Partnership: Bei v. B & Z Trades Company

 

Claims by a father that he was a partner in his son’s car importation and repair business and with it was entitled to share in ownership of properties owned by the business came to nought.  There was no evidence that a partnership existed.  Flows of funds were explicable as family loans and repayments, rather than the father’s contributions of partnership capital.

In October 2000, Yong Sheng Bei was granted permanent residence.  Bei’s son, Yaoping Bei, arrived in New Zealand the following year.  His aunt already had a business up and running in New Zealand trading as B & Z Trades Company Ltd, primarily importing clothing from China.

The High Court was told B & Z Trades subsequently became the vehicle for Yaoping’s motor vehicle business.  Over the years it purchased sites: in Auckland suburbs of Onehunga and Kelston; plus, a further site in Christchurch at Sydenham.

There was no dispute that both father and son worked in the business.  What was in dispute was the extent of the father’s involvement.

This came to a head when the two fell out mid-2021 and was exacerbated when Yaoping told his father the Galway Street property in Onehunga was to be sold.  His father was living at Galway Street.  Evidence was given that B & Z Trades applied to the Tenancy Tribunal, without success, seeking to have Yong Sheng evicted.   

In the High Court, Yong Sheng claimed to be a partner in his son’s business and with it part-ownership of all partnership business assets including properties held in the name of B & Z Trades.

Yong Sheng said he was heavily involved in the business: repairing and preparing cars for sale.  Yaoping said his father’s involvement was little more than doing odd jobs.

Yong Sheng said he provided cash.  The end use of funds being moved between members of the family over a nine year period was heavily disputed. Yong Sheng provided no evidence that payments he made could be viewed as capital contributions towards the claimed partnership.

Associate judge Gardiner ruled there was no evidence a partnership existed.  There was no written agreement.  There was no evidence of emails, texts or other business records which would provide proof of an oral partnership agreement.  There was no evidence of partnership accounts being kept or partnership profits allocated.

Yong Sheng Bei v. B & Z Trades Company Ltd – High Court (31.01.24)

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Asset Forfeiture: Commissioner of Police v. Hughes

 

Admitting to both tax fraud and frauds against Kainga Ora, plumbing contractor Mark Frederick Hughes had a $2.2 million settlement negotiated with Police approved by the High Court under the Criminal Proceeds (Recovery) Act.

Evidence was given that Hughes and his company Jamark Plumbing Ltd defrauded Kainga Ora for nearly a decade starting in 2010; charging in excess of agreed contract rates, charging for work not done and failing to install product that met Kainga Ora specifications.  The cost of these frauds was estimated at about $528,000.

In addition, Hughes and his company were involved in large-scale tax evasion.  Income was not declared.  Untaxed barter deals saw Hughes involved in contra deals; failing to invoice plumbing work in return for work done on private properties he owned.      

Hughes came clean with voluntary disclosure to Inland Revenue of his tax fraud.  This resulted in tax assessments of some $1.46 million.  This has been paid, the High Court was told.

Separately, police sought to recover profits generated from these frauds.  Hughes had come to own two properties just south of Hamilton and four properties in Queensland.  The criminal proceeds application sought to recover not only funds generated by the frauds but also capital gains arising from Hughes purchase of real estate with tainted funds.    

The High Court approved Hughes payment of $2.2 million in full settlement of claims under the Act.  Payment by instalments over the next nine months was approved.

If payment is not paid by required date, the six properties are to be sold, starting first with the two New Zealand properties.

Commissioner of Police v. Hughes – High Court (25.01.24)

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Cryptopia: Epic Trust Ltd v. Ruscoe

 

Epic Trust, controlled by alleged scammer Victor Cattermole, was refused permission to join court hearings deciding distribution of assets held by failed cryptocurrency exchange, Cryptopia Ltd.  Epic is not directly affected, the High Court ruled.  There is no evidence it has any claim to Cryptopia’s remaining assets.  Epic’s claim to have purchased digital currency from a Cryptopia customer in a contract complying with laws of the Principality of Cogito, an entity existing in the metaverse controlled by Mr Cattermole as Crown Prince of Cogito, cut no ice with Justice Palmer.

Based in Christchurch, Cryptopia was put into liquidation by shareholders in May 2019 following a hack resulting in the loss of some thirty million dollars by value in cryptocurrency holdings.  Liquidators Grant Thornton report that at that time Cryptopia had over 2.2 million registered users.  They have identified some 960,000 accounts with positive balances.  Account holders are spread across 180 countries.  Between them, they hold around 370 different digital currencies.

Account holders have been contacted and asked to verify their balances.  Many have not responded.

Liquidators asked the High Court for instructions on how Cryptopia assets should be valued and distributed.  Epic Trust sought permission to also make submissions.  Liquidators questioned Epic’s motives.  They said Epic is not entitled to share in any distribution.  They alleged Epic has an ulterior motive; seeking to identify specific account holders and full details of their claimed cryptocurrency holdings.

In 2021, Mr Cattermole was held in contempt of court for improperly obtaining and retaining email addresses of Cryptopia account holders.

Justice Palmer dismissed Epic Trust’s application to join the proceedings.  Epic said it purchased Cryptopia digital currency holdings held in the name of a Joshua Stevenson.  There is no evidence that Mr Stevenson has transferred this asset, Justice Palmer ruled.

Liquidators dispute whether account balances can be transferred.  Cryptopia’s client rules prohibited sale of account balances.

His Honour said there was no need to even consider the validity of an unsigned agreement for sale and purchase between Mr Stevenson and Epic Trust described as being governed exclusively by laws of the Principality of Cogito.

Epic Trust Ltd v. Ruscoe – High Court (24.01.24)

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