Weiti Invest Co Ltd), which he controlled.
(ii) Mr Williams and his family interests: 40 per cent interest. The Williams’ family interests were in the form of Weiti General Partner Limited (WGPL), as general partner of the Weiti Limited Partnership (Weiti LP).
27 June 2012
Amended Development Agreement. Stage 1 now to be the 80 Weiti Bay lots.
As to later stages (called Village 1 and Village 2)—planning applications to be made to protect future development. WDLP took over WCNL’s interest in the Development Agreement.
Payments to GMHL conditional on issuance of titles. Weiti Bay still at the
$80 million purchase price.
LEAD UP TO THE TWO TRIPARTITE AGREEMENTS AND LOANS
8 December 2012
GMHL entered into a loan agreement with the general partner of WDLP for
$1.569 million, loaned in five tranches. This money was required for initial pre- development work.
12 December 2012
WDLP notifies GMHL it will apply for increase in development capacity to 1,200 lots.
3 May 2013
GMHL and WDLP vary Master Sales Agreement, allowing for increase in purchase price if Auckland Council consent to increase in number of lots from 550 to a maximum of up to 1,600.
Up to 6 May 2013 Discussions with NZMS (a financier part owned by the Manson family) about subdivision development finance—being a single loan for both pre-development and construction. Mr Liu eventually clear that GMHL does not want to provide mortgage security over any of the Weiti land.
17 July 2013
Mr Williams as CEO of WLL advises Mr Liu that $6.25 million required for pre-construction costs including obtaining approval for increase in lots from 1,200 to 1,600.
17 July 2013
Four new titles issued for the Weiti land:
1. Village 1
2. Weiti Bay encompassing the planned premiere 150 luxury size residential lots
3. Village 2
4. Balance land
8 August 2013
First Tripartite Deed between GMHL, WDLP and Spinnaker Capital. Loan agreement for $6.25 million. Mortgage security only over the Weiti Bay land to Spinnaker Capital. Money to be used by GMHL for pre-development costs and consents.
30 September 2013
Auckland Council Draft Unitary Plan released approving increase in subdivision from 550 to 1,200 lots as well as extensive commercial floor area.
27 August 2014
New Loan Facility Agreement signed between WDLP and Killarney Capital.
$10,420 million for six months. Designed to repay Spinnaker and bridge gap until construction. Loan was for further “pre-construction” finance, as Spinnaker loan was insufficient to complete all the pre-construction work.
1 September 2014
Second Tripartite Deed executed between Killarney (a finance company), WDLP and GMHL.
4 October 2014
Presentation in Taipei by Mr Williams in person to Mr Liu, and his father and sister. $65 million loan plus interest and costs approved for subdivision construction.
28 February 2015
WDLP defaulted on Killarney Facility Agreement repayment.
LEAD-UP TO AND SIGNING OF THE THREE QUADRIPARTITE AGREEMENTS AND LOAN FACILITIES
By 15 April 2015
Purchase price had been reduced to $180 million in three tranches for Weiti Bay, Village 1 and Village 2.
23 April 2015
Mr Liu visits New Zealand and meets with Mr Williams and with WDLP personnel including Mr Simon Matthews and Mr Dempsey. Updated forecasts/estimates/accounting bills were presented. Mr Liu very upset with the increases. This meeting became known as the “angry meeting”.
24–29 May 2015 Mr Liu again visits New Zealand. Mr Liu engages Mr Anderson of Lowndes & Co for meetings.
5 June 2015
Killarney issued Property Law Act 2007 (PLA) default notices to WDLP and GMHL for $11,906,150.80.
June–July 2015
Mr Liu separately negotiated to pay back Killarney with a loan from Westpac. No acceptance by GMHL of BNZ loan offer and mortgage security. Much uncertainty.
26 August 2015
GMHL and WDLP signed a Senior Facility Agreement with the BNZ providing for up to $68,300,000 in lending; and a Junior Facility Agreement with Capital Group for $9.785 million in lending.
Mr Williams executed deed of personal guarantee to BNZ (capped at $1.5 million).
7 September 2015
First Quadripartite Deed signed between GMHL/WDLP/BNZ/Capital Group.
Senior lender: BNZ. Initial loan of $67.31 million ($65 million principal, plus costs).Junior “mezzanine” lender: Capital Group loan of $9.785 million (apparently to repay the Westpac loan)
All GMHL’s intellectual property interests assigned to the lenders.
Early November 2015
Construction of access and subdivision roads began.
17 February 2016
81 lots in Weiti Bay had been sold (off the plans) for $77.3 million.
4 October 2016
Capital Group inform they do not wish to proceed with Stage 2 financing.
1 February 2017
Second Quadripartite Deed signed. Capital Group was replaced by Nomura Finance through its wholly owned New Zealand subsidiary, Pacific Dawn. Pacific Dawn loan for 18 months to expire 2 August 2018.
For the first time, Village 1 land also mortgaged to secure loans.
13–14 May 2017
A major slip occurred in the western corner of the Weiti Bay development. It occurred within an area of engineered fill affecting and isolating five lots.
23 December 2017
WDLP signed Settlement Agreement in respect of judicial proceedings against Auckland Council in respect of application for 1,200 lots. Council agreed not to oppose application.
17 January 2018
Weiti Bay Stage 1 settlements: 68 out of 80 lots settled within first four hours.
May–July 2018
Mr Williams says it is clear to him that relationship breaking down with Mr Liu about this time.
24 June 2018 Email from Mr Liu to Mr Williams expressing concern about Mr Williams’ conduct in relation to the development. Mr Liu questions whether, after all Weiti Bay lots are sold, and all the financiers (WDLP and Williams) are paid off, GMHL will receive anything at this stage?
2 July 2018
Lambton Quay Properties Nominees (Lambton Quay) agreed to become the junior lender in order to “take out” Nomura/Pacific Dawn loan.
20 July 2018
Third and final Quadripartite Deed finalised between WDLP/GMHL/BNZ and Lambton Quay. Lambton Quay “takes out” Pacific Dawn loan. GMHL again, as for the two previous quadripartite deeds grants encumbrances over Village 2 and balance land. GMHL also covenanted to pay BNZ and Lambton Quay amounts due and payable by WDLP to BNZ and Lambton Quay.
27 July 2018
Deed of Amendment executed by WDLP, WDGPL and BNZ which amended the 2015 BNZ facility.
$28 million advanced to WDLP by Lambton Quay.
AFTER LAMBTON QUAY BECAME INVOLVED
12 November 2018
Email from GMHL advisers to Mr Williams querying plan to repay BNZ and seeking confirmation that, after all Weiti Bay lots sold, there would be a shortfall of $5 million.
14 November 2018
Email from Mr Williams on behalf of Williams Group/WDLP to GMHL’s legal and accountancy advisers and Mr Liu, advising that BNZ will not extend past 31 January 2019, and confirming shortfall.
Late 2018
Approximately 80 per cent of Weiti Bay lots had been sold. Generally, sales had significantly slowed.
7 December 2018
Savills valuation issued:
(a) Remaining lots at Weiti Bay: $42.5 million.
(b) Village 1: ($60 million).
Early 2019
Successful completion of construction stage of Weiti Bay subdivision, constituting 150 lots at a cost of more than $100 million.
BNZ LOAN EXPIRED 2019 AND LEAD UP TO MORTGAGEE SALE
30 January–5
February 2019Mr Liu and his two sons visit New Zealand. It was a private visit, with hospitality from Mr Williams.
31 January 2019
The BNZ loan facility expired with arrears of about $12 million.
4 February 2019 Separate face to face meeting between Mr Liu and Mr Williams. Mr Liu says Mr Williams first informed him that BNZ loan was in default. Mr Liu says that “left me in shock”.
Mr Williams presented an indicative offer from Singaporean investor in range of $50 to $60 million with net payment to GMHL of $37.2 to $47.2 million.
Mr Liu walked out of meeting.
Early–Mid February 2019
Mr Liu very concerned at the deteriorating position. Effectively, the relationship between Mr Williams and Mr Liu ends. Mr Liu no longer trusts Mr Williams. Mr Williams apparently committed to resurrecting business relationship.
19 February 2019
BNZ is owed about $12.8 million. BNZ agreed not to enforce penalty interest. BNZ agreed to wait until April 2019. Lambton Quay is owed about $30 million.
25 February 2019
Mr Thompson (GMHL’s lawyer) advises Mr Paterson (WDLP’s lawyer) that GMHL “no longer prepared to pass title to its land without some payment on account of the $180 million” —(being the total purchase price for Weiti Bay and Villages 1 and 2 land). GMHL require a “re-negotiation” of existing Quadripartite deal.
1 March 2019
Lambton Quay gave notice of its wish to exercise its option to purchase BNZ loan debt.
7 March 2019
Mr Thompson confirms no agreement to further funding until GMHL’s conditions are met.
10 April 2019
Offer to buy out the Liu family/GMHL’s interest for $30 million from a Williams Group “new company” was rejected.
7 June 2019
BNZ novated all its mortgage and loan rights, title, and interest to Lambton Quay. Lambton Quay now holds the first ranking mortgage over Weiti Bay and Village 1, in addition to its second mortgages.
21 June 2019
$50 million offer to GMHL from Clearwater Capital Partners (sixth defendant) to purchase all land with three years to complete plan changes and a payment to Lambton Quay. No final response.
DEFAULT NOTICES ISSUED AND MORTGAGEE SALE
9 July 2019
The offer to GMHL by Clearwater still on table, but it is effectively revoked by this time.
10 July 2019
Lambton Quay served notices of demand (dated 9 July 2019) on WDLP, WDGPL and GMHL under the BNZ facility—$12,866,070.13.
20 July 2019
Lambton Quay registered on the Financial Service Providers Register pursuant to the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSP).
22 July 2019 Lambton Quay served PLA default notices on WDLP, WDGPL and GMHL under the BNZ facility.
1 August 2019
Lambton Quay served notices of demand on GMHL and WDLP under the 2018 Lambton Quay term loan for $33,679,824.00.
12 August 2019
Lambton Quay served PLA default notices on GMHL and WDLP under the Lambton Quay term loan.
28 September 2019
Advertisement of mortgagee sale by Bayleys Real Estate. A sales campaign began. 6 November 2019 was the mortgagee sale deadline.
14 October 2019
Stuff media interview undertaken by Mr Williams attempting to play down damage to the development of any mortgagee sale.
6 November 2019
Mortgagee sale deadline expired without a sale.
MORTGAGEE SALE PROCESS CONTINUES
12 November 2019
Valuations by Savills provided to WDLP. Adopted Market Value Gross Realisation of:
(a) $29.02 million for Village 1.
(b) $39.1 million for unsold Weiti Bay sections. Various forced sales valuations also provided.
20 November 2019
Lambton Quay’s lawyer advised GMHL’s lawyer that it did not consider there was any issue with the process and that the mortgagee sale process had not yet been concluded. Negotiations with Lambton Quay and an overseas buyer for Village 1 commence.
17 December 2019
Lambton Quay advised it had signed a conditional offer at $21 million for Village 1.
10 February 2020
The existing conditional agreement for purchase of Village 1 was cancelled by potential overseas buyer.
15 April 2020
Lambton Quay signed Term Sheet for Williams Companies/Clearwater purchase of unsold Weiti Bay lots and Village 1.
8 May 2020
Ara Weiti Development Ltd (AWDL) and Ara Weiti Investments Ltd (AWIL) are incorporated.
14 May 2020
Ara Weiti Bay Development Ltd (AWBDL) is incorporated.
18 May 2020 Intended settlement date under deed for Lambton Quay, Clearwater and Williams’ companies expired. Mr William’s companies could not settle. Mr Williams’ asked Sir Mark for more time. 22 May 2020
Further agreement with Lambton Quay was reached. Amended agreement concluded.
12 June 2020
Mortgagee sale settled.
All financing agreements with Clearwater are settled.
$35 million specified purchase price.
A very complicated legal/financial structure was adopted involving companies effectively controlled by Mr Williams, Lambton Quay and various Clearwater entities.
$54,846,881.77 in total was due and owing by WDLP and GMHL to Lambton Quay (under original BNZ loan and Lambton Quay loan). Increase in total debt due to daily interest rates of 10 per cent and 21 per cent respectively).
WDLP executes an Acknowledgement of Debt for that amount. Transaction documents executed. Money held in escrow.
12 June 2020
Lambton Quay assigned $19,846,881.71 residual debt to AWIL (the debt was owed by GMHL to Lambton Quay as a result of the shortfall in the agreed mortgagee sale).
24 June 2020
GMHL was notified of the terms of the mortgagee sale and the assignment of its residual debt to Lambton Quay to AWIL.
7 July 2020
AWIL served statutory demand on GMHL and WDLP for $20,133,278, for total residual debt. Demand notice against GMHL was later withdrawn, after GMHL applied to set it aside. AWIL’s claim for the outstanding balance thereafter was incorporated as its counterclaim in this consolidated proceeding.
21 August 2020
GMHL filed an application that its caveats not lapse.
GMHL also commenced the present substantive proceedings against Mr Williams and Williams Companies (being the second to fourth defendants and Williams Management Trust) which included claims for breach of fiduciary duties by Mr Williams personally, and related knowing receipt, knowing assistance and constructive trust claims against Williams companies. All these claims were later abandoned.
7 July 2022
Plaintiff filed amended and consolidated statement of claim. Claim against Williams Management Trust was abandoned. Lambton Quay and Clearwater were joined as fifth and sixth defendants.
8 December 2023
GMHL filed and served second amended and consolidated statement of claim, abandoning those claims it had relied upon in respect of its earlier caveats.
- AGLC
- Green & McCahill Holdings Ltd v Williams [2025] NZHC 2581
- Case
- [2025] NZHC 2581
- Decision Date
CaseChat Overview and Summary
Orders
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Reasons for decision
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Ratio Decidendi
Legal Principle Established
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