Wu v Chiu
[2021] NZHC 3577
•21 December 2021
NOTE: PURSUANT TO S 35A OF THE PROPERTY (RELATIONSHIPS) ACT 1976, ANY REPORT OF THIS PROCEEDING MUST COMPLY WITH SS 11B,
11C AND 11D OF THE FAMILY COURT ACT 1980. FOR FURTHER INFORMATION, PLEASE SEE
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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2021-404-001287
[2021] NZHC 3577
IN THE MATTER of the Property (Relationships) Act 1976 BETWEEN
JIAN WU
Appellant
AND
YU-JU NIKITA CHIU
Respondent
Hearing: 19 October 2021 Appearances:
D K Wilson for Appellant
N Malarao and E Hong for the Respondent
Judgment:
21 December 2021
JUDGMENT OF WOOLFORD J
This judgment was delivered by me on Tuesday, 21 December 2021 at 10:30am pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors: Henry Feng Lawyer, (H Feng), Auckland
Meredith Connell, (N Malarao and E Hong), Auckland
Counsel: D K Wilson, Auckland
WU v CHIU [2021] NZHC 3577 [21 December 2021]
[1] On 8 June 2021, Judge PS Ginnen delivered judgment in the Manukau Family Court in relation to the division of relationship property between the parties following their failed marriage.1 The husband, Jian Wu, now appeals against two of the findings by the Judge. Other findings are not contested.
Family Court hearings
[2] The Family Court takes an inquisitorial role in hearings under the Property (Relationships) Act 1976 (the Act). As noted by Fisher on Matrimonial and Relationship Property:2
[The Court] is bound to take each of the assets that has been put in issue, classify it under ss 8 to 10 and divide the result under ss 11 to 18C. In doing so, there is no general onus of proof on the applicant akin to that of a plaintiff in a proceeding. However, in certain specific areas an onus of proof is created either by express or implied statutory intention or because a party asserting an affirmative proposition risks failure if he or she fails to adduce evidence to support it.
[3] Fisher then lists 19 different matters as examples in respect of which positive evidence should be adduced if a party proposes to allege such matters exist, stating that “in these and other situations the proponent faces failure in the absence of positive evidence to support his proposition”.
Appeal jurisdiction
[4] The appeal is brought under s 39 of the Act. It is to proceed by way of rehearing. As appellant, Mr Wu bears the burden of satisfying this Court that the Judge’s decision is wrong and that it should be departed from on appeal.
[5] In determining the appeal, this Court can have regard to the particular advantages of the Judge at first instance. One of those advantages is hearing oral evidence and making an assessment of a witness’s credibility in circumstances where questions of fact are contested.
1 Chiu v Wu [2021] NZFC 5398.
2 RL Fisher (ed) Fisher on Matrimonial and Relationship Property (looseleaf ed, LexisNexis) at [19.27].
[6] An appellate court should exercise “customary caution” where the challenge is to credibility findings based on contested oral evidence. As stated by the Supreme Court in Sena v Police:3
[38] To the extent that Mr Jones’ first line of argument is based on the premise that the approach in Austin, Nicholls applies to appeals from judge- alone trials, as indicated above, we agree. If an appellate court comes to a different view on the evidence, the trial judge necessarily will have erred and the appeal must be allowed. But, to the extent that Mr Jones was suggesting that the role of an appellate court is to consider the issues de novo as if there had been no hearing at first instance, then we do not agree. Since it is an appeal, it is for the appellant to show that an error has been made. Further, in assessing whether there has been an error, an appellate court must take into account any advantages a trial judge may have had. Because of this, where the challenge is to credibility findings based on contested oral evidence, an appellate court will exercise “customary caution”. There are two main, overlapping, reasons for this.
[39] The first is that a slow-paced trial, at which the evidence emerges gradually, provides a good opportunity for evaluating the strengths and weaknesses of a case. In assessing the plausibility of what is said by the witnesses, the judge has the advantage of being also able to form a view as to what sort of people they are. This is an appreciable consideration despite the now well-recognised difficulties with demeanour-based credibility assessments.
[40] The second consideration, in effect the other side of the coin to the first, is that appellate judges dealing with a case on the basis of a written record of what happened at trial and the submissions of counsel are unlikely to be as well-placed as a trial judge to determine contested questions of fact based on contested oral evidence. For instance, what a witness means may be conveyed, at least in part, by gesture or intonation, something which will not be apparent on the written record. More generally, the appellate process in which appellate judges are taken, sometimes rather selectively, to the aspects of the evidence on which counsel rely does not replicate the advantages of a trial judge which we have just described.
Disputed findings
[7]Mr Wu disputes two findings of the Family Court Judge:
(a)Two properties at 4 and 6 Kiltole Drive, Flat Bush, or the proceeds of sale thereof, are relationship property and are to be split 50/50 between Mr Wu and his former wife, Ms Chiu.
3 Sena v Police [2019] NZSC 55, [2019] 1 NZLR 575 at [38] – [40].
(b)Two sums of $100,000 deposited into Mr Wu’s personal bank account on 13 and 18 February 2014 are relationship property and are to be split 50/50 between Mr Wu and Ms Chiu.
Kiltole Drive properties
[8]Mr Wu purchased the Kiltole Drive properties on 23 September 2015 for
$680,000 each. On 8 December 2015, he sold 4 Kiltole Drive by auction for $750,000 and used the proceeds to pay off his overdraft of $288,044 and repay his home loan of
$380,000. Mr Wu still owns 6 Kiltole Drive. He has used it to secure a loan to his company, Kai Di Architectural Design Limited, for the purpose of purchasing other properties at Thomas Road, Flat Bush.
[9] Mr Wu did not pay any money to purchase the Kiltole Drive properties. He purchased them from two old classmates from China, Ms Ling Jiang and Ms Yanmei Han, by executing deeds of debt for the full amount of the sale price.
[10] It is therefore Mr Wu’s position that the Kiltole Drive properties or the proceeds of sale thereof are not his, but belong to Ms Jiang and Ms Han.
[11] Mr Wu had powers of attorney from Ms Jiang and Ms Han dated 28 April 2008 and signed by them in the presence of a Remuera solicitor. The powers of attorney enabled Mr Wu to buy and sell property on their behalf and to operate bank accounts in New Zealand for them. On 9 October 2012, Mr Wu signed a sale and purchase agreement for 4 Kiltole Drive on behalf of Ms Jiang. Although there is no sale and purchase agreement for 6 Kiltole Drive in evidence, it is accepted that Mr Wu had signed a similar agreement for 6 Kiltole Drive on behalf of Ms Han. Using the powers of attorney, Mr Wu arranged for the payment of a deposit of $65,000 for each of the properties from bank accounts in the names of Ms Jiang and Ms Han respectively. Fourteen months later, and after title had been issued, the balance of the purchase price was paid from the classmates’ bank accounts.
[12] On 6 December 2013, the sum of $307,595 was paid from Ms Jiang’s bank account for settlement of her purchase of 4 Kiltole Drive. Again, although there is no
bank statement showing a similar payment from Ms Han’s account, it is accepted that Ms Han’s purchase of 6 Kiltole Drive was settled at the same time.
[13] The crucial issue at trial was where the funds to purchase the Kiltole Drive properties came from.
[14] Mr Wu had earlier exercised the power of attorney given to him by Ms Han to buy and sell three sections in Kildare Road, Flat Bush. On 18 May 2011, Mr Wu had arranged the payment of a deposit on the three sections of $108,000, being the GST payable on the purchases, from Ms Han’s account. The three sections were resold on the day of settlement, being 4 November 2011. A profit of approximately $150,000 was made on the resale.
[15] Even earlier, Mr Wu points to the deposit of $400,000 into Ms Jiang’s account and $200,00 into Ms Han’s account, both on 20 July 2009. This date was 15 months after Ms Jiang and Ms Han had executed powers of attorney in favour of Mr Wu and 10 months before Ms Han’s purchase of the 3 Kildare Road sections. Mr Wu was adamant that all the money in Ms Jiang’s and Ms Han’s accounts was their money and none of it was his. He says that the $400,000 deposited into Ms Jiang’s account on 20 July 2009 was sufficient in itself to fund the purchase of 4 Kiltole Drive in 2012, while the $200,000 deposited into Ms Han’s account on 20 July 2009, together with the profit of approximately $150,000 on the sale of the Kildare Road sections, was sufficient to fund the purchase of 6 Kiltole Drive.
Family Court decision
[16] After reciting the basic facts of the Kiltole Drive properties, the Judge referred to other activity in Ms Han’s bank accounts, which were apparently unrelated to property transactions. There were, she said, a number of significant transactions in Ms Han’s bank account between December 2009 and November 2010 before the purchase of the three sections in Kildare Road. Then, between August 2010 and July 2011 there were a number of deposits totalling $10,700 made into Ms Han’s bank account by three people - JH Jiang, J Guo and H Zheng - who appeared to be connected with Mr Wu’s previous professional practice, Master Architectural Design Limited.
The Judge found that Mr Wu was using Ms Han’s bank account to divert money that should have gone to Master Architectural Design Limited.
[17] As to the source of the funds required to purchase the Kiltole Drive properties, the Judge said one answer may be given with confidence: the funds did not come from overseas. None of the credits received in either of the women’s bank accounts show an overseas source. On the other hand, there was evidence of deposits sourced to Mr Wu. The purchase of the Kiltole Drive properties by Ms Jiang and Ms Han required each of them to pay a deposit of $65,000. These sums were paid into their respective bank accounts on Friday, 5 October 2012. Given that the exact same references were used in both bank accounts (“prepare for Monday”) and that receipts for the deposits were attached to papers held by Mr Wu, the Judge said one may safely conclude that he paid them.
[18] The Judge then referred to Mr Wu’s evidence that the titles to the Kiltole Drive properties were transferred to him because it was understood that Ms Jiang and Ms Han would not be able to be owners of real estate in New Zealand, as not credible. The Judge also noted that Mr Wu was not assisted by his failure to be forthright about the various transactions.
[19] The Judge also thought it significant that Ms Jiang had died in 2019 and said one would have thought that the beneficiaries in her estate would be clamouring for the proceeds of sale of 4 Kiltole Drive, being $680,000 plus interest, if this sum were in fact owed by Mr Wu. The Judge said that “silence … speaks volumes. Nothing is owed”. The Judge concluded that the powers of attorney, the agreements of sale and purchase entered into between Mr Wu and Ms Jiang and Ms Han and the deeds of debt were a sham. They did not evidence the true common intention of the parties to them. They did not intend to create any rights or obligations of the kind evidenced by the documents or at all. The Judge was of the view that Mr Wu’s actions were such a significant departure from the purported intent of the documents, that even if the documents were bona fide on inception (which was not accepted), that was no longer the case later.
Appellant’s submissions
[20] The appellant submits that the Family Court Judge erred in the following manner:
(a)The Judge did not make any assessment of where the sum of $600,000 credited to Ms Jiang’s account ($400,000) and Ms Han’s account ($200,000) on 20 July 2009 came from.
(b)Mr Wu did not pay the two deposits of $65,000 each for the Kiltole Drive properties.
(c)The Judge was incorrect to find that Mr Wu did not deny effecting various transactions in Ms Han’s bank account, but was unable to explain them.
(d)The deposits made into Ms Han’s bank account by JH Jiang, J Guo and H Zheng were not income derived from Master Architectural Design Limited.
(e)There is nothing improper about the powers of attorney in favour of Mr Wu executed by Ms Jiang and Ms Han.
(f)The deposit receipts from the bank which Mr Wu retained were not evidence that Mr Wu had deposited his own money into the bank accounts.
(g)The Judge had no basis for making the statement that the credits into the bank accounts of Ms Jiang and Ms Han did not show an overseas source.
Analysis
[21] As noted earlier, the crucial issue at trial was where the funds to purchase the Kiltole Drive properties came from.
[22] Mr Wu has lied about the properties. In an affidavit sworn on 1 April 2016, Mr Wu said that Ms Jiang and Ms Han were former classmates who had come to New Zealand and wanted to buy sections and build a house on each of them. He said that they did buy adjoining sections in East Tamaki and asked him to do the design work, but the houses were never built. He said the powers of attorney were given to him so that he could “do things on their behalf in relation to the two properties while they were back in China” and “all that has happened is that they bought the two sections and have remained as owners, on my understanding”. Mr Wu said, “I have no interest in any asset arising out of the material produced by the applicant [Ms Chiu]”.
[23] It cannot, however, have been Mr Wu’s understanding that Ms Jiang and Ms Han remained as owners because the Kiltole Drive properties had been transferred to him six months earlier, on 28 September 2015. Mr Wu also failed to mention that he had then sold 4 Kiltole Drive to a third party four months earlier, on 8 December 2015, with settlement two and a half months earlier, on 18 January 2016. Following settlement, Mr Wu then used the sale proceeds of $674,066 to pay off his personal overdraft of $288,044 and repay his home loan of $380,000.
[24] Counsel for Mr Wu candidly acknowledges that in a sense Mr Wu has been his own worst enemy in the way he has responded to Ms Chiu’s claim.
[25] Then, in an affidavit sworn three years later, on 18 July 2019, Mr Wu disclosed that Ms Jiang had died earlier that year and he was awaiting advice from China as to how the money he received from the sale of 4 Kiltole Drive was to be paid to the estate or family of Ms Jiang. Even then, Mr Wu makes no mention in this affidavit of his application of the sale proceeds of 4 Kiltole Drive to pay off or repay personal debt, which is inconsistent with him holding the proceeds for Ms Jiang’s estate or family. At trial, 20 months later, Mr Wu did not provide any evidence or correspondence with Ms Jiang’s family regarding the sale proceeds of 4 Kiltole Drive. There was also no application before me to adduce fresh evidence.
[26] In his 2019 affidavit, Mr Wu states the reason the Kiltole Drive properties were transferred to him was because it was understood that Ms Jiang and Ms Han would
not be able to be owners of New Zealand real estate. Again, this is wrong. At the time the Kiltole Drive properties were transferred to Mr Wu the Overseas Investment Act 2005 did not prevent foreigners purchasing residential land. The Act was amended three years later on 22 October 2018 to include residential land in the definition of “sensitive land”. However, these changes did not apply retrospectively. They only apply to transactions entered into after the changes came into effect. A legislative amendment three years later, which did not in any event apply retrospectively, cannot have been the reason for the transfer of the Kiltole Drive properties to Mr Wu.
[27] Mr Wu has not filed any affidavit evidence from Ms Jiang (in the three years between commencement of these proceedings in 2016 and her death in 2019) or Ms Han claiming that the funds in the bank accounts in their names were their own. Nor did Mr Wu arrange for production of a complete set of bank statements, notwithstanding that he had powers of attorney from Ms Jiang and Ms Han, which permitted him to operate their bank accounts in New Zealand. Ms Chiu produced some bank accounts which she had copied from records kept by Mr Wu at their home.
[28] In acknowledging that in a sense Mr Wu had been his own worst enemy in the way he has responded to this claim, counsel asked that it be noted that he has obviously been angered by the kind of allegations being made, including tax fraud and a mistress in China. Be that as it may, an inference was available that evidence from Ms Jiang and Ms Han would not have helped Mr Wu’s case. This was the approach adopted by this Court in Ithaca (Custodians) Ltd v Perry Corp,4 applying the rule in Jones v Dunkel:5
[151] In Jones v Dunkel, Windeyer J (at 321) approved of the following passage from Wigmore on Evidence (3ed), 1949 at 142, which he was said “plain commonsense”, as follows:
“The failure to bring before the tribunal some circumstance, document, or witness, when either the party himself or his opponent claims that the facts would thereby be elucidated, serves to indicate, as the most natural inference, that the party fears to do so, and this fear is some evidence that the circumstance or document or witness, if brought, would have exposed facts unfavourable to the party. These inferences, to be sure, cannot fairly be made except upon certain conditions; and they are also open always to explanation by circumstances which made some other hypothesis a more
4 Ithaca (Custodians) Ltd v Perry Corp [2004] 1 NZLR 731 (CA) at [151] – [154].
5 Jones v Dunkel (1959) 101 CLR 298 (HCA).
natural one and the party’s fear of exposure. But the propriety of such an inference in general is not doubted.”
…
[154] Where an explanation or elucidation is required to be given, an inference that the evidence would not have helped a party’s case is inevitably an inference that the evidence would have harmed it. The result of such an inference, however, is not to prove the opposite party’s case but to strengthen the weight of evidence of the opposite party or reduce the weight of evidence of the party who failed to call the witness.
[29] Turning to the particular errors alleged by the Family Court Judge, it is correct that the Judge did not make an express determination of the source of the total sum of
$600,000 deposited in the accounts of Ms Jiang and Ms Han on 20 July 2009. The Judge said:6
… It may be safely concluded that Mr Wu was instrumental in purchasing the Kiltole Drive properties in the name of Ms Jiang and Ms Han, but the source of the funds remains unexplained.
[30] However, I agree with counsel for Ms Chiu that it was unnecessary for the Court to analyse each and every transfer of funds into the accounts of Ms Jiang and Ms Han and satisfy itself as to the source of those funds. The Judge was entitled to conclude, based on all of the evidence and Mr Wu’s obvious lack of credibility, that he was not being truthful about his involvement with the bank accounts in the names of Ms Jiang and Ms Han or the properties that were purchased in the names of the two women. The Judge was entitled to conclude that Mr Wu operated the bank accounts as his own. His use of the proceeds of sale of 4 Kiltole Drive to pay off his personal indebtedness and repay his home loan is cogent evidence of Mr Wu treating the funds as his own.
[31] As to the payment of the two deposits of $65,000 each for the Kiltole Drive properties, the Judge said, “One may safely conclude that he [Mr Wu] paid them”. If the Judge meant that Mr Wu arranged for the deposits to be paid, then she was undoubtedly correct. But if the Judge meant that Mr Wu had deposited the two sums of $65,000 each to the bank accounts of Ms Jiang and Ms Han on Friday, 5 October 2012, from his own separate personal funds, then the Judge may well have been
6 Chiu v Wu, above n 1, at [9].
mistaken. Here, the Judge was hampered by Mr Wu’s failure to arrange for the production of a complete set of bank statements. It may well be the case that the two sums of $65,000 had their origin in separate savings accounts (with the same account number, but different suffixes) in the names of Ms Jiang and Ms Han. The Judge was, however, entitled to conclude that wherever they came from, Mr Wu treated the funds as his own.
[32] Most of the other errors alleged also relate to the operation of the bank accounts in the names of Ms Jiang and Ms Han. As to his perceived inability to explain various transactions in Ms Han’s bank account, Mr Wu maintains that such transactions must have been made by the women by internet banking from China. There is, however, no independent evidence led by Mr Wu about the nature of the accounts, who could operate them (apart from Mr Wu) and the meaning of the terminology used in the bank statements. The Judge did make a specific finding that the credits into the bank accounts of Ms Jiang and Ms Han “did not show an overseas source”. That much is true. If there was an overseas source, then it was not evident on the face of the incomplete set of bank statements produced by Ms Chiu.
[33] Mr Wu also maintained that the deposit receipts from the bank (which he retained and Ms Chiu copied) did not mean that he had deposited his own money into the bank account. Mr Wu said he went into the bank monthly and obtained such receipts to evidence transactions that had been made by the women over the internet. That explanation is, however, not credible. There were a number of deposits using a “Fastdeposit Bag” deposit with a specified number, which were inferentially made by a person attending the bank in person.
[34] The Judge also made reference to deposits made into Ms Han’s bank account by three individuals. One of those individuals was J Guo. On 22 September 2010, Mr Guo made five deposits of $1,000 into Ms Han’s bank account with the reference “Master”. Master Architectural Design Limited was the name of Mr Wu’s architectural design practice at the time. In his affidavit, Mr Wu denies that Mr Guo was a client of Master Architectural Design Limited and he suspected the reference to “Master” was just referring to Mr Guo as a young man. However, during cross- examination, Mr Wu said the reference to “Master” was not because he was a young
man, but suspects it was a reference to Mr Guo’s master’s degree. The Judge was entitled to conclude that such an explanation did not “ring true” and the funds deposited by Mr Guo should have gone to Master Architectural Design Limited.
[35] The Judge concluded that the powers of attorney, the agreements for sale and purchase entered into between Mr Wu and Ms Jiang and Ms Han and the deeds of debt were a sham. The powers of attorney are, however, not shams. They are witnessed by a Remuera solicitor and do not purport to evidence any particular transaction. They are commonplace and often granted to others for a myriad of reasons. The Judge characterised the sale and purchase agreements and the deeds of debt as shams because, in her view, Mr Wu was already the beneficial owner of the Kiltole Drive properties and did not owe any money to Ms Jiang and Ms Han. Mr Wu used their names to conceal his property deals. Notwithstanding that the bank accounts were in the names of Ms Jiang and Ms Han, he controlled the funds in the accounts, which he used for his own purposes.
[36] As noted earlier, as appellant, Mr Wu bears the burden of satisfying this Court that the Judge’s decision is wrong and that it should be departed from on appeal. Mr Wu has, however, not been able to satisfy me that the Judge’s characterisation of the Kiltole Drive properties as relationship property is wrong.
[37] The parties married on 17 September 2003. The transactions at issue occurred between 28 April 2008 when Ms Jiang and Ms Han signed powers of attorney in favour of Mr Wu and the present day. Mr Wu signed agreements to purchase 4 and 6 Kiltole Drive on 9 April 2012, 10 months before separation.
[38] It was the cumulative affect of all the evidence which enabled the Family Court Judge to displace Mr Wu’s evidence that the money was not his, but that of Ms Jiang and Ms Han. The following are all matters which support the conclusion that Mr Wu treated and continues to treat the money as his own:
(a)There is no independent or verifiable evidence from Ms Jiang or Ms Han about the origin of the money used by Mr Wu for various property transactions. In an affidavit dated 7 July 2020, Mr Wu annexes
what he says is an email dated 18 April 2009 from Ms Jiang in which Ms Jiang states:
Last time I heard that the price of land was between $350,000 and $400,000 NZ. If so, please deposit $400,000 NZ to me first, and I will give you RMB according to the exchange rate on that day.
The genuineness of this email was challenged at trial and Mr Wu no longer seeks to rely on the correspondence. The sum of $400,000 was deposited into Ms Jiang’s account on 20 July 2009, but the bank statement does not show an overseas source nor does Mr Wu explain how or in what way he was reimbursed in RMB if he had deposited the sum of $400,000 into Ms Jiang’s account as the email purportedly asked him to do.
(b)There were transactions in the bank account in the name of Ms Han, which were probably unconnected with Ms Han. I agree that Mr Wu’s suggestion that the reference to Master next to Mr Guo’s payment was intended to identify the payer either as a young man or as possessing a Master’s degree lacks credibility. It is much more likely to be a reference to Mr Wu’s architectural design practice called Master Architectural Design Limited.
(c)Mr Wu was heavily involved in administrating the bank accounts of Ms Jiang and Ms Han. He had a power of attorney to operate them and retained bank statements and withdrawal receipts. He also utilised Fastdeposit Bags to deposit funds into the accounts.
(d)The solicitors acting on real estate transactions in 2014 deposited the surplus from settlements into Mr Wu’s personal bank account and not into the bank accounts of Ms Jiang and Ms Han.
(e)When Mr Wu transferred the properties at 4 and 6 Kiltole Drive from Ms Jiang and Ms Han to himself in 2015, he signed a deed of debt for the entire purchase price, but did not execute or register a mortgage
against the title to the properties, thereby exposing the women to risk. The deed of debt to Ms Jiang reads:
Jian Wu borrows money $680,000 for the purchasing [sic] a piece of land at 4 Kiltole Drive, Flash [sic] Bush Auckland from Ling Jiang.
The interest depends on the bank interest at the time of repayment.
It is repayable on demand.
If Mr Wu holds the money on trust for Ms Jiang and Ms Han, as he says he does, then his actions in transferring the properties to himself without any security for the women are not those of a reasonable trustee.
(f)When Mr Wu sold 4 Kiltole Drive he did not use the sale proceeds to repay Ms Jiang, but instead used them to pay off his personal overdraft of $288,044 and repay his home loan of $380,000. Again, this is not consistent with his role as trustee. In his affidavit dated 19 July 2019, Mr Wu states:
My two friends wanted me to handle all their dealings with these properties and where appropriate hold the property in my name in trust for either one or other of them.
Mr Wu further states:
I’m continuing to hold the money from the sale, and I’m waiting advice from China as to how it is to be paid to her estate or family.
That is wrong. Mr Wu does not hold the money from the sale. Nor has he disclosed any “advice from China” in the more than two and a half years since Ms Jiang’s death.
Two sums of $100,000
[39] On 13 February 2014 the sum of $100,000 was deposited into Mr Wu’s bank account by “Fastdeposit Bag # 2719026”. At the time, the account had a balance of
$2,022.63. The sum of $100,000 was then withdrawn from the account on 14 February 2014, bringing the account back down to $2,022.63. The withdrawal had no narration.
[40] Then on 18 February 2014, the sum of $100,000 was deposited into the same account by “Fastdeposit Bag # 1408682”. The sum of $100,000 was then withdrawn on 20 February 2014, again bringing the account back down to $2,022.63. This withdrawal had the narration “Repayment”.
[41] Ms Chiu also produced a faint photocopy of a record of a foreign exchange transaction by Dong Ping Financial Limited, 312 Ti Rakau Drive, Botany, whereby
$100,000 was sold for RMB$512,500 on 17 February 2014. This date falls between the withdrawal of $100,000 from Mr Wu’s account on 14 February 2014 and the deposit of $100,000 into Mr Wu’s account on 18 February 2014.
[42] Stapled to the photocopy of the foreign exchange transaction record were two withdrawal receipts from Mr Wu’s account showing the withdrawal of $100,000 at
12.48 pm on 14 February 2014 and $100,000 at 1.07 pm on 20 February 2014. There is handwriting on the receipt dated 14 February 2014, which reads “(Repayment to Jun Luo)”.
[43] Mr Wu says that the funds deposited in February 2014 were from Jun Luo. Mr Luo lived in China and had sent him money for investment in property. Mr Wu says that there was, however, only one sum of $100,000. He says the bank made a “mistake” on the first transfer. It was not successful and so “it appears to have
$200,000, but it actually is just $100,000”. In any event, Mr Wu says he sent Mr Luo’s money back to him because the property market had changed “in just one or two days”.
[44] The crucial issue at trial was primarily where the funds deposited into Mr Wu’s account came from. Secondly, whether the sum credited and debited was $200,000 or
$100,000.
Family Court decision
[45] After reciting the basic facts of the deposits of $100,000, the Judge stated that there were difficulties in the way of accepting Mr Wu’s explanation. First, there was
no evidence of Mr Wu receiving funds for investment from Mr Luo in the first place. The words “Jun Luo” written on the ASB withdrawal slip dated 14 February 2014 proved nothing. If Mr Wu did not write them, the person who did undoubtedly recorded what Mr Wu told them to write. The other handwriting on the document, Mr Wu admits, is his.
[46] Secondly, the first debit withdrawal entered on the bank statement on 14 February 2014 is not a reversal, but a withdrawal for which ASB issued a withdrawal receipt dated 14 February 2014. Another was issued by ASB on 20 February 2014. So, there were two deposits and two withdrawals each of $100,000. Thirdly, Mr Wu’s payment of the equivalent of $100,000 to China is recorded on 17 February 2014, so it can only relate to the 13 February 2014 deposit and 14 February 2014 withdrawal, not the later 18 February 2014 deposit and 20 February 2014 withdrawal.
[47] Given Mr Wu’s unsatisfactory explanation for the transactions and the fact that they occurred a matter of months after separation, the Judge found that they involved money accumulated during the relationship between Mr Wu and Ms Chiu, and that Mr Wu was endeavouring to hide this money not only from IRD, but also from his wife. She found that Mr Wu had disposed of $200,000 relationship property post- separation and must now account to his wife for her share. The Judge directed that Mr Wu pay Ms Chiu $100,000 from his share of relationship property.
Appellant’s submissions
[48] The appellant submits that the Judge erred in finding that the sum of $200,000 was relationship property. Mr Wu’s clear evidence was that the money was not his but had been sent to him by Mr Luo for the purpose of investment in property. Mr Wu said that as the market had changed he sent the money back. He had written “(Repayment to Jun Luo)” in red on the withdrawal receipt, inferentially on the day it was issued, 14 February 2014.
[49] Furthermore, Ms Chiu was intimately familiar with Mr Wu’s architectural design practice, having worked with him in the business. She therefore knew their
income and expenditure and their investments, yet she was unable to point to a source for the $200,000 in any relationship property assets.
[50] The appellant submits that there was simply no evidence at all for the Judge to conclude that the $200,000 was money he accumulated during the relationship and was endeavouring to hide, not only from the IRD but also from his wife. Counsel submits that what seems to have happened is that the Judge has taken a very negative view of the appellant in relation to the property of the two women and has applied that to the issue of the $200,000.
Analysis
[51]In her first affidavit affirmed on 23 February 2016, Ms Chiu stated:
After we separated, [Mr Wu] withdrew a total of $200,000 from the Master Architectural Design Limited’s bank account […]. The withdrawals were made on 14th and 20th February 2014. Annexed and marked “S” are withdrawal receipts which show the funds were withdrawn and then exchanged by [Mr Wu] at the address 168 Whitford Road.
[52] The document annexed was a photocopy taken by Ms Chiu from financial records held at their home while the parties were both living there, although they may have been technically separated.
[53] Mr Wu responded in an affidavit dated 1 April 2016, saying he was unable to understand the claim and $200,000 had not been withdrawn from a company account. He asked Ms Chiu to clarify what she was seeking.
[54] Ms Chiu filed further affidavits dated 3 November 2017, 5 October 2018 and 14 August 2019, none of which referred to the sum of $200,000. Ms Chiu did not clarify what she was seeking.
[55] Mr Wu had, however, produced bank statements for several personal and company accounts in an affidavit dated 20 May 2020. Within this material were statements for Mr Wu’s ASB personal Omni account, which showed two deposits of
$100,000 and two corresponding withdrawals of $100,000. These were for the same account as the withdrawal receipts produced by Ms Chiu in her first affidavit.
[56] Counsel for Mr Wu advises that it was only in preparation for the Family Court hearing and receipt of Ms Chiu’s opening submissions that the appellant became aware that this claim was being pursued.
[57] The evidence at trial about these bank entries was relatively brief. Under cross- examination7 Ms Chiu said she knew nothing of the transactions. When questioned about the $100,000, she answered as follows:8
Q.Jian Wu says that his friend, Jun Loh, put $100,000 into his account for transfer to Chinese currency, 100 only. It was reversed and then a second payment was made. Do you have anything to suggest that that’s incorrect?
A.It is the money that he borrowed, why it is transferred out from the companies account I don’t know. There is no record. It is shown on his personal account. Actually I just wondering if, if his friend did (inaudible 14:31:32) just borrow him money and then as he like to return, how come he can’t use the architecture Master Architectural Design account to arrange the cheque and to say anything? Why he just translate straight away to his personal account, and until now he just make the explanation?
[58]Mr Wu gave brief evidence in chief9 and was cross-examined briefly.10
[59] The parties separated on 11 July 2013 although they were still living in their home for some time after that. The transactions at issue occurred between 13 and 20 February 2014, seven months after separation.
[60] With respect to the Family Court Judge, I am of the view there was insufficient evidence to displace Mr Wu’s evidence that the money was not his, but that of Jun Luo. In that regard, Ms Chiu’s claim that the money was relationship property fails because she has not been able to point to something in the evidence that supports her claim. She just does not know anything about the money.
[61]In reaching this assessment on appeal, I have regard to the following matters:
7 Court transcript, page 30 line three to page 33, line 33.
8 Court transcript, page 33 line one to line 13.
9 Court transcript, page 42, line eight to page 44, line seven.
10 Court transcript, page 95, line nine to page 97, line two.
(a)The limited nature of the transactions. There were just four transactions over a week, which may in fact have been just two – the deposit and withdrawal of $100,000 twice;
(b)Mr Wu has written “(Repayment to Jun Luo)” on one of the withdrawal receipts. There is also a corresponding purchase of $512,500 RMB for
$100,000 which is consistent with Mr Wu’s evidence that he was repaying money to Mr Luo in China;
(c)The transactions occurred seven months after separation. They were not ongoing for a number of years throughout the currency of the marriage as were the transactions relating to the funds eventually used to purchase the Kiltole Drive properties;
(d)Although Mr Wu did not lead any evidence from Jun Luo, Mr Wu’s evidence has not been shown to be false as it has been in relation to the Kiltole Drive properties;
(e)The initial vague evidence from Ms Chiu that Mr Wu had taken the money out of his architectural design practice was later unable to be verified; and
(f)The limited cross-examination of Mr Wu on the topic. Most of the cross-examination was whether there were two sums of $100,000 or whether it was the same sum transacted twice. There was very little cross-examination of Mr Wu about Mr Luo.
Result
[62]The appeal is allowed in part. The order that Mr Wu reimburse Ms Chiu
$100,000 for a half share of the post-separation disposition of $200,000 is quashed. It has not been shown to be relationship property. The orders for payment of half of the proceeds of sale of 4 Kiltole Drive and half the value of 6 Kiltole Drive to Ms Chiu remain.
[63]As a successful party, Mr Wu is entitled to costs on a 2B basis.
Woolford J
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