It was a clash between Chinese custom and legal property rights in a cross-cultural chasm as a relationship property dispute saw Chinese cultural norms taking priority over signed documents with an inter-spousal gift of an Auckland house ruled to be not a gift, the house remaining relationship property.
Yanlan Wu and Kai Tan married in 2013, separating just over three years later. The High Court was told they purchased an Auckland home and later a Palmerston North motel, in both cases with financial assistance from Mr Tan’s parents.
The Auckland property was initially registered in both their names. Mr Tan later transferred his half interest to his spouse, having Ms Wu listed on the title as sole owner. He told a Family Court hearing that this was done because their relationship was unstable; he wanted to make Ms Wu happy. It was to satisfy her vanity, he said.
Legal documentation for the transfer described the transaction as a gift. Mr Tan acknowledged it was a gift when asked directly. Generally, a specific gift by one spouse to another removes that asset from the pool of relationship property; it becomes separate property.
In the High Court, Justice Grice declined to overturn a Family Court ruling that the Auckland property remained relationship property. Mr Tan did not intend to gift his ownership share. In Mr Tan’s view, removing his name from the title was purely cosmetic. Rentals from the Auckland property continued to go into their joint bank account; income from their Palmerston North motel business continued to be used to cover the difference between Auckland rental income and the property’s outgoings; he remained liable for the Auckland mortgage debt as guarantor.
Separately, Justice Grice confirmed funds totalling $520,000 received from Mr Tan’s parents put towards purchase of both the Auckland and Palmerston North properties were loans, not gifts, to be deducted from relationship assets before division between Mr Tan and Ms Wu.
There was detailed evidence in the Family Court about circumstances of this funding.
Ms Wu produced a ‘gift certificate’ supposedly signed by Mr Tan’s mother evidencing the first tranche of funding provided by Mr Tan’s parents. It transpired this document had been manufactured by Mr Tan to identify available funds already held when seeking bank finance for purchase of the Auckland house.
Also at issue, was written loan documentation supposedly acknowledging all the funding from his parents were loans. Mr Tan later admitted in court that he had created these documents after the deal was done; the loan arrangement was previously agreed orally with his parents.
Justice Grice ruled evidence from Mr Tan’s mother of a prior oral agreement that funds she provided were loans was conclusive, in the absence of any evidence to the contrary. An oral agreement fitted with Chinese custom that family financial deals are seldom in writing.
Wu v.Tan – High Court (18.12.23)
24.038