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Wang v Yuan

Wang v Yuan

Case [2024] NZHC 2526 4 September 2024

Contract Formation

Breach of Contract

Compensatory Damages

Money Had and Received

Statutory Interpretation

Limitation Periods

Civil Litigation & Procedure

Contract Law

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IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2024-409-124

[2024] NZHC 2526

IN THE MATTER OF Alternative claims in equity for money advanced and unpaid and in debt

BETWEEN

KAITIAN WANG

Plaintiff

AND

WENJING YUAN

First Defendant

AND

BARRINGTON ELITE NAILS LIMITED

Second Defendant

Hearing: 11 June 2024

Appearances:

S F Gaines for Plaintiff First Defendant in Person

Judgment:

4 September 2024

JUDGMENT OF CULL J

[1] Mr Wang seeks judgment against Ms Yuan for $350,000, which Ms Yuan used to purchase Barrington Elite Nails Limited (“Elite Nails”). Mr Wang initially advanced $370,000 to Ms Yuan, on condition that he would acquire a minority shareholding in a petrol station in Canterbury, which Ms Yuan was planning to purchase but did not do so. The moneys now owing to Mr Wang are $350,000.

Factual background

[2] Mr Wang emigrated to New Zealand from China in March 2010. He bought a residential property in Christchurch with his wife in 2013. They have no immediate

WANG v YUAN and BARRINGTON NAILS LTD [2024] NZHC 2526 [4 September 2024]

family in New Zealand and a limited network of friends and associates. Mr Wang has limited proficiency in English and has minimal business experience.

[3] Mr Wang was introduced to Ms Yuan and her then-husband, Mr Hong, through a mutual friend. Mr Wang was told that Ms Yuan is a successful businesswoman and that Ms Yuan and Mr Hong might be able to provide Mr Wang with a job.

[4] Mr Wang and Ms Yuan met and Ms Yuan informed Mr Wang that she wanted to buy a petrol station in Ohoka, Canterbury. Ms Yuan invited Mr Wang to invest in the business. Mr Wang told Ms Yuan that he wanted to invest in a business where he could work for a regular income that would provide for his family and assist him in attaining residency in New Zealand.

[5] Mr Hong owned a fish market. Mr Hong and Ms Yuan invited Mr Wang to work as a store manager at the fish market until the petrol station was purchased. It was planned that Mr Wang would then move to Ohoka to manage the day-to-day operations of the petrol station and receive a share of its profits. This agreement was not recorded in writing. In April 2018, Mr Wang paid Ms Yuan and Mr Hong $20,000 in cash for his work visa for the fish market. Mr Wang worked at the fish market from 20 April 2018 to 10 May 2019.

[6] Ms Yuan and Mr Hong told Mr Wang that they were waiting for an environmental inspection report on the petrol station’s land. Mr Wang was not involved in obtaining the report as Ms Yuan and Mr Hong wanted to hold the land in their name. Mr Wang did not interact with the vendor of the petrol station and did not see a written agreement to buy the business.

[7] In November 2017, 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.

Continue reading Wang v Yuan

Details

AGLC: Wang v Yuan [2024] NZHC 2526
Case: [2024] NZHC 2526
Decision Date: 4 September 2024

CaseChat Overview and Summary

Kaitian Wang has sued Wenjing Yuan for $350,000, which was used by Yuan to purchase Barrington Elite Nails Limited. Wang claims that Yuan used the money for a different purpose than agreed upon, which was to secure him a minority shareholding in a petrol station. Yuan disputes the claim, arguing that Wang agreed to invest in the beauty parlour. The court had to determine whether Wang's claim under the cause of action for money had and received was valid, and if so, whether statutory interest was payable. Additionally, the court had to decide whether Yuan owed Wang a fiduciary duty.

The court found that Wang's claim for money had and received was valid because Yuan received the money with the understanding that it was to be used to purchase a petrol station. The court held that the refusal to return the funds was unconscionable, and Yuan had not applied the funds for the purpose they were received. The court dismissed the claim of breach of fiduciary duty, finding that the relationship between Wang and Yuan did not establish a fiduciary relationship. The court also found that Wang's claim for an unpaid loan was not determinative because the claim for money had and received was successful. The court awarded statutory interest on the judgment sum from 30 August 2019, the date of the formal demand for repayment.

Judgment is entered for Wang against Yuan in the sum of $350,000 for money had and received, plus interest from 30 August 2019 until final payment of the judgment sum. Costs are awarded on a 2B basis in favour of Wang. No costs are payable on Wang's abandonment of two of his causes of action.

Orders