A Mt Eden house vendor kept a buyer’s $2.3 million deposit but didn’t settle the sale or transfer ownership to her.
Associate Judge Grant Brittain ruled in favour of the buyer in the High Court at Auckland, saying she was entitled to her $2.3m back.
Wejun (Renee) Ji sued ZhaohaiDing after she paid his company Annecy Holding a $2.3m deposit for the $2.9m purchase of the Dominion Rd house, the ruling said: a deposit of $1.3m and a purchase price instalment of a further $1m, leaving only $600,000 due on the settlement.
Companies Office records show Ding’s company Annecy is now struck off but when he registered it, his address was given as that of Sir John and Lady Bronah Key’s Parnell home. The Keys have sold that house.
The judge said the Mt Eden house deal was to close last October but on the very settlement date, Annecy’s solicitor emailed Ji’s solicitor saying it couldn’t go ahead.
“Unfortunately our company does not have sufficient funds to discharge the mortgage at the moment, thus not in a position to settle today. We understand that the finance company will sell the property by tender in the upcoming weeks. If the property can be sold at a reasonable price, we might be able to repay part of the deposit back to the purchaser. At the same time, we will try our best to raise funds to repay the purchaser,” Annecy’s solicitor wrote.
The Dominion Rd, Mt Eden property where buy lost her $2.3m deposit. Photo / Google Maps
The company couldn’t settle the sale because of a mortgage to financier Loan Investment Trustees.
Ji, represented in the High Court by Graham Kohler, KC, served a settlement notice, which was not satisfied, and then cancelled the contract.
The property has since been sold by the mortgagee.
Yet Annecy failed to refund the deposit, Judge Brittain said.
So Ji went to court to get an order of summary judgment under the Companies Act requiring Ding to repay her the $2.3m plus interest.
An application for summary judgment against him was heard on September 12. He didn’t file a notice of opposition and a judge then directed Ding to file any notice of opposition by September 26.
Ding failed to comply with that direction and made no appearance in the latest case, Judge Brittain noted.
Ji had Annecy put into liquidation and the first report from the Insolvency and Trustee Service confirmed debts and showed Ji was the only person to lodge an unsecured creditor claim.
The judge said Ding allowed Annecy to receive $2.3m of the purchase price from Ji without applying those payments towards the discharge of the mortgage, which would be required if Annecy was to complete the settlement and convey clear title to the property to Ji.
Ding knew, or ought to have known, that Annecy would be unable to perform the obligations owed to Ji under the contract. There was no basis for Ding to hold a belief on reasonable grounds that Annecy would be able to perform its obligation to convey clear title to the property to Ji when it was required to do so.
Ding made no appearance at the hearing, nor was he represented by a lawyer.
The Herald asked Ji about the situation this week and if she’d got the $2.3m the court found she was owed.
“We will share or answer your questions after the case ends,” she said. Kohler referred the Herald to the High Court decision.
The liquidator’s report said Annecy owned the Mt Eden property, subject to a security.
“The security holder has advised that they have accepted a tender which will result in a significant shortfall,” that report of April 21 this year said.
“Further investigations by the liquidator have revealed that the company was the owner of 12 prior owned properties that were sold in the last two years prior to liquidation. The liquidator will obtain and investigate the details of the sale of these properties and determine if there was any surplus from the sale,” the report said.
Anne Gibson has been the Herald’s property editor for 23 years, has won many awards, written books and covered property extensively here and overseas.
