Zheng v Deng

The Court of Appeal of New Zealand recently handed down a decision in Zheng v Deng, a case that involved a complex web of business relationships and corporate structures between two individuals, Lu Zheng and Donglin Deng. The central issue in the appeal was whether a partnership existed between Zheng and Deng, and if so, what remained to be done to effect the separation of their business interests. The Court of Appeal allowed the appeal, finding that a partnership did exist between the two men, and that an account should be taken to determine the balances owing between the parties. The Court of Appeal set aside the High Court judgment in relation to Zheng's claims for a declaration of partnership and the consequential taking of an account, as well as Zheng's claim for a sum of $290,000 against Deng. The Court of Appeal held that the evidence, including internal accounts and the "Principles in Separation" document, established that Zheng and Deng were carrying on a property development and construction business in common with a view to profit, and that they had equal shares in that partnership. The Court of Appeal also held that the dismissal of Zheng's claim for $290,000 should be set aside to allow for the relevant payments to be taken into account in the course of taking an account as between the partners. The Court of Appeal remitted the proceedings to the High Court for the taking of that account, and ordered that any balance due to one party to the other should be paid accordingly. The Court of Appeal also set aside the costs order made in the High Court, with costs issues to be determined by that Court in light of the outcome before the Court of Appeal.