Yue v Zhou
[2023] NZHC 1157
•17 May 2023
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
https://IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-001756
[2023] NZHC 1157
UNDER the Property (Relationships) Act 1976 BETWEEN
WEIHANG YUE
AppellantAND
XIN ZHOU
First Respondent
WEN ZHOU
Second Respondent
Hearing: 16 March 2023 Counsel:
D Zhang and E Tie for Appellant MJ Hodge for First Respondent
AH Brown and G Zhang for Second Respondent
Judgment:
17 May 2023
JUDGMENT OF DOWNS J
This judgment was delivered by me on Wednesday, 17 May 2023 at 11 am pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors/Counsel:
Advent Ark Lawyers, Auckland. K3 Legal Ltd, Auckland.
MJ Hodge, Auckland.
YUE v ZHOU [2023] NZHC 1157 [17 May 2023]
A relationship property appeal
[1] Xin Zhou (Bonnie) and Weihang Yue (Tony) married in 2011.1 They lived in an apartment on Hobson Street bought by Tony’s parents.2 In May 2015, the couple moved into a home in Blockhouse Bay.3 Blockhouse Bay was registered in the couple’s names, but the fruit of a project of Wen Zhou, Bonnie’s father. In 2017, Bonnie and Tony divorced. Thereafter, they contested relationship property in the Family Court. Judge J G Adams found:4
(a)Bonnie and Tony held Blockhouse Bay on trust for Mr Zhou.
(b)Tony’s parents owned a half-share in the apartment, and Tony owned the other half share.
(c)Tony’s half-share was subject to s 11(1)(a) of the Property (Relationships) Act 1976, and Bonnie was therefore entitled to a quarter of the proceeds from the sale of the apartment.
(d)Most of the funds in Tony’s bank accounts were advances from his parents and not intermingled, and therefore not relationship property.
(e)The parties’ car was worth $34,000, and Tony must account for half.
(f)The engagement ring given by Tony to Bonnie was her property, and Tony took the ring when he left New Zealand. He therefore had to account for its value ($6,000).
[2] Tony appeals every finding except (d). On his behalf, Mr Zhang says the most important issues are twofold:
(a)Who is the “true owner” of Blockhouse Bay?
1 For ease of reference, I refer to the couple by their English names.
2 The apartment.
3 Blockhouse Bay.
4 Zhou v Yue [2022] NZFC 6946 [Family Court Judgment].
(b)Was a half-share of the apartment relationship property?
[3] In relation to both, Tony contends the Judge erred. He argues the evidence warrants conclusions Tony owns Blockhouse Bay, not Mr Zhou, and the apartment was not relationship property. Bonnie and her father contend otherwise.
Principles on appeal
[4] The appeal is brought under s 39 of Property (Relationships) Act and is by way of rehearing.5 The Supreme Court’s decision in Austin Nichols & Co Inc v Stichting Lodestar applies.6 So, the appellant must demonstrate the Family Court erred or persuade this Court to a different conclusion from that below.7
[5] Mr Zhang offered wide-ranging observations about appellate impeachment of credibility determinations, citing those of Kirby J in State Rail Authority of New South Wales v Earthline Constructions Pty Ltd.8 These do not require analysis because Kirby J also emphasised appellate Courts must continue to respect “the advantages enjoyed by the trial judge”.9 Furthermore, Austin Nichols makes clear credibility determinations attract “customary caution”,10 but are amenable to review. The respondents did not argue otherwise.
Background
[6] What follows here is a précis only; additional background is provided, as needed, throughout.
[7]In 2001, Tony came from China to New Zealand to study.
[8] In 2006, Tony’s parents bought the apartment for him to live in. The apartment was registered in Tony’s name.
5 District Court Act 2016, s 127.
6 Austin Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
7 At [4].
8 State Rail Authority of New South Wales v Earthline Constructions Pty Ltd [1999] HCA 3, (1999) 160 ALR 588 at [68]–[93].
9 At [89].
10 Austin Nichols & Co Inc v Stichting Lodestar, above n 6, at [13].
[9]Bonnie and Tony met during 2011.
[10] In December 2011, they married. Bonnie moved into the apartment, as did her parents.
[11]In 2013, Bonnie and Tony had a son.
[12]In May 2015, Bonnie, Tony, and their son moved into Blockhouse Bay.
[13]Bonnie and Tony began looking for another property for their family.
[14] Tension arose between Bonnie and Tony—and between the two sets of parents—in relation to financial matters. Tony’s parents considered they and Bonnie’s parents should provide the couple ongoing financial support. Bonnie’s parents considered the couple should have financial support through inheritance; that is, once the parents had died. A WeChat message from Tony to Bonnie on 30 October 2016 is illustrative:
I beg you to think about it again, have your parents already given us the money? In their minds, they would be the one who have and manage the money. They always say they will give you the money in the future, in the future, in the future, Really? Don't forget you still have a sister who also can get division of the money. At the same time, what my parents are doing? They keep sending money to New Zealand for us. Yes, that money gives me to manage it now. You might say you haven't even touched the money, but haven't we spent it already? So now if you want to compare, you can see the differences. Your family keeps cheating you by making excuses of the property, but my family has already sent us money.
[15] Bonnie’s position became unenviable. Her loyalty was divided between her husband and his parents, and her own parents.
[16] On 16 November 2015, Bonnie transferred $250,000 from her father’s bank account, which she operated, into her bank account with Tony. Mr Zhou did not authorise the transaction. When he learned of it, he threatened to involve Police. Tony’s father then drafted an agreement, which I call the draft 2015 agreement, purporting to allow the couple all but $50,000. Mr Zhou refused to sign it, and the money was later returned.
[17] On 10 May 2016, Tony’s mother slapped Bonnie, and prevented her from leaving Blockhouse Bay with their son.
[18]In June 2016, Tony and his parents returned to China.
[19]Bonnie visited twice, hoping to reconcile:
(a)She first went in August 2016. There, with Tony’s assistance, Bonnie prepared a letter of apology for her parents-in-law.
(b)In January 2017, Bonnie returned to China. Tony served her with divorce papers in China.
Blockhouse Bay
[20] Blockhouse Bay was purchased in 2013 as part of a project by Mr Zhou. Mr Zhou and his friend, Xinhe Lin, had identified the land in 2012. Mr Zhou and Mr Lin intended to buy it, subdivide, build, then live there as neighbours. Mr Zhou and Mr Lin agreed their children would borrow to fund the purchase price of $926,000 and the titles would be in the children’s names. However, after Mr Zhou paid the deposit of $92,600, Mr Lin had to withdraw from the project for personal reasons. What happened thereafter is captured by the Judge’s description of funding arrangements:11
In broad terms, Blockhouse Bay was funded in the following manner. Kun Zhou (Mr Zhou’s older daughter) sold Harbutt Avenue on 17 August 2012, yielding $354,387 for her father. Mr Zhou paid the Blockhouse Bay deposit of $92,600. In July 2013, Mr Yue and Ms Zhou obtained a mortgage advance of $660,000 on the security of Blockhouse Bay. Part of the loan was retained to service it. On 18 November 2014 and 15 December 2015, Mr Yue drew down a total of $207,606.40 on the existing facility registered against the apartment. Again, a portion was set aside to service the borrowing. Because of delay in Mr Zhou accessing funds from a sale in Otorohanga, Mr Yue contributed sums from his parents’ funds under his control: $50,000 on 24 March 2015 and $20,000 on 28 March 2015. The borrowings were repaid from sales of 236B ($550,000 on 26 August 2015) and 236A ($515,000 on 28 August 2015). Mr Yue accepted that $133,964 was refunded to his parents. Mr Yue accepted that sums were refunded to him.
11 Family Court Judgment, above n 4, at [78]–[79] (footnotes omitted).
Rui Gao had raised a mortgage on Thompson Street, Otorohanga to provide funds for the project. When Thompson Street sold for $263,874 in 2014, a little over $250,000 went to repay that mortgage. Sunset Road, Otorohanga (in name of other son-in-law Jie Zhang) sold in September 2015, the funds of
$269,953 were paid into Ms Zhou’s bank account for her father. (This was the deposit that tempted Ms Zhou and Mr Yue to take the $250,000.)
[21] In the Family Court, Tony said: (a) he drove the project; (b) he did so on the understanding he would own Blockhouse Bay; and (c) he contributed some of the finance, again on the understanding he would own Blockhouse Bay. However, in evidence-in-chief and under cross-examination, Tony abandoned a key aspect of (c), in that he accepted all of his contributions towards Blockhouse Bay had been repaid by Mr Zhou by the end of August 2015.
[22] Mr Zhou said once Mr Lin withdrew, the project was his alone. Mr Zhou said Bonnie and Tony provided “bridging finance”, which was repaid from the proceeds of the sale of the other two sections and of an unrelated property he owned in Ōtorohanga, registered in Rui Gao’s name. Ms Gao is Mr Zhou’s niece. Mr Zhou acknowledged Tony and Bonnie were occasionally called upon to help with the project but said that was because he does not speak English.
[23] The Judge rejected Tony’s account and accepted Mr Zhou’s. The Judge concluded everyone intended Blockhouse Bay was Mr Zhou’s property, and Tony and Bonnie therefore held Blockhouse Bay on trust for him. The Judge identified 10 features of the evidence, which I call planks, consistent with Mr Zhou’s account, inconsistent with Tony’s evidence, or both.
[24] Mr Zhang says Tony no longer advances proposition (a); in other words, Tony now accepts Mr Zhou did drive the project. However, Mr Zhang contends the Judge nonetheless erred in finding Tony and Bonnie held Blockhouse Bay on trust for Mr Zhou, because Tony’s contributions, while repaid, were needed to buy the land and complete construction. Mr Zhang also emphasises the responsibility Tony and Bonnie assumed by having Blockhouse Bay, and a loan, in their names. Under the banner of those submissions, Mr Zhang identifies alleged errors in the planks of reasoning identified by the Judge for accepting Mr Zhou’s account and rejecting Tony’s.
[25]The argument is best addressed plank by plank, then in the round.
The removal of $250,000
[26]The Judge said this about the removal of $250,000 belonging to Mr Zhou:12
On 16 November 2015, Ms Zhou and Mr Yue jointly stole $250,000 from an account Ms Zhou operated for her father. Ms Zhou made the transfer. Initially, Mr Yue denied involvement. She claimed he persuaded her. She said they went together to get it. They both made gestures to joint responsibility. She accepted she “stood side by side with your husband and took the blame”. He said he “was aware” of the action and she agreed with him. It seems plain that they presented jointly immediately thereafter in attempts to persuade Mr Zhou to let them keep the money. Although Mr Yue tried to distance himself from this action, he accepts he knew about it and I find they did it together. Their wrongdoing was discovered promptly because although Mr Zhou may not understand English, he can read figures. He was furious.
Why would they do such a mad thing? The clues reveal themselves in later family discourse. Plainly, they desired property that Mr Zhou held. At 16 November 2015, Mr Yue was the registered owner of the apartment worth about $600,000. Mr Yue and Ms Zhou were also the registered owners of Blockhouse Bay, a property worth perhaps $1.6 million. On Mr Yue’s litigation stance, they had achieved the Blockhouse Bay property without incurring any resultant debt. Their joint implication in this act is incongruent with Mr Yue’s litigation stance. If they believed that they had no beneficial rights to Blockhouse Bay, as Mr Zhou contends, their envious action makes more sense.
When Mr Zhou ordered them to return the money immediately, he strengthened his urgency by stating he needed to pay $50,000 for an uncle in China. The young couple attempted to bargain with him to let them keep
$200,000. He did not agree. He demanded that Blockhouse Bay be transferred to him.
[27] Mr Zhang says these observations wrongly imply Tony acknowledged involvement in the removal of the money, whereas Tony never accepted involvement:
The Judge said that Tony “initially” denied involvement, was aware of the money being taken, that Tony had made a joint gesture of responsibility, and that “Bonnie [agreed] with him”.
….
To say Tony “initially denied involvement suggests that he later accepted involvement. But Tony never had. He has always maintained that the taking of the $250,000 was Bonnie’s idea. His accepting that he knew Bonnie intended to and did take the $250,000, without more, does not elevate Tony’s role into involvement. Neither did Tony ever say that Bonnie “agreed” with him. The evidence which the judge refers to does not constitute acceptance or admission by Tony that he pressured Bonnie, or that she agreed with him. In fact, Tony explicitly rejects that proposition.
12 Family Court Judgment, above n 4, at [45]–[47] (footnotes omitted).
[28] I accept the Judge’s reference to Tony “initially” denying involvement could be read as implying Tony later acknowledged involvement. However, when the Judge’s remarks are read overall, it is clear he recognised Tony denied being responsible of the removal of the money.
[29] The issue then becomes whether it was open to the Judge to find Tony had been involved in the money’s removal, despite his denial, as a plank in the reasoning in relation to Blockhouse Bay. At least three points support Tony’s involvement in the removal of the money. First, there was plentiful evidence Bonnie was under pressure from Tony and his parents to obtain money from her parents. Second, Tony’s father created the draft 2015 agreement shortly after the money was taken, an agreement in which all but $50,000 would remain with the couple. Third, Tony stood to benefit from taking the money.
[30] Mr Zhang also contends the Judge’s reliance on the taking of the money “is somewhat circular”:
With respect, the Judge’s reasoning on this point is somewhat circular. His Honour said that Tony/Bonnie desired 236C BHB. In other words, they knew they had no interest in 236C BHB, but they wanted one. But because they had no interest in 236C BHB, they conspired to steal $250,000 from Wen instead. Their theft of $250,000 is consistent with, and thus proof of their belief that they had no interest in 236C BHB.
[31] This submission overlooks the obvious. Bonnie and Tony removed a large amount of money from Mr Zhou’s account without his consent, and then tried to keep most of it. That they did so implies they were anxious about money, a stance inconsistent with them being the true owners of a valuable Auckland property.
The draft 2015 agreement and WeChat messages between Tony and his mother
[32]These planks are considered together because of Mr Zhang’s argument.
[33] Mr Zhou found out about missing funds within three days of their transfer. He demanded the money be returned. Initially, Bonnie refused. Tony’s father then prepared the draft 2015 agreement. By it, the couple would keep $200,000; Mr Zhou would be repaid $50,000; Tony would transfer his registered interest in
Blockhouse Bay to Bonnie (as will be recalled, he and Bonnie were on the title); the property would be sold in two years’ time; and the proceeds would go to Mr Zhou.
[34]About this, the Judge said:13
... These terms fit with my understanding of the involvement of the Yue family behind the scenes. My understanding of these tensions is confirmed by congruent behaviours that form part of this narrative. Although Mr Yue and his mother attempted to frame the November 2015 agreement as their attempt to resolve a problem between their daughter-in-law and her father, I, like Mr Zhou, recognise it as their family desire to extract funds from Mr Zhou. I do not regard the term whereby Mr Yue relinquished his interest in Blockhouse Bay as being more than administrative; it does not appear to me to be a solid part of the bargain. In other words, I do not read this document as representing that Mr Yue was making a substantive claim to Blockhouse Bay at that time.
[35] Mr Zhang submits this reasoning is wrong when the draft 2015 agreement is read with WeChat messages between Tony and his mother, Ms Chi. The messages are not dated. The Judge dated them to 2016, but their content is consistent with them being made in late 2015, more specifically November that year.
[36]An excerpt of the messages reads:
Tony: Please fellow [sic] this idea to write that [Bonnie] doesn't want to give up the property rights
Ms Chi: [Voice]
Tony: Please be careful with the wording, [Bonnie] have questions for the word I have wrote [sic].
Ms Chi: [Voice]
Ms Chi: Why don’t you give up the property right now? After sold, you will give up everything what’s the point?
Ms Chi: ??
Tony: You won’t understand, [Bonnie] does not know the situation, she still had fantasies.
Ms Chi: I really cannot understand.
Tony: I am sure we won’t sign today. It’s just an intention.
13 Family Court Judgment, above n 4, at [53] (footnotes omitted).
[37] Mr Zhang contends the reference to giving up the property is consistent with Tony and Bonnie being the real owners of Blockhouse Bay.
[38] I disagree. The messages are Delphic; even when read with the draft 2015 agreement, they disclose no obvious claim by Tony to Blockhouse Bay.14 Furthermore, Mr Zhou successfully demanded the money be returned by the couple.
[39] The Judge considered the WeChat messages showed Tony and his mother acting “in concert to obtain an outcome beneficial to the Yue family interests”.15 That interpretation is just as apt to the applicable timeframe (late 2015).
Email to Nelson Wang of 18 November 2015
[40]This plank is best introduced in the Judge’s own words:16
Mr Yue was concerned about tax implications if they immediately transferred Blockhouse Bay to Mr Zhou. On 18 November 2015, he emailed an accountant, Nelson Wang. The email reads:
Re: New Tax Rule Dear Nelson Wang,
1. I have received and read your documents, and I expect your analysis and instructions on my case.
2. I bought an apartment in 2006 and moved out in May 2015. If I sell this property, it should not be taxed.
3. Our parents bought a second property in our name in June 2013. Split it into three pieces with titles around August 2015. Sold two of them, and kept one for house construction. We moved into this house in May 2015. If we change the property owner or sell it now, shall we pay taxes? If we change the property owner to our parents, what will be the impact on us? Since we cannot live with our parents for a long time, we plan to move out of this second property and purchase another one. If the owner name of the second property is not changed, what impact will it have on the purchase of the third property? Up to 70% loan. What else impact will there be on buying a house? Will it be determined that the second property is our investment house and other income taxes will be charged to us? Shall be taxes paid based on our wage income?
In addition, if the husband and wife buy a house separately, will some tax be avoided?
14 Bonnie signed the draft 2015 agreement but said she did not discuss it with Tony before doing so. Bonnie was not cross-examined on why her name would remain on the title under the draft 2015 agreement.
15 Family Court Judgment, above n 4, at [66].
16 At [48]–[49] (footnotes omitted).
Sincerely, Yue Weihang
Mr Yue’s email to Nelson Wang was sent near midnight, two days after the
$250,000 theft. Mr Yue wanted advice on tax implications if he sold the apartment, and if they transferred title to Blockhouse Bay to Mr Zhou. The email discloses “Our parents bought a second property in our name [sic] in June 2013.” I read “our parents” in that sentence as reference to Mr Zhou and his wife. No suggestion has been advanced that Mr Yue’s parents were stakeholders in the Blockhouse Bay project. In this context, I find that Mr Yue wrote this letter on behalf of himself and his wife jointly. In this chapter of the narrative, they were operating in concert.
[41] Mr Zhang contends the email was inadmissible because of s 54 of the Evidence Act 2006, which confers a privilege in relation to confidential communications with a legal adviser, made for the purpose of obtaining legal advice. The Evidence Act defines, exhaustively, a legal adviser as a lawyer;17 a registered patent attorney; or an overseas practitioner, in turn defined as an Australian lawyer or:18
a person who is, under the laws of a country other than New Zealand or Australia, entitled to undertake work that, in New Zealand, is normally undertaken by a lawyer or a patent attorney
[42] The submission suffers an elementary difficulty. Mr Wang is an accountant, not a legal adviser. Mr Zhang argues s 54 nonetheless applied because Tony believed Mr Wang was a legal adviser. Even if this were true, a point that need not be explored, the situation would still fall beyond the clear language of the Act, which it is not open to me to rewrite.
[43] Mr Zhang also contends the email did “not disclose strong support” for Mr Zhou’s narrative as Bonnie told Tony to refer to Blockhouse Bay as Mr Zhou’s property in the email. The submission misses the force of the Judge’s point, which was that the email, on its face, undercuts Tony’s case in relation to Blockhouse Bay, as the email appeared to acknowledge Mr Zhou owned Blockhouse Bay.
[44] Timing supports that conclusion. Tony sent the email within days of the withdrawal of the $250,000 belonging to Mr Zhou. Furthermore, it is not clear how
17 Evidence Act 2006, s 51(1).
18 Section 51(1)(c).
misrepresenting the ownership of Blockhouse Bay would help Tony. Tony was presumably seeking to gain accurate advice from Mr Wang, advice necessarily based on information he provided.
The #78 property agreement
[45]This plank is also best introduced by the Judge:19
On 2 May 2016 (only days before the incident and subsequent separation), Mr Yue, his parents, and Ms Zhou signed what is known as the “#78 property agreement.” It discloses a plan for buying a property. The property was not purchased. The address is not material: all that is recalled is that it was #78 in an Auckland street. The text of the document reads:
Contributive Fund Agreement for Purchasing #78 Property
1. Yue Jianping, Chi Xiaroan, Yue Weihang and Zhou Xin agreed to co- purchase the #78 Property.
2. The total fund for the purchase is estimated to be 1.3 million (among which
1.2 million is for the purchase of the property, 100,000 is for subdivision)
3. Yue Jianping and Chi Xiaroan contribute approximately 1 million (the sale proceeding of the city apartment, 630,000; Cash 290,000; purchase of part of the construction material and furniture from China, 80,000). Yue Weihang and Zhou Xin provide a long term loan of 300,000 (estimated repayment in 5-7 years). Yue Weihang and Zhou Xin promise to pay 30,000 per annum (for repayment of the loan interest and part of the capital). Yue Jianping and Chi Xiaroan promise to pay 30,000 – 40,000 per annum for repayment of the capital.
4. Yue Weihang and Zhou Xin provide a short-term loan as revolving fund for constructing the new house, the interest of which shall be calculated as the cost of the construction. The sale proceeding of the existing house and the rental income shall be used as funds to construct the new house.
5. All four persons shall abide by the above agreement to ensure timely implementation of the purchase and construction.
The agreement reflects the continuing discourse between the signatories about acquiring a home for the young couple, with ownership shared with Mr Yue’s parents. The #78 project would require $1.3 million. The capital was to be sourced from sale of the apartment ($630,000), cash from Mr Yue’s parents ($290,000), a loan (I assume a mortgage) to be obtained by Mr Yue and Ms Zhou ($300,000), and Mr Yue’s parents would provide $80,000 worth of materials and furniture from China. There is no suggestion that Blockhouse Bay was regarded as a financial resource for this project. This document is congruent with the proposition that neither Mr Yue nor Ms Zhou believed they had any right to Blockhouse Bay despite their registration on the title.
19 Family Court Judgment, above n 4, at [54]–[56] (footnotes omitted).
Ms Zhou says she only signed a blank page, that she was unaware of the contents of the document. I am not willing to accept her evidence on that point. In many instances, I prefer her evidence to that of Mr Yue but I do not find her utterly reliable at all points. As will appear, her track record has been “wobbly” as she has been pulled between competing loyalties. I find she did sign the “#78 property agreement.” For the purposes of this section of my judgment, that document is notable for the absence of any indication that Mr Yue (and Ms Zhou) were beneficial owners of Blockhouse Bay. I shall later discuss this document further in relation to the apartment.
[46] Mr Zhang contends clause 4 of the #78 property agreement, which says “the sale proceeding of the existing house and rental income shall be used as funds to construct the new house”, implied Blockhouse Bay was the property to be sold. Mr Zhang observes Tony said as much during re-examination.
[47] The last aspect is important. Tony did not make the point in evidence-in-chief, or under cross-examination. He raised it, for the first time, in re-examination. Furthermore, Bonnie was not cross-examined on this point, notwithstanding an obligation to do so.20 These aspects deprive the submission of any force.
30 October 2016 WeChat message and the November 2016 agreement
[48]These planks are also assessed together because of Mr Zhang’s argument.
[49]On 30 October 2016, Tony sent this WeChat message to Bonnie:
I beg you to think about it again, have your parents already given us the money? In their minds, they would be the one who have and manage the money. They always say they will give you the money in the future, in the future, in the future, Really? Don’t forget you still have a sister who also can get division of the money. At the same time, what my parents are doing? They keep sending money to New Zealand for us. Yes, that money gives me to manage it now. You might say you haven’t even touched the money, but haven’t we spent it already? So now if you want to compare, you can see the differences. Your family keeps cheating you by making excuses of the property, but my family has already sent us money.
[50] The Judge considered the message provided support for Mr Zhou’s case as it revealed Tony’s frustration at the lack of financial support from Bonnie’s parents.
20 Evidence Act, s 92.
[51] In November 2016, Tony presented Bonnie with an agreement treating Blockhouse Bay as their property. Blockhouse Bay was then worth approximately
$1.6 million. Bonnie signed the agreement 23 November 2016.21 She was in
New Zealand, Tony in China.
[52] The November 2016 agreement provided Blockhouse Bay would be sold, and the proceeds divided in two. $800,000 would go into the couple’s joint account, and the other $800,000 would go into Mr Zhou’s account (the account was in Bonnie’s name).
[53]The Judge said this about the November 2016 agreement:22
I find that by October 2016, Mr Yue’s family had decided that Blockhouse Bay was worth about $1.6 million, and that, if Ms Zhou was to be allowed to reconcile with Mr Yue, her family would have to contribute half of the value of Blockhouse Bay. In other words, I find that she was presented with a financial price to achieve her desire for reconciliation. Ms Zhou said: “After I met the respondent and his mother [in August 2016] the respondent’s mother told me if I want the respondent come back to me and my children [sic], if I wanted to maintain this marriage, my parents had to take out $800,000.” Mr Yue’s message to her on 9 October 2016 is congruent. For example: “I will tell you my request one last time, what I want now is that your family to give you the money to sustain our marriage… So the total is $800,000… This is the best solution and there are no other options!!!”
The Judge also said, “I find Mr Zhou was unaware of the proposition”, presumably meaning Mr Zhou was unaware of the November 2016 agreement.
[54] Mr Zhang contends the Judge misapprehended the 30 October 2016 message and November 2016 agreement because material information was excluded from evidence. On the last day of the trial, Mr Zhang sought to adduce WeChat messages between Tony and Bonnie on or about 7, 25 and 30 November 2016. Those on or about 7 November appear to be the most important, and read:
Tony: If yes we can discuss again.
Bonnie: I just want to get my hands on the 800,000, then the three of us unite as a family. I personally have no issues.
Tony: I will draft the agreement, will send it to you to review in a few days.
21 November 2016 agreement.
22 Family Court Judgment, above n 4, at [64] (footnotes omitted).
Tony: I am just worried that your father will look for trouble again.
Bonnie: My father has just two demands, one is adding his account number to the contract, which we have agreed. The other is that the 800,000 goes into my personal account. With regards to the transfer to my personal account, what do you think can be done about it?
Bonnie: If these two conditions are satisfied my father will definitely not cause trouble. I can be sure of this.
[55]The Judge excluded the evidence for lateness.
[56] Mr Zhang contends the excluded evidence calls into question the Judge’s reasoning in relation to the two planks, especially as the WeChat messages on or about 7 November 2016 imply Mr Zhou did know about the November 2016 agreement, contrary to his evidence.
[57] Again, I disagree. First, the excluded evidence confirms $800,000 was the price of reconciliation, a price Bonnie was seemingly prepared to pay: “I just want to get my hands on the 800,000, then the three of us unite as a family”. Second, Mr Zhou was not a party to the messages so Bonnie’s references to him, including as to his “demands”, do not address Mr Zhou’s denial of knowledge of the November 2016 agreement. Third, it is entirely plausible Bonnie might have been less than accurate about her father’s position in her communications with Tony; she had, after all, withdrawn $250,000 from her father’s account, absent his consent, in the hope of meeting Tony’s expectations and those of his parents. All of which is to say, the excluded evidence tends to support the Judge’s reasoning, not undermine it.
[58] For completeness, no error arises in relation to the Judge’s decision to exclude the evidence. The evidence was not discovered until day seven of the trial, its final day. No explanation was provided beyond Mr Zhang had only just received the evidence from Tony. Admission would have required Bonnie and her father to have been recalled for further cross-examination. As will be apparent, the evidence did not advance Tony’s case.
Other submissions
[59] Mr Zhang advanced other submissions directed at Bonnie’s credibility. It is not necessary to address these because the Judge did not accept everything Bonnie said. Indeed, the Judge described Bonnie as “wobbly”.23 Furthermore, the real contest in relation to Blockhouse Bay was not between Tony and Bonnie, but between Tony and Mr Zhou.
[60] Mr Zhang was also critical of Mr Zhou’s credibility. He placed great weight on the fact Mr Zhou defrauded Work and Income New Zealand, or WINZ, about which the Judge said this:24
For completeness, I note the tenancy agreements. While living at the apartment, Mr Zhou (as tenant) signed a tenancy agreement with Mr Yue, thereby supporting Mr Zhou to obtain a WINZ benefit. Later, a similar agreement was signed in relation to Blockhouse Bay between Mr Zhou (as tenant) and Mr Yue and Ms Zhou (as landlords). The agreement in relation to Blockhouse Bay was backdated to 1 October 2013, long before the property was inhabitable. I find that Mr Yue filled out the forms because Mr Zhou was unable to do so. Nonetheless, I find they both knew the import of what they were doing. I find that these documents were false, fraudulently designed by all parties to enable Mr Zhou to secure a WINZ benefit for which he declared that he owned no property. Whether the benefit funds were paid into the household I do not know. The tenancy agreements demonstrate the pragmatism and opportunism of the parties. The tenancy agreements also demonstrate cavalier and casual approaches by all parties to documentation.
...
Mr Zhou and Mr Yue pointed the finger at each other about the tenancy agreements. I find they are both complicit in the falsity and the resultant fraud on WINZ.
[61] Mr Zhou’s fraud does not alter the calculus, as on the Judge’s findings, Tony was also involved in that fraud and does not contest that. Furthermore, Mr Zhou’s account was consistent with:
(a)The evidence of Mr Lin, with whom Mr Zhou was to originally develop Blockhouse Bay. Mr Lin’s account was not challenged in cross-examination.
23 Family Court Judgment, above n 4, at [77].
24 At [69] and [74] (footnotes omitted).
(b)The evidence of Jie Yao, a real estate agent. Mr Yao sold the two sections arising out of the Blockhouse Bay development. Notably, Mr Yao said he reported to Mr Zhou, not Tony.
(c)Mr Zhou’s broader business practices concerning realty, about which the Judge said:25
Mr Zhou, who impresses me as an entrepreneurial person with a roving interest in property, provided a detailed narrative that was supported by his old friend Xinhe Lin. Mr Zhou already owned properties in New Zealand, typically placing them in the names of various relatives. For example, his first property in Richardson Road was registered in the name of his daughter Kun Zhou; she later became sequentially registered owner of his substitute properties at Koromiko Street and Harbutt Avenue. Her husband Jie Zhang was registered owner of Mr Zhou’s property in Sunset Close, Otorohanga. Mr Zhou was personally registered as owner of his Thompson Street, Otorohanga property until he needed to raise finance on it, so he then transferred it to his niece Rui Gao. Mr Zhou was unable to raise a mortgage personally despite his obvious resourcefulness and (disguised) property ownership
Assessing the submission in the round
[62] I return to Mr Zhang’s overarching submission, which is that the Judge erred in finding Tony and Bonnie held Blockhouse Bay on trust for Mr Zhou, because Tony’s contributions, while repaid, were needed to buy the land and complete construction. Mr Zhang emphasised the responsibility Tony and Bonnie assumed by having Blockhouse Bay, and a loan, in their names. Mr Zhang said Tony and Bonnie agreed to these responsibilities believing Blockhouse Bay would be theirs. Mr Zhang said the taking of the loan was a contribution in itself: Tony put himself at risk by having a mortgage over the property, which he emphasises was in the couple’s names. Mr Zhang says the Judge’s explanation this was done as a matter of family duty is “unrealistic”.
[63] The decisive question is what the parties intended in relation to Blockhouse Bay. The Judge concluded they intended Blockhouse Bay was Mr Zhou’s, albeit with associated tension about the couple’ s financial needs and how these were
25 Family Court Judgment, above n 4, at [25] (footnotes omitted).
best met. I am not persuaded the Judge erred in reaching this conclusion. Indeed, no other conclusion was reasonably available on the evidence for six reasons.
[64] First, by the end of August 2015, every dollar of Tony’s contributions to Blockhouse Bay had been repaid. It follows Tony’s claim to be the true owner cannot turn on financial contributions beyond the transitory, as there are none. As Ms Brown observes on behalf of Mr Zhou, the significance of this point cannot be overstated. After all, Tony claims to be, with Bonnie, the true owner of a property worth
$1.6 million.
[65] Second, the transitory nature of Tony’s contributions is consistent with them constituting “bridging finance”, not more. That, of course, is how Mr Zhou treated them.
[66] Third, Tony’s involvement with Blockhouse Bay arose by chance. Mr Zhou called on Tony to help only after Mr Lin withdrew from the project for personal reasons. As will be recalled, Tony did not challenge Mr Lin’s evidence.
[67] Fourth, Bonnie and Tony lived at Blockhouse Bay rent-free. This aspect underscores the familial nature of the arrangements. It also addresses Mr Zhang’s criticism Tony (and Bonnie) would not have assumed legal ownership of Blockhouse Bay and responsibility for the loan unless they actually owned Blockhouse Bay.
[68] Fifth, Mr Zhou has a pattern of placing property in others’ names. Blockhouse Bay accords that pattern.
[69] Sixth, Tony’s claim has changed throughout the case. Tony initially told the Family Court that Mr Zhou had not repaid some of his contributions towards Blockhouse Bay. Tony resiled from this contention during testimony. Tony also told the Family Court he drove the Blockhouse Bay project. The Judge rejected this contention. Tony now acknowledges Mr Zhou drove the project. These changes reveal Tony’s case as elastic. Indeed, Mr Zhang’s submissions oscillated between
describing Tony as the “true owner” of Blockhouse Bay, and him having a discrete interest in Blockhouse Bay, according to his (repaid) contributions.
[70] For completeness, Mr Zhang argues Telford v Telford is analogous.26 In that case, the defendants obtained a loan in relation to the property, which was also in their names. One of the defendants worked extensively on the property. I held the defendants had a 27 percent interest in the property. I also held the defendants’ obligations in relation to the loan were relevant to the quantification of that interest.27
[71] That aspect of the case is distinguishable, in that it reflected particular facts. The plaintiffs accepted the defendants had an interest in the property; the only issue was quantification. Moreover, I made clear in Telford the decision was factual, and no point of principle arose.28
The apartment
[72]Two issues arise in relation to the apartment: beneficial ownership and use.
Beneficial ownership
[73] The apartment was in Tony’s name but bought by his parents. The Judge’s decision conveniently provides the background:29
The apartment was purchased in October 2006 when Mr Yue was a student in Auckland. The purchase price was $322,000 which was paid by a deposit of
$87,000 and a Westpac mortgage loan of $235,000. Mr Yue’s parents paid the deposit and subsequently made payments to reduce, and eventually repay, the mortgage by August 2011. I find the apartment was substantially acquired by funds provided by Mr Yue’s parents.
When Mr Yue and Ms Zhou moved to Blockhouse Bay, the apartment was rented out and the rent was paid into their joint account. Body corporate fees were paid from that account.
After separation, the apartment was sold for $620,000.
26 Telford v Telford [2022] NZHC 1412.
27 At [37].
28 At [71].
29 Family Court Judgment, above n 4, at [100]–[102] (footnotes omitted).
[74] Tony produced an agreement, ostensibly dated July 2006, between himself and his parents. In short, the agreement said the apartment was theirs. The Judge set out the text of the July 2006 agreement:30
Party A: Jianping Yue, Xiaoran Chi (Parents) Party B: Weihang Yue (Son)
In order for it to be convenience for Jianping Yue and Xiaoran Chi (the parents) to go to New Zealand to live there or settle there permanently, Jianping Yue and Xiaoran Chi (Party A) have decided to purchase a small house in Auckland, New Zealand. And in 2006, [the parents] firstly sent 90 thousand (NZD) to Party B as a deposit for purchasing the house. The remainder will be paid by the Son through a mortgage. All payments for this property (including all related costs) will be Party A’s responsibility. Later, Party A will send [the money] to Party B, in succession, to use for repaying the mortgage interest and principal until all the mortgage is paid off,
Party A (Parents) have the total ownership of this house.
Party B (Son) can live in this property long-term until the time he has the means to be able to buy a house of his own and then move out.
This agreement has two copies, one for each party. Party A (Signature) Jianping Yue, Xi
Party B (Signature) Weihang Yue
[75] The Judge noted the July 2006 agreement came as “news” to Bonnie,31 and Tony had not mentioned its existence to others in circumstances calling for its mention:32
I find Mr Yue did not inform any bank or other third party that his parents had an interest in the apartment. In November 2015, when he sought advice (on behalf of himself and his wife) from accountant Nelson Wang about tax implications of rearranging ownership, he wrote, plainly: “I bought an apartment in 2006 and moved out in May 2015. If I sell this property I should not be taxed.” This representation is congruent with his having beneficial ownership.
Although Ms Chi (Mr Yue’s mother) suggested that Ms Zhou’s apology letter handed to her in August 2016 contains an admission that the apartment belongs to Mr Yue’s parents. I am unable to find any such implication in it.
I find that Mr Yue never told Ms Zhou that his parents had any interest in the apartment. Unless she tacitly admitted otherwise by signing the #78 property
30 Family Court Judgment, above n 4, at [105].
31 At [104].
32 At [106]–[109] (footnotes omitted).
agreement a few days before separation, she had every reason to believe its ownership lay with him. That said, she must have been aware that he could not have afforded to buy it without his parents’ substantial assistance. In a familial sense, she should have been aware that he owed duties to his parents because of their support.
Although Mr Yue instructed solicitors to pay the sale proceeds of the apartment into his parents’ bank account, when he enquired about tax liability in July 2016, he stated “I own this apartment since year 2006.”
[76] The Judge also noted no agreement like the July 2016 agreement existed in relation to a property belonging to Tony in China, “even though that property has been similarly purchased with parental contribution and bank borrowing”.33
[77]The Judge concluded the July 2006 agreement was:34
... a sham. I think it is more likely to have been produced by Mr Yue’s parents and Mr Yue to shore up their defence to Ms Zhou’s attack on the apartment which they had never anticipated might be partly lost through divorce proceedings. As a close-knit trio, they left Ms Zhou, returned to the apartment and left New Zealand soon after. Mr Yue sold the apartment soon thereafter but was delayed in removing the proceeds because Ms Zhou obtained a freezing order.
[78] The Judge found Tony had a half-share in the beneficial ownership of the apartment, and his parents had the other half-share.
[79] Mr Zhang submits the Judge erred in relation to this finding because there was inadequate evidence to conclude the July 2006 agreement was a sham, especially given the serious nature of that conclusion. Mr Zhang said the apartment’s distinctive treatment is explicable as Tony’s parents contributed several hundreds of thousands of dollars towards it and New Zealand is a foreign country to them; they put less money towards Tony’s home in China and it is their home.
[80]I note:
(a)Bonnie did not know about the July 2006 agreement until the relationship property dispute; Tony had not said anything about it.
33 Family Court Judgment, above n 4, at [111].
34 At [118].
(b)No independent evidence exists to show the July 2006 agreement came into being then.
(c)Tony’s email to Mr Wang, the accountant, is contrary to the July 2006 agreement. In that email, Tony said, “I bought an apartment in 2006”.
(d)Tony did not disclose the July 2006 agreement to the bank when obtaining a loan in relation to the apartment.35
(e)No written agreement exists in relation to Tony’s home in China, despite apparent similarities between its funding arrangements and those in relation to the apartment.
(f)The couple paid expenses in relation to the apartment and collected associated rental income while living at Blockhouse Bay.
[81]All of these features support the Judge’s conclusions, which are unremarkable.
[82] This leaves one aspect in relation to ownership: the #78 agreement. The relevant aspect of it provides:
[Tony’s parents] contribute approximately: 1 million (the sale proceeding of the city apartment, 630,000; Cash 290,000; purchase part of the construction material and furniture from China, 80,000).
The implication is that the apartment belonged to Tony’s parents.
[83] Bonnie said she did not sign the #78 agreement; she said she signed a blank page. The Judge did not accept her testimony on that point.36 However, the Judge rejected the contention the #78 agreement demonstrated the apartment belonged to Tony’s parents because of the circumstances in which it was made.37
35 Ironically, Mr Zhang cross-examined a witness at trial on the importance of disclosure of true ownership to a bank.
36 Family Court Judgment, above n 4, at [56].
37 At [113] and [117].
The #78 agreement was drafted by Tony’s father two weeks before Bonnie and Tony separated. The Judge said:38
I have already found that, when Ms Zhou signed the #78 property agreement (days before separation), the Yue family were well engaged in negative rhetoric about the Zhou family (especially about Mr Zhou). Her interests were to please her in-laws and to further the prospect of she and her husband achieving a bigger home because the apartment was too small. The #78 property agreement sketched a prospective plan of action in relation to a property that was ultimately not pursued. Within the dynamics of the Yue family, I do not think Ms Zhou would have argued with her in-laws about the ownership of the apartment, even if she noted that implication in the agreement. I do not think that would have been her focus in respect of this proposal. Its thrust advanced her interests; I do not think she would make waves unnecessarily. I acknowledge that this is a reconstruction, but it fits with my understanding of the parties and their circumstances at the time. I find it is the probable scenario. Accordingly, I read little into the allegation that her signing the #78 property agreement amounts to a firm concession on her part.
In his interlocutory decision discharging the freezing order, Muir J placed some emphasis on the #78 property agreement. Undoubtedly, it should have been disclosed in Ms Zhou’s application for a freezing order. Nonetheless, as I observed earlier, I am better placed to assess its import.
I have formed the view that Mr Yue and his parents form a close-knit cluster in which retention of “their” property became a keen focus immediately the marriage seemed to be foundering. They departed Blockhouse Bay, returned to the apartment, left New Zealand, and promptly sold the apartment. In relation to his parents’ reaction to the 10 May 2016 incident, Mr Yue said: “I felt very guilty for having placed them in this situation in the first place. I decided that as a son I owe it to them to take care of them and give them some warmth. We left for China on 19 June 2016.”
Mr Yue’s mother swore an affidavit and was cross-examined. I am distrustful of the evidence both of Mr Yue and his mother. In respect of the Blockhouse Bay property, I find that Mr Yue has tried to construct a case out of lies. His representations about that property until about October 2016 are at odds with his later claims. His mother operated covertly with him to seek a financial deal out of Ms Zhou (and, through her, her father). She was avoidant under cross-examination and, although Mr Zhang persuaded her, in re-examination, to answer the question she tried to avoid, I have an impression that she is manipulative and untrustworthy. These features bear on my assessment of the July 2006 document.
If there were no familial nuances to this situation, I would hold that Mr Yue had the beneficial ownership of the apartment. I find that the only contra- indicator available to Ms Zhou would be if she drew an inference from the term of the “#78 property agreement” that indicated Mr Yue’s parents were contributors of the apartment. That said, her lens is not the lens through which this matter must be determined. I infer that she would not have raised the issue, if she noticed it as pertinent. They were meeting as a family group to
38 Family Court Judgment, above n 4, at [113]–[117].
find a way to achieve a bigger property for her and Mr Yue. In the context, she would defer to the older generation. I do not count her having signed the #78 property agreement as a weighty concession.
[84] Mr Zhang submits the Judge erred to reach this conclusion. He contends the #78 agreement is an accurate depiction of the way the Yue family treated the apartment, and Bonnie’s signature demonstrates she acknowledged that view. He says the Judge was wrong to find she did not speak up to appease Tony’s parents, particularly as Bonnie never claimed that; again, she said she signed a blank document.
[85] The #78 agreement was never implemented; as the Judge observed, it “sketched” a possible plan that did not come to pass. So, its value in this context is not as great as might have been the case had it been implemented. That said, the #78 agreement appears to imply the apartment belonged to Tony’s parents. As against this, the Yue family had an apparent habit of creating imaginative agreements to support their financial designs. The Judge was therefore entitled to look beyond the face of the document to attendant circumstances. They revealed the #78 agreement was prepared just two weeks before the relationship ended. Moreover, the Judge was steeped in the idiosyncratic behaviours of the parties, and these are difficult to reconstruct on the written record alone. As Kirby J emphasised in the case cited by Mr Zhang, appellate Courts must continue to respect “the advantages enjoyed by the trial judge”. Two other aspects are important. First, other evidence, as to which see [80], implied the apartment belonged to the couple. Second, the Judge concluded Tony owned a half-share, and his parents owned the other half-share. That there were crosscurrents in the evidence is thus unsurprising.
[86] For these reasons, I am not persuaded of error or to a different view. In short, it was open to the Judge to conclude an inference that might otherwise be available from the #78 agreement should not be drawn having regard to the totality of the evidence.
Use as family home
[87] A family home is deemed to be relationship property no matter when acquired.39 The concept is defined this way in the Property (Relationships) Act:
family home—
(a)means the dwellinghouse that either or both of the spouses or partners use habitually or from time to time as the only or principal family residence, together with any land, buildings, or improvements appurtenant to that dwellinghouse and used wholly or principally for the purposes of the household; and
(b)includes a joint family home.
[88]Fitzgerald J summarised applicable principle in F v F:40
(a) The use of the words “habitually” and “from time to time” indicates that a house can be classified as a family home even if it is not in constant use as the family residence.
(b) The word “use” in the definition is not necessarily synonymous with “occupy”, although that may commonly be the case.
(c) There is no minimum threshold of activities required before a house will qualify a “family residence”. The concept is a matter of common sense and the inquiry in each case will be intensely fact specific.
The words “wholly or principally” give rise to a question of degree; the true test being “for what purpose are the dwellinghouse and land principally used.”
And as to the application of the [statutory] definition:
(a) First, there is no “onus of proof” on any party to establish that a particular property is, or is not, a family home. Rather, the issue is one of classification, which requires the court to be satisfied that a particular state of affairs exists.
(b) Second, there cannot be more than one family home at any time.
(c) Third, there need not be a family home in every case.
(d) Fourth, where a relationship has ended, and where the classification of property depends upon its use, that classification is to be determined on the basis of the use to which the property was being put before the relationship ended. This point is particularly important in the present case, and will be discussed in some detail below.
39 Property (Relationships) Act, s 8.
40 F v F [2017] NZHC 1450 at [19]–[20] (footnotes omitted).
(e) Finally, the fact that a house has been used as a family home at an earlier point in time does mean that the house will retain that character and receive classification as a family home under the Act. If a house ceases to be the family home before a relationship ends, its classification will revert to the status it would have had at the time the relationship began.
[89] Judge Adams found the apartment was still used as a family home despite the family moving to Blockhouse Bay. Tony and Bonnie were planning to buy a larger home using proceeds from the apartment’s sale and did not have a beneficial interest in Blockhouse Bay. The apartment’s use as a family home was therefore not spent. The Judge considered F v F analogous:41
I find that the circumstances of this family are analogous to the parties in F v F. I find that they moved out of the apartment into Mr Zhou’s Blockhouse Bay property as a stop-gap measure while they looked to buy a property using the apartment sale proceeds. This state of affairs reflects in the 2015 agreement, the #78 property agreement, and other signs of ongoing searches for a bigger residence. The use of the apartment as family home was not spent before separation. Accordingly, Mr Yue must account for his beneficial one half of the sale proceeds (namely $310,000 as at August 2016).
[90] Mr Zhang submits this conclusion is wrong because when the family moved to Blockhouse Bay, Blockhouse Bay became their only residence. The couple did not intend to return to the apartment; they were planning to purchase a larger home. Therefore, the apartment’s use as the family home was spent. Mr Zhang argues the case is distinguishable from F v F.
[91] In F v F, the couple lived in the property for eight years, then moved into rental accommodation (in another town) less than a year before separating. Fitzgerald J found the parties had not decisively parted with the property. The couple let the property and there remained a strong possibility they would move back in. The Judge therefore concluded the property remained the family home.
[92] Unlike F v F, Bonnie and Tony did not intend to return to the apartment. Rather, they intended to sell the apartment and buy a larger home for their family, using the proceeds from the sale. In this respect, F v F presents as a clearer example
41 Family Court Judgment, above n 4, at [131].
of a family home retaining that character. Does it follow then the apartment was no longer the family home?42
[93] In this area, everything turns on the facts, a point Fitzgerald J also made.43 As to those, Tony and Bonnie moved to Blockhouse Bay, where they lived rent free, while they let the apartment. During this reasonably brief period (of approximately a year), the couple received rental income from the apartment, and paid expenses in connection with it. The couple intended to sell the apartment and use the proceeds to buy a bigger family home. Blockhouse Bay was thus a convenient, intermediate step, not more. In light of all this, I consider the couple continued to use the apartment as the family home prior to their separation; it did not lose its character as that by the mere fact the couple were temporarily living elsewhere, rent-free, until buying another home.
[94]Anticipating this reasoning, Mr Zhang contends Thompson v Thompson
precludes it:44
In Thompson v Thompson [2000] NZFLR 161, the parties had occupied a Titirangi property, owned by the husband prior to their marriage. The property was sold in 1996, and the sale proceeds were advanced to trustees of a family trust which purchased another property at Tiroroa Avenue, Te Atatu South. The parties held a life interest in the Tiroroa property. Potter J … conclud[ed] that the Titirangi property ceased to be the matrimonial home and reverted to being the husband’s separate property. The parties must have contemplated that the Titirangi property would be used to acquire the Tiroroa property; but that did not convert the Titirangi proceeds into relationship property. In our submission, intention to sell severs the family home connection; on the other hand, intention to use sale proceeds, absent actual sale, falls short of making the property relationship property.
[95] Thompson v Thompson is consistent with my analysis. It too reflects particular facts, including that the family home (in Titirangi) had been sold before the relationship ended. A portion of the sale proceeds reverted to being the husband’s separate property. However, another portion was advanced as a loan to a trust. The trust purchased a home for the family. The Court held the debt owed by the trust was
42 The apartment was sold after the relationship ended.
43 F v F, above n 40, at [30] and [37].
44 Thompson v Thompson [2000] NZFLR 161.
relationship property as it was purchased for the common use and benefit of both husband and wife.45
Value of the Honda CRV
[96] Mr Zhang disputes the Judge’s $34,000 valuation of the couple’s 2010 Honda CRV. Tony said he sold the car in July 2017 for $8,000. Mr Zhang argues
$15,000 is a realistic valuation.
[97]As Mr Hodge observes on behalf of Bonnie, the argument is:
... whether the date of valuation of the vehicle should be on the parties separation (s 2G(2)) or the date of the hearing (s 2G(1)). Given the vehicle was a depreciating asset which Ms Zhou did not get the benefit of after separation, it is submitted that separation date is preferable. On that basis
$34,000 is a reasonable valuation.
[98]I agree with Mr Hodge.
Engagement ring
[99] Mr Zhang submits the Judge was wrong to find Tony took the engagement ring when he returned to China. Mr Zhang offers no argument about the facts concerning the taking of the ring. Rather, he says there are difficulties with Bonnie’s credibility generally, such that the Judge should not have believed her about the ring.
[100] This submission amounts to one that Bonnie’s testimony is worthless. The Judge did not adopt this absolutist position. There is no reason for me to do so either.
Funds in bank accounts
[101] Bonnie said if the Court concluded a half-share in the apartment was not relationship property, she would invite reconsideration of the Judge’s conclusion in relation to funds in bank accounts. As will be apparent, the issue does not arise.
45 Thompson v Thompson, above n 44, at [45].
Summary
[102] The Judge did not err in concluding the couple held Blockhouse Bay on trust for Mr Zhou. As I have explained, no other conclusion was reasonably available on the evidence.46 The Judge did not err either in relation to the apartment, car, or ring, and I have not been persuaded to a different view in relation to any of this property. The Judge’s determinations therefore endure.
Result
[103]The appeal is dismissed.
Costs
[104] The respondents are entitled to costs, in relation to which I anticipate agreement. Failing that, the parties may file submissions of not more than six pages each according to this timetable:47
(a)Tony, on or before 21 June 2023.
(b)Bonnie and Mr Zhou, on or before 5 July 2023.
……………………………..
Downs J
46 See [63]–[69] above.
47 To avoid doubt, the submissions may address the stay application(s) in this Court.
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