Shaojun Wang needed a court order to prevent her Auckland investment property being sold to recover money colleague Qian Zhang stole from New World.
In 2017, New World sued Zhang getting a court order for repayment of some $329,600. Recovery was not straightforward. In 2020, it had a charging order placed on title to a property in Moore Street, Hillcrest, registered in Zhang’s name. Charging orders are used as a precursor to a forced sale. Ms Wang objected. Zhang’s name was on the title, but Zhang held title in trust for her, she said.
The High Court was told Zhang purchased Moore Street in 2016 for $1.18 million putting in $45,000 cash. Balance of the purchase price came from an ASB loan together with a cash contribution of $309,000 from Ms Wang. Zhang was registered as the sole owner. The two women agreed the property would be tenanted with Zhang personally liable for any shortfall between rent received and property expenses. Over the next eighteen months, Zhang personally carried a shortfall of about $20,900.
In late 2017, their business relationship was reorganised. A formal deed was drawn up and signed in which Ms Wang agreed to accept liability for the mortgage debt and all property outgoings, with Zhang paid $70,000 and agreeing to transfer title to Ms Wang when requested. The deed stated Zhang now held Moore Street on trust for Ms Wang. Zhang said she wanted out because she intended to return to China. There was no evidence that Ms Wang knew Zhang was then being pursued by New World for theft. New World claimed it had rights to Moore Street because beneficial ownership was transferred to Ms Wang at less than market value; it was a ploy to defeat New World’s rights as a creditor, it said. Justice Peters ruled that Ms Wang’s payment of $70,000 was sufficient to cover both Zhang’s initial contribution to the purchase price and any modest capital gain which had accrued since Zhang’s purchase. She ordered the charging order over Moore Street removed.
New World (New Zealand) Ltd v. Zhang – High Court (29.10.21)
21.178