Hemu Trade Co Ltd v Le

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2016-404-416

[2018] NZHC 982

BETWEEN

HEMU TRADE COMPANY LIMITED

First Plaintiff

CHIN WEN LI
Second Plaintiff

CHING-CHI LI
Third Plaintiff

AND

CHUN MAO LE

Defendant

Hearing:

30, 31 October and 1 November 2017, further submissions

8 November 2017

Counsel:

R Reed and A Manuson for plaintiffs JA Wickes for defendant

Judgment:

8 May 2018

JUDGMENT OF FITZGERALD J

This judgment was delivered by me on 8 May 2018 at 4 pm], pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors:           Prestige Lawyers Ltd, Auckland

Loo & Koo, Auckland

Hemu Trade Company Limited v Le [2018] NZHC 982 [8 May 2018]

Contents

Introduction.......................................................................................................... [1]

Factual background............................................................................................. [7]

The establishment of Wenheng and lead up to the Property’s purchase............ [8]
Events leading to settlement of the purchase................................................... [18]
Use of the Property — 1996 to 2008............................................................... [34]
The brothers fall out........................................................................................ [42]

The Taiwan civil and criminal proceedings..................................................... [46]

The pleaded causes of action............................................................................. [49]

Resulting trust

Legal principles................................................................................................ [57]
Did Wenheng fund the purchase of the Property?........................................... [65]
Did Wenheng fund the deposit?....................................................................... [76]
Does Hemu have “standing” to bring the resulting trust claim?.................... [82]
Is Hemu Trade entitled to an account from the defendant for rent?................ [91]
What relief ought to be granted under the first cause of action?.................... [99]

Breach of fiduciary duty................................................................................. [104]

Tort of deceit..................................................................................................... [110]

Result................................................................................................................. [116]

Introduction

[1]                  This proceeding concerns the beneficial ownership of a property in Avondale Heights, Auckland (“Property”).

[2]                  The Property was purchased in 1996. The registered proprietors are the second plaintiff and the defendant, as tenants in common. The first plaintiff (“Hemu”) says that it (or more accurately, a predecessor company, Wenheng Enterprise Ltd (“Wenheng”)) funded the purchase of the Property. It says the funds were not advanced as a gift or a loan. The second plaintiff does not dispute this. On this basis, Hemu says that on orthodox resulting trust principles, it is the beneficial owner of the Property.

[3]                  The defendant denies this. He says that when the Property was purchased in 1996, it was his and his brother’s (the third plaintiff’s) intention that they would jointly purchase and own the Property. He says that consistent with that intention, he contributed 50 per cent of the purchase price of the Property. On that basis, he says he remains the legal and beneficial owner of a 50 per cent share in the Property.

[4]                  As will be appreciated, central to Hemu’s claim is the factual question of whether Wenheng did pay the full purchase price of the Property. A subsidiary issue is whether, if Wenheng did fund the purchase of the Property, Hemu can enforce its claim of resulting trust.

[5]                  One other matter is appropriate to mention by way of introduction. There was no dispute that the third plaintiff (the defendant’s older brother) was and remains a key figure in relation to both Hemu and Wenheng.…