A
compulsive gambler at Sky City Casino complains she was manipulated by a fellow
gambler who kept extending credit, gradually racheting up the stakes with vague
threats of violence for non-payment, obtained a mortgage over her property to cover
further credit and then went for the kill, selling up her home. The High Court blocked a theatened mortgagee
sale pending a Credit Contracts Act inquiry.
Hanyue Xiao told the High Court what started
as a $10,000 loan in April 2014 to tide her over some gambling losses blew out
to a threatened mortgagee sale 18 months later on what was claimed to be a
$700,000 debt. She had been approached at the casino by
Xiufang Sun offering sympathy following a session of gambling losses. Ms Sun offered Ms Xiao a loan of $10,000 in
casino chips to continue gambling.
Repayment was expected in a month. When Ms Xiao was unable to pay,
further credit of $30,000 was arranged through an unidentified “wealthy
friend”. Interest was payable at four
per cent per week, with interest to be paid direct to Ms Sun in the form of
casino chips to be handed over discreetly in the Sky City female toilets. Successive loans could not be repaid and were
rolled over with further extensions of credit.
Gambling losses mounted. Ms Xiao said she was warned the unidentified
lenders were loan sharks from the criminal underworld and she was at personal
risk if she did not repay. Initial oral
loan agreements were subsequently replaced by successive written loan
agreements in which Ms Xiao agreeed to mortgage an apartment in Auckland’s CBD
and her home on Auckland’s North Shore, both owned jointly with her husband.
Justice Davison halted a threatened
mortgagee sale of Ms Xiao’s half share in the properties. A trial was ordered to determine whether the
loan transactions needed to comply with the Credit Contracts and Consumer
Finance Act.
Ms Sun denies the transactions were
consumer credit contracts. Ms Sun says
she is a housewife and has never been in the business of providing credit
either on her own behalf or on behalf of others. She denies interest was payable on the
loans. She says her references to
criminal gangs were a subterfuge, intended to have Ms Xiao take her seriously.
Xiao
v. Sun – High Court (16.03.16)
16.044