Le v Hemu Trade Company Limited
[2019] NZCA 476
•3 October 2019 at 9.30 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA299/2018 [2019] NZCA 476 |
| BETWEEN | CHUN MAO LE |
| AND | HEMU TRADE COMPANY LIMITED |
| Hearing: | 9 September 2019 |
Court: | Gilbert, Duffy and Wylie JJ |
Counsel: | P F Chambers for Appellant |
Judgment: | 3 October 2019 at 9.30 am |
JUDGMENT OF THE COURT
A The application to adduce further evidence is declined.
B The appeal is dismissed.
CThe cross appeal is allowed in part. The appellant holds his 50 per cent share of the property at 32 Pinewood Street, Avondale, Auckland on trust for the first respondent.
DThe appellant is to pay one set of costs to the respondents for a standard appeal on a band A basis and usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Duffy J)
Chun Mao Le and Chin Wen Li are the registered owners of a property at 32 Pinewood Street, Avondale, Auckland (the property) as tenants in common in equal shares. In the High Court Fitzgerald J found that 91 per cent of the funds used to acquire the property was provided by a Taiwanese registered company, Wenheng Enterprise Co Ltd (Wenheng) and therefore the registered proprietors held 91 per cent of the beneficial interest in the property on a resulting trust for Wenheng.[1] It was common ground that Mr Le had paid the deposit for the purchase of this property. The Judge was not satisfied that Wenheng had reimbursed Mr Le for the deposit, which led her to find that he held the remaining portion of the beneficial interest in his own right. It was also common ground that Wenheng had ceased operation and its assets had been distributed.[2] The Judge found that Wenheng had transferred its beneficial interest in the property to Hemu Trade Co Ltd (Hemu). Accordingly, she upheld Hemu’s claim for a beneficial interest in the property, but only as to 91 per cent of this interest. The remainder was found to be held by and for Mr Le. She dismissed Hemu’s claims to recover from Mr Le rents he had collected for the property and other financial benefits he allegedly had enjoyed from its use.
[1]Hemu Trade Co Ltd v Le [2018] NZHC 982.
[2]The respondents asserted this fact. In his evidence at trial Mr Le stated that “post dissolution of Wenheng” he suspected that Mr Li had appropriated Mr Le’s share of Wenheng’s assets.
Mr Le appeals against the judgment insofar as it upholds Hemu’s claims and Hemu cross appeals against the dismissal of part of its claims.[3] Mr Le also applies to adduce new evidence in support of his appeal.
Admission of new evidence
[3]In the High Court the respondents also brought claims in breach of fiduciary duty and deceit. These claims were dismissed by Fitzgerald J. There is no cross appeal in respect of them.
We deal with the application to admit new evidence first. This evidence is in the form of an affidavit from Mr Le’s daughter Che Wen Lee. It does not meet the requirements for admission of new evidence on appeal.[4] First, the evidence is neither cogent nor material. Secondly, much of the evidence was available at the time of the trial in the High Court. There is no satisfactory explanation for why there was no attempt to adduce it then. Thirdly, much of the new evidence is inadmissible. The factual content of the evidence provides a hearsay account of events and the remainder comprises expressions of opinion and argument from Ms Lee on the merits of Hemu’s claim against Mr Le and the competency of his trial counsel. We are satisfied the application for admission of this evidence should be dismissed.
Background facts
[4]Erceg v Balenia Ltd [2008] NZCA 535 at [15].
Mr Le is the younger brother of Ching-Chi Li. They are from Taiwan. In 1980 Mr Li became a shareholder and director of Wenheng.[5] Mr Le and three other persons were also shareholders. Then in 1992 Hemu was incorporated by Mr Li who together with Mr Le and three others, became shareholders in that company.
[5]Chin Wen Li says his father established Wenheng. Mr Le says he and Mr Li purchased the shares in this company.
Mr Le contends he played an active and important role in Wenheng until he left Taiwan for New Zealand in 1997, whereas, the respondents contend that Mr Le was registered as a shareholder because Taiwanese law requires there to be a minimum of five shareholders. The respondents’ case is that at the relevant times Mr Le was having difficulty finding full time employment, and that as the younger brother of Mr Li it was expected that Mr Li would find a place for Mr Le in Wenheng. Although the degree of Mr Le’s involvement in Wenheng is disputed, the evidence generally shows that he was actively participating in Wenheng’s affairs while he lived in Taiwan.
In 1997 Mr Le went to live in New Zealand where he gained residence, but in 2001 he returned to Taiwan. Apart from a time between 2004 and 2008 when he returned to New Zealand with his son, Mr Le has remained in Taiwan.
Regrettably the business relationship between Mr Li and Mr Le broke down in 2010, when they had a major falling out. Litigation in Taiwan ensued and Hemu was ultimately successful in suing Mr Le for the return of TWD 6,900,000. Some other disputed matters were settled. Mr Le’s conduct also resulted in criminal proceedings, which led to him receiving a two-year sentence of imprisonment. By then the parties were also in dispute over who held the beneficial ownership of the New Zealand property. This dispute had to be resolved by the courts in New Zealand.
It is against this general factual context that the purchase and ownership of the property must be viewed.
The property was acquired in 1996 after the two brothers visited New Zealand with their families. Each had reason to want to purchase a property in New Zealand. Mr Li’s son Chin Wen Li was in New Zealand studying and Mr Li was unhappy with the rental accommodation that was available for his son. Mr Le had plans to move his family to New Zealand and so he required accommodation in New Zealand.
After looking at a number of properties the two brothers attended and were successful bidders at an auction for the property. Also present then were Mr Li’s wife, Kue Yue Yang, and their son Chin Wen Li.
The sale and purchase agreement named Mr Le and Mr Li as purchasers. Mr Le paid the deposit of NZD 30,000 from his own funds. The brothers instructed Peggy Lim of Russell McVeagh, a solicitor whom Mr Le described in his brief of evidence as being fluent in “Chinese”, for the conveyance of the property. Shortly afterwards the family group left for Taiwan.
Ms Lim provided oral and written advice on how the two brothers might own the property, either as joint tenants or tenants in common. There is no evidence of them discussing whether Wenheng would own the property or not. At some time before settlement both Chin Wen Li and Mr Le independently wrote to Ms Lim and advised her that the share of the property Mr Li was to take should instead be registered in the name of his son Chin Wen Li. She was instructed to register the property in the names of Mr Le and Chin Wen Li as tenants in common in equal shares.[6]
[6]Settlement occurred on 27 September 1996.
Sometime later in 1996 Chin Wen Li returned to New Zealand to complete his studies. In 1997 Mr Le and his family moved to New Zealand where they joined Chin Wen Li at the property. The families lived there until 2001 when Mr Le and his wife and family returned to Taiwan. Later in 2004 Mr Le returned to New Zealand with his son and remained here until 2008, when he returned to Taiwan. He has been living in Taiwan since then.
The evidence shows that once the property was acquired various members of the extended family of Mr Li and Mr Le lived there while resident in New Zealand.
Whilst the extent to which Mr Le and his brother maintained a business relationship in Taiwan is now disputed there was a time when the brothers worked closely together as is evidenced by their visit to New Zealand, the purchase of the property and the shared family use of the property.
High Court judgment
The Judge was faced with a claim which required her to resolve factual disputes dating back to the period between 1996 and 2002. Much of the documentary evidence that might be relied upon for independent proof, such as bank statements and lawyers’ files, was no longer available. Mr Li was suffering from ill-health and was too unwell to travel to New Zealand to give evidence. There was a move to have him give evidence from Taiwan by audio visual link, but this was denied by Downs J following an interlocutory hearing.[7] Mr Li then gave evidence by affidavit. At trial the Judge put Mr Li’s evidence to the side.[8] There was no challenge on appeal to this decision.
[7]Hemu Trade Co Ltd v Le HC Auckland CIV-2016-404-416, 18 October 2017 (Minute (No 2) of Downs J).
[8]Hemu Trade Co Ltd v Le, above n 1, at [6].
The key witnesses at trial for the respondents were Ms Yang and Hsiu Chuan Tsai, who was employed in 1995 to work for Wenheng and Hemu. Ms Yang and Ms Tsai were both involved in the daily financial management of Wenheng, and Ms Tsai gave evidence as Hemu’s accountant.
Ms Yang’s evidence was that she and Mr Li had left New Zealand the day after the auction so that they could arrange for funds to enable Wenheng to purchase the property. She said they had not expected to purchase a property in New Zealand so quickly and so they did not have ready access to funds to allow them to complete the purchase. This was the reason Ms Yang gave for why Mr Le paid the deposit for the property. She said it was always the intention that Wenheng would reimburse Mr Le.
She gave evidence that she later transferred funds to reimburse Mr Le for the deposit payment. She also said she had provided the balance of the purchase price from Wenheng’s funds which she gave to Mr Le to transfer to New Zealand. She said that at the time she trusted him as he was her husband’s brother and a senior employee of Wenheng.
Ms Tsai gave evidence of how she became aware of the purchase of the property. She recalled the price was TWD 6,621,184. Wenheng was to pay approximately TWD 656,000 in cash and the balance from term deposits. These funds were to be transferred to New Zealand. She was told this at the time by Ms Yang.[9] The payment necessitated changes in Wenheng’s internal accounts. Ms Tsai said she recorded the change in the company’s assets from term deposits to the overseas property investment. Copies of these accounts in evidence included the statements of assets and liabilities for the months ending December 1997, 1998, 1999 and 2000 all of which recorded the “New Zealand” house as an asset at the book value of TWD 6,621,184. This sum is the approximate equivalent of the purchase price in New Zealand dollars. The internal accounting records for the years prior to December 1997 were no longer available.
[9]Ms Tsai gave evidence of what Ms Yang said to Ms Tsai about the purchase as background to the actions she took to record the purchase of the property in Wenheng’s accounts. In this context Ms Tsai’s relating what Ms Yang had said was relevant and admissible as it went to explain the actions Ms Tsai undertook. Further, in light of Mr Le’s challenge to Ms Yang’s account of the payment by Wenheng, Ms Tsai’s evidence of what Ms Yang told Ms Tsai at the relevant time is evidence of a prior consistent statement by Ms Yang that is admissible under s 35(2) of the Evidence Act 2006 as a response to Mr Le’s challenge to Ms Yang’s veracity.
Ms Tsai also said that the internal accounts for the 2001 year could not be found but that from 2002 onwards the property was then recorded as an asset in the internal accounting records of Hemu. Copies of that company’s internal records included the statement of assets and liabilities for the years ending December 2002, December 2003, December 2004, December 2005 and December 2010 all of which record the “New Zealand” house at the book value of TWD 6,621,184.
The Judge gave six reasons for finding Wenheng provided the funds for the purchase. First, she found the initial correspondence from Ms Lim was not inconsistent with Wenheng providing the funds for the purchase.[10]
[10]Hemu Trade Co Ltd v Le, above n 1, at [68].
Secondly, she noted that all Mr Le’s communications with Ms Lim were on Wenheng’s letterhead and the communications were addressed from and to Mr Le at Wenheng. The Judge found this was consistent with Wenheng providing the purchase funds. Also, she found Mr Le’s explanation for why he had used Wenheng’s address, when he was asserting he was acting on his own and his brother’s behalf to be unconvincing.[11]
[11]At [69].
Thirdly, the Judge found that Ms Yang and Ms Tsai had confirmed that Wenheng’s funds were used to pay the balance of the purchase price. The Judge found both to be credible and reliable witnesses.[12]
[12]At [70].
Fourthly, the Judge found the evidence of Ms Yang and Ms Tsai to be consistent with Wenheng’s internal records which were the only available contemporaneous documents. In this regard the Judge found the recording of the property in the accounts of Wenheng was consistent with the property belonging to Wenheng as a result of it having funded the purchase price. This action was also consistent with Ms Tsai’s evidence about the need to balance Wenheng’s accounts by recording the house as an asset given Wenheng’s term deposits had been used to fund the purchase. The Judge noted there was no suggestion the accounts were not prepared on that basis before the brothers fell out.[13]
[13]At [71].
Fifthly, the Judge found the property being registered in the names of Mr Le and Chin Wen Li was not inconsistent with the purchase being funded by Wenheng. In this regard she noted that a number of the respondent’s witnesses, Ms Yang, Ms Tsai, Chin Wen Li and his younger brother Chao Wen Li gave evidence of assets of Wenheng, such as bank accounts, being held in the names of individual family members. The Judge also noted that Wenheng’s internal accounts often recorded an individual’s name next to a local or international bank account, which is consistent with the account being held in that individual’s name.[14]
[14]At [72].
Sixthly, the Judge found that Mr Le had provided no clear evidence of where he had obtained funds to personally fund his share of the property. That amount would have been approximately NZD 150,000 which was a considerable sum in 1996. However, at the time Mr Le’s evidence was he worked part time as a lecturer at university in Taiwan and part time for Wenheng, but in circumstances where he acknowledged he did not receive any salary. Further, in answer to interrogatories Mr Le had said he “[did] not now recall” how much he had contributed directly to the purchase price; how much had had contributed indirectly to the purchase price; or which bank and country the funds originated from. The Judge was satisfied that even taking into account the lengthy period of time since the purchase of the property Mr Le’s answers to interrogatories were “somewhat unusual in the context of a reasonably significant purchase, and in the context of formal court proceedings on the issue”.[15]
[15]At [73].
The Judge was not satisfied Wenheng had paid the deposit.[16] No-one disputed Mr Le had initially paid the deposit of NZD 30,000; however, the respondents’ case was that later Wenheng reimbursed Mr Le for this payment. Ms Yang gave evidence that on her return to Taiwan in August 1996, she arranged for Mr Le to be reimbursed from Wenheng’s funds. She said he was paid the equivalent of NZD 60,000 in cash. Ms Tsai did not address this issue in her evidence.
[16]At [76]–[81].
There was no documentary record of Ms Yang either withdrawing cash funds from Wenheng’s bank account or paying them to Mr Le at a time that coincided with when he might have expected to be reimbursed. The documentary record the respondents did provide related to an earlier payment Ms Yang made to Mr Le on 7 March 1996. Given it pre-dated the purchase of the property, that payment could not constitute reimbursement of the deposit. The Judge found that in the absence of any contemporaneous documentary evidence to show the payment of funds to Mr Le, she was not satisfied Wenheng had reimbursed him.
The final issue the Judge had to deal with regarding the resulting trust claim was Hemu’s standing to bring the claim. The Judge acknowledged there was no evidence as to how Wenheng’s beneficial interest in the property came to be transferred to Hemu.[17] Nevertheless, she was satisfied the transfer had occurred. First, there was the evidence of Chin Wen Li who in 1997 had replaced Mr Le as a director of Hemu. His evidence was that in 2001 Hemu had taken over Wenheng’s business and acquired all its assets and liabilities.[18]
[17]At [84].
[18]At [85].
Secondly, Ms Tsai prepared the accounts for both Wenheng and Hemu. She confirmed that there was a single book of internal accounts for both companies, which recorded the property as a company asset.[19]
[19]At [86].
Thirdly, Hemu’s internal accounts recorded the property as a company asset in precisely the same way and amount as had been recorded in the Wenheng accounts.[20]
[20]At [89].
Accordingly, the Judge was satisfied a transfer had occurred despite the absence of direct evidence to show how it came about. She also found there was no suggestion or evidence that the transfer was ineffectual as a matter of Taiwanese law.[21] All of which led her to conclude Mr Le holds 41 per cent of the property on a resulting trust for Hemu.[22]
[21]At [89].
[22]At [101].
As to Hemu’s claim to be entitled to an account from Mr Le for rent from the property the Judge took into account the use various members of the extended family of Mr Li and Mr Le made of the property from the time of its acquisition in 1996. During those times a sleepout at the back of the property and rooms in the main house were rented out to third parties when not in use by family members. Ms Yang confirmed that when she lived at the property between 2002 and 2003 with her son Chao Wen Li and Mr Le’s two children she arranged for the sleepout to be rented and used the rent to pay for outgoings and utilities in respect of the property as well as for general living expenses, in particular meals for family members. She never remitted any surplus rental to Wenheng.[23]
[23]At [93].
The Judge found there was no evidence at any time between the property’s purchase in 1996 and 2010 of rent being paid to Wenheng.[24] Nor was there evidence that during this period Wenheng, Hemu, Mr Li or Chin Wen Li asked Mr Le or members of his family to account for the rent. The Judge considered it “extraordinary” that if Wenheng expected to receive surplus rent from Mr Le or his family members the company had made no such demands over approximately a decade. Accordingly, she concluded that despite the property being funded largely by Wenheng there was a general understanding and expectation that family members could reside in the property, and any room or rooms, including the sleepout, which were rented from time to time. The rental income received would be applied to meet outgoings on the property with any surplus rent being available for general living expenses.[25] She noted this was the position from the outset without objection until the brothers fell out. Thus, she rejected the respondents’ claim for rent.[26]
Grounds of appeal
[24]At [95].
[25]At [96].
[26]At [98].
The grounds of appeal make numerous challenges to the material factual findings of the Judge on the basis she erred: (a) by failing to give proper consideration to the evidence on which she relied; and (b) by failing to give sufficient weight to other evidence all of which has led to her wrongly giving judgment for the respondents. A further ground of appeal contends Mr Le had a complete defence under s 21 of the Limitation Act 1950. In the written submissions Mr Le also complained about the quality of the respondents’ evidence contending that much of it was hearsay.[27]
Discussion
[27]There is no record of objection to the admissibility of the witnesses’ evidence at trial.
Mr Le commenced his arguments by reliance on the Limitation Act ground of appeal, which he considered to provide a complete answer to the respondents’ claims. We take a different view. The resulting trust claim is an equitable claim which falls outside the scope of the Limitation Act. Whilst the defence of laches is available it was not pleaded. Moreover, had it been pleaded we see no prospect of its success. The respondents commenced their claim in March 2016. Mr Le’s evidence is that the brothers fell out in 2010 and this led to Hemu taking proceedings against him in Taiwan. Mr Le does not say when in 2010 the falling out occurred however it places the commencement of the present proceedings sufficiently close to meeting the six‑year time frame in the Limitation Act, which can be used as a guide for assessing whether an equitable claim should be dismissed on the ground of delay.
As to the other grounds of appeal, we see no basis for interfering with the Judge’s conclusion that Wenheng funded the purchase of the property, which has led to it having a beneficial interest in the property. The Judge had the benefit of seeing and hearing the witnesses give evidence. She plainly preferred the evidence of the respondents’ witnesses, particularly Ms Yang and Ms Tsai. It was open to the Judge to do so. They each had a direct involvement in the steps Wenheng took to fund the purchase of this property and therefore were able to give a first-hand account of what was done. Moreover, the evidence of those witnesses is consistent with the available documentary evidence and the circumstantial evidence.
It is difficult to account for why Ms Tsai would have recorded the property in Wenheng’s statements of assets and liabilities had it not been funded by that company. We acknowledge there is evidence that both Wenheng and Hemu had internal and external sets of accounts and that the property was not listed in the companies’ external accounts, upon which their tax liability was assessed. Mr Le contends that this shows the companies were conducting a tax fraud in Taiwan by not disclosing all assets. Accordingly, he contends the New Zealand courts should not recognise the internal accounts on which the respondents rely. However, he has provided no expert evidence on Taiwanese law to establish the companies’ actions in having two sets of accounts constituted a tax fraud in Taiwan. The parties have been involved in litigation against each other in Taiwan that would have provided opportunity for Mr Le to raise issues regarding the companies’ alleged tax evasion, but he seemingly has not done so. Nothing to this end has eventuated from the Taiwanese litigation. Accordingly, we see no basis for rejecting the respondents’ evidence relating to the internal accounts.
The idea of Mr Le holding his share of the property on trust for Wenheng is consistent with other occasions where other persons have held property on trust for that company. Chin Wen Li holds the other half share of the property despite him having paid no money towards the purchase, which is consistent with him holding that share on trust for the provider of those funds. Chao Wen Li (Chin Wen Li’s brother) gave evidence of holding bank accounts in his name on behalf of Wenheng. The accounts of Wenheng record bank accounts which have individual’s names recorded alongside, which is consistent with associating the named individuals with those accounts. It also supports the view that those accounts were held in the names of those individuals.
Whilst the idea of having different named owners from the beneficial owner of particular assets is not usual in this country in a commercial context, the use of this pattern of ownership was always part of the respondents’ case. It was, therefore, open to Mr Le to obtain expert evidence from Taiwan to establish such conduct was not a proper or usual way of doing business in Taiwan, however he chose not to do so. This suggests to us such evidence was not available for him to call.[28]
[28]See Ithaca (Custodians) Ltd v Perry Corp [2004] 1 NZLR 731 (CA) at [154].
We also find Mr Le’s inability to recall how he funded the purchase extraordinary. He was asked to provide this information by answering interrogatories and he had ample time to consider the answer.
We observe that Mr Le addressed no arguments on the legal consequences of Wenheng having funded the purchase of the property. We agree with the Judge that the provision of funds from Wenheng has the legal consequence of creating a resulting trust for the benefit of Wenheng.[29]
[29]Hemu Trading Co Ltd v Le, above n 1, at [57]–[61] citing Westdeutsche Landesbank Girozentrale v Islington London Borough Council [1996] AC 669 (HL) at 708; Stack v Dowden [2007] UKHL 17, [2007] 2 AC 432; Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] 1 NZLR 5 at [36], [37] and [41] referring to William Swadling “Explaining Resulting Trusts” (2008) 124 LQR 72 at 74; Jessica Palmer “Resulting Trusts” in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed Thomson Reuters, Wellington 2009), 307 at [12.3.1]; Chang v Lee [2017] NZCA 308 [2017] NZAR 1223 at [18]–[21]; Potter v Potter [2003] 3 NZLR 145 (CA) at [13].
As to the transfer of the beneficial interest in the property from Wenheng to Hemu, again we see no basis for interfering with the Judge’s findings. She relied on the evidence of Chin Wen Li, Ms Tsai and the accounting records of Hemu.
Chin Wen Li was a director of Hemu from 1997 onwards. He gave evidence that in 2001 Hemu had taken over Wenheng’s business and acquired its assets and liabilities, including the property. As a director of Hemu, Chin Wen Li can be expected to have direct knowledge of the assets and liabilities of that company.
Ms Tsai referred to the internal accounts being initially one set of accounts for both Wenheng and Hemu, but that after 2000 there was only Hemu, which is when the property then appeared in Hemu’s statements of assets and liabilities. This is confirmed by the copies of those accounts that are in evidence.
It is difficult to see why an asset of Wenheng would appear in Hemu’s statement of assets and liabilities if it were not for the fact the property had been transferred to Hemu. In 2001 and the years immediately following the brothers were still on good terms. There is no obvious ulterior reason for Hemu to take this action.
In his evidence Mr Le accepted, albeit for different reasons, that Wenheng was not operating after 2001 and that Mr Li had transferred Wenheng’s assets elsewhere. Thus, there is no dispute that the company’s assets were placed elsewhere. This coupled with the property being recorded in Hemu’s statements of assets and liabilities, as shown in the evidence, confirms the direct evidence of Chin Wen Li and Ms Tsai. Accordingly, we are satisfied Wenheng’s beneficial interest in the property was transferred to Hemu.
It follows that we find Hemu has standing to bring this proceeding against Mr Le.
Cross appeal
The respondents cross appeal against the Judge’s findings that Wenheng did not reimburse Mr Le for the deposit he paid on the purchase of the property and the findings that Mr Le did not account to Wenheng for rent received for the property.
Unlike the Judge we consider there was sufficient evidence to establish that Wenheng reimbursed Mr Le for the deposit he paid for the property. We acknowledge that Ms Yang was confused about the payment of TWD 1,200,000 on 7 March 1996. We also acknowledge that there are no banking records in evidence of Wenheng transferring funds equivalent to the deposit around the time it would have been paid. But against this we note that Wenheng consistently recorded the book value of the property in its accounts at its purchase price equivalent in Taiwanese dollars, which suggests that Wenheng provided all the funds for this purchase.
In relation to payment of the balance of the purchase price, like the Judge we have found Wenheng’s treatment of the property in the internal accounts to be reliable and credible evidence the company provided the funds for this purpose. Like the Judge, we have also found Ms Tsai’s explanation for the inclusion of the property in the company’s accounts to be reliable evidence. However, unlike the Judge, we consider that Wenheng would not have recorded the full amount of the purchase price as representative of its interest in the property had the company not paid this amount. To do differently would be contrary to the reasons Ms Tsai gave for recording the property in Wenheng’s accounts. The Judge found Ms Tsai to be a reliable and credible witness in relation to the payment of the balance of the purchase price and we consider it would be logically inconsistent not to apply the same reasoning to the deposit as well.
Regarding the Judge’s findings on Mr Le’s alleged failure to account for rent received for the property, we take the same view. The complete absence of demands from Wenheng is consistent with the parties’ understanding at the time that rent should be used to meet the outgoings of the property and any surplus could be applied to meet family expenses.
Accordingly, we are satisfied the cross-appeal should be allowed to the extent it relates to the payment of the deposit. It follows that we find Mr Le holds his entire share in the property on a resulting trust for Hemu.
The findings we have reached are based on primary evidence. We acknowledge the evidence of some of the witnesses, in particular Chin Wen Li, included hearsay statements. However, such evidence has not influenced our reasoning, nor do we consider it was influential on the Judge. Accordingly, we reject Mr Le’s arguments that the outcome of the trial was adversely affected by inadmissible evidence.
Result
The application to adduce further evidence is declined.
The appeal is dismissed.
The cross-appeal is allowed in part. The appellant holds his 50 per cent share of the property at 32 Pinewood Street, Avondale, Auckland on trust for the first respondent.
The appellant is to pay one set of costs to the respondents for a standard appeal on a band A basis and usual disbursements.
Solicitors:
Henley-Smith Law, Auckland for Appellant
Prestige Lawyers Ltd, Auckland for Respondents
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