Wei Xu and Huimin Guan went to school together in China. Two decades later they were facing off in the New Zealand High Court arguing over a residential property deal that fell apart.
Mr Xu agreed to let Ms Guan and her husband take occupation of a residential property in Browns Bay on Auckland’s North Shore with a May 2018 handshake deal. They agreed to buy at $1.78 million, paying Mr Xu’s property outgoings until such time as they got finance to complete their purchase.
Applications for a bank loan were unsuccessful. No bank would lend on an oral agreement to buy; a written contract was required. The deal collapsed when Mr Xu wanted to increase the price.
It took a court order for Mr Xu to regain possession in September 2021, followed by a dispute over who owed what. Ms Guan demanded return of a $200,000 deposit paid. Mr Xu said they had not paid in full all property outgoings as agreed.
Property outgoings included interest on successive bank loans Mr Xu had secured over the property. Ms Guan complained the amount claimed included interest on a mortgage over Mr Xu’s private home; the bank mortgage took security over both Browns Bay and Mr Xu’s family home.
In the High Court, Justice Woolford calculated Browns Bay interest unpaid amounted to some $16,500. This was the amount Ms Guan was required to pay, not the $153,600 Mr Xu claimed.
In turn, Mr Xu was ordered to refund the $200,000 deposit. He had agreed to refund the balance left after all property outgoings were cleared.
Separately, Mr Xu demanded Ms Guan hand over $70,380 received from boarders at the property while they were in occupation. This was income derived from use of his asset, he said.
Justice Woolford ruled Ms Guan was entitled to keep the income. There was evidence that Mr Xu had agreed to boarders being taken in, to help Ms Guan meet property outgoings.
Mr Xu’s further claim for rent was dismissed. He claimed rent for a 96 week period at just on $1700 per week; the period from when Ms Guan stopped contributing to outgoings and their subsequent departure from the property.
Justice Woolford ruled Mr Xu could not claim there was tenancy with rent unpaid after earlier getting a High Court order that Ms Guan leave the property by stating there was no tenancy agreement in place and there was no continuing right to her occupation.
Xu v. Meng – High Court (18.12.23)
24.035