Intop Homes Limited v Xie
[2025] NZHC 2212
•7 August 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2025-404-862
[2025] NZHC 2212
UNDER the Land Transfer Act 2017 IN THE MATTER OF
an application under Section 142 of the Land Transfer Act 2017
BETWEEN
INTOP HOMES LIMITED
First Applicant
CARNATION DEVELOPMENT LIMITED
Second ApplicantAND
LU XIE
Respondent
Hearing: 17 July 2025 Appearances:
J Taylor for Applicants K Sun for Respondent
Judgment:
7 August 2025
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 7 August 2025 at 2 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar
…………………………………
Solicitors:
Inspire Legal, Hamilton
Capstone Law Ltd, Auckland
INTOP HOMES LTD v XIE [2025] NZHC 2212 [7 August 2025]
Introduction
[1] This application concerns whether two notices of claim (NOCs) lodged by the respondent, Ms Lu Xie, over properties owned by Intop Homes Ltd (Intop) and Carnation Development Ltd (Carnation) (together, the applicant companies), should be removed.
[2] The application is brought under s 142 of the Land Transfer Act 2017. The core dispute is whether Ms Xie, the former spouse of Mr Geng Wu (the sole director and shareholder of the applicant companies), has a sufficient proprietary interest in the properties to justify the continued registration of the NOCs, or whether the NOCs should be removed to allow the applicant companies to deal with their assets.
Facts
[3] The applicant companies, Intop and Carnation, are property development companies incorporated in 2009 and 2012 respectively. Both are controlled by Mr Wu, who is the sole director and shareholder.
[4] Ms Xie and Mr Wu were married in December 2007 and separated in November 2021. The respondent alleges that, during their marriage, they jointly operated a real estate development business through several companies, including the applicants, and the companies and their assets were acquired and operated using relationship property funds.
[5] Ms Xie lodged the relevant NOCs over a number of properties owned by the applicant companies: NOC 12365373.1 (over Intop properties) and NOC 13223410.1 (over Carnation properties). The first NOC was lodged in January 2022, and the second in February 2025.
[6] The parties are currently engaged in Family Court proceedings to divide their assets. Meanwhile, Ms Xie claims the NOCs are necessary to prevent Mr Wu from dissipating relationship property through the applicant companies, citing a pattern of asset transfers and lack of transparency in company dealings.
Legal principles
Requirements for a valid notice of claim
[7]Section 42 of the Property (Relationships) Act 1976 (PRA) provides:
42 Notice of interest against title
(1) A claim to an interest, pursuant to this Act, in any land subject to the Land Transfer Act 2017 shall be deemed to be a registrable interest for the purposes of that Act.
(2) Notice of a claim under subsection (1) shall be effected by lodging a duly completed notice in the prescribed form with the Registrar-General of Land.
(3) Every notice so lodged shall have effect as if it were a caveat lodged pursuant to section 138 of the Land Transfer Act 2017 and the provisions of that Act, except section 141, shall apply subject to the following modifications:
(a)any application under section 142 of that Act in respect of any notice lodged under subsection (2) may be made to, and determined by, the Family Court, District Court, or High Court; and
(aa) any application that may be made to a court under section 143 of that Act in respect of any notice lodged under subsection (2), may be made to and determined by a Family Court Associate, a Family Court Judge, the District Court, or the High Court; and
(b)an order under section 146 of that Act authorising the receipt of a second notice under this section may be made by the Family Court or the District Court or the High Court.
(4) In the case of land that is not subject to the Land Transfer Act 2017, notice of a claim to an interest pursuant to this Act may be registered in the manner in which deeds and other instruments affecting the land may be registered.
(5) A notice under subsection (2) or subsection (4) may be registered notwithstanding that no proceedings under this Act are pending or in contemplation, and notwithstanding that there is no dispute between the parties.
[8] The purpose of s 42 is to prevent dealings with land in respect of which the applicant claims to have an interest by virtue of the PRA.1 For example, such claims are typically lodged against the family home or investment properties registered in the name of only one of the partners.
[9]The form prescribed for filing a notice of claim says:2
I, … am the spouse, civil union partner, or de facto partner of … , who is—
*registered as a proprietor of [nature of estate or interest] in the land described below.
*entitled to, or beneficially interested [nature of estate or interest under Land Transfer Act 2017] in, the land described below, by virtue of an unregistered agreement or other instrument or transmission, or an express or an implied trust, or by virtue of some other circumstances.
…
[10]Two requirements must be satisfied to lodge a notice of claim over land:3
(a)the claimant must be, or have been, in a qualifying relationship with the registered proprietor of the land over which the notice of claim is lodged, or a person who is entitled to, or is beneficially interested in, the land; and
(b)there must be an unresolved claim to an interest in the land in question under the PRA.
[11] The statutory requirements for a caveat under s 138(3) of the LTA and sch 2 of the Land Transfer Regulations 2018 also apply, requiring:
(a)a description of the nature of the estate or interest claimed, stated with sufficient certainty; and
1 Martin v Guy [2023] NZHC 1963, [2023] NZFLR 702 at [24].
2 Property (Relationships) Forms Regulations 2001, sch 1. See also Relationships (Statutory References) Act 2005, s 11 and sch 3.
3 Martin v Guy, above n 1, at [27]–[30]; and Bill Atkin “Protecting the Non-Owner Spouse or Partner” in Robert Fisher (ed) Fisher on Relationship Property (online ed, LexisNexis) at [9.17].
(b)details of how the estate or interest claimed is derived from the registered owner.
[12] Under s 146 of the LTA, unless the court orders otherwise, a caveat against dealings must not be lodged by or on behalf of the same person to protect the same estate or interest as a caveat against dealings that has been removed or lapsed.
Removing a notice of claim
[13] The key principles for determining whether to sustain or remove a caveat (and by analogy, a notice of claim) are:4
(a)The onus is on the caveator (here, the notice of claim registrant) to demonstrate a sufficient interest in the land, but not to establish it definitively.
(b)It is enough if the caveator puts forward a “reasonably arguable case” to support the interest claimed.
(c)The summary nature of the procedure means the court will only order removal if it is “patently clear” the caveat (or notice of claim) cannot be maintained — either because there is no valid ground for lodging it, or such a ground no longer exists.
(d)Even if the threshold is met, the court retains a discretion to remove the caveat or notice of claim, exercised cautiously and only if the caveator’s legitimate interest would not be prejudiced by removal. The court may consider the balance of convenience, including the conduct of the caveator and the practical impact on the parties.5
4 Philpott v Noble Investments Ltd [2015] NZCA 342 at [26]; and B W (2004) Ltd v Mlouk [2021] NZHC 1894, [2021] NZFLR 451 at [30].
5 Blumenthal v Stewart [2014] NZHC 1924, [2014] NZFLR 1002.
Resulting trusts
[14] A notice of claim may be lodged against property held in trust (or by a company acting as a trustee) where a spouse arguably has a vested or contingent interest in the trust asset, including under resulting trust principles.
[15] A resulting trust arises where one party pays for property vested in another and there is a presumption that the property is held on trust for the person who provided the funds: 6
… where A makes a voluntary payment to B or pays (wholly or in part) for the purchase of property which is vested either in B alone or in the joint names of A and B, there is a presumption that A did not intend to make a gift to B: the money or property is held on trust for A (if he is the sole provider of the money) or in the case of a joint purchase by A and B in shares proportionate to their contributions. It is important to stress that this is only a presumption, which presumption is easily rebutted either by the counter-presumption of advancement or by direct evidence of A’s intention to make an outright transfer … A resulting trust is not imposed by law against the intentions of the trustee (as is a constructive trust) but gives effect to his presumed intention …
Separate legal personality
[16] The principle of separate legal personality is particularly relevant in this case. A company owns its assets in its own right, and neither shareholders nor directors have a legal or beneficial interest in company property simply by virtue of their roles.7 A claim based solely on shareholding or directorship will not support a notice of claim;8 something more is required, such as a trust or other equitable interest:
(a)In Schubert v Schubert,9 the Court held that a home owned by a company in which the husband held shares was not beneficially owned by the husband for the purposes of the Matrimonial Property Act 1976.
6 Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669, [1996] 2 All ER 961 (HL) at 990, applied in Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] 1 NZLR 5 at [35]–[36]; Chang v Lee [2017] NZCA 308, [2017] NZAR 1223 at [18]; Mo v Yang [2022] NZCA 573 at [57]–[59]; and Wang v Wang [2025] NZHC 951 at [76] and [78].
7 B W (2004) Ltd v Mlouk, above n 4, at [44], referencing s 15 of the Companies Act 1993; Salomon v A Salomon & Co Ltd [1897] AC 22 (HL); Beric v Beric Holdings Ltd (1986) 2 FRNZ 522 (HC); Strait Views Ltd v Hannaway (2005) 6 NZCPR 725 (HC); and Pisidia Holdings Ltd v Darby [2019] NZHC 1216, [2019] NZFLR 96 at [34].
8 B W (2004) Ltd v Mlouk, above n 4, at [49].
9 Schubert v Schubert [2001] 1 NZLR 76 (HC).
(b)In B W (2004) Ltd v Mlouk,10 the Court held that Mr Turkmani’s position as sole director and shareholder did not give him a legal or beneficial interest in the properties of the companies. As Mr Turkmani had no legal or beneficial interest, neither did Ms Mlouk.
[17] Section 44 of the PRA contains a power to set aside a disposition of property made, whether for value or not, by or on behalf of or by direction of or in the interests of any person in order to defeat the claim or rights of any person under the PRA. However, there is nothing in Clayton v Clayton11 that suggests that the Family Court could use its powers under s 44 of the PRA to sweep aside the company structures and hold the companies’ properties to be the properties of a director/shareholder.12
Submissions
Applicants
[18] The applicants argue that the NOCs should be removed because Ms Xie does not have a caveatable interest in the properties. They submit that:
(a)The applicant companies are separate legal entities, and neither Ms Xie nor Mr Wu (as shareholders or directors) have a legal or beneficial interest in the companies’ assets simply by virtue of their roles.
(b)The NOCs are deficient because they fail to adequately describe the derivation of Ms Xie’s claimed interest, as required by the LTA and associated regulations.
(c)Even if relationship property funds were used to establish the companies, this does not automatically give Ms Xie a direct interest in the properties owned by the companies; her interest is in the value of the shares, not the underlying assets.
10 B W (2004) Ltd v Mlouk, above n 4.
11 Clayton v Clayton [Vaughan Road Property Trust] [2016] NZSC 29, [2016] 1 NZLR 551.
12 B W (2004) Ltd v Mlouk, above n 4, at [52].
(d)There is no evidence that the companies were used to defeat Ms Xie’s interests or that the corporate veil should be pierced. Mr Wu has acknowledged that the shares in the companies are relationship property, and the net assets of the companies are included in the relationship property pool.
(e)The continued existence of the NOCs is prejudicial to the companies’ ability to conduct business, including selling properties to pay debts, and does not serve to protect Ms Xie’s interests, which are already safeguarded by other means.
Respondent
[19]The respondent, Ms Xie, submits that the NOCs should be sustained because:
(a)Mr Wu has a history of dissipating relationship property and has breached undertakings not to do so. The removal of the NOCs would allow further dissipation to her detriment.
(b)All funds transferred to the applicant companies by Mr Wu are relationship property and the companies act as mere trustees, holding these funds (and the properties purchased with them) on trust for Mr Wu (and by extension, for Ms Xie as a spouse with a beneficial interest).
(c)The properties are subject to a resulting trust in favour of Mr Wu (and thus the relationship property pool), as they were purchased with relationship property funds, and Ms Xie has a direct beneficial interest in them.
(d)If the interest described in the NOCs is found to be deficient, this can be remedied by discharging and re-lodging amended notices.
(e)The NOCs are necessary to protect her interest in the properties, given the lack of transparency and control she has over the companies and Mr Wu’s demonstrated conduct.
Analysis
[20]The descriptions of Ms Xie’s interest in the NOCs are as follows:
Geng Wu as Director and Shareholder of [the company that is the registered owner] has an interest in the property and that the claimant is entitled to a share of that interest under the Property (Relationships) Act 1976.
…
The claimant’s ex-husband Geng Wu, is the sole director and shareholder of [the company that is the registered owner, which] was incorporated during the parties’ relationship using relationship property funds. These properties were purchased using relationship property funds.
[21] During the hearing, the respondent’s counsel conceded that the above asserted interests are insufficient, because of the principles of separate legal personality referred to in [16] above.
[22] Mr Sun, for the respondent, asked that I instead consider the merits of the NOCs being amended to assert a resulting trust. In particular, he submitted that a resulting trust should be recognised by analogy with the position of a company acting as a bare trustee, as discussed in Lee v Oceania P&D Ltd.13 In that case, the Court decided that the caveat was deficient and ordered that it lapse. Even if the Court could allow the amendment of the caveat,14 it was inappropriate to do so on the facts given that Mr Lee had repeatedly changed the basis of his claimed estate or interest in the property and he had failed to substantiate a valid basis for a caveatable interest.
[23] In this case, the respondent has failed to establish any basis for a resulting trust or for alleging that the applicant companies were acting as bare trustees (with no beneficial interest in the company assets). The respondent alleges a risk of dissipation and an intention on Mr Wu’s part to use the assets of the companies as if they were his
13 Lee v Oceania P&D Ltd [2022] NZHC 3257.
14 At [81], noting the Court of Appeal previously left this question open: Lu Trustee Ltd v Parklane Infrastructure Ltd [2020] NZCA 682, (2020) 21 NZCPR 740 at [54]–[56].
own, without proper regard to his duties as a director under the Companies Act 1993 and the concept of separate legal personality. However, those allegations (leaving aside whether there is any factual basis) do not satisfy the requirements for a resulting trust. The resulting trust responds to a situation where one person makes a payment for the purchase of property without any intention to make a gift. In this case, no foundation has been laid for any allegation that payments were made directly for the purposes of buying land. Rather, the payments were made into the company, with those interests then represented by a shareholding entitlement and however else any shareholder loans were accounted for. In other words, a resulting trust cannot be asserted as a device to circumvent the principle of separate legal personality.
[24] In exploring the nature of the test that Mr Sun advances for his client, he agreed that the existence of a bare trustee relationship should be assessed as at the time when the monies are paid into the company, but he submits that subsequent conduct can be admissible for those purposes. He accepted that if a separate company was intended at the outset, and the sole shareholder and director intended to comply with all relevant statutory duties, then the separate legal personality principles properly apply, even if the director subsequently seeks to misappropriate company assets. However, he submits that the position is different if the sole shareholder and director intends to act fraudulently from the outset, intending all along to misappropriate the assets and treat them as his own to the prejudice of creditors. In those circumstances, Mr Sun submits that the director should be treated as retaining a proprietary interest over all of the assets, treating the company as a bare trustee and the assets as his own. Through such an entitlement, he submits Ms Xie would have a valid notice of claim under the PRA.
[25] I cannot accept that there is any legal or moral basis for supporting the above position, which would turn on its head well-established case law about separate legal personality, the duties of directors, and protections for creditors, employees and other third parties who are entitled to assume compliance with the Companies Act.15
15 See for example Companies Act, ss 17 and 18.
[26] Mr Sun explained that Ms Xie wants to achieve visibility and shared control over the applicant companies, including control over any ongoing borrowing from secured creditors. That type of company control is simply not achievable by the nature of the claim asserted in this proceeding. The purpose of the caveat/notice of claim regime is to protect interests in land, not a back door route to take control of a company.
[27] The matter before me solely concerns whether Ms Xie has a proprietary interest in land. Ms Xie has failed to substantiate such an interest and has no proper basis for the notices of claim lodged against the properties, either in the form lodged or in the amended form proposed in the hearing.
[28] Any concern that Ms Xie has about Mr Wu dissipating his company interests (shareholdings, current account entitlements and shareholder loans) can be protected by different means. In this case, Ms Xie has applied (unsuccessfully) for a freezing order, and an appeal of that decision is pending separately.
Result
[29] I grant the application and order the removal of the notices of claim lodged against the properties listed in subparas 1(a) and 1(b) of the originating application.
[30] The applicants are entitled to costs. If counsel are unable to agree, then the applicant may file and serve a memorandum within 10 working days, and the respondent’s memorandum must then be filed and served 10 working days later, costs to be determined on the papers.
O’Gorman J
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