Yangtze Industrial Cooperation Ltd v Lee - [2024] NZHC 3552

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2837

[2024] NZHC 3552

IN THE MATTER
of the liquidation of Yangtze Industrial Cooperation Limited (in liquidation), Harbour Basin Investment Limited (in liquidation) and Nestling Limited (in

liquidation)

BETWEEN

YANGTZE INDUSTRIAL COOPERATION LIMITED (IN LIQUIDATION)

First Applicant/First Plaintiff

HARBOUR BASIN INVESTMENT LIMITED (IN LIQUIDATION)

Second Applicant/Second Plaintiff

NESTLING LIMITED (IN LIQUIDATION)
Third Applicant/Third Plaintiff

AND

MARTYN PAUL LEE

Respondent/Defendant

Hearing: On the papers

Counsel:

G Neil and M Tan for the Applicants/Plaintiffs

Judgment:

26 November 2024

JUDGMENT OF GORDON J

This judgment was delivered by me
on 26 November 2024 at 3 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors:
Meredith Connell, Auckland

YANGTZE INDUSTRIAL COOPERATION LTD (IN LIQ) v LEE [2024] NZHC 3552 [26 November 2024]

[1] The first, second and third applicants, Yangtze Industrial Cooperation Ltd (in liq) (Yangtze), Harbour Basin Investment Ltd (in liq) (Harbour) and Nestling Ltd (in liq) (Nestling), respectively (together, the applicants) seek freezing and ancillary orders under pt 32 of the High Court Rules 2016 in respect of property of the respondent Martyn Lee, who was a former director and shareholder of the applicants.

[2] The applicants also seek ancillary orders to require the production of financial statements for landholding and other companies of which Mr Lee is the director and shareholder. The applicants say this is to enable the equity position of those companies to be assessed and the value of Mr Lee’s shareholdings to be estimated.

[3] The application is made without notice pursuant to rr 7.23, 7.46 and 32.2(1) of the High Court Rules on the basis that proceeding on notice would cause undue delay or prejudice to the applicants.

[4] The application was filed together with a statement of claim, notice of proceeding, four affidavits, memorandum of counsel and an undertaking as to damages. One of those affidavits is from Jared Booth of Baker Tilly Staples Rodway Auckland Ltd, who is one of the two liquidators of the applicants.

The application

[5] The applicants seek a freezing order to prevent Mr Lee from disposing of, or otherwise dissipating the following property:

(a)Any funds held within any bank accounts in Mr Lee’s name or for his benefit.

(b)Any debts or other moneys that are payable to Mr Lee.

(c)Interests in three properties that are registered solely or jointly in his name. One of the three properties is presently listed for sale.

(d)100 per cent shareholdings in Neo-Concept Ltd (Neo-Concept), Bright-Fortune Trustee Ltd (Bright-Fortune), Grand Stations Ltd

(Grand Stations) and Dunkirk Development Ltd (Dunkirk). Neo-Concept owns properties in Orakei Road, Remuera.

(e)76 per cent shareholding in Metar Investment Ltd (Metar). Metar owns properties in Tennyson Avenue, Takapuna. These properties are advertised for sale.

(f)50 per cent shareholding in Matric Ltd (Matric). Matric owns property in Bracken Avenue, Takapuna. This property is advertised for sale.

[6] Mr Lee is the sole director of Neo-Concept, Bright-Fortune, Grand Stations and…

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.

Keep reading for free

Create a free CaseChat account to read Yangtze Industrial Cooperation Ltd v Lee and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2024] NZHC 3552
Decision Date: 26 November 2024

CaseChat Overview and Summary

The applicants, Yangtze Industrial Cooperation Ltd (in liquidation), Harbour Basin Investment Ltd (in liquidation), and Nestling Ltd (in liquidation), seek freezing and ancillary orders against Martyn Paul Lee, a former director and shareholder of the applicants, to prevent the dissipation of his assets. The applicants argue that Mr Lee has breached his fiduciary duties and seek to recover debts owed by the companies to Mr Lee, as well as damages for breaches of fiduciary duties. The Court was required to determine whether the applicants had established a good arguable case, identified assets to which the order could apply, and demonstrated a real risk of dissipation. The Court found that the applicants had established a good arguable case on all four causes of action, identifying assets to which the order could apply and demonstrating a real risk of dissipation based on Mr Lee’s conduct and the difficulty in locating him. The Court granted the freezing and ancillary orders, noting that the balance of convenience and overall justice supported the granting of the orders. The freezing order will expire unless renewed, and leave is reserved for Mr Lee to apply for a variation of the freezing order if necessary.

Orders