Li v Yu

[2018] NZHC 3248

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2017-404-000939

[2018] NZHC 3248

BETWEEN

ZHONG LI

Plaintiff

AND

YORK BUYUN YU

Defendant

(continued over)

Hearing:

20-22 August 2018

Appearances:

B O’Callahan & K Puddle for Plaintiff

No Counsel for First, Second, Third Defendants K Burkhart & G Beresford for Fourth Defendant D Salmon & C Upton for Fifth Defendant

W L Aldred & E J Couper for Sixth Defendant

Judgment:

11 December 2018

JUDGMENT OF VAN BOHEMEN J

This judgment was delivered by me on 11 December 2018 at 2pm Pursuant to Rule 11.5 of the High Court Rules

…………………………

Registrar/Deputy Registrar

Counsel:

WL Aldred, Wellington

Solicitors:

K3 Legal Limited, Auckland Kennedys, Auckland
Lee Salmon Long, Auckland Crown Law, Wellington

LI v YU & Ors [2018] NZHC 3248 [11 December 2018]

(continued)

AND  HARV PROPERTIES LIMITED

Second Defendant

AND  KE CHENG

Third Defendant

AND  WINLAW LIMITED

Fourth Defendant

ANDHENRY FENG LAWYERS LIMITED & HENRY YU FENG

Fifth Defendant

AND  ATTORNEY-GENERAL

Sixth Defendant

Introduction

[1]        The question for determination is whether four properties owned by the plaintiff, Zhong Li, were transferred without his agreement to the second defendant, Harv Properties Ltd, in circumstances that amounted to fraud such that:

(a)The one property still held by Harv Properties – at 109 Tauroa Street,

Whangarei (Tauroa property) – should be re-vested in Mr Li; and

(b)Harv Properties and the third defendant, Ke Cheng, who at all relevant times was the sole director of Harv Properties, should be required to account to Mr Li for the equity Mr Li held in the other three properties

– three apartments at 12-14 Schnapper Road, Auckland (the three apartments) – which have since been transferred to third parties for value and without notice of the fraud.

Procedural history

[2]        This proceeding initially involved a larger cast of parties and covered a broader scope than is dealt with in this judgment, although all transactions at issue related to the relationship between Mr Li and the first defendant, York Yu, who agreed to work together in developing a property at 12-14 Schnapper Road, Albany.

[3]        In his second amended statement of claim dated 21 May 2018, Mr Li pleads 12 causes of action against six defendants:

(a)First cause of action – against first defendant, Mr Yu –interference by unlawful means;

(b)Second cause of action – against Mr Yu – breach of fiduciary duty;

(c)Third cause of action – against second defendant, Harv Properties – recovery of Tauroa property;

(d)Fourth cause of action – against Harv Properties – knowing receipt;

(e)Fifth cause of action – against third defendant, Ms Cheng – dishonest assistance;

(f)Sixth cause of action – against Mr Yu, Harv Properties, Ms Cheng and fifth defendant, Henry Feng Lawyers – conspiracy to injure by unlawful means;

(g)Seventh cause of action – against Harv Properties – breach of contract;

(h)Eighth cause of action – against Mr Yu – breach of partnership;

(i)Ninth cause of action – against fourth…