Wang v Zhang
[2021] NZHC 3175
•24 November 2021
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-2583
[2021] NZHC 3175
UNDER the Property Law Act 2007 IN THE MATTER
of a prejudicial disposition of property
BETWEEN
JIANPING WANG
Plaintiff
AND
WEIHUA ZHANG
First Defendant
DENNIS CLIFFORD PARSONS AS ADMINISTRATOR OF THE ESTATE OF JIHONG LU
Second Defendant
Hearing: 26 October 2021 Appearances:
G E Slevin for Plaintiff
K G Davenport QC and A E Issacs for First Defendant P V Cornegé for Second Defendant
Judgment:
24 November 2021
JUDGMENT OF PETERS J
This judgment was delivered by Justice Peters on 24 November 2021 at 3.30 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Date: ...................................
WANG v ZHANG [2021] NZHC 3175 [24 November 2021]
[1] This judgment determines an application by the plaintiff, Mr Wang, for an order pursuant to s 348(2)(b) of the Property Law Act 2007 (“Act”). The order sought is to require the first defendant, Ms Zhang, to pay reasonable compensation in respect of property she received or is alleged to have received as a result of dispositions by her son, Mr Jihong Lu (deceased).
[2] Mr Lu died in Taiwan in January 2020. As at the date of death, Mr Wang was Mr Lu’s creditor. On Mr Wang’s application, on 29 April 2021 the second defendant, Mr Parsons, was appointed to administer Mr Lu’s estate.1 Mr Wang seeks that any compensation I order be paid to Mr Parsons in that capacity.
[3]Two dispositions are in dispute.
[4] The first and most significant is Mr Lu’s disposal to Ms Zhang of his interest as a joint tenant in a residential property in Auckland (“property”). Ms Zhang was the other joint tenant. Mr Lu disposed of his interest to Ms Zhang in August 2019, by way of gift, so that she became the sole registered proprietor of the property. Ms Zhang sold the property in December 2019 and the net proceeds of sale are held on trust.
[5] The main issue between the parties in regards to this disposition is what constitutes reasonable compensation in respect of the property disposed of by Mr Lu. Ms Zhang submits that it is no more than 50 per cent of the net proceeds of sale of the property, and she is willing, and has offered, to pay this sum. Ms Zhang sold the property for $3,696,000. The net proceeds of sale achieved were $836,376.48, 50 per cent of which is $418,188.24.
[6] Mr Wang submits that Ms Zhang sold the property at an undervalue. He contends the market value of the (entire) property at the relevant time was $4,250,000, and that reasonable compensation should be calculated as 50 per cent of the proceeds of sale that would have been derived had the property been sold at that price, less the sum required to repay debt secured against the property. Mr Wang calculates this sum as being $1,660,004.57, a 50 per cent share of which is $830,002.28.
1 Insolvency Act 2006, Part 6, s 387(2).
[7] The second disposition is Mr Lu’s payment of sums due to General Finance Ltd (“GFL”) pursuant to a loan agreement between GFL and Mr Lu and Ms Zhang. Mr Lu made these payments, which totalled $70,721, after the gifting and they continued until the principal was repaid from the proceeds of sale in December 2019. For reasons set out below I am not satisfied there can be any claim in respect of this sum.
[8] I turn now to the statutory provisions as they affect the disposition of the half share. The payments to GFL are dealt with at the end of the judgment.
Statutory provisions
[9] Part 6, Subpart 6 of the Act makes provision for setting aside a disposition that prejudices a creditor or creditors. The purpose of the Subpart is to ensure the restoration of such property, or its value, for the benefit of creditors.2
[10] Section 346 makes provision for the types of disposition to which Subpart 6 applies. It is common ground that the disposition of the interest in the property is within s 346, being a disposition of property by way of gift, and by a debtor (Mr Lu in this case) who was or became insolvent as a result.
[11] Section 347 permits a creditor who claims to be prejudiced by such a disposition to apply for an order under s 348, which provides:
348 Court may set aside certain dispositions of property
(1)A court may make an order under this section—
(a)on an application for the purpose (made and served in accordance with section 347); and
(b)if satisfied that the applicant for the order has been prejudiced by a disposition of property to which this subpart applies.
(2)The order must do 1, but not both, of the following:
(a)vest the property that is the subject of the disposition in the person (for any applicable purpose) specified in section 350:
(b)require a person who acquired or received property through the disposition to pay, in respect of that property, reasonable
2 Property Law Act 2007, s 344.
compensation to the person (for any applicable purpose) specified in section 350.
(3)If the order does what is specified in subsection (2)(a), it may also require a person who acquired or received property through the disposition to physically restore some or all of that property that is tangible personal property to 1 or more persons specified in the order.
(4)Person who acquired or received property through the disposition means a person who acquired or received property—
(a)under the disposition; or
(b)through a person who acquired or received property under the disposition.
(5)The order must not have effect so as to increase the value of a security held by a creditor over the debtor’s property.
(6)Subsection (5) overrides subsection (2) and section 350.
(7)This section is subject to section 349.
[12] I am satisfied that the requirements of s 348(1) have been met. For the avoidance of any issue on that score, on 27 October 2021 I gave counsel for Mr Wang, Mr Slevin, leave to file a second amended statement of claim that responded to a point taken by counsel for Ms Zhang, Ms Davenport QC.
[13] Ms Zhang, having received property through the disposition, is susceptible to an order under s 348(2)(b), subject to s 349 referred to below.
Background
[14] Ms Zhang and Mr Lu purchased the property in 2015 for $3,000,000. They were its registered proprietors, as joint tenants. No borrowings were secured against the title on purchase. There is a dispute between the parties as to the source of the funds used to acquire the property. Ms Zhang says they were her funds. Mr Wang’s evidence is that they were Mr Lu’s, or at least were held in bank accounts in his name.
Debt
[15] In 2017, DBR Ltd (“DBR”) advanced $2,500,000 to Ms Zhang and Mr Lu. Ms Zhang’s evidence is that these borrowings were to enable the purchase of a
business. The amount of the loan was subsequently increased to $2,568,830. The advance was secured by a mortgage over the property.
[16] In early 2019, Mr Lu who divided his time between New Zealand and Taiwan, was informed that an existing illness had become terminal.
[17] DBR was due to be repaid in late-July 2019. It declined to extend the term of its loan and Mr Lu arranged a re-financing with GFL. A term loan agreement of 5 August 2019 between GFL and Mr Lu and Ms Zhang provided for GFL to advance
$2,642,035 to both Ms Zhang and Mr Lu. It was a term of GFL’s loan that its funds be applied to repay DBR. GFL’s advance was likewise to be secured by way of a first mortgage against the property, and the agreement provided for repayment on the sale of the property.
Mr Wang
[18] Prior to this, in February or March 2019, Mr Wang had made demand of Mr Lu under a guarantee. The demand not being met, in April 2019 Mr Wang had commenced proceedings against Mr Lu. On 6 August 2019, Mr Wang obtained summary judgment against Mr Lu for $1,500,000, plus interest and costs, being a total of $2,024,663.43.
[19] Ms Zhang’s evidence is that she was unaware of Mr Wang’s Court proceedings against Mr Lu. I accept this evidence, on which Ms Zhang was not cross-examined. Also, it is clear that Ms Zhang’s English was limited (I take this from her affidavits and some of the marketing reports from Bayleys referred to below), and she is now elderly.
Gifting
[20] The circumstances relating to the gifting were as follows. Ms Zhang says that she and her son intended to sell the property, and that he told her the sale process would be more straightforward if she were to be the sole registered proprietor, particularly if he died before a sale was achieved, and also because Mr Lu was then living in Taiwan.
[21] On 5 August 2019, Mr Lu and Ms Zhang executed a “Deed of Gifting of ½ Shares” in the property (“deed”) prepared by their solicitors. The recitals to the deed stated that Mr Lu and Ms Zhang were re-financing the existing debt due to DBR and borrowing from GFL, which there were. The deed also recited, and provided, that Mr Lu would gift his interest in the property to Ms Zhang, that the current market value of the property was $4,100,000 and that the value of the gifting was $2,050,000. Ms Zhang’s evidence is that $4,100,000 reflected the then rating valuation and was inserted by the solicitors.
Settlement
[22] There was a series of transactions on 6 August 2019. Ms Zhang and Mr Lu drew down the funds from GFL and repaid DBR; DBR’s mortgage was discharged; Mr Lu and Ms Zhang transferred the property to Ms Zhang alone; Ms Zhang became the sole registered proprietor of the property; and the mortgage in favour of GFL was registered.
Sale of the property
[23] On 15 August 2019, Ms Zhang entered into an agency agreement with Bayleys Remuera, appointing Mr David Rainbow and Mr Harry Cheng (who speaks Mandarin) to market the property for sale. Ms Zhang’s evidence is that Mr Lu helped her organise the sale as his English was “a lot better” than hers and she did not have her own email address.
[24] It is necessary to say something of the sale process given the dispute as to whether Ms Zhang sold the property at an undervalue.
[25] Bayleys conducted at least a three week marketing campaign. Ms Zhang says it was four weeks. The property was advertised for sale in the New Zealand Herald, the Chinese Herald, and on several websites, including Bayleys’, Trademe, Realestate.co.nz, and OneRoof. Bayleys also held open homes and conducted private viewings. The method of sale was a “deadline sale”, to close on 12 September 2019.
[26] Bayleys provided reports addressed to Mr Lu and Ms Zhang dated 27 August, 3 September, and 10 September 2019, including information as to the number of parties that had viewed the property, their apparent level of interest, feedback received, and other information such as the number of “hits” on the websites.
[27]Two offers were made to purchase the property.
[28] The first offer, which Ms Zhang accepted, was made on or about 12 September 2019. The purchase price was $4,050,000. The agreement for sale and purchase provided for payment of a deposit of $400,000 on the date the agreement became unconditional (which appears to have been on acceptance), with settlement 10 working days thereafter. The deposit was not paid.
[29] On about 24 September 2019, the purchaser requested a three calendar month extension to the settlement date, which would have been a date close to Christmas 2019. It appears the solicitors acting on the sale were taking instructions primarily from Mr Lu. An offer was made to extend the settlement date to the end of October 2019, subject to the purchaser paying the deposit by 26 September 2019. The purchaser failed to pay the deposit by that date, and the agreement was cancelled, again on Mr Lu’s instructions on the face of it. Mr Slevin criticised Ms Zhang for this cancellation. Ms Zhang’s response to this criticism is that it was reasonable to cancel. Her evidence is that the solicitors acting for her were suspicious of the purchaser, and thought he or she might not be eligible to purchase under the Overseas Investment or Foreign Buyer legislation, and they were also concerned about the possibility of money laundering.
[30] Another offer was to be presented on 3 October 2019, for $3,660,000, but it was withdrawn before it could be accepted. The gist of the email correspondence between Mr Rainbow and the solicitors for that offeror was that the offeror withdrew on the basis that he or she might submit a lower offer.
[31]On 4 October 2019, Ms Zhang accepted an offer to purchase the property for
$3,696,000. The purchaser paid the deposit of $369,600 on 18 October 2019 and the sale was settled on 2 December 2019. It is common ground the purchaser was at arm’s length to Ms Zhang.
Freezing order
[32] Mr Wang sought and obtained a without notice freezing order on 19 November 2019, restraining any dealings with or disposal of the property. Mr Wang subsequently agreed to settlement of the sale of the property, subject to the retention of the net proceeds of sale in trust.3
[33] The net proceeds of sale were $836,376.48, after allowing for legal fees, selling costs including Bayleys’ commission, repayment of GFL’s advance of $2,738,702.24, and outstanding rates.
Submissions
[34] As I have said, Mr Wang submits that reasonable compensation for the property disposed of equates to 50 per cent of the sum equivalent to a sale at $4,250,000 less the debt to GFL.
[35] Ms Zhang submits that it is 50 per cent of the net proceeds of sale in fact. She rejects any suggestion that she sold at an undervalue. Ms Zhang’s evidence is that she engaged Mr Rainbow especially because he is so highly regarded and experienced, that she engaged Mr Cheng because he speaks Mandarin, which might be convenient for some purchasers, and that she had every reason to secure the best possible price for the property. It was the only property in which she had an interest and, as I have said, she is elderly. Ms Zhang is now in her early 80s. If I do not accept Ms Zhang’s submissions on this point, she relies on s 349(2) of the Act.
[36] Mr Wang’s submission that the fair market value of the property at the time of sale was $4,250,000 is based on the following.
[37]First, in advance of their appointment, Bayleys had appraised the property at
$4,600,000 to $5,000,000.
[38] Secondly, Mr Wang adduced expert evidence from a registered, and experienced, valuer, Mr Ian Colcord of Seagars. In July 2021 a member of
3 Wang v Zhang HC Auckland CIV-2019-404-2583, 28 November 2019.
Mr Colcord’s firm, Mr Andrew Buckley, valued the property at $4,250,000 as of 6 August 2019. Mr Buckley had previously valued the property in 2015. In Mr Buckley’s absence, Mr Colcord gave evidence confirming his agreement with the valuation.
[39] Mr Buckley inspected the property from the street in July 2021, but was not able to enter the property as it had been sold. Mr Buckley prepared his report on the assumption that the home had been maintained to a similar standard as it had been in 2015.
[40] Mr Buckley had regard to sales of properties in the locality, and which he considered similar, between October 2018 and October 2019, and ranging from
$4,130,000 to $5,150,000, and to market conditions prevailing as of October 2019. The gist of the comments in this section of the report is that from 2015 onwards the Government had taken steps to dampen the appreciation of house prices, that the residential market was “quite subdued”, values had “come back” for most residential property types, and some properties were experiencing longer selling periods, particularly if the vendor was “reluctant to adjust their expectations”. Although the property in issue in this case was not as susceptible to the dampening effect referred to given its price point, there had still been an impact on demand throughout 2019.
[41] Having regard to these matters, Mr Buckley assessed the market value of the property as $4,250,000.
[42] Ms Davenport questioned Mr Colcord as to the extent of the adjustment to the valuation made on account of an apartment building situated immediately on the property’s rear (southern) boundary, on Kepa Road, and under construction at the time the property was for sale. Now complete, this development occupies three sites, comprises approximately 30 units, and is four stories high, excluding underground carparking. The building affects privacy to the rear yard of the property. Mr Colcord said Mr Buckley’s valuation reflected a five per cent reduction for the effect of the development.
[43] Mr Colcord also gave evidence as to zoning changes to the land surrounding the property made under the Unitary Plan and enabling increased density of
development as of right. As I understand it, Mr Buckley did not make any additional reduction to the fair market value of the property for this change.
[44] As to why the offers that were made fell short of Seagars’ valuation, Mr Colcord acknowledged that Bayleys are reputable and successful agents, Mr Rainbow in particular, and could be expected to run a good sales campaign. Mr Colcord suggested that the absence of such an offer might reflect a constrained marketing budget, or too short a campaign, his recollection being that sales campaigns at the time were for a longer period than three weeks. Mr Colcord’s evidence was that he considered Ms Zhang ought to have persisted with the sale process and not accepted the offer that she did. That said, Mr Colcord had not spoken to Mr Rainbow, and nor was Mr Rainbow called to give evidence.
Discussion
[45] Section 348(2) provides for an order to pay reasonable compensation for the property disposed of, and it is apparent from s 344, which sets out the purpose of the Subpart, that will usually equate to the value of that property.
[46] In this case, the property disposed of was the interest of a joint tenant in a residential property, encumbered by a mortgage securing a debt to DBR. Strictly speaking, it is that which has to be valued.
[47] Regardless, the parties have proceeded on the basis that reasonable compensation equates to 50 per cent of the value of the entire property as a whole at the date of disposition — 5 August 2019 — and I shall do likewise.
[48] For the following reasons I am not persuaded that Ms Zhang sold at less than fair market value.
[49] First, as Mr Colcord said, Bayleys are reputable agents. The property was advertised for sale in the usual media and on the usual websites. The first offer was made a little over three weeks after marketing commenced, and the second and third six weeks later. There is no appearance of a poorly conducted campaign or a hasty sale process.
[50] Secondly, it is apparent from Bayleys’ reports that the apartment development was a significant deterrent to some purchasers. Comments such as “Big detractor was the looming block of apartments behind” are listed in the reports. In their report of 3 September 2019 Bayleys stated:
The main comment that is holding parties back from taking it further is the apartment block behind and the potential to build another block next door to the west. Some feel overlooked despite our telling parties that when one is inside or out the front, one does not see what is behind them ...
[51] This suggests that an allowance of five per cent for the impact of that development (and increased development generally) may be insufficient. Certainly the development shown in a photograph that Ms Davenport put to Mr Colcord appears very substantial.
[52] Thirdly, several parties who viewed the property commented that they “saw value under $4m” and Bayleys’ own expectations as to price seems to have diminished by the time of the set sale date. In their report of 10 September 2019, Bayleys said:
The campaign has worked very well with several parties wanting to own the property. At the end of the day, it will really come down to [the] price someone is prepared to pay and the vendor accept. Also, when selling any home we do have people who look at it and make comments none of us want to hear. Buyers often do not tell us what they will pay for a property until they see it so we have to deal with all types in order to find the ‘right type’ who will be the end buyer. Sometimes it can be very frustrating, but we as agents have to ‘put up with it’. With your beautiful home we have had to deal with some people who make unrealistic comments. Let’s hope we have several realistic offers to be able to present and discuss with you. And negotiate a sale at an acceptable price.
[53] Lastly, there is the offers themselves. One at just over $4 million with the purchaser failing to pay the deposit, another one withdrawn at $3,660,000, and then one at $3,696,000. There is no suggestion in Bayleys’ emails to Mr Lu and Ms Zhang that they considered the offers unrealistic or that they were advising declining them.
[54] Accordingly, I am not persuaded that Ms Zhang sold the property at an undervalue. Put another way, I am satisfied that reasonable compensation in respect of the disposition is 50 per cent of the net proceeds of sale derived in fact.
Section 349(2)
[55] If I am wrong in that, it is necessary to consider s 349(2) on which Ms Zhang relies and which provides:
349 Protection of persons receiving property under disposition
(1)A court must not make an order under section 348 against a person who acquired property in respect of which a court could otherwise make the order and who proves that—
(a)the person acquired the property for valuable consideration and in good faith without knowledge of the fact that it had been the subject of a disposition to which this subpart applies; or
(b)the person acquired the property through a person who acquired it in the circumstances specified in paragraph (a).
(2)A court may decline to make an order under section 348, or may make an order under section 348 with limited effect or subject to any conditions it thinks fit, against a person who received property in respect of which a court could otherwise make the order and who proves that—
(a)the person received the property in good faith and without knowledge of the fact that it had been the subject of a disposition to which this subpart applies; and
(b)the person’s circumstances have so changed since the receipt of the property that it is unjust to order that the property be restored, or reasonable compensation be paid, in either case in part or in full.
[56] I am satisfied on the basis of her affidavit evidence that Ms Zhang received the property, that is her son’s half share, in good faith and without knowledge it was a disposition to which the Subpart applied.
[57] The more difficult issue is whether Ms Zhang’s circumstances have so changed since receipt of the property that it is unjust to order her to pay a greater sum than that she has offered.
[58] I am satisfied that Ms Zhang’s acceptance of the offer on 4 October 2019, which bound her to sell the property at $3,696,000 on 2 December 2019, constitutes a sufficient change of circumstances for the purposes of s 349(2)(b). As I have indicated, I consider it reasonable for Ms Zhang to accept that offer. Aside from the
matters already mentioned, absent acceptance of that offer, it was possible Ms Zhang would hold the property into 2020 with no certainty of a better price. I also note that Mr Wang obtained judgment two months before Ms Zhang accepted that offer. It was open to him to take steps to protect his position earlier. This is not to criticise him, but the consequence of his not doing so was that Ms Zhang committed herself to sell whilst unaware of his interest. In the circumstances of this case, I consider it for Mr Lu’s creditors to bear the consequence of that lapse in time, not Ms Zhang.
Payments to GFL
[59] The loan made by GFL was to retire the debt due to DBR. The borrowings from DBR were not to purchase the property but another asset. That the loan was secured over the property transferred to Ms Zhang is irrelevant.
[60] GFL advanced its funds to both Mr Lu and Ms Zhang and, in the usual course of events, each would be liable to pay 50 per cent of the interest due.
[61] Mr Slevin submitted that Ms Zhang alone should have made the payments to GFL, as she held the entire property. That overlooks the purpose of GFL’s loan, and it also overlooks that Mr Wang is seeking an order that Ms Zhang should pay half of the value of that very property to Mr Parsons. Accordingly, as a matter of principle, Ms Zhang could not be liable to pay more than 50 per cent of the full $70,721.
[62] Turning now to Subpart 6, the payments to GFL are a “disposition” within the meaning of s 345, that is a payment.
[63] However, I am not persuaded they are a disposition within s 346, which provides:
346 Dispositions to which this subpart applies
(1)This subpart applies only to dispositions of property made after 31 December 2007—
(a)by a debtor to whom subsection (2) applies; and
(b)with intent to prejudice a creditor, or by way of gift, or without receiving reasonably equivalent value in exchange.
(2)This subsection applies only to a debtor who—
(a)was insolvent at the time, or became insolvent as a result, of making the disposition; or
(b)was engaged, or was about to engage, in a business or transaction for which the remaining assets of the debtor were, given the nature of the business or transaction, unreasonably small; or
(c)intended to incur, or believed, or reasonably should have believed, that the debtor would incur, debts beyond the debtor’s ability to pay.
(3)However, this subpart does not apply to dispositions to which the limit in section 142(3) of the Infrastructure Funding and Financing Act 2020 applies under a levy order made under that Act.
[64] Mr Lu’s payments to GFL were made because they were due under the loan agreement (entered into in the circumstances to which I have referred) and not to prejudice a creditor.
[65] Nor am I satisfied that Ms Zhang acquired or received property through those payments as s 348(2)(b) requires, even under the expanded definition in s 348(4). Although Mr Lu’s payments relieved Ms Zhang of her legal obligation to pay interest to GFL, I am not satisfied she acquired or received property as a result.
[66]For those reasons, I decline to make any order in respect of payments to GFL.
Section 350
[67] Section 348(2)(b) requires that Ms Zhang pay the compensation to a person specified in s 350, which provides:
350 Person in or to whom order under section 348 vests property or makes compensation for it payable
(1)Property vested, or compensation to be paid, by or under an order under section 348, vests in, or is payable to, the following person:
(a)the Official Assignee, if the debtor is a bankrupt; or
(b)the debtor, if the debtor is a company in liquidation or an overseas company being liquidated under section 342 of the Companies Act 1993; or
(c)in every other case, the person directed by the court under subsection (2).
(2)A direction under this subsection must specify that the property vests in, or the compensation is payable to, the following person (for the following purpose, if any):
(a)a trustee for the debtor’s creditors; or
(b)the debtor (for the purpose only of enabling the carrying out of any execution or similar process against the debtor or the administration of a future bankruptcy or liquidation of the debtor or arrangement with the debtor’s creditors).
(3)On or after making a direction under subsection (2)(a) the court may, on its own initiative or on an application for the purpose, make any further orders it thinks fit concerning all or any of the following:
(a)the administration of the property or amounts paid by way of compensation; and
(b)proofs of debt; and
(c)the distribution of assets available to the trustee; and
(d)any other relevant matters.
(4)This section overrides the Land Transfer Act 2017.
[68] As I have said, the parties propose that Ms Zhang should pay such compensation as is ordered to Mr Parsons.
[69] On considering the matter, it was not clear to me that Mr Parsons fell within one of ss 350(1) or (2) of the Act. Mr Parsons was appointed under Part 6 Insolvency Act 2006 (“IA”). Part 6 makes provision for the administration of the estate of a person who is insolvent on his or her death. Mr Wang, as a creditor of Mr Lu, made an application for the appointment of an administrator pursuant to s 381(1)(a) of the IA. Section s 387(2) of the IA permits the Court to appoint, as administrator, the existing administrator of the estate (as that term is defined in the Administration Act 1969), the Official Assignee, the Public Trust, or “some other person”, being the category within which Mr Parsons fell.
[70] Having reflected on the matter, counsel submitted that Mr Parsons must fall within ss 350(2)(a) or (b) of the Act.
[71] Ultimately, however, any issue that might have arisen on this score was resolved by Mr Parsons swearing an affidavit advising the Court that he would receive any compensation that was ordered on trust for Mr Lu’s creditors. On the basis of that assurance, I shall make the order sought.
Other matters
[72] On 28 November 2019, Wylie J ordered Mr Wang to pay $950,000 into Court as security. Mr Wang seeks an order that this sum be released to him. There is no objection to this sum being released. However, I shall delay making the order in case issues as to costs arise. Counsel should confer and revert to the Court on that issue without delay. I reserve leave to apply.
Result
[73]I order that 50 per cent of the net proceeds of sale of the property, being
$836,376.48, plus interest accrued thereon, less any holding costs thereon, is to be paid to the second defendant, Dennis Clifford Parsons, as trustee for the creditors of Jihong Lu. The balance of the proceeds plus interest, less holding costs, is to be paid to the first defendant, Weihua Zhang.
[74]I reserve leave to apply.
[75]The parties may make submissions on costs if they are unable to agree.
Peters J
Solicitors: Davidson Legal, Christchurch
Ben Liu & Co, Auckland Nielsen Law, Hamilton
Counsel: G E Slevin, Christchurch
K G Davenport QC, Auckland A E Isaacs, Auckland
P V Cornegé, Hamilton
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