My Templar Limited v Parsons - [2022] NZHC 1189

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-419-000253

[2022] NZHC 1189

UNDER Companies Act 1993

BETWEEN

MY TEMPLAR LIMITED

Applicant

AND

DENNIS CLIFFORD PARSONS

Respondent

Hearing: 8 April 2022

Appearances:

L A O’Gorman and A L Harlowe for Applicant P V Cornegé for Respondent

Judgment:

26 May 2022

JUDGMENT OF ASSOCIATE JUDGE P J ANDREW

This judgment was delivered by Associate Judge Andrew on 26 May 2022 at 3.30 pm
pursuant to r 11.5 of the High Court Rules Registrar / Deputy Registrar

Date ……………………………

MY TEMPLAR LTD v PARSONS [2022] NZHC 1189 [26 May 2022]

Introduction

[1] The applicant, MY Templar Ltd,1 is one of a number of companies in the Templar group, incorporated in New Zealand by the Lu family of Taiwan to manage and diversify their wealth.

[2]Mr Parsons2 is the administrator of the estate of the late Mr Jihong Lu.3

[3] MY Templar seeks to set aside a statutory demand issued by Mr Parsons against it, pursuant to s 290(2) of the Companies Act 1993. Mr Parsons says that the demand, for the sum of $2,970,914.67, includes the proceeds of the sale by Jihong of a yacht, the MV Templar.4 He says that the yacht was owned by Jihong and sold to MY Templar. Those proceeds and cash advances made by Jihong to MY Templar are said to be a debt owing to Jihong’s estate.

[4] MY Templar contends that there is a genuine and substantial dispute as to the existence of the debt. It says that Jihong purchased the yacht on its behalf, using Templar group funds. It claims that Jihong did not have any wealth of his own or any obvious sources of income other than from his role with MY Templar and the Templar group. The yacht was never Jihong’s to sell.

[5] MY Templar contends for a resulting trust over the proceeds of the sale of the yacht.

[6] The critical issue I must determine is whether MY Templar has established a genuine and substantial dispute as to the existence of the debt; do MY Templar’s claims meet a threshold of credibility and plausibility when a number of the critical documents support Mr Parson’s position that Jihong owned the yacht, sold it to MY Templar and that MY Templar has never paid any consideration?

1      MY Templar.
2      Mr Parsons was appointed to administer Jihong’s estate pursuant to s 385(2)(b) of the Insolvency Act 2006 in the Auckland High Court on 29 April 2021.
3      Jihong.
4      The yacht.

Factual background

Family background

[7]Jihong passed away in Taiwan on 21 January 2020.

[8] The Lu family now consists of Mr Bin Lu5 and Weihua Zhang.6 Ms Zhang is Bin and Jihong’s mother. All members of the Lu family have resided in New Zealand from time to time. Jihong had management and control of the Templar group, including MY Templar, between 2015 and January 2020.

The Templar group of companies

[9] The…

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: [2022] NZHC 1189
Decision Date: 26 May 2022

CaseChat Overview and Summary

My Templar Limited, a company within the Templar group owned by the Lu family, sought to set aside a statutory demand issued by Dennis Clifford Parsons, the administrator of the estate of the late Jihong Lu, for the sum of $2,970,914.67. Mr Parsons claimed that the demand included proceeds from the sale of a yacht, the MV Templar, and cash advances made by Jihong to My Templar. My Templar contended that there was a genuine and substantial dispute as to the existence of the debt, claiming that Jihong purchased the yacht using Templar group funds and that Jihong did not have any wealth of his own or any obvious sources of income other than from his role with My Templar and the Templar group. The court had to determine whether My Templar had established a genuine and substantial dispute as to the existence of the debt.

The court found that My Templar had not established a credible or plausible resulting trust and/or agency arrangement in support of its claim that Jihong never owned the yacht. The court concluded that there was no genuine and substantial dispute as to Jihong's ownership of the yacht and Jihong's estate maintains the right to call up the debt owed to it by My Templar. The application by My Templar Ltd to set aside the statutory demand was dismissed, and the respondent, Mr Parsons, was entitled to costs on a 2B basis.

Orders