Wang v Broad Water Limited

[2025] NZHC 533

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2569

[2025] NZHC 533

UNDER

the Land Transfer Act 2017, section 143

IN THE MATTER OF

Caveat no.13034523.1

BETWEEN

ZHEN WANG

Applicant

AND

BROAD WATER LIMITED

Respondent

Hearing:	27 February 2025
Appearances:	Sean McAnally and Alden Ho for the Applicant David T Broadmore and S Lee for the Respondent
Judgment:	17 March 2025

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for order that caveat not lapse]

This judgment was delivered by me on 17 March 2025 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Crimson Legal (Alden Ho), Parnell, Auckland, for the Applicant

Buddle Findlay (David Broadmore/Shereen Lee), Auckland, for the Respondent

Counsel:

Sean McAnally, Barrister, Auckland, for the Applicant

WANG v BROAD WATER LIMITED [2025] NZHC 533 [17 March 2025]

TABLE OF CONTENTS

Paragraph

Introduction  [1]

Background  [3]

Zhen’s visa application  [10]

Zhen’s investment in WTL  [12]

Repayment of WTL shareholder loans  [16]

Kascade Holdings Limited  [19]

Legal principles  [20]

Analysis  [26]

Zhen’s submissions  [27]

BWL’s submissions  [34]

Zhen’s payment was for WTL shares  [36] Zhen’s claim to an existing beneficial interest in WTL shares  [38] Zhen’s claim the payment was for the development of Beach Road  [41] Credibility issues of Zhen’s evidence  [42]

Result  [44]

Orders  [46]

Introduction

[1]                  The applicant, Mr Zhen Wang (Zhen),1 has registered caveat 13034523.1 against the two titles to a property known as 11 McDonald Street, Morningside, Auckland (the Property).

[2]                  The Property is owned by Broad Water Limited (BWL). Mr Ziran Wang (Ziran) is BWL’s sole director. Zhen claims an interest in the Property arising from either a resulting trust or a constructive trust as he says he made financial contributions to the acquisition, development and sustenance of the Property. BWL refutes Zhen’s claim. There are substantive proceedings underway in this Court which will determine if Zhen has any interest in the Property.

Background

[3]                  On 13 May 2015, Ziran entered into an agreement to purchase 79-83 Beach Road, Auckland (Beach Road) for $5,600,000. On 30 July 2015, Water Terraces Limited (WTL) was incorporated with Ziran as the sole director and shareholder. On 15 October 2015, WTL was nominated as purchaser for Beach Road. On 16 October 2015, WTL settled the purchase of Beach Road.

[4]                  On 26 May 2016, Ziran entered into an agreement to purchase 56-58 Grafton Road, Auckland (Grafton Road) for $4,500,000. On 18 November 2016, WTL was nominated as purchaser of Grafton Road. On 24 November 2016, WTL settled the purchase of Grafton Road.

[5]                  To purchase Beach Road and Grafton Road, WTL borrowed $4,130,000 from ASB, for which Ziran was the guarantor. WTL also allegedly borrowed $5,916,575.90 from Ziran.

1      Because of the commonality of surnames, I will use first names in this judgment, no disrespect intended.

[6]                  Ziran’s evidence is that he also loaned further amounts to WTL to pay various invoices in connection with the development of Beach Road. Ziran's loans to WTL as at 31 March 2017 were recorded in WTL's financial statements for the year ended  31 March 2017, which accounts showed WTL owed Ziran $6,423,328.

[7]                  Zhen says that in 2015 he advanced $1.721 million to Ziran and that “of the sum of $1.721 million, approximately $1.4 million was for my share of Beach Road”. Zhen's further evidence in reply is that of the sum of $1.721 million he allegedly advanced to Ziran, $1.523 million was for expenses in connection with the acquisition and development of Beach Road.

[8]                  On 18 August 2016, BWL was incorporated with Ziran as the sole director and shareholder. On 3 November 2016, BWL entered into an agreement to purchase the Property for $24 million. On 12 December 2016, Ziran paid the $2.4 million deposit due under the agreement to purchase the Property.

[9]                  On 24 May 2018, BWL settled the purchase of the Property. It is alleged Ziran advanced a further $10,555,017.78 to BWL (in addition to the deposit) to settle. The balance of the purchase price was paid using $11 million borrowed from ASB.

Zhen’s visa application

[10]              In May 2015, Zhen applied for a New Zealand resident visa, which was approved in principle on 27 July 2015. The visa was conditional on a minimum investment of $10 million in New Zealand, which had to be made within two years.

[11]              In June 2017, to satisfy his visa requirements, Zhen transferred $10 million to New Zealand and applied it to purchase various bonds. Zhen's investment in bonds was an acceptable investment such that on 3 August 2017 his resident visa was approved, although he was required to retain the investment for a minimum of three years.

Zhen’s investment in WTL

[12]              Zhen could have continued to hold his $10 million resident visa investment in bonds. However, Ziran's evidence is that in July 2017 Zhen agreed to pay Ziran

$6,203,750 for an investment in WTL. On 27 July 2017, Ziran sent Zhen an email with:

(a)WTL's financial statements for the year ended 31 March 2017 (which recorded the $6,423,328 debt that WTL owed to Ziran);

(b)valuation reports for Beach Road and Grafton Road; and

(c)a draft share sale agreement for Ziran to sell to Zhen 50% (at that time,

500) of the shares in WTL.

[13]              The draft share sale agreement provided for Zhen to pay Ziran $6,203,750, consisting of $2,992,086 for the 500 shares in WTL and $3,211,664 for an assignment of half of Ziran's shareholder loan. The agreement was intended to result in Zhen and Ziran having identical shareholdings in WTL and identical shareholder loans.

[14]              However, it transpired that the draft share sale agreement would not satisfy Zhen's visa requirements. As a result, the agreement was restructured to provide for Zhen to subscribe for 1,000 new shares in WTL for $6,203,750. This restructured investment met Zhen's visa requirements.

[15]              On 9 August 2017, Zhen was sent another copy of WTL's financial statements for the year ended 31 March 2017 together with the final WTL Share Subscription Agreement for execution. On 10 August 2017, Zhen returned the signed WTL Share Subscription Agreement and it was countersigned on behalf of WTL.

Repayment of WTL shareholder loans

[16]              On 5 September 2017, Zhen paid WTL the $6,203,750 share subscription price under the WTL Share Subscription Agreement. In return, WTL issued 1,000 new shares to Zhen.

[17]              At that time, WTL allegedly owed a debt to Ziran of at least $6,423,328, as recorded in the 31 March 2017 financial statements. On 6 September 2017, WTL transferred $6,203,750 to Ziran in partial repayment of his shareholder loan.

[18]              On 3 July 2019, Zhen (by his agent Pan) was sent WTL's financial statements for the year ended 31 March 2018 which recorded Ziran's shareholder loan having been partially repaid. Zhen's accountants (QBA) also prepared financial reports for WTL for immigration purposes, which recorded Ziran's shareholder loan having been partially repaid.

Kascade Holdings Limited

[19]              Zhen is also party to a share subscription agreement in relation to shares in Kascade Holdings Ltd (KHL). The background to Zhen’s investment in KHL is:

(a)On 3  May  2016,  Ziran  entered  into  an  agreement  to  purchase  25- 27 Exmouth Street, Auckland (Exmouth Street), for $5,700,000.

(b)On 30 June 2017, KHL was incorporated with Ziran as the sole director and shareholder.

(c)On 7 September 2017, Zhen entered into a share subscription agreement to subscribe for 1,000 new shares in KHL for $2,850,000.

(d)On 11 September 2017, KHL was nominated as the purchaser of the Exmouth Street.

(e)On 15 September 2017, Zhen paid KHL the share subscription price of

$2,850,000 and he was subsequently issued with 1,000 shares in KHL. That day, KHL also settled the purchase of the Exmouth Street.

Legal principles

[20]Section 138 of the Land Transfer Act 2017 provides, relevantly:

138     Caveats against dealings with land

(1)A person may lodge a caveat against dealings with an estate or interest in land (a caveat against dealings) on the basis that the person—

(a)claims an estate or interest in the land, whether capable of registration or not; or

(b)has a beneficial estate or interest in land under an express, implied, resulting or constructive trust[.]

…

[21]Schedule 2 of the Land Transfer Regulations 2018 provides:

Caveat against dealings document

A description of the nature of the estate or interest claimed by the caveator (which must be stated with sufficient certainty) or, for a caveat under section 138(1)(d)(ii) of the Act, the matters that establish that there is a risk that the estate of interest may be lost through fraud.

Details of how the estate or interest claimed is derived from the registered owner.

[22]              The principles governing the determination of applications to sustain caveats are well-established.2 The onus is on the caveator to demonstrate an interest in the land sufficient to support the caveat, and the caveator must demonstrate a reasonably arguable case to support the claimed interest.3 This means the caveator need not definitively establish his or her right to the interest.

[23]              The process by which applications to sustain a caveat are determined is ill- suited to resolving disputed factual questions. An order for removal will only be made if it is clear the caveat cannot be maintained – either because there was no valid ground for its lodging in the first place, or because the ground on which it was lodged has now ceased to exist.

[24]              Although the onus of proof lies with the caveator, any conflict between affidavits will generally be resolved in the caveator’s favour.4 This is not to say that the Court is bound to accept uncritically statements in an affidavit that lack precision,

2      See generally Philpott v Noble Investments Ltd [2015] NZCA 342 at [26]. For a general statement of the principles, see Wallace v Studio New Zealand Ltd [2021] NZCA 392 at [39]–[41].

3      Botany Land Development Ltd v Auckland Council [2014] NZCA 61 at [24]–[25].

4      Bethell v Rickard [2013] NZCA 68 at [22]. See also MacRae v Rapana HC Auckland M633/94, 17 June 1994.

are equivocal, inconsistent with the documentary evidence or other statements of the same deponent, or inherently improbable.5

[25]              While the Court retains a residual discretion to remove a caveat or allow it to lapse even if the caveator has a legitimate and caveatable interest, that discretion is to be exercised cautiously. The Court must be completely satisfied removal would not prejudice the caveator’s legitimate interests.6

Analysis

[26]              The issue to be determined in this judgment is whether it is reasonably arguable that, by virtue of a resulting or constructive trust, Zhen has a proprietary interest in the Property sufficient to support a caveat.

Zhen’s submissions

[27]Mr McAnally, for Zhen, submits that it is reasonably arguable that:

(a)on 5 September 2017 WTL received $6,203,000 of Zhen’s money which was advanced for the following purposes:

(i)repayment of the $1.125m owed by Zhen to Ziran for Zhen’s share of Grafton Road; and

(ii)application of the balance of approximately $5,078,000 for the development of Beach Road owned by WTL;

(b)Ziran caused that money to be paid to him by, or on behalf of, WTL ostensibly for payment of loans due to him; and

(c)Ziran subsequently applied that money to the purchase of the Property via BWL without regard to, and contrary to, any interest of Zhen.

5      Barrett v IBC International Ltd [1995] 3 NZLR 170 (CA) at 175, citing Eng Mee Yong v Letchumanan s/o Velayutham [1980] AC 331 (PC) at 341; and Xie v 126 Waimumu Ltd [2020] NZHC 1109 at [8].

6      Pacific Homes Limited (in rec) v Consolidated Joineries Ltd [1996] 2 NZLR 652 (CA) at 656.

[28]Mr McAnally submits:

(a)it is arguable that Zhen can trace his money (or at least the chose in action represented by the bank account credit in his favour) from payment to WTL, to payment by WTL back to Ziran, and to payment by Ziran to BWL, with BWL using the funds to fund part of the purchase of the Property;

(b)Zhen can trace the funds in equity if Zhen can show that, at each step, the money was and remained impressed with a trust in his favour;

(c)if Zhen can so trace the movement of his funds in this manner, the result is an equitable charge securing a proportionate share of the Property in favour of Zhen relative to his contribution to the purchase price. That interest supports a caveat;

(d)none of the recipients of Zhen’s money, or its substitute, was a bona fide purchaser for value without notice of Zhen’s interest, which would prevent Zhen’s ability to trace the money into the Property. Ziran personally, or a company of which he is the sole director was, in each instance, the recipient and all parties in the chain shared the same knowledge.

[29]              Mr McAnally submits that Zhen reposed trust and confidence in Ziran and was entitled to do so given the following:

(a)Zhen was a recent immigrant to New Zealand, encouraged by his close friend and business associate, Ziran, to emigrate and invest with him in New Zealand properties.

(b)Ziran referred Zhen to an immigration advisor and liaised with same — to the point of being the primary point of contact.

(c)Ziran identified and referred Zhen to potential properties for purchase.

(d)Ziran entered into the sale and purchase agreements for various properties.

(e)Ziran structured the ownership of properties acquired by the parties by incorporating WTL and KHL.

(f)Ziran is the sole director of property-owning companies WTL and KHL.

(g)Ziran has liaised with and instructed all necessary professional advisors including accountants and lawyers.

(h)Zhen paid substantial amounts of money to Ziran for the specific purpose of acquiring properties together.

(i)Ziran has managed the commercial properties owned by the companies.

(j)Ziran has managed all finances.

[30]              Mr McAnally submits that when Zhen paid $6,203,000 to WTL on or about  5 September 2017, he reposed trust and confidence in Ziran that all of that money would be applied only for the intended purposes, namely repayment of a personal loan owed by Zhen to Ziran (relating to Zhen’s share of Grafton Road) and, as to the balance of approximately $5 million, to the development or improvement of jointly-owned property. Accordingly Ziran then owed Zhen fiduciary duties in respect of that money. He submits, alternatively, that Zhen retained his beneficial interest in that money subject only to its application to its agreed purposes.

[31]              Mr McAnally submits WTL knew that the money Zhen had paid to it was subject to obligations to apply it for its development of Beach Road, and when its sole director, Ziran, caused WTL to pay that money back to himself purportedly as repayment of loans, WTL became a party to Ziran’s breach of his fiduciary obligations to Zhen. Ziran knew that, and he received the money as a constructive trustee or subject to the pre-existing resulting trust in favour of Zhen.

[32]              To complete the chain of tracing Zhen’s money into BWL, Mr McAnally submits:

(a)that Ziran appears to have mixed Zhen’s money with his own and paid

$10,555,017 to, or on behalf of, BWL for the acquisition of the Property;

(b)Ziran is the sole director of BWL, so it knew that, of the money it received from Ziran, $5,078,000 of it belonged in equity to Zhen and accordingly BWL received the money subject to the same trust; and

(c)when BWL used that money to acquire legal ownership of the Property, Zhen acquired the right to enforce an equitable lien over the Property proportionate to his contribution to the purchase price.

[33]              Mr McAnally submits, in summary, that the equitable interest Zhen claims to the Property is reasonably arguable and therefore the caveat should not lapse.

BWL’s submissions

[34]              Mr  Broadmore,   for   BWL,   submits   that   the   caveat   should   lapse.   He commenced his submissions by reviewing the principles relating to a Quistclose trust, referring to Lord Millet’s explanation of the principles in Twinsectra v Yardley.7 In the context of caveat applications, he submits that New Zealand courts have drawn a distinction between money advanced for a specific purpose, and money advanced for the general purpose of making an investment, citing Zhong v Wang.8

[35]              Mr Broadmore also references the principles applicable to a constructive trust, citing Tipping J’s well-established formulation in Lankow v Rose of what the claimant must show in order to be awarded a beneficial interest in property owned by the defendant. These are:9

7      Twinsectra v Yardley [2002] UKHL 12; [2002] 2 AC 164 at [67]

8      Zhong v Wang (2006) 5 NZ ConvC 194,308 (2006) 7 NZCPR 488 at [83]-[84].

9      Lankow v Rose [1995] 1 NZLR 277 (CA) at 294.

(a)contributions, direct or indirect to the property in question;

(b)the expectation of an interest therein;

(c)that such an expectation is a reasonable one; and

(d)that the defendant should reasonably expect to yield the claim and interest.

Zhen’s payment was for WTL shares

[36]Mr Broadmore submits that the contemporaneous documents show that Zhen's

$6,203,750 payment was for shares in WTL, as is shown by the following sequence of events:

(a)On 11 August 2017, WTL and Zhen entered into the WTL Share Subscription Agreement, under which Zhen agreed to subscribe for 1,000 new shares in WTL for $6,203,750.

(b)At that time, WTL owed Ziran a debt of at least $6,423,328. Ziran's loans to WTL were recorded in WTL's financial statements, which had twice been sent to Zhen prior to entry into the WTL Share Subscription Agreement.

(c)On 5 September 2017, Zhen paid WTL the $6,203,750 share subscription price to WTL under the WTL Share Subscription Agreement.

(d)On 6 September 2017, WTL paid Ziran $6,203,750 in partial repayment of the debt that WTL owed to Ziran. Use of the share subscription price to repay debt was expressly contemplated by the WTL Share Subscription Agreement.

(e)On 15 September 2017, WTL issued 1000 new shares to Zhen in accordance with the WTL Share Subscription Agreement.

[37]              Mr Broadmore submits that it is clear from these documents that Zhen made the payment of $6,203,750 to WTL, and WTL did not owe any fiduciary duties to Zhen. He submits Zhen paid $6,203,750 to WTL and received 1000 shares in return, he has got what he paid for, and upon receipt of the $6,203,750 WTL did not hold those funds on trust for Zhen. Mr Broadmore submits WTL was entitled to apply those funds in its best interests, and elected to use them to repay debt that it owed.

Zhen’s claim to an existing beneficial interest in WTL shares

[38]Mr Broadmore refers to Zhen’s claims:

(a)that prior to entry into the WTL Share Subscription Agreement, he already had a beneficial shareholding in WTL based on payments he made between June and November 2015 for Beach Road; and

(b)that he could not take the WTL shares at that time because his visa had not been approved (so the payments would not have counted towards his investment for immigration purposes).

[39]              Mr Broadmore submits that while there is a dispute as to whether, and if so why, Zhen paid $1,721,021.88 into Ziran's bank account between June and November 2015, it is inherently improbable that they were payments towards shares in WTL that could not be registered at the time because:

(a)The payments between June and November 2015 were ultimately never applied towards the $10 million visa investment requirement, which demonstrates that they were never an investment in WTL. The $10 million visa investment requirement was satisfied in June 2017 when Zhen transferred $10 million to New Zealand and applied it to purchase various bonds.

(b)Zhen's New Zealand resident visa was approved in principle on 27 July 2015 and WTL was incorporated on 30 July 2015. However, all but one of the payments were made after 30 July 2015 and could have counted towards the investment requirement.

(c)Zhen cannot recall exactly how much he paid, or the reason for the payments. Ziran sent Zhen various invoices and information on various properties, but it does not follow that Zhen was a beneficial shareholder in WTL.

(d)Zhen originally pleaded that the agreement to acquire properties jointly was formed in or around September 2015. It was only after Ziran filed a statement of defence (recording that on 13 May 2015 he entered into the agreement to purchase Beach Road) that Zhen changed his position and alleged that the agreement to acquire properties jointly was formed in May 2015.

[40]              In these circumstances, Mr Broadmore submits it is simply not credible that the payments made between June and November 2015 were for an agreed investment in WTL, but that Ziran would hold the shares on trust for Zhen until the payments could be treated as an investment for visa purposes.

Zhen’s claim the payment was for the development of Beach Road

[41]              Mr Broadmore refers to Zhen’s claim that approximately $5,078,000 of the payment of $6,203,750 was to be  applied  to  the  development  of  Beach  Road.  He submits that:

(a)This claim ignores the WTL Share Subscription Agreement. It is indisputable that under the WTL Share Subscription Agreement, Zhen paid $6,203,750 to WTL in return for 1000 new shares in WTL. Upon receiving the 1000 new shares in WTL, Zhen no longer had any interest in the funds he paid to WTL for those shares.

(b)To attempt to overcome this hurdle, Zhen alleges that he thought that the WTL Share Subscription Agreement was recording his existing share subscription in WTL. Therefore, properly understood, Zhen's claim is one of non est factum or mistake, because it suggests that Zhen misunderstood the agreement. Even if Zhen could advance a claim based on non est factum or mistake, Mr Broadmore’s submission was

that any such claim would be a claim for damages against WTL and it would not give Zhen any proprietary interest in the Property.

(c)Zhen's claim that he thought the WTL Share Subscription Agreement was for the purpose of showing Immigration New Zealand that he had invested $6,203,750.73 is untenable because:

(i)For the reasons set out above, it is inherently improbable that prior to the WTL Share Subscription Agreement, Zhen had a beneficial shareholding in WTL that could not be registered.

(ii)On Zhen's case, he had invested only $1.4 million or $1.5 million in WTL, not $6,203,750.

(iii)Following entry into the WTL Share Subscription Agreement, Zhen paid $6,203,750 in accordance with the agreement. Thus he cannot have believed that the agreement did not require him to make any further payment for shares, and then have paid the amount specified under the WTL Share Subscription Agreement.

(iv)On 7 September 2017, approximately one month after entry into the WTL Share Subscription Agreement, Zhen entered into the KHL Share Subscription Agreement. The terms of that agreement were essentially the same as the WTL Share Subscription Agreement. However, there is no suggestion that the KHL Share Subscription Agreement means anything other than exactly what it says on its face. There is no suggestion that Zhen already had a beneficial shareholding in KHL. Zhen must have understood both share subscription agreements to have had the same effect.

(v)The WTL Share Subscription Agreement was deliberately structured and carefully documented to satisfy Zhen's

immigration requirements (because he was using funds from the

$10 million that he held in bonds so needed to ensure that the investment continued to comply with immigration requirements):

A.On 27 July 2017, Ziran sent Zhen a draft share sale agreement. The agreement provided for Zhen to pay Ziran $6,203,750 ($2,992,086 for 500 shares in WTL and $3,211,664 for an assignment of half of Ziran's shareholder loan). This would have resulted in Zhen and Ziran each holding 500 shares in WTL and each being owed shareholder loans of $3,211,664.

B.The draft share sale agreement did not satisfy Zhen's immigration requirements. On 28 July 2017, an email was sent to Jimmy Shang (Zhen's immigration advisor) asking whether the subscription for 1,000 new shares in WTL would satisfy Zhen's immigration requirements.

C.On 8 August 2017, Jimmy Shang sent an email to WTL and Zhen confirming that the proposed WTL Share Subscription Agreement could satisfy Zhen's visa requirements, provided the funds were used to fund company growth, pay down company debt or purchase capital items.

D.On 10 August 2017, Zhen signed and returned the WTL Share Subscription Agreement, which provided for the funds to be used to fund company growth, pay down company debt or purchase capital items. The share subscription price paid by Zhen under the WTL Share Subscription Agreement was used to pay down company debt.

E.In 2019, Immigration New Zealand conducted a review of Zhen's investment in WTL. Zhen subsequently passed the review. Zhen now seeks to resile from the transaction that was carefully and deliberately structured to satisfy his visa requirements.

Credibility issues of Zhen’s evidence

[42]              There are other aspects of Zhen's claims which Mr Broadmore submits are not credible. In particular, Zhen alleges that in early 2018 the parties agreed that the approximately $5,000,000 (being part of the $6,203,750 paid by Zhen) would be used to purchase the Property (because the development of Beach Road did not proceed) but:

(a)by 12 December 2016, BWL had already entered into an agreement to purchase the Property, and Ziran had paid the $2.4 million deposit;

(b)by early 2018, the $6,203,750 that Zhen transferred to WTL had (several months earlier) already been applied by WTL to repay debt owed by Ziran. It is not credible that in early 2018 the parties discussed how WTL should use that money; and

(c)by 2019 or 2020, Zhen must have known that WTL had used the share subscription price to repay the debt owed to Ziran. However, he did not lodge the caveat until 2024.

[43]Therefore, Mr Broadmore submits the caveat should lapse.

Result

[44]              I find that the caveat should lapse. It is not reasonably arguable that the funds Zhen invested to subscribe for 1,000 new shares in WTL were impressed with either a resulting trust or a constructive trust. It follows that no equitable interest attached to the funds which were used by WTL to repay loans to Ziran, and then used by Ziran

(together with other funds) to fund the purchase by BWL of the Property. Therefore there can be no equitable interest in the Property in favour of Zhen.

[45]The reasons for my view are:

(a)Zhen’s assertion that the funds invested in WTL were to be used for the purposes of developing Beach Road and to repay any personal loan to Ziran is contradictory to the contemporaneous documentation of the WTL Share Subscription Agreement. Given the careful structuring of the WTL Share Subscription Agreement to meet Zhen’s visa investment requirements, it is not reasonably arguable that the document was intended to operate in any other manner than in accordance with its terms. Zhen used the document to satisfy his visa investment requirements, which is contradictory to his assertion that he had misunderstood its meaning, and the document was recording his existing investment when it was clearly being used to justify the current transfer of approximately $6.2 million of his bond investment into an investment in WTL shares which was acceptable for visa investment purposes.

(b)Zhen’s assertion that WTL’s Share Subscription Agreement was recording his existing beneficial interest in the shares in WTL is not credible. He had only invested approximately $1.7 million prior to the investment of approximately $6.2 million for the new WTL shares, and therefore it is difficult to see how he could have believed that the payment of $6.2 million required under the WTL agreement reflected his existing beneficial interest in the WTL shares. The fact that he then proceeded to pay the $6.2 million to WTL is difficult to understand if he thought he had already paid for his existing beneficial interest in the WTL shares.

(c)Zhen’s assertion that the WTL shares were being held on trust for him by Ziran and could not be registered in Zhen’s name at the time because his visa had not been approved, is not credible. The payments of

approximately $1.7 million were never applied towards his visa investment requirement as this was separately satisfied by Zhen acquiring $10 million in bonds. There is no evidence that the payments of approximately $1.7 million were intended to create a beneficial interest in WTL’s shares.

(d)Zhen asserted that he discussed the acquisition of the Property in early 2018 with Ziran and it was agreed that the amount of approximately

$5 million earmarked for the development of Beach Road (which development was not proceeding) would be used to purchase the Property. This assertion is not credible as BWL had already entered into the agreement to purchase the Property in 2016 and Zhen’s money, paid in September 2017, had already been disbursed to repay the alleged loans to Ziran.

Orders

[46]I make the following orders:

(a)Caveat 13034523.1 shall lapse.

(b)BWL is the successful party, and costs should follow the event. Counsel are directed to endeavour to agree on costs, and failing agreement being reached within a period of 20 working days from the date of this judgment, counsel for BWL will file a memorandum as to costs (not to exceed five pages) within five working days after the expiry of the 20 working day period, and counsel for Zhen will file a memorandum  (not  to  exceed  five  pages)   in   response   within  five working days of receipt  of  counsel  for  BWL’s  memorandum. A decision as to costs will then be made on the papers.

…………………………….. Associate Judge Taylor