Now working in Dubai as a self-proclaimed forex trading specialist, Jiayuan (Georgia) Chen said she should be excused a $350,000 Westpac debt because writing off this amount would be ‘a tiny drop in Westpac’s kitty’ compared with its record profits. She was bankrupted at Westpac’s request.
The High Court was told this debt arose from a loan used to buy an investment property in Auckland suburb Millwater. Named as co-guarantor was Mathew McKenzie. According to Companies Office records, they then shared the same Auckland residential address.
The Millwater property was purchased by their company J & MWM Holdings Ltd in December 2017. Mortgage repayments were irregular. The loan was put on Westpac’s watchlist with an agreement payments would become interest only. No payments at all were made after February 2020. Evidence was given that Ms Chen had been diverting rental receipts to an account she held at another bank.
Under pressure from Westpac, Ms Chen put Millwater on the market. A sale for $1.17 million in late 2020 left a shortfall owed Westpac of approximately $350,000.
The High Court was told negotiations with Mr McKenzie saw him making part-payment on his guarantee to Westpac. Ms Chen claimed that her renegotiation discussions with Westpac got nowhere and that should be grounds to excuse further liability. Westpac had demanded current arrears be made good before it would look at negotiating new terms. She further claimed Westpac should look solely to Mr McKenzie for further payment.
Associate judge Lester said it was a simple case of Ms Chen refusing to accept the commercial reality of being called to account on her guarantee.
Ms Chen said she had no assets in New Zealand and that bankruptcy was pointless. The bank account Ms Chen used to divert rental income will be the starting point for Insolvency Service to identify where the money went, Judge Lester said.
Westpac v. Chen – High Court (1.05.23)
23.058