Huang v Chen - [2022] NZHC 1888

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2019-404-100 CIV-2021-404-304

[2022] NZHC 1888

BETWEEN
HONGZHAO HUANG

First Plaintiff

JIEYU LU
Second Plaintiff

MATAKANA WINES LIMITED
Third Plaintiff

AND

CHRIS CHEN

First Defendant

continued: …/2

Hearing: 18 May 2022 to 3 June 2022

Appearances:

M D O’Brien QC, M D Pascariu and M J Grayson for the Plaintiffs

SRG Judd for the Defendants

Judgment:

4 August 2022

JUDGMENT OF GORDON J

This judgment was delivered by me on 4 August 2022 at 2 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Counsel: Solicitors:
M D O’Brien QC, Barrister, Auckland William Gong Lawyers, Auckland M D Pascariu, Anderson Creagh Lai, Auckland
M J Grayson, Anderson Creagh Lai, Auckland SRG Judd, Barrister, Auckland

HUANG v CHEN [2022] NZHC 1888 [4 August 2022]

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WAIHOPAI VALLEY VINEYARD LIMITED
Second Defendant
YI LU
Third Defendant
DON CHEN
Fourth Defendant
JINPING HUANG
Fifth Defendant
QI YANG
Sixth Defendant
ADELAIDE EDUCATION GROUP PTY LIMITED
Seventh Defendant
TABLE OF CONTENTS

Introduction [1]

The parties [21]

Factual background [30]

Matakana Villa Lots [31]

Waihopai [37]

Chateau Kiwi [41]

Willow Flat [43]

Long-term business visa application – Ms Lu and Mr Huang [45]

Acquisition of Matakana Estate [47]

The JV agreement [57]

Amended INZ application – Ms Lu and Mr Huang [61]

Integration Scheme [65]

Further advances for Waihopai [81]

Memorandum of corporate trusteeship [84]

End of relationship [86]

Continued operation of Matakana Estate and Matakana Zhongshan [92]

Retrospective OIO consent [93]

First proceeding against Mr Chen [97]

Sale of Waihopai and distribution of proceeds of sale [99]

Proceedings against Waihopai and freezing orders [104]

Credibility issues [108]

Mr Huang [110]

Ms Lu [113]

Mr Chen [116]

Yi Lu [119]

Order of consideration of issues [122]

Status of Mr Huang’s payments to Mr Chen/Waihopai [123]

Partnership [140]

Relevant law [144]

Relevant documents [150]

Cultural context [169]

Conduct of parties [176]

First affirmative defence: estoppel [204]

Misrepresentation [215]

Relevant law [219]

Were the representations made as pleaded? [224] First pleaded misrepresentation: equity in Waihopai [224]
Second pleaded misrepresentation: willingness [238]

Was Mr Chen’s representation of Waihopai’s value and his share of it
misleading and deceptive? [245]

Was Mr Huang misled or deceived? [252]

Was Mr Chen’s conduct an effective cause of Mr Huang’s loss? [254]

JV Agreement – 19 April 2012 [259]

Principles of contract interpretation under Chinese law [271]

The claims [284]

Applicable law [287]

Third cause of action: breach of the JV agreement [292]

Second cause of action: breach of fiduciary duty [296]

First cause of action: constructive trust based on the law of property [305]

Laches [311]

Equitable damages [319]

Counterclaims [325]

First counterclaim (against Mr Huang and Ms Lu): Matakana Zhongshan
shares  [328]
Second counterclaim (against Ms Lu): shares in Matakana Wines                   [332]
Third counterclaim (against Matakana Wines): failure to repay advances      [336]
Fourth counterclaim (against Matakana Wines): failure to pay rent and
outgoings  [344]

Matakana claims (first to third causes of…

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.

Continue reading Huang v Chen

Details

AGLC: Huang v Chen [2022] NZHC 1888
Case: [2022] NZHC 1888
Decision Date: 4 August 2022

CaseChat Overview and Summary

This proceeding arose following a falling out between two couples who were once friends and were involved in business dealings with each other. The exact nature of their business relationship was in issue. The plaintiffs, Hongzhao (Alex) Huang and Jieyu (Chrissy) Lu, and the first defendant, Xiaolin (Chris) Chen, together purchased land and a winery business in Matakana, north of Auckland. The plaintiffs alleged that Mr Chen had breached contractual and equitable obligations by refusing to transfer the legal title of the Matakana land to them or pay his share of the purchase price. The plaintiffs also sought repayment of the so-called "Waihopai advances" which they claimed were loans to Mr Chen and Waihopai Valley Vineyard Ltd (Waihopai). Mr Chen maintained that the parties' relationship and overall shares in the assets of the two businesses were governed by the "Integration Scheme" which superseded the original Joint Venture Agreement. The court found that the terms of the Integration Scheme were not finally agreed between the parties and that the business relationship was governed by the Joint Venture Cooperation Agreement signed on 19 April 2012. The court found that the Waihopai advances were loans and not payments under the alleged Integration Scheme or otherwise in the course of partnership. The court found Mr Chen in breach of the Joint Venture Cooperation Agreement by failing to make the payments required for his share of Matakana Estate and by failing to transfer title to the Matakana land to the plaintiffs. The court ordered Mr Chen to transfer the title to the Matakana land to the plaintiffs, unencumbered, and ordered equitable damages against Mr Chen in the sum of $3 million in favour of the plaintiffs as a consequence of the delay suffered by the plaintiffs in developing the Matakana land. The court also ordered Mr Chen to repay the Waihopai advances to the plaintiffs, with interest calculated under s 12 of the Interest on Money Claims Act 2016. Costs were reserved pending agreement between the parties.

Orders