Wu v Tan

• Jurisdiction: New Zealand
• Judge: Grice J
• Judgment Date: 18 December 2023
• Neutral Citation: [2023] NZHC 3747
• Court: High Court
• Docket Number: CIV-2023-454-028

UNDER the Property (Relationships) Act 1976

IN THE MATTER of an appeal

Between

Yanlan Wu

Appellant

and

Kai Tan

Respondent

[2023] NZHC 3747

CIV-2023-454-028

IN THE HIGH COURT OF NEW ZEALAND

PALMERSTON NORTH REGISTRY

I TE KŌTI MATUA O AOTEAROA

TE PAPAIOEA ROHE

Family — appeal against a Family Court decision determining the division and classification of the parties property — funds advanced by respondent's parent — presumption of advancement — gifts or loans — gifts between spouses — Chinese culture in relation to gifts — Property (Relationships) Act 1976

Appearances:

D Zhang for Appellant

Respondent in person with Ms Ping Peng as Interpreter

The appeal was dismissed.

JUDGMENT OF Grice J

Table of Contents

Introduction and background	[1]
Approach on appeal	[7]
The Family Court hearing	[11]
Whether the advances were loans or gifts	[15]
Presumption	[34]
Analysis on first and second grounds of appeal	[37]
Third ground of appeal	[52]
Gifts between spouses — the legal framework	[69]
Analysis	[74]
Conclusion	[82]
Costs	[84]

Introduction and background

1 This is an appeal from a judgment of the Family Court at Palmerston North determining the division and classification of the parties' property under the Property (Relationships) Act 1976 (the Act). 1

2 Ms Wu and Mr Tan married in October 2013. They separated in mid-February 2017 when Mr Tan moved out of the family home. There are no children of the relationship. There is no dispute that the relationship for the purposes of the property division lasted some three-and-a-half years.

3 The Family Court made determinations on various aspects of the division of their property. At the time of separation, the parties owned a motel business and land in Palmerston North (the motel), which they agreed was relationship property to be divided equally. The other main property they owned was a house in Auckland (the Auckland house), which was rented out. Ms Wu claimed the Auckland house was her separate property. The Family Court determined it was relationship property.

4 There is no dispute that Mr Tan's parents sent money from China which went into the purchase of both the Auckland house in 2013 and the Palmerston North motel in 2015. The Judge found the Auckland house was relationship property to be divided equally between the parties but that the contributions by Mr Tan's parents were loans and to be deducted from the relationship property pool before division. The judgment made various other adjustments for contributions and services provided by the parties. These are not the subject of this appeal.

5 There are two main issues on appeal, although formulated in the notice of appeal as three issues. The first main issue relates to the determination that various contributions by Mr Tan's parents, who reside in China, were loans not gifts. The money paid by Mr Tan's parents was used by the couple in part to finance the purchase of the Auckland house in 2013 and for a contribution toward the purchase of the Palmerston North motel in 2015. The Judge found these loans must be deducted out of the relationship property pool before division. The second main issue relates to whether or not in 2016 Mr Tan gifted the Auckland house property to Ms Wu such that it became her separate property.

6 The amount of monies provided by Mr Tan's parents totalled $520,000. The Judge directed that the Auckland house be sold and outstanding debts, including the advances to Mr Tan's parents, be repaid. The motel was to be divided between the parties and for that purpose was to be sold, with Ms Wu having an opportunity to purchase it. 2 The balance of proceeds of the Auckland house and the motel were to be divided equally, with some adjustments which are not in dispute.

Approach on appeal

7 The Act allows a general right of appeal from a decision of a Family or District Court to the High Court. 3 These proceed by way of rehearing. The appeal court considers the issues that had to be determined in the proceeding below on the basis of the evidence appearing in the lower court's record, but applies the law as it is when the appeal is heard. 4 “By way of rehearing” does not mean there is to be a complete rehearing of the evidence, as in a new trial.

8 The leading decision on the approach of the appeal court to general appeals is Austin, Nichols & Co Inc v Stichting Lodestar. 5 The appellant bears the onus of satisfying the appeal court that it should differ from the decision under appeal. 6 In discharging that onus, the appellant must identify the respects in which the judgment under appeal is said to be in error. 7 The appeal court has the responsibility of arriving

at its own assessment of the merits of the case. 8 The extent of the consideration the appeal court gives to the decision appealed from is a matter for its judgement. 9

9 Where the court below had a particular advantage (such as technical expertise or the opportunity to assess the credibility of witnesses), the appeal court may rightly hesitate to conclude that findings of fact are wrong. 10 This is particularly so where the case depends largely on disputed oral evidence, even where no issue of credibility arises. 11

10 In Austin, Nichols, Elias CJ, writing for the Court, said: 12

[16] Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court's opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ.

The Family Court hearing

11 The Judge noted that during the relationship the parties had purchased two properties, the house property in Auckland and the motel business (and land) in Palmerston North. She noted both were purchased in part with advances provided by Mr Tan's parents. 13 Her Honour noted that the Auckland house was initially registered in the parties' joint names but was transferred to Ms Wu's sole name in January 2016. At that time, the mortgage to the ANZ bank was repaid with money borrowed from the BNZ bank. This transaction was related to the purchase of the motel. 14 At the time of separation, the parties owned various property, including KiwiSaver accounts and a motor vehicle, as well as the motel and Auckland house, with various loans from BNZ outstanding in relation to those properties. 15

12 The main issues before the Family Court were:

• (a) whether the advances from Mr Tan's parents were gifts, and therefore relationship property to be shared equally, and

• (b) whether the Auckland house and outstanding loan were the separate property of Ms Wu.

13 A further outstanding issue related to compensation under s 18B of the Act, sought by way of cross claims by each party. 16

14 Consequential orders for the sale of the Auckland house, the Palmerston North motel, filing of Inland Revenue Department documentation and related orders were sought. 17

Whether the advances were loans or gifts

15 Under the heading “Advances provided by Mr Tan's parents”, the Judge outlined the facts as she found them in relation to these as follows. 18 Mr Tan's parents advanced two lots of funds to the couple. The first advance was in 2013 and amounted to $235,000 (or $236,000), of which $195,000 was applied to the purchase of the Auckland house, $15,000 (or $25,000) towards the purchase of a cleaning business and the remainder towards the purchase of the household effects. The second advance of $285,000 was made in 2015 and was applied entirely to the purchase of the motel.

16 Ms Wu said the advances from Mr Tan's parents were gifts and had been shocked to see the loan documents after the separation. She was aware that $195,000 was being gifted at the time of the purchase of the Auckland house, which was applied to the deposit. She was unaware of the total advance being $235,000 (or $236,000). She relied on the presumption of advancement, citing N v N, which held that such a presumption was rebuttable, but only by acts or declarations that are reasonably contemporaneous to the transaction. 19 Ms Wu submitted the loan documents prepared by Mr Tan after the advances were not admissible in his favour to rebut the

presumption of advancement and they were intended to create a false impression that they had been created contemporaneously. In addition, Mr Tan had refused to provide a copy of the loan documents to Ms Wu for forensic examination. In another hearing he had admitted he had created the documents on his own. 20 Ms Wu also said that the affidavits of Ms Xue, Mr Tan's mother, stating that the advances were loans were inadmissible to rebut the presumption of advancement

17 In relation to the 2013 advance, Ms Wu said that Mr Tan told her that his mother had emailed the bank gifting certificate to him to secure the loan to purchase the Auckland property and she never received an email but Mr Tan had physically passed her a copy of the gift certificate. She said that gift certificate evidenced an “unconditional gift” with no expectation of the funds being “returned” or “repaid”. Therefore, Mr Zhang on behalf of Ms Wu submitted:

• (a) Mr Tan's assertion of falsely signing the document on his mother's behalf cannot be trusted, given that it amounts to an admission of criminal conduct.

• (b) Mr Tan's declaration of the falsity of the gift certificate is inadmissible, again...