Wellington
property developer David Mo was ordered to account for a 35 per cent share in a
Plimmerton residential subdivision to brother-in-law Tony Lam after a
protracted High Court hearing punctuated with allegations that lies and false
evidence were used to fabricate the extent of their business relationship.
Justice Williams said
Mr Mo maintained a certain informality and ambiguity around arrangements with
his potential business partners. He used
that ambiguity to keep the Lam family in the game, having them bank him for
free until he was ready to incorporate their money into a particular venture,
he said.
The High Court was told
David Mo and Tony Lam are linked by marriage, having married sisters Lily and
Betty. Their business relationship spanned
several proposed Wellington property developments. No formal business records were kept of
ongoing business deals operated through the Sunlink Group of companies. A vacant lot in Dixon Street, central
Wellington, used as a car park was sold in 2006 at a capital gain of some $2.4
million after being held undeveloped for ten years. A Cuba Street property was held for four
years before being sold in 2001 at a capital gain of nearly $600,000. At various times, Mr Mo worked with investors
other than the Lam family. In November
1996, a Sunlink company purchased 9.6 hectares of subdividable land in
Plimmerton. A decade later, 52 lots had
been sold, with only four remaining. Mr
Mo was by then the sole director and shareholder of the Plimmerton Sunlink
company. The Lams claimed it was a joint
venture project and they were entitled to between 35 and 50 per cent of the
profits. Mr Mo agreed they were entitled
to a share, but no more than six per cent based on his calculation of the
extent of their capital contribution.
The Lam family withdrew
from the joint venture in June 2013, complaining of poor returns on their
investment. They sued to recover a share
of profits allegedly due.
The lack of formal
documentation hampered an assessment of who owned what share of what. Justice Williams said both Mr Mo and Mr Lam
proved to be less than truthful witnesses.
He said Mr Mo’s modus operandi was
to maintain a certain fuzziness about financial arrangements and entitlements
for investment partners. Mr Mo created
and then exploited ambiguity in the arrangements where it was to his advantage
to do so, he said. But there was
sufficient evidence that by 2007 all were agreed that the Lam family had a 35 per
cent stake in the Plimmerton project.
Justice Williams
ordered the appointment of an investigative accountant to determine the profits
generated by the Plimmerton development and the amount to be deducted for Mr
Mo’s time and expertise in managing the project.
Lam
v. Mo – High Court (16.05.17)
17.045