Hanover wins apartment claim

Money was owed on Winsun Heights on Vincent St, Auckland. Photo / Paul Estcourt

Hanover Finance has won litigation against an Auckland developer over about $5 million it wants repaid.

The financier successfully made an application in the High Court at Auckland against Winsun Developments, a company fronted by apartment developer Lily Zhong.

Late last year, Winsun owed Hanover $9 million. When the money was not forthcoming, Hanover took swift action against Zhong by calling a mortgagee apartment sale on the block she developed.

But that led to only partial payment.

Laura O'Gorman of Buddle Findlay, which acted for Hanover, said the application for summary judgment yesterday had been granted.

This means Winsun Developments must pay back Hanover's loan. Lindsay Gregg, acting for Winsun, told the court he had no instructions on the matter.

The court action follows Hanover's move last year to instruct agents Barfoot and Thompson to sell 92 apartments in the 153-unit Winsun Heights on Vincent St.

Zhong got finance from Hanover to develop the block but money was outstanding after it was finished. Not all the units sold and many were rented to foreign students on a short-term basis.

Hanover appointed Horwath Corporate receiver of income on the block so it could get the rent. Winsun is in receivership and liquidation and Horwath said the company owed Hanover $5,036,485. Winsun also owes Inland Revenue $290,004 and unsecured creditors $397,445.

Associate Judge John Faire heard the application made by Sharley Willets acting for Hanover.