Lyu v Lu

• Jurisdiction: New Zealand
• Judge: Associate Judge C B Taylor
• Judgment Date: 26 July 2022
• Neutral Citation: [2022] NZHC 1796
• Docket Number: CIV-2021-404-2399
• Court: High Court

Between

Sibo Lyu

Applicant

and

Han Lu

First Respondent

TCYHL Trustee Limited

Second Respondent

[2022] NZHC 1796

Associate Judge C B Taylor

CIV-2021-404-2399

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA

TĀMAKI MAKAURAU ROHE

Family, Property — application to sustain a notice of claim — de facto relationship of short duration — disposition of property owned prior the relationship to a trust — sustenance of separate property — substantial contribution — Property (Relationship) Act 1976

Appearances:

Eva Kuo for the Applicant

Peter Spring for the Respondents

The notice of claim was removed.

JUDGMENT OF Associate Judge C B Taylor

This judgment was delivered by me on 26 July 2022 at 3:00pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Introduction

1 Mr Sibo Lyu applies for an order sustaining notice of claim 12269500.1.1 (the Notice of Claim).

2 The Notice of Claim relates to two Auckland properties, the first being at 1/30 Cockayne Crescent, Auckland (described as Lot 1 on DP500455), and the second being at 22 Maungakiekie Avenue, Auckland (described as Lot 107 on DP70086) (the Properties).

3 The Properties are held by the second respondent, TCYHL Trustee Ltd as sole trustee of the TCYHL Trust. The first respondent, Ms Han Lu, is the sole director and shareholder of that company. The respondents oppose Mr Lyu's application.

Background

4 Mr Lyu and Ms Lu are former domestic partners. They have known one another since the 1970s, when they were classmates in middle school in China.

5 In 2013, Mr Lyu and Ms Lu reconnected via social media. Mr Lyu claims that this was when the two formally established their relationship. Ms Lu disputes that claim. She says she and Mr Lyu first became a couple in August or September of 2016.

6 Mr Lyu came to New Zealand in February 2016. He stayed with Ms Lu at a Henderson address. The two did some travelling around the country. Mr Lyu left the country at the end of the month. He returned to New Zealand in April 2016. He and Ms Lu then opened a joint bank account with ANZ. He also purchased Ms Lu an expensive Rolex watch.

7 Ms Lu set up the TCYHL Trust in late 2018. Its sole trustee is TCYHL Trustee Ltd. The Properties were transferred to TCYHL Trustee Ltd on 28 February 2019.

8 Mr Lyu claims to have made extensive contributions to the Properties while he was in a relationship with Ms Lu. Those contributions are said to include washing, repairs, installation, painting, carpentry, carpeting, electrical work and supervision of renovations. He says he was unaware Ms Lu had taken steps to move the Properties to TCYHL Trustee Ltd.

9 The couple's relationship ended on 11 May 2019, when Mr Lyu assaulted Ms Lu. He pleaded guilty to two assault charges and was discharged without conviction. 1

10 On 19 October 2021, Mr Lyu lodged the Notice of Claim. In response, Ms Lu wrote to the Registrar-General of Land to request that the Notice of Claim be removed.

11 On 15 December 2021, Mr Lyu applied for an order sustaining the Notice of Claim. The respondents oppose that application.

12 Due to delays in hearing the application and the strict timeframe required by Land Information New Zealand (LINZ), Mr Lyu sought an interlocutory order that the Notice of Claim not lapse. On 14 January 2022, Lang J granted that application. 2

13 Mr Lyu has now commenced proceedings in the Family Court for division of relationship property.

Mr Lyu's application to sustain the Notice of Claim

14 Mr Lyu seeks an order: 3

1. … sustaining Notice of Claim 12269500.1.1 registered against the parcel of land containing 497 square metres more or less being Lot 1 Deposited Plan 500455 contained in Record of Title 744633 (Auckland Registry) and against the parcel of land containing 1/2 share of 1112 square metres more or less of Lot 107 Deposited Plan 70086 being Flat 1 of Deposited Plan 181581 contained in Record of Title NA112C/845 (“the properties”)

15 The grounds on which the orders are sought are: 4

• a. The Applicant and the Respondent were in a de facto relationship. The Applicant says that the de facto relationship was more than 3 years.

• b. The Applicant had made substantial contributions towards the properties.

• c. The Order sought would preserve the Applicant's interests in the properties.

• d. Upon an application made by the Respondent, Land Information New Zealand intends to remove the Applicant's Notice of Claim on 17 December 2021

• e. The overall justice of the case favours such Order being granted.

• f. Upon further grounds in the Affidavit of the Applicant fded in support of application together with the Affidavit of Translation.

Mr Lyu's affidavit

16 Mr Lyu has made an affidavit in support of his application. He deposes that he and Ms Lu separated on 11 May 2019 after a family violence incident. He says he later became aware that Ms Lu had set up a family trust in December 2018 or early 2019. He says TCYHL Trustee Ltd is the trustee of that family trust. He says he filed the Notice of Claim on 2 November 2021, and that Ms Lu filed an application with LINZ on 3 December 2021 to lapse the Notice of Claim. 5

17 Mr Lyu says he and Ms Lu have known each other since childhood. He says they formally established their relationship in 2013. He refers to various items of documentary evidence from between 2014 and early 2016 that he says show, among other things, the two travelling to meet one another, purchasing a car together and setting up a joint bank account. 6

18 Mr Lyu says that before he came to New Zealand, he transferred his savings of more than 100,000 NZD to a bank account Ms Lu nominated. He says Ms Lu operated the account as her own, and that he trusted her to do so. He said he contributed to the

property at Cockayne Crescent by washing the exterior walls, tidying the gardens, cleaning the rooms, installing the windows and painting the walls, doors and windows. He says further that he repaired and repainted the downstairs kitchen ceiling two or three times after water leakage caused it to rot away. And he says that after the Maungakiekie Avenue property was settled, it required a full-scale renovation that took close to three months of constant work. He says Ms Lu asked him to be at the site every day to supervise the work, purchase materials and work as a labourer. 7

19 Mr Lyu says he began to feel quite unwell, tired and stressed. He was prescribed anti-depressants. As a result, he says he and Ms Lu had frequent altercations in the time leading up to the 11 May 2019 incident. He says he has made significant contributions to the Properties and that he wants to know what Ms Lu did with the money under her control. He says he will seek a court order in relation to his relationship with Ms Lu and the division of property. 8

Respondents' notice of opposition

20 The respondents oppose Mr Lyu's application: 9

• (a) Although the first respondent is not the registered proprietor of Lot 1 DP 500455 ( 22 Maungakiekie Avenue, Auckland) and Lot 107 DP 70086 (1/30 Cockayne Crescent, Auckland) (together, the Properties), she is the sole director and shareholder of TCYHL Trustee Ltd, which, as sole trustee of the TCHYHL Trust, is the registered proprietor.

• (b) 22 Maungakiekie Avenue has, at all relevant times, been owned by the trustee of the TCYHL Trust – the applicant has no arguable interest in that property pursuant to any section of the Property (Relationships) Act 1976.

• (c) 1/30 Cockayne Crescent was acquired by Ms Lu on 2 November 2015 (prior to the relationship and in any case from separate property). It was settled on the TCYHL Trust on 28 February 2019 and, immediately prior to that settlement, was the first respondent's separate property.

• (d) The applicant does not have an arguable case that he and Ms Lu were in a de facto relationship lasting longer than three years. The Family Court therefore has no jurisdiction to make orders and the applicant

  therefore has no interest under the Property (Relationships) Act 1976 to preserve. None of the exceptions in sections 14 and 14A of the Property (Relationships) Act 1976 apply.

• (e) The properties are held in trust, meaning the applicant can have no interest in the properties as relationship property under the Property (Relationships) Act 1976.

• (f) None of sections 44A, 44B, or 44C (which the notices of claim record as giving rise to the applicant's asserted interest in the Properties) can, as a matter of law, give rise to an interest in the Properties in terms of section 42 of the Property (Relationships) Act 1976.

• (g) Even if it is true that the applicant made “contributions” (in terms of the Property (Relationships) Act 1976) to the Properties (which is denied), it is not reasonably arguable, on the evidence before the Court, that such contributions:

  • (i) Were “substantial”;

  • (ii) outweighed the benefits received by the applicant during the relationship;

  • (iii) gave rise to any interest in the Properties; or

  • (iv) were made at a time when the Properties were owned by the respondent (meaning sections 44, 44A, 44B, and 44C do not apply).

• (h) Such grounds as appear in the affidavit of Han Lu dated 8 February 2022 filed in support of this opposition.

Ms Lu's affidavit

21 Ms Lu has made an affidavit in support of the respondents' notice of opposition. She deposes she is the sole director and shareholder of TCYHL Trustee Ltd, which is the sole trustee of the TCYHL Trust and the registered proprietor of the Properties. She says Mr Lyu's affidavit contains many exaggerations and untruths. She says their relationship started in August or September of 2016 and ended on 11 May 2019, after Mr Lyu assaulted her for a third time. 10

22 Ms Lu says she knew Mr Lyu when they were both children in China in the 1970s. She deposes they reconnected in June 2013 as part of a group set up by...