Sentenced to 18 years jail for the 2020 murder of business associate Elizabeth Zhong, Fang Sun used stand-over tactics to force signature on a document claiming $2.07 million. In the High Court, this contract was ruled not enforceable on grounds of duress.
A curtain was lifted partially on the business dispute leading to Ms Zhong’s death when the High Court was asked to rule on validity of a 2019 contract signed in the year before she was murdered in her east Auckland Sunnyhills home.
Her business relationships were complicated. The fact she held New Zealand citizenship was a major asset. There were claims Ms Zhong held assets in trust for offshore investors.
Evidence was given of Sun transferring substantial sums from China to New Zealand; money placed with Ms Zhong for property investment. She came to be involved with a company called Sunbow Ltd which owned land and a vineyard on Waiheke Island. She guaranteed Sunbow debts and was paying interest on a mortgage over Waiheke securing borrowings from a company called DBR Ltd. With Sunbow and related companies under pressure, Sun provided financial assistance. It was not clear whether this was a loan or an equity investment in the business. This financial support was in addition to some $1.3 million provided two years previously, described in court by Sun as pre-payment for purchase of Waiheke and its vineyard. The $1.3 million purchase was not finalised. Getting Overseas Investment Office consent proved a stumbling block.
The High Court was told Sun then demanded repayment of funds provided to Sunbow. At the same time, DBR was threatening a forced sale to recover its loan. A deal was negotiated between Zhong and Sun: Waiheke was to be sold to interests associated with Sun for $4.5 million, with a deduction of $2.07 million stated as funds previously provided. Circumstances in which this agreement was signed led to the later High Court hearing about the agreement’s validity.
In affidavit evidence provided by Ms Zhong in court proceedings underway before her death, she stated she was pressured into signing with threats she would otherwise be killed. Ms Zhong told of being continually harassed with phone calls and of being threatened more than once.
She did sign, but it was not in her commercial interest to sign. As guarantor of Waiheke debts, it was more advantageous for her to find a third party buyer, getting the full price in cash and clearing business’ debts, rather than getting a lesser sum of $4.5 million minus $2.07 million on a sale to Sun.
Waiheke was sold to a third party for $4.3 million. Ms Zhong was murdered eleven months later.
Sunbow liquidators asked for a High Court ruling on whether the $2.07 million agreement evidenced a debt Sunbow had to pay. Justice Tahana ruled it was not a Sunbow debt; it was signed under duress with Ms Zhong signing on behalf of Sunbow with her life threatened.
Insolvency Service records show she was bankrupted by an unpaid creditor in the weeks after her death.
Tang v. Sunbow Ltd - High Court (5.07.23)
23.111