Involved in offshore real estate deals in both Dubai and Thailand, Chinese nationals Kai Wei and Guolong Ou claim investment funds totalling $14.3 million they sent to New Zealand have been misapplied with properties they claim ownership over winding up under control of Heping Yang who they allege strong-armed his way into control after his son Yuqi was charged with drug offences.
The High Court was told their 2020 plans to invest in New Zealand property faced a problem. Mr Wei and Mr Ou held visitor visas only. They could not invest. A plan was concocted to have Mr Wei’s childhood friend, Xing Guo, assist. Mr Guo held New Zealand residency.
Over a period of two years, a total of $14.3 million was remitted to Mr Guo in New Zealand for purchase of properties he recommended.
Title was taken in name of entities controlled by Mr Guo. Purchases included: land and a hotel business on Marsden Road in Paihia; plus multiple residential properties across Auckland, ripe for development.
These properties eventually came under control of Mr Guo’s father-in-law: Heping Yang.
Evidence was given that when Mr Yang discovered his son Yuqi had borrowed money on security of his properties without authority, Mr Yang saw Mr Guo as responsible and demanded compensation from Mr Guo. To make good on this demand, Mr Guo handed over ownership of both Marsden Road and sundry Auckland properties.
Mr Wei and Mr Ou lodged caveats to title of Marsden Road and the Auckland properties claiming ownership rights. Mr Guo held title in trust for them, they argue.
The legal complication is that Mr Guo no longer holds title, Mr Yang’s companies do.
Rules governing ownership of land allow a third party to get clear title on purchase if they were unaware of any prior claims and were not party to ‘fraud.’ Fraud has a specialised definition in relation to land ownership.
Associate judge Gardiner ruled Mr Yang did have prior notice of Mr Wei’s and Mr Ou’s interests as beneficial owners of the Marsden Road hotel.
Correspondence in 2022 between Mr Guo and Mr Yang spelt out in detail the existing agreement having Mr Guo holding Marsden Road at Paihia in trust for Mr Wei and Mr Ou.
There was strong evidence that Mr Yang was aware of their rights to the land when he took ownership, Judge Gardiner said. That caveat could stand.
This caveat blocks any sale of Marsden Road, pending a full court trial.
Caveats claiming rights over named Auckland properties now owned by Mr Yang’s companies were removed.
There was no clear documentary evidence linking Mr Wei’s and Mr Ou’s periodic New Zealand cash transfers to any specific Auckland property, Judge Gardiner ruled. Any claim Mr Wei and Mr Ou may have regarding misappropriation of their funds by Mr Guo is a claim against Mr Guo personally. They have no claim over the properties since sold.
The court was told Mr Guo is bankrupt.
Wei & Ou v. Chin Yun Holdings Ltd & Daqin Holding Ltd – High Court (20.06.24)
24.157