Zhong v Ong

[2017] NZHC 3242

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-002996 [2017] NZHC 3242

BETWEEN

TING LONG ZHONG

Plaintiff

AND

MICHAEL ONG First Defendant

STANLEY SHING LOO Second Defendant

Hearing:	On the papers
Judgment:	19 December 2017

JUDGMENT OF COURTNEY J [No 3: Division of Proceeds]

This judgment was delivered by Justice Courtney on 19 December 2017 at 4.00 pm

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date………………………

ZHONG v ONG & OR [2017] NZHC 3242 [19 December 2017]

[1]      In my judgment of 5 July 2017 I dismissed Mr Zhong’s claim for damages against Mr Ong and also his claim for an order that he be paid $676,201.01 from the proceeds of sale of a property that the parties co-owned.1  Neither party had sought an order as to how, in the event of Mr Zhong’s claim failing, the proceeds should be divided. The most I could do in that regard was make the following finding:2

They held equal shares and in my view it was implied that they would be joint and severally liable for the expenses, including the bank loan, entitled to share equally in the rental income, entitled to receive their respective equity contributions (Mr Zhong $168,000 and Mr Loo $72,000) from the proceeds of sale and would be equally entitled to the remaining balance.

[2]      There is now in excess of $970,000 being held in a solicitor’s trust account. In order to address the question of how those funds should be divided the parties were permitted to amend the pleadings and file further evidence. It was subsequently agreed that I would determine the issue on the papers.

[3]      It is agreed that the parties made unequal equity contributions and that those contributions should be paid out of the proceeds. There is disagreement as to how the expenses and liabilities should be dealt with. Over the course of ownership Mr Zhong paid $72,806.94 for expenses and liabilities connected with the property and Mr Loo

$175,581.50. The parties (through their respective accountants) have taken slightly different approaches to the problem of division of these amounts.

[4]        Mr Maitland, who provided evidence for Mr Loo, approached the task by identifying  the  parties’ respective  net  contributions  by  way  of  both  equity  and expenses and considered that these (slightly unequal) figures should be paid out to each of Mr Zhong and Mr Loo with the balance divided equally.

[5]      Mr McQuaid, who gave evidence for Mr Zhong, also apportioned the equity contributions but he simply added the expenses and liabilities together and treated the total as being equally divisible.  I do not accept that this is the appropriate approach. Where the parties have made unequal equity and expense contributions they should

each be entitled to have those respective figures paid out and the balance remaining

1      Zhong v Ong [2017] NZHC 1537.

2      At [49]

divided equally.   That is the effect of my judgment and I accept Mr Maitland’s evidence that this is the usual commercial practice.

[6]      There is one remaining issue.  In my judgment I treated Mr Zhong’s equity contributions as $48,000 and $120,000, the latter figure being based on Mr Zhong’s own statement in evidence.   However, Mr Maitland has pointed out that the bank statement showing the relevant deposit was for a figure of $123,000. Mr Maitland had prepared his initial calculation on the basis that the additional $3,000 was to be credited to Mr Zhong and I accept, in the circumstances, that is appropriate.

[7]      I therefore direct that the balance currently held be divided in accordance with Mr Maitland’s schedule MM1 to his affidavit of 17 November 2017 and that any monies accumulated in excess of the amount that existed when he prepared that

evidence be divided equally between Mr Zhong and Mr Loo.

P Courtney J