Waterstone Insolvency has the difficult task of unravelling fluid financing arrangements for a lifestyle subdivision at Hakaru between Kaiwaka and Mangawhai in Northland. A default interest rate of 120 per cent features. As do Augustine Lau and Jiawen Mao, recently convicted following multiple breaches of resource management and building regulations in respect of properties in Auckland City.
Waterstone are liquidators of Chen Hong Co Ltd. Chen Hong’s sole director is Jiawen Mao. The company holds second mortgage security over a Hakaru subdivision being developed by Mangawhai Property Ltd. Mangawhai Property is owned by Yan Lin of Beach Haven in Auckland, also known as Bella Lin.
Chen Hong Ltd’s financing of the project is disputed; evidence indicates there might have been two separate loans. Mangawhai Property alleges documents describing a second loan from Chen Hong Ltd were forged. Immediately in dispute was an initial August 2016 loan. It itemised a $693,000 advance for one month only, interest on maturity in a lump sum of $3000 with default interest running at 120 per cent for late payment. Mangawhai Property claims it borrowed only $600,000 and that $505,100 was repaid in November 2016. Waterstone deny there was any repayment. They suspect a supposed repayment went to Jiawen Mao’s father.
Putting to one side the dispute about repayment, Waterstone sued in the High Court alleging at least $100,000 was still due, had not been paid and asked the High Court to put Mangawhai Property into liquidation on grounds of insolvency. Just prior to the application coming to a hearing, Mangawhai paid the claimed $100,000. That is the end of the winding up application, Associate judge Bell ruled. The claimed unpaid debt had been paid. He refused Waterstone’s request to consider further money allegedly unpaid. Waterstone allege a total of $2.2 million is owed. New court proceedings have to be filed.
There was evidence that Jiawen Mao, director of second mortgagee Chen Hong Ltd, was at critical times also director of Niu Niu Bi Co Ltd, a company which also appears to have financed Mangawhai Property. She told Waterstone she had no hands-on involvement; Augustine Lau ran the business.
Mangawhai Property Ltd v. Chen Hong Co Ltd – High Court (15.11.18)
18.227