Jian Wu used powers of attorney given him by two former classmates as cover to hide funding for two south Auckland properties ruled by the High Court to be relationship property. He was ordered to hand over half the properties’ value to former spouse Yu-Ju Chiu after their marriage of ten years came to an end.
Funding sources for Mr Wu’s 2015 purchase of two adjoining properties in Flat Bush were disputed after the couple separated. He said funding came from two former classmates, not relationship resources.
The High Court was told the two classmates signed powers of attorney in favour of Mr Wu in 2008. There was no dispute that these powers of attorney were valid; they were properly executed in front of an Auckland solicitor. It was intended Mr Wu would act on their behalf whilst they were in China. In 2012, the two Flat Bush properties were purchased in their respective names, the paperwork signed by Mr Wu. Three years later, Mr Wu transferred Flat Bush ownership into his own name in what purported to be a sale from his classmates to himself at a price of $680,000 for each property. In a brief written agreement signed by Mr Wu on behalf of each classmate, they each supposedly left the full purchase price owing as an unsecured debt, payable on demand. Three months later, Mr Wu sold one of the properties for $750,000. He used the proceeds to pay down personal debts. There was no evidence of any classmate receiving repayment of the promised unsecured loan.
In the High Court, Justice Woolford ruled the purchases were a sham; Mr Wu was the true owner from the outset. There was no evidence of any overseas funding from his classmates for the initial Flat Bush purchases. The supposed onward sale by these classmates to Mr Wu was a fiction. Leaving in vendor finance without the protection of mortgage security and the fact Mr Wu kept the full proceeds of his onward sale all indicated Mr Wu was always the true owner.
Funding for the initial Flat Bush purchases in 2015 was from relationship resources and the properties were relationship property, Justice Woolford ruled. Ms Chiu was entitled to half the $750,000 sale price from the Flat Bush property which had been sold and half the value of the second property still owned by Mr Wu.
There was no clear evidence of the source of funds used in 2015 to first purchase the Flat Bush properties. Ms Chiu alleged it was undeclared income from his business: Master Architectural Design Ltd.
Wu v. Chiu – High Court (21.12.21)
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