Wang - [2020] NZHC 1894

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000696

[2020] NZHC 1894

UNDER the Insolvency Act 2006

AND

IN THE MATTER OF

an application by JIANPING WANG, company director, of Christchurch, for an order that the deceased estate of JIHONG LU be administered by an appointee under Part 6 of the Insolvency Act 2006

Hearing: 30 July 2020

Appearances:

R B Stewart QC and G Slevin for Applicant

A L Harlowe for Mr Bin Lu, an Interested Party

K G Davenport QC and A E Isaacs for Ms Weihua Zhang, an Interested Party

Judgment:

31 July 2020

JUDGMENT OF WYLIE J
[Reasons for oral ruling]

This judgment was delivered by Justice Wylie
On 31 July 2020 at 12.00 midday Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:…………………………

Solicitors/counsel:
Davidson Legal/R B Stewart QC and G Slevin, Christchurch Couch Harlowe Kovacevich/Ben Liu & Co, Auckland
K Davenport QC and A E Isaacs, Auckland

Re estate of JIHONG LU [2020] NZHC 1894 [31 July 2020]

Introduction

[1] The applicant, Jianping Wang, is a substantial creditor of Jihong Lu (Mr Lu). He has adduced evidence that, on 6 August 2019, he obtained summary judgment against Mr Lu in the sum of $1.5 million together with interest. The judgment has been sealed. Mr Wang has taken some steps to try and recover the monies owing to him. He held security over shares in a company. He has appointed receivers of that company, and he has received approximately $100,000 from the receivers in reduction of the amount is owing. He has also commenced proceedings in respect of a property in Mission Bay. That property has been sold, but the net proceeds of sale (approximately $810,000) are currently being held in a solicitor’s trust account, pending final resolution of those proceedings.

[2] Mr Lu died in Taiwan on 22 January 2020. A copy of his death certificate is before the Court. It records that his permanent residence was in Taiwan, but that he was a foreign national, with a passport, number LM488685. A document purporting to be Mr Lu’s last will and testament is also before the Court. In this document, Mr Lu described himself as a New Zealander and sets out the same passport number. The document is dated 7 January 2020. Mr Lu appointed Mr Bin Lu, his brother, as his administrator to execute his will. It records that, if Mr Bin Lu is unavailable, then Mr Bruce Davidson is to administer the will and that, if Mr Davidson is unavailable, then David Wong Tung is to be the administrator. Mr Lu made provision for his property, which he said includes real estate, securities, stock, an art collection, jewellery “etc.” He directed that it was to be used to pay his funeral expenses and taxes, as well as various debts which he listed. The named creditors include Mr Bin Lu and his mother, Ms Weihua Zhang. There was then provision…

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] NZHC 1894
Decision Date: 31 July 2020

CaseChat Overview and Summary

The High Court of New Zealand considered an application by Jianping Wang, a creditor of the deceased Jihong Lu, for an order that Lu's estate be administered by an appointee under Part 6 of the Insolvency Act 2006. Jianping Wang, who had obtained a judgment against Jihong Lu for $1.5 million, sought to appoint an administrator to manage Lu's estate after Lu's death. Jihong Lu had passed away in Taiwan, leaving behind a will that appointed his brother, Bin Lu, as the administrator of his estate. However, Bin Lu had not yet sought to be appointed as the administrator. Wang's application did not initially seek to have Lu's estate administered under Part 6 of the Act, but during the hearing, Wang's counsel requested that the application also be treated as such an application. Both Bin Lu and Weihua Zhang, Lu's mother and another interested party, opposed this request, arguing that it could prejudice the interests of the creditors and beneficiaries named in Lu's will. The court declined to treat the application as also seeking an order for administration under Part 6 of the Act, reasoning that there had been no express application for such an order and that the consequences of such an order were potentially far-reaching, affecting the operation of Lu's will and the distribution of his estate.

The court held that an application for an order to administer an estate under Part 6 of the Act must be by way of an originating application and that the interested parties, including the creditors and beneficiaries named in Lu's will, should be given the opportunity to participate in the hearing. As Bin Lu and Weihua Zhang had not been served with the application and other interested parties were likely unaware of the proceedings, the court found that there was a risk of prejudice to those persons if the application were treated as also seeking an order for administration under Part 6 of the Act. The court allowed an adjournment to give counsel the opportunity to consider the position and obtain further instructions.

Orders