Li v 110 Formosa (NZ) Ltd - [2020] NZCA 492

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA44/2019
[2020] NZCA 492

BETWEEN
JUN LI
Appellant

AND

110 FORMOSA (NZ) LIMITED
First Respondent

MENG WANG
Second Respondent

GOLDEN BEACHLANDS HOLDINGS LIMITED
Third Respondent

JENNY AND EAMON HOLDINGS LIMITED
Fourth Respondent

ARTHUR LOO AND FUI LOONG CHAN, TRADING AS LOO & KOO BARRISTERS, SOLICITORS, NOTARY PUBLIC
Fifth Respondent

Hearing:
11 and 12 February 2020

Court:

Cooper, Brown and Collins JJ

Counsel:

N R Campbell QC for Appellant
D W Grove for First Respondent
J W A Johnson and W L Porter for Second Respondent
No appearance for Third, Fourth and Fifth Respondents

Judgment:

16 October 2020 at 11 am

JUDGMENT OF THE COURT
AThe appeal is dismissed.
B The order at [267(a)] of the High Court judgment is quashed, and substituted with an order that Mr Wang holds that proportion of his shareholding in 110 Formosa which represents an original contribution of $4.8 million on constructive trust for Mr Li.
CThe cross-appeal is dismissed.
DIn the circumstances, we make no order as to costs between Mr Li and Mr Wang.
E110 Formosa is entitled to costs in respect of both the appeal and the cross‑appeal on a band A basis and usual disbursements. Those costs are to be paid one half by Mr Li and one half by Mr Wang.

____________________________________________________________________
REASONS OF THE COURT
(Given by Cooper J)
Table of Contents

Para No

Introduction  [1]
The facts  [5]
The proceeding in the High Court  [54]
First cause of action  [55]
Second cause of action  [57]
Third cause of action  [62]
Fourth cause of action  [66]
Fifth cause of action  [68]
Sixth cause of action  [69]
Seventh cause of action  [70]
Eighth cause of action  [72]
Summary  [73]

The appeal  [77]
Breach of fiduciary duties and dishonest assistance  [81]
The argument for Mr Li  [81]
The argument for Mr Wang  [91]
The argument for 110 Formosa  [95]
Analysis  [97]

Resulting trust and proprietary remedy in respect of the
Formosa property  [119]
Money had and received  [165]
Cross-appeal  [167]
Result  [182]
Introduction
[1]       This appeal arises out of a dispute between parties who had joined in arrangements for the purchase, subdivision and development of land in Beachlands, on which the Formosa golf course is located (the Formosa property). They decided it should be purchased by a company in which the shareholding would reflect the capital contributions made to fund the purchase and development.
[2]       In circumstances that we set out, the appellant, Jun Li, claimed that he provided $4.8 million towards the purchase of the land but received neither an interest in the property nor in the company that purchased it, that company being the first respondent, 110 Formosa (NZ) Ltd (110 Formosa). The second respondent, Meng (Eamon) Wang claimed in the High Court that the money Mr Li provided was not his, alleging that Mr Li had merely been a conduit for investment monies arranged by Mr Wang’s mother, Yanqin Zhao.[1] But Mr Wang…

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: [2020] NZCA 492
Decision Date: 16 October 2020 at 11 am

CaseChat Overview and Summary

In Li v 110 Formosa (NZ) Ltd, Jun Li sought to recover $4.8 million which he had contributed to the purchase of land. Meng Wang claimed that Li's contribution was not his own, but belonged to Wang's family in China, and that Li had acted as a conduit. The High Court found in Li's favour, holding that Wang held the proportion of his shareholding in 110 Formosa which represented Li's contribution on a resulting trust for Li. The Court of Appeal dismissed Li's appeal against the rejection of his claims for a proprietary interest in the Formosa property on the basis of breach of fiduciary duty by Wang and Golden Beachlands Holdings Ltd and dishonest assistance by 110 Formosa. The Court also dismissed Wang's cross-appeal against the finding that Li had proved on the balance of probabilities that he had a beneficial interest in the $4.8 million. The appeal is dismissed and Wang is ordered to hold the proportion of his shareholding in 110 Formosa which represents Li's contribution of $4.8 million on constructive trust for Li. 110 Formosa is entitled to costs in respect of both the appeal and the cross-appeal on a band A basis and usual disbursements. Those costs are to be paid one half by Li and one half by Wang.

Orders