Zeng v Cai - [2018] NZHC 2548

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-002012

[2018] NZHC 2548

BETWEEN
JIANQIANG ZENG

Plaintiff

AND

OU CAI

First Defendant

FANG LI
Second Defendant

ALEXANDER YUNXIAN CAI by his

litigation guardian PAUL JOHN DALE Third Defendant

Hearing: 3 – 5 and 14 September 2018

Appearances:

CJR Baird and AV Shinkarenko for Plaintiff

No appearance for First Defendant and Second Defendants PJ Dale and EA James for Third Defendant

Judgment:

28 September 2018

JUDGMENT OF DOWNS J

This judgment was delivered by me on Friday, 28 September 2018 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
Quinn Law, Auckland.
Neilsons Lawyers Ltd, Auckland. CJR Baird, Auckland.
AV Shinkarenko, Auckland. PJ Dale, Auckland.
EA James, Auckland. Copy to: First Defendant.

ZENG v CAI [2018] NZHC 2548 [28 September 2018]

The case

[1] In March 2010 in Auckland, Mr Jianqiang Zeng met Ms Ou Cai. The pair commenced an affair after Mr Zeng’s wife, Ms Jennifer Zhang, returned to China. The relationship lasted until December 2012, when Ms Zhang learned of it.1 Mr Zeng transferred more than $2.4 million to Ms Cai. Ms Cai used the money to buy apartments along with funds of her own; and then a home in Epsom.

[2] In the middle of all this, Ms Cai became pregnant to Mr Zeng and had a baby— Dahai. With Mr Zeng’s agreement, all five properties were to be placed in the name of Ms Fang Li, Ms Cai’s mother.2 As will be apparent, Ms Li contributed nothing to the purchases. She is elderly and lives in China.3

[3] Mr Zeng now sues. He advances no fewer than eight causes of action, including resulting trust, constructive trust, breach of a contractual “joint venture”, Pallant v Morgan equity,4 and the tort of deceit. This multiplicity of pleading adds nothing, save complexity. However, the core contention of Mr Zeng’s suit is ultimately simple: the home is beneficially his. So too—to the extent of his contributions—the apartments. Mr Zeng also claims his share of associated rental profit and other matters too. Events before and during trial are important, as the case was ultimately heard by formal proof.

Absent parties, settlement and formal proof

[4] Mr Zeng commenced his suit in 2014. Despite being served, Ms Li never appeared. Dahai did, through a litigation guardian appointed 27 June 2017.5 So too Ms Cai, at least for a time.

[5] Ms Cai had the same lawyers until the middle of 2016. She then dispensed with their services and continued with a case they had prepared: she and Mr Zeng were

1 The relationship was not in the nature of marriage; see [5].
2 I say “were to be placed” as one was not, at least for a three-month period. And, Ms Cai later sold that apartment.
3 As title holder, Ms Li is presumed to own the properties because of ss 35, 41 and 62 of the Land…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Zeng v Cai

Details

AGLC: Zeng v Cai [2018] NZHC 2548
Case: [2018] NZHC 2548
Decision Date: 28 September 2018

CaseChat Overview and Summary

In Zeng v Cai, the High Court of New Zealand was tasked with determining the ownership of various properties and financial contributions made by Mr. Jianqiang Zeng to Ms. Ou Cai during their relationship. The court heard the case through formal proof due to Ms. Cai's absence and refusal to participate in the proceedings. The central issue was whether Mr. Zeng was entitled to a beneficial interest in the properties and financial contributions he made to Ms. Cai.

The court found that Mr. Zeng had indeed made the financial contributions he claimed and that these contributions were used to acquire beneficial interests in certain properties. Specifically, Mr. Zeng held a 100% beneficial interest in one apartment and an 83.1% beneficial interest in another. However, his contributions did not reach two other apartments. Regarding the family home, Mr. Zeng held a 100% beneficial interest, with pre-settlement contributions forming a resulting trust and post-settlement contributions forming a constructive trust.

The court also determined that rental profits from the family home should be accounted for, but not from the apartments, as Mr. Zeng had not expressed a clear intention regarding the use of such profits. Additionally, personal items given by Mr. Zeng to Ms. Cai were considered gifts, and thus not subject to recovery. The court declined to address the tort of deceit and the award of compound interest, finding that the absence of Ms. Cai compromised the fairness of such determinations.

Ultimately, the court declared that Ms. Li, Ms. Cai's mother, held certain properties on trust for Mr. Zeng's benefit and ordered that Ms. Li and Ms. Cai account for the sale proceeds of one apartment and rental profit from the family home, along with interest. The court also ordered substituted service to ensure that the defendants could be properly notified of the proceedings and outcomes.

Orders