Angered
by a handshake deal that went sour, an Auckland property developer threatened
his business associate with an axe.
Civil action in the courts is the better way to settle disputes said
Justice Fogarty, awarding $507,000 damages against the business associate for
deceit.
The High Court was told property
developer Tom Peng flew into a rage after losing money advanced to associate
Richard Li for a property development planned for the Auckland suburb of Epsom. Mr Li claimed the payment was agreed
compensation for his failed investment in a fitness centre. Mr Peng denied there was any such deal for
compensation.
The two men had a history of business
dealings having co-operated on a series of Auckland property developments
between 2010 and 2012. The projects
turned a profit. Deals were done on a
handshake; there were no written agreements.
According to Mr Peng, another project was suggested by Mr Li in April
2012. Mr Li’s Epsom neighbour was
recently widowed and looking to sell. If
Mr Peng were to put up $507,000 cash to buy out the neighbour Mr Li said he
would put his adjoining property into the pot and the two sites could be
amalgamated and redeveloped.
Evidence was given that Mr Peng handed
over $507,000 borrowed from Kookmin Bank, thinking this gave him a 35 per cent
stake in the Epsom redevelopment. Learning later that Mr Li had no intention of
proceeding, Mr Peng armed himself with an axe purchased from the Warehouse and
threatened his business associate in an attempt to get a written acknowledgement
that the $507,000 paid was a debt due. A
brawl followed with Mr Li left bruised and bleeding.
In the High Court, Mr Li said the
$507,000 payment had nothing to do with an Epsom property redevelopment; it was
payment to buy out his interest in a business called Harbour Fitness. Mr Li had put in $400,000 and was promised a 24
per cent return, the same as promised earlier to Mr Peng. Mr Peng lost $900,000 when Harbour Fitness
failed. Mr Li alleged that Mr Peng had
agreed to compensate him for his $400,000 lost.
It was to come out in evidence that Mr
Li’s Harbour Fitness investment was funded in large part by his brother then
living in China. His brother emigrated
to Canada during 2012 and the $507,000 received by Mr Li from Mr Peng was used
to repay the brother and help pay the cost of setting up in Canada.
Justice Fogarty ruled there was an
agreement to develop the Epsom properties and the $507,000 paid by Mr Peng was
part of this project. While Mr Li initially
may have intended to proceed with the project, he was liable for deceit in
later diverting the funds and denying any existence of the prior agreement, His
Honour said.
Peng
v. Li – High Court (24.09.15)
15.108