With
details of $275,000 family funding for an Auckland house purchase at Sunnynook
on Auckland’s North Shore never finalised, the transaction created rights of
part-ownership ruled the Court of Appeal in a dispute between Chin-Fu Chang and
his niece Hsing-En Lee.
Ties between the Chang
and Lee families go back a long way.
They had joint business interests in Taiwan. The Court of Appeal was told Mr Chang
advanced $275,000 in May 2011 to help Ms Lee purchase a property at Stoneleigh
Court, in Sunnynook. Details of the
advance were left to be sorted out later, but nothing eventuated. When Mr Chang subsequently raised the issue,
Ms Lee said the $275,000 was written off against a family debt he owed the
Lees. This argument was rejected in the
High Court. The trial judge said it was
an interest free loan. Mr Chang
objected. He said he was a part-owner,
despite Ms Lee being registered as the sole owner.
The Court of Appeal
ruled Mr Chang was a part-owner. Where
terms of an advance are not agreed, there is a presumption a trust exists
creating part-ownership in the acquired property. It is not for the courts to construct a loan
agreement when no terms have been agreed, the Court said.
Mr Chang holds a 48.6
per cent interest in the Sunnynook property, being the percentage of the purchase
price he provided. Ms Lee was given six
months to buy out her uncle’s share at a fair price. Failing that, the property is to be sold and
the proceeds divided between them.
Chang
v. Lee – Court of Appeal (19.07.17)
17.083