Huang v Chen - [2025] NZHC 1003

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001229

[2025] NZHC 1003

UNDER Part 18 of the High Court Rules 2016 and the Trusts Act 2019

BETWEEN

XIN HUANG, JULIA BUHAGIAR and

JIANAN ZHANG as Trustees of the Bread of Life Christian Church

Plaintiffs

AND

XI CHEN, YANG LIU and JIEDAN LI

Defendants

Hearing: 3 April 2025

Appearances:

A Barker KC for the Plaintiffs

A Low and J Yu for the Defendants

Judgment:

30 April 2025

JUDGMENT OF ANDERSON J

This judgment was delivered by me on 30 April 2025 at 3.00 pm pursuant to r 11.5 of the High Court Rules 2016.

………………………………
Registrar/Deputy Registrar

Solicitors:Garry Pollak & Co Ltd, Auckland Turner Hopkins, Auckland

HUANG v CHEN [2025] NZHC 1003 [30 April 2025]

Introduction

[1] The parties are the trustees (Trustees) of the trust (Trust) incorporated as a Board under the Charitable Trusts Act in 1988. The Board is incorporated to hold and manage the assets of the Bread of Life Christian Church in Auckland (the Church) for the charitable purposes stated in the Trust deed.1 The Church is an unincorporated body of members who share common religious beliefs.

[2] In July 2022 the plaintiffs commenced proceedings seeking to remove the defendants as trustees. The defendants counterclaimed seeking the removal of the plaintiffs. The proceedings did not progress for a lengthy period while the parties tried, but failed, to come to a resolution. When the parties ultimately sought a trial date, the first available date was not until August 2026.

[3] The pleadings demonstrate animus and deadlock between the opposing sets of Trustees. The congregants have since divided into two congregations, affiliated with either the plaintiffs or the defendants. A key underlying issue giving rise to a deadlock was, and remains, what should happen to a property at 75F Apollo Drive, Rosedale, Auckland (the Building).

[4] I discuss the background below. For introductory purposes, it suffices to say that both sets of Trustees agree that the trial is so far away that some interim steps should be taken as relates to the Building. They disagree on what those should be. The plaintiffs consider certain limited works should be done to the property so that it can be used lawfully for church purposes pending trial. The defendants, for their part, say that the works should not be undertaken. Instead, they consider that interim receivers should be appointed to investigate leasing out the showroom area in the Building as office space pending trial.

[5] The present application for determination is the plaintiffs’ application seeking orders effecting the implementation of the works they seek to have undertaken.

1 The Trustees were incorporated as a board under the Charitable Trusts Act 1957 on 21 July 1998 (the Board).

[6] The defendants also have a live application for the appointment of interim receivers. It is now common ground interim receivers should be appointed. The proposed administrators and most of the terms have been agreed…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2025] NZHC 1003
Decision Date: 30 April 2025

CaseChat Overview and Summary

Xin Huang, Julia Buhagiar, and Jianan Zhang, as Trustees of the Bread of Life Christian Church, initiated proceedings against Xi Chen, Yang Liu, and Jiedan Li, seeking their removal as trustees and the implementation of certain works on a property owned by the Church. The defendants counterclaimed for the removal of the plaintiffs. The parties were unable to resolve their differences, leading to a deadlock that resulted in the division of the congregation. The central issue was the fate of a property located at 75F Apollo Drive, Rosedale, Auckland. The plaintiffs sought permission to undertake specific works to the property to make it usable for church purposes, while the defendants opposed these works and advocated for the appointment of interim receivers to investigate leasing the property as office space. The court had to determine whether to grant the plaintiffs' application for permission to undertake the works or to decline it.

The legal issues that the court had to decide involved the application of section 133 of the Trusts Act 2019, which allows trustees to apply to the court for directions regarding the trust property. The court was required to determine whether it was appropriate to exercise its discretion in this deadlock scenario and whether the plaintiffs' application was an application for interim relief. The court had to consider the financial position of the Church and the potential implications of the proposed works or a lease on the Church's finances.

The court declined the plaintiffs' application. While the court acknowledged that there was merit in the plaintiffs' argument that the use of the building for church purposes should be regularised pending trial, it found that the Church was in a poor financial position. The court considered that a prudent trustee would not authorise the works without investigating the leasing scenario further. The court held that it did not have sufficient information to assess whether the proposal to undertake the works or a lease was the appropriate course. The court found that the plaintiffs' application was not for interim relief, and the test for making the orders was a substantive one. The court concluded that it should not make the orders without further investigation into the leasing scenario. The costs of the application were reserved.

The court's decision was based on the lack of sufficient information to properly weigh the proposal to undertake the works against the possibility of a short-term lease. The court found that a prudent trustee would seek that information and consider the present and likely financial obligations of the Trust before making a decision. The court declined to make the orders and reserved costs.

Orders