LE v HEMU TRADE CO LIMITED [2019] NZCA 476

LE v HEMU TRADE CO LIMITED [2019] NZCA 476 [3 October 2019]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA299/2018[2019] NZCA 476BETWEEN CHUN MAO LEAppellantAND HEMU TRADE COMPANY LIMITEDFirst RespondentCHIN WEN LISecond RespondentCHING-CHI LIThird RespondentHearing: 9 September 2019Court: Gilbert, Duffy and Wylie JJCounsel: P F Chambers for AppellantR Reed and A Manuson for RespondentsJudgment: 3 October 2019 at 9.30 amJUDGMENT OF THE COURTA The application to adduce further evidence is declined.B The appeal is dismissed.C The cross appeal is allowed in part. The appellant holds his 50 per centshare of the property at 32 Pinewood Street, Avondale, Auckland on trustfor the first respondent.D The appellant is to pay one set of costs to the respondents for a standardappeal on a band A basis and usual disbursements.____________________________________________________________________REASONS OF THE COURT(Given by Duffy J)[1] Chun Mao Le and Chin Wen Li are the registered owners of a property at32 Pinewood Street, Avondale, Auckland (the property) as tenants in common in equalshares. In the High Court Fitzgerald J found that 91 per cent of the funds used toacquire the property was provided by a Taiwanese registered company, WenhengEnterprise Co Ltd (Wenheng) and therefore the registered proprietors held 91 per centof the beneficial interest in the property on a resulting trust for Wenheng.1 It wascommon ground that Mr Le had paid the deposit for the purchase of this property.The Judge was not satisfied that Wenheng had reimbursed Mr Le for the deposit,which led her to find that he held the remaining portion of the beneficial interest in hisown right. It was also common ground that Wenheng had ceased operation and itsassets had been distributed.2 The Judge found that Wenheng had transferred itsbeneficial interest in the property to Hemu Trade Co Ltd (Hemu). Accordingly, sheupheld Hemu's claim for a beneficial interest in the property, but only as to 91 per centof this interest. The remainder was found to be held by and for Mr Le. She dismissedHemu's claims to recover from Mr Le rents he had collected for the property and otherfinancial benefits he allegedly had enjoyed from its use.[2] Mr Le appeals against the judgment insofar as it upholds Hemu's claims andHemu cross appeals against the dismissal of part of its claims.3 Mr Le also applies toadduce new evidence in support of his appeal.Admission of new evidence[3] We deal with the application to admit new evidence first. This evidence is inthe form of an affidavit from Mr Le's daughter Che Wen Lee. It does not meetthe requirements for admission of new evidence on appeal.4 First, the evidence isneither cogent nor material. Secondly, much of the evidence was available at the time1 Hemu Trade Co Ltd v Le [2018] NZHC 982.2 The respondents asserted this fact. In his evidence at trial Mr Le stated that "post dissolution ofWenheng" he suspected that Mr Li had appropriated Mr Le's share of Wenheng's assets.3 In the High Court the respondents also brought claims in breach of fiduciary duty and deceit.These claims were dismissed by Fitzgerald J. There is no cross appeal in respect of them.4 Erceg v Balenia Ltd [2008] NZCA 535 at [15].of the trial in the High Court. There is no satisfactory explanation for why there wasno attempt to adduce it then. Thirdly, much of the new evidence is inadmissible.The factual content of the evidence provides a hearsay account of events andthe remainder comprises expressions of opinion and argument from Ms Lee onthe merits of Hemu's claim against Mr Le and the competency of his trial counsel.We are satisfied the application for admission of this evidence should be dismissed.Background facts[4] Mr Le is the younger brother of Ching-Chi Li. They are from Taiwan. In 1980Mr Li became a shareholder and director of Wenheng.5 Mr Le and three other personswere also shareholders. Then in 1992 Hemu was incorporated by Mr Li who togetherwith Mr Le and three others, became shareholders in that company.[5] Mr Le contends he played an active and important role in Wenheng until heleft Taiwan for New Zealand in 1997, whereas, the respondents contend that Mr Lewas registered as a shareholder because Taiwanese law requires there to be a minimumof five shareholders. The respondents' case is that at the relevant times Mr Le washaving difficulty finding full time employment, and that as the younger brother ofMr Li it was expected that Mr Li would find a place for Mr Le in Wenheng.Although the degree of Mr Le's involvement in Wenheng is disputed, the evidencegenerally shows that he was actively participating in Wenheng's affairs while he livedin Taiwan.[6] In 1997 Mr Le went to live in New Zealand where he gained residence, but in2001 he returned to Taiwan. Apart from a time between 2004 and 2008 when hereturned to New Zealand with his son, Mr Le has remained in Taiwan.[7] Regrettably the business relationship between Mr Li and Mr Le broke down in2010, when they had a major falling out. Litigation in Taiwan ensued and Hemu wasultimately successful in suing Mr Le for the return of TWD 6,900,000. Some otherdisputed matters were settled. Mr Le's conduct also resulted in criminal proceedings,5 Chin Wen Li says his father established Wenheng. Mr Le says he and Mr Li purchased the sharesin this company.which led to him receiving a two-year sentence of imprisonment. By then the partieswere also in dispute over who held the beneficial ownership of the New Zealandproperty. This dispute had to be resolved by the courts in New Zealand.[8] It is against this general factual context that the purchase and ownership ofthe property must be viewed.[9] The property was acquired in 1996 after the two brothers visited New Zealandwith their families. Each had reason to want to purchase a property in New Zealand.Mr Li's son Chin Wen Li was in New Zealand studying and Mr Li was unhappy withthe rental accommodation that was available for his son. Mr Le had plans to move hisfamily to New Zealand and so he required accommodation in New Zealand.[10] After looking at a number of properties the two brothers attended and weresuccessful bidders at an auction for the property. Also present then were Mr Li's wife,Kue Yue Yang, and their son Chin Wen Li.[11] The sale and purchase agreement named Mr Le and Mr Li as purchasers.Mr Le paid the deposit of NZD 30,000 from his own funds. The brothers instructedPeggy Lim of Russell McVeagh, a solicitor whom Mr Le described in his brief ofevidence as being fluent in "Chinese", for the conveyance of the property.Shortly afterwards the family group left for Taiwan.[12] Ms Lim provided oral and written advice on how the two brothers might ownthe property, either as joint tenants or tenants in common. There is no evidence ofthem discussing whether Wenheng would own the property or not. At some timebefore settlement both Chin Wen Li and Mr Le independently wrote to Ms Lim andadvised her that the share of the property Mr Li was to take should instead be registeredin the name of his son Chin Wen Li. She was instructed to register the property inthe names of Mr Le and Chin Wen Li as tenants in common in equal shares.6[13] Sometime later in 1996 Chin Wen Li returned to New Zealand to complete hisstudies. In 1997 Mr Le and his family moved to New Zealand where they joined Chin6 Settlement occurred on 27 September 1996.Wen Li at the property. The families lived there until 2001 when Mr Le and his wifeand family returned to Taiwan. Later in 2004 Mr Le returned to New Zealand withhis son and remained here until 2008, when he returned to Taiwan. He has been livingin Taiwan since then.[14] The evidence shows that once the property was acquired various members ofthe extended family of Mr Li and Mr Le lived there while resident in New Zealand.[15] Whilst the extent to which Mr Le and his brother maintained a businessrelationship in Taiwan is now disputed there was a time when the brothers workedclosely together as is evidenced by their visit to New Zealand, the purchase ofthe property and the shared family use of the property.High Court judgment[16] The Judge was faced with a claim which required her to resolve factualdisputes dating back to the period between 1996 and 2002. Much of the documentaryevidence that might be relied upon for independent proof, such as bank statements andlawyers' files, was no longer available. Mr Li was suffering from ill-health and wastoo unwell to travel to New Zealand to give evidence. There was a move to have himgive evidence from Taiwan by audio visual link, but this was denied by Downs Jfollowing an interlocutory hearing.7 Mr Li then gave evidence by affidavit. At trialthe Judge put Mr Li's evidence to the side.8 There was no challenge on appeal to thisdecision.[17] The key witnesses at trial for the respondents were Ms Yang and Hsiu ChuanTsai, who was employed in 1995 to work for Wenheng and Hemu. Ms Yang andMs Tsai were both involved in the daily financial management of Wenheng, andMs Tsai gave evidence as Hemu's accountant.[18] Ms Yang's evidence was that she and Mr Li had left New Zealand the day afterthe auction so that they could arrange for funds to enable Wenheng to purchase7 Hemu Trade Co Ltd v Le HC Auckland CIV-2016-404-416, 18 October 2017 (Minute (No 2) ofDowns J).8 Hemu Trade Co Ltd v Le, above n 1, at [6].the property. She said they had not expected to purchase a property in New Zealandso quickly and so they did not have ready access to funds to allow them to completethe purchase. This was the reason Ms Yang gave for why Mr Le paid the deposit forthe property. She said it was always the intention that Wenheng would reimburseMr Le.[19] She gave evidence that she later transferred funds to reimburse Mr Le forthe deposit payment. She also said she had provided the balance of the purchase pricefrom Wenheng's funds which she gave to Mr Le to transfer to New Zealand. She saidthat at the time she trusted him as he was her husband's brother and a senior employeeof Wenheng.[20] Ms Tsai gave evidence of how she became aware of the purchase ofthe property. She recalled the price was TWD 6,621,184. Wenheng was to payapproximately TWD 656,000 in cash and the balance from term deposits. These fundswere to be transferred to New Zealand. She was told this at the time by Ms Yang.9The payment necessitated changes in Wenheng's internal accounts. Ms Tsai said sherecorded the change in the company's assets from term deposits to the overseasproperty investment. Copies of these accounts in evidence included the statements ofassets and liabilities for the months ending December 1997, 1998, 1999 and 2000 allof which recorded the "New Zealand" house as an asset at the book value ofTWD 6,621,184. This sum is the approximate equivalent of the purchase price inNew Zealand dollars. The internal accounting records for the years prior toDecember 1997 were no longer available.[21] Ms Tsai also said that the internal accounts for the 2001 year could not be foundbut that from 2002 onwards the property was then recorded as an asset in the internalaccounting records of Hemu. Copies of that company's internal records includedthe statement of assets and liabilities for the years ending December 2002,9 Ms Tsai gave evidence of what Ms Yang said to Ms Tsai about the purchase as background tothe actions she took to record the purchase of the property in Wenheng's accounts. In this contextMs Tsai's relating what Ms Yang had said was relevant and admissible as it went to explainthe actions Ms Tsai undertook. Further, in light of Mr Le's challenge to Ms Yang's account ofthe payment by Wenheng, Ms Tsai's evidence of what Ms Yang told Ms Tsai at the relevant timeis evidence of a prior consistent statement by Ms Yang that is admissible under s 35(2) ofthe Evidence Act 2006 as a response to Mr Le's challenge to Ms Yang's veracity.December 2003, December 2004, December 2005 and December 2010 all of whichrecord the "New Zealand" house at the book value of TWD 6,621,184.[22] The Judge gave six reasons for finding Wenheng provided the funds forthe purchase. First, she found the initial correspondence from Ms Lim was notinconsistent with Wenheng providing the funds for the purchase.10[23] Secondly, she noted that all Mr Le's communications with Ms Lim were onWenheng's letterhead and the communications were addressed from and to Mr Le atWenheng. The Judge found this was consistent with Wenheng providing the purchasefunds. Also, she found Mr Le's explanation for why he had used Wenheng's address,when he was asserting he was acting on his own and his brother's behalf to beunconvincing.11[24] Thirdly, the Judge found that Ms Yang and Ms Tsai had confirmed thatWenheng's funds were used to pay the balance of the purchase price. The Judge foundboth to be credible and reliable witnesses.12[25] Fourthly, the Judge found the evidence of Ms Yang and Ms Tsai to be consistentwith Wenheng's internal records which were the only available contemporaneousdocuments. In this regard the Judge found the recording of the property in the accountsof Wenheng was consistent with the property belonging to Wenheng as a result of ithaving funded the purchase price. This action was also consistent with Ms Tsai'sevidence about the need to balance Wenheng's accounts by recording the house asan asset given Wenheng's term deposits had been used to fund the purchase.The Judge noted there was no suggestion the accounts were not prepared on that basisbefore the brothers fell out.13[26] Fifthly, the Judge found the property being registered in the names of Mr Leand Chin Wen Li was not inconsistent with the purchase being funded by Wenheng.In this regard she noted that a number of the respondent's witnesses, Ms Yang,10 Hemu Trade Co Ltd v Le, above n 1, at [68].11 At [69].12 At [70].13 At [71].Ms Tsai, Chin Wen Li and his younger brother Chao Wen Li gave evidence of assetsof Wenheng, such as bank accounts, being held in the names of individual familymembers. The Judge also noted that Wenheng's internal accounts often recorded anindividual's name next to a local or international bank account, which is consistentwith the account being held in that individual's name.14[27] Sixthly, the Judge found that Mr Le had provided no clear evidence of wherehe had obtained funds to personally fund his share of the property. That amount wouldhave been approximately NZD 150,000 which was a considerable sum in 1996.However, at the time Mr Le's evidence was he worked part time as a lecturer atuniversity in Taiwan and part time for Wenheng, but in circumstances where heacknowledged he did not receive any salary. Further, in answer to interrogatoriesMr Le had said he "[did] not now recall" how much he had contributed directly tothe purchase price; how much had had contributed indirectly to the purchase price; orwhich bank and country the funds originated from. The Judge was satisfied that eventaking into account the lengthy period of time since the purchase of the propertyMr Le's answers to interrogatories were "somewhat unusual in the context ofa reasonably significant purchase, and in the context of formal court proceedings onthe issue".15[28] The Judge was not satisfied Wenheng had paid the deposit.16 No-one disputedMr Le had initially paid the deposit of NZD 30,000; however, the respondents' casewas that later Wenheng reimbursed Mr Le for this payment. Ms Yang gave evidencethat on her return to Taiwan in August 1996, she arranged for Mr Le to be reimbursedfrom Wenheng's funds. She said he was paid the equivalent of NZD 60,000 in cash.Ms Tsai did not address this issue in her evidence.[29] There was no documentary record of Ms Yang either withdrawing cash fundsfrom Wenheng's bank account or paying them to Mr Le at a time that coincided withwhen he might have expected to be reimbursed. The documentary recordthe respondents did provide related to an earlier payment Ms Yang made to Mr Le on14 At [72].15 At [73].16 At [76]–[81].7 March 1996. Given it pre-dated the purchase of the property, that payment couldnot constitute reimbursement of the deposit. The Judge found that in the absence ofany contemporaneous documentary evidence to show the payment of funds to Mr Le,she was not satisfied Wenheng had reimbursed him.[30] The final issue the Judge had to deal with regarding the resulting trust claimwas Hemu's standing to bring the claim. The Judge acknowledged there was noevidence as to how Wenheng's beneficial interest in the property came to betransferred to Hemu.17 Nevertheless, she was satisfied the transfer had occurred.First, there was the evidence of Chin Wen Li who in 1997 had replaced Mr Le asa director of Hemu. His evidence was that in 2001 Hemu had taken over Wenheng'sbusiness and acquired all its assets and liabilities.18[31] Secondly, Ms Tsai prepared the accounts for both Wenheng and Hemu.She confirmed that there was a single book of internal accounts for both companies,which recorded the property as a company asset.19[32] Thirdly, Hemu's internal accounts recorded the property as a company asset inprecisely the same way and amount as had been recorded in the Wenheng accounts.20[33] Accordingly, the Judge was satisfied a transfer had occurred despitethe absence of direct evidence to show how it came about. She also found there wasno suggestion or evidence that the transfer was ineffectual as a matter of Taiwaneselaw.21 All of which led her to conclude Mr Le holds 41 per cent of the property ona resulting trust for Hemu.22[34] As to Hemu's claim to be entitled to an account from Mr Le for rent fromthe property the Judge took into account the use various members of the extendedfamily of Mr Li and Mr Le made of the property from the time of its acquisition in1996. During those times a sleepout at the back of the property and rooms in the main17 At [84].18 At [85].19 At [86].20 At [89].21 At [89].22 At [101].house were rented out to third parties when not in use by family members. Ms Yangconfirmed that when she lived at the property between 2002 and 2003 with her sonChao Wen Li and Mr Le's two children she arranged for the sleepout to be rentedand used the rent to pay for outgoings and utilities in respect of the property as well asfor general living expenses, in particular meals for family members. She neverremitted any surplus rental to Wenheng.23[35] The Judge found there was no evidence at any time between the property'spurchase in 1996 and 2010 of rent being paid to Wenheng.24 Nor was there evidencethat during this period Wenheng, Hemu, Mr Li or Chin Wen Li asked Mr Le ormembers of his family to account for the rent. The Judge considered it "extraordinary"that if Wenheng expected to receive surplus rent from Mr Le or his family membersthe company had made no such demands over approximately a decade.Accordingly, she concluded that despite the property being funded largely byWenheng there was a general understanding and expectation that family memberscould reside in the property, and any room or rooms, including the sleepout, whichwere rented from time to time. The rental income received would be applied to meetoutgoings on the property with any surplus rent being available for general livingexpenses.25 She noted this was the position from the outset without objection untilthe brothers fell out. Thus, she rejected the respondents' claim for rent.26Grounds of appeal[36] The grounds of appeal make numerous challenges to the material factualfindings of the Judge on the basis she erred: (a) by failing to give proper considerationto the evidence on which she relied; and (b) by failing to give sufficient weight to otherevidence all of which has led to her wrongly giving judgment for the respondents.A further ground of appeal contends Mr Le had a complete defence under s 21 ofthe Limitation Act 1950. In the written submissions Mr Le also complained aboutthe quality of the respondents' evidence contending that much of it was hearsay.2723 At [93].24 At [95].25 At [96].26 At [98].27 There is no record of objection to the admissibility of the witnesses' evidence at trial.Discussion[37] Mr Le commenced his arguments by reliance on the Limitation Act ground ofappeal, which he considered to provide a complete answer to the respondents' claims.We take a different view. The resulting trust claim is an equitable claim which fallsoutside the scope of the Limitation Act. Whilst the defence of laches is available itwas not pleaded. Moreover, had it been pleaded we see no prospect of its success.The respondents commenced their claim in March 2016. Mr Le's evidence is thatthe brothers fell out in 2010 and this led to Hemu taking proceedings against him inTaiwan. Mr Le does not say when in 2010 the falling out occurred however it placesthe commencement of the present proceedings sufficiently close to meetingthe six-year time frame in the Limitation Act, which can be used as a guide forassessing whether an equitable claim should be dismissed on the ground of delay.[38] As to the other grounds of appeal, we see no basis for interfering withthe Judge's conclusion that Wenheng funded the purchase of the property, which hasled to it having a beneficial interest in the property. The Judge had the benefit of seeingand hearing the witnesses give evidence. She plainly preferred the evidence ofthe respondents' witnesses, particularly Ms Yang and Ms Tsai. It was open tothe Judge to do so. They each had a direct involvement in the steps Wenheng took tofund the purchase of this property and therefore were able to give a first-hand accountof what was done. Moreover, the evidence of those witnesses is consistent withthe available documentary evidence and the circumstantial evidence.[39] It is difficult to account for why Ms Tsai would have recorded the property inWenheng's statements of assets and liabilities had it not been funded by that company.We acknowledge there is evidence that both Wenheng and Hemu had internal andexternal sets of accounts and that the property was not listed in the companies' externalaccounts, upon which their tax liability was assessed. Mr Le contends that this showsthe companies were conducting a tax fraud in Taiwan by not disclosing all assets.Accordingly, he contends the New Zealand courts should not recognise the internalaccounts on which the respondents rely. However, he has provided no expert evidenceon Taiwanese law to establish the companies' actions in having two sets of accountsconstituted a tax fraud in Taiwan. The parties have been involved in litigation againsteach other in Taiwan that would have provided opportunity for Mr Le to raise issuesregarding the companies' alleged tax evasion, but he seemingly has not done so.Nothing to this end has eventuated from the Taiwanese litigation. Accordingly, we seeno basis for rejecting the respondents' evidence relating to the internal accounts.[40] The idea of Mr Le holding his share of the property on trust for Wenheng isconsistent with other occasions where other persons have held property on trust forthat company. Chin Wen Li holds the other half share of the property despite himhaving paid no money towards the purchase, which is consistent with him holding thatshare on trust for the provider of those funds. Chao Wen Li (Chin Wen Li's brother)gave evidence of holding bank accounts in his name on behalf of Wenheng.The accounts of Wenheng record bank accounts which have individual's namesrecorded alongside, which is consistent with associating the named individuals withthose accounts. It also supports the view that those accounts were held in the namesof those individuals.[41] Whilst the idea of having different named owners from the beneficial owner ofparticular assets is not usual in this country in a commercial context, the use of thispattern of ownership was always part of the respondents' case. It was, therefore, opento Mr Le to obtain expert evidence from Taiwan to establish such conduct was nota proper or usual way of doing business in Taiwan, however he chose not to do so.This suggests to us such evidence was not available for him to call.28[42] We also find Mr Le's inability to recall how he funded the purchaseextraordinary. He was asked to provide this information by answering interrogatoriesand he had ample time to consider the answer.[43] We observe that Mr Le addressed no arguments on the legal consequences ofWenheng having funded the purchase of the property. We agree with the Judge thatthe provision of funds from Wenheng has the legal consequence of creating a resultingtrust for the benefit of Wenheng.2928 See Ithaca (Custodians) Ltd v Perry Corp [2004] 1 NZLR 731 (CA) at [154].[44] As to the transfer of the beneficial interest in the property from Wenheng toHemu, again we see no basis for interfering with the Judge's findings. She relied onthe evidence of Chin Wen Li, Ms Tsai and the accounting records of Hemu.[45] Chin Wen Li was a director of Hemu from 1997 onwards. He gave evidencethat in 2001 Hemu had taken over Wenheng's business and acquired its assets andliabilities, including the property. As a director of Hemu, Chin Wen Li can be expectedto have direct knowledge of the assets and liabilities of that company.[46] Ms Tsai referred to the internal accounts being initially one set of accounts forboth Wenheng and Hemu, but that after 2000 there was only Hemu, which is whenthe property then appeared in Hemu's statements of assets and liabilities. This isconfirmed by the copies of those accounts that are in evidence.[47] It is difficult to see why an asset of Wenheng would appear in Hemu'sstatement of assets and liabilities if it were not for the fact the property had beentransferred to Hemu. In 2001 and the years immediately following the brothers werestill on good terms. There is no obvious ulterior reason for Hemu to take this action.[48] In his evidence Mr Le accepted, albeit for different reasons, that Wenheng wasnot operating after 2001 and that Mr Li had transferred Wenheng's assets elsewhere.Thus, there is no dispute that the company's assets were placed elsewhere.This coupled with the property being recorded in Hemu's statements of assets andliabilities, as shown in the evidence, confirms the direct evidence of Chin Wen Li andMs Tsai. Accordingly, we are satisfied Wenheng's beneficial interest in the propertywas transferred to Hemu.[49] It follows that we find Hemu has standing to bring this proceeding againstMr Le.29 Hemu Trading Co Ltd v Le, above n 1, at [57]–[61] citing Westdeutsche Landesbank Girozentralev Islington London Borough Council [1996] AC 669 (HL) at 708; Stack v Dowden [2007] UKHL17, [2007] 2 AC 432; Crampton-Smith v Crampton-Smith [2011] NZCA 308, [2012] 1 NZLR 5 at[36], [37] and [41] referring to William Swadling "Explaining Resulting Trusts" (2008) 124 LQR72 at 74; Jessica Palmer "Resulting Trusts" in Andrew Butler (ed) Equity and Trusts inNew Zealand (2nd ed Thomson Reuters, Wellington 2009), 307 at [12.3.1]; Chang v Lee [2017]NZCA 308 [2017] NZAR 1223 at [18]–[21]; Potter v Potter [2003] 3 NZLR 145 (CA) at [13].Cross appeal[50] The respondents cross appeal against the Judge's findings that Wenheng didnot reimburse Mr Le for the deposit he paid on the purchase of the property andthe findings that Mr Le did not account to Wenheng for rent received for the property.[51] Unlike the Judge we consider there was sufficient evidence to establish thatWenheng reimbursed Mr Le for the deposit he paid for the property. We acknowledgethat Ms Yang was confused about the payment of TWD 1,200,000 on 7 March 1996.We also acknowledge that there are no banking records in evidence of Wenhengtransferring funds equivalent to the deposit around the time it would have been paid.But against this we note that Wenheng consistently recorded the book value ofthe property in its accounts at its purchase price equivalent in Taiwanese dollars, whichsuggests that Wenheng provided all the funds for this purchase.[52] In relation to payment of the balance of the purchase price, like the Judge wehave found Wenheng's treatment of the property in the internal accounts to be reliableand credible evidence the company provided the funds for this purpose.Like the Judge, we have also found Ms Tsai's explanation for the inclusion ofthe property in the company's accounts to be reliable evidence. However, unlikethe Judge, we consider that Wenheng would not have recorded the full amount ofthe purchase price as representative of its interest in the property had the company notpaid this amount. To do differently would be contrary to the reasons Ms Tsai gave forrecording the property in Wenheng's accounts. The Judge found Ms Tsai to bea reliable and credible witness in relation to the payment of the balance of the purchaseprice and we consider it would be logically inconsistent not to apply the samereasoning to the deposit as well.[53] Regarding the Judge's findings on Mr Le's alleged failure to account for rentreceived for the property, we take the same view. The complete absence of demandsfrom Wenheng is consistent with the parties' understanding at the time that rent shouldbe used to meet the outgoings of the property and any surplus could be applied to meetfamily expenses.[54] Accordingly, we are satisfied the cross-appeal should be allowed to the extentit relates to the payment of the deposit. It follows that we find Mr Le holds his entireshare in the property on a resulting trust for Hemu.[55] The findings we have reached are based on primary evidence.We acknowledge the evidence of some of the witnesses, in particular Chin Wen Li,included hearsay statements. However, such evidence has not influenced ourreasoning, nor do we consider it was influential on the Judge. Accordingly, we rejectMr Le's arguments that the outcome of the trial was adversely affected by inadmissibleevidence.Result[56] The application to adduce further evidence is declined.[57] The appeal is dismissed.[58] The cross-appeal is allowed in part. The appellant holds his 50 per cent shareof the property at 32 Pinewood Street, Avondale, Auckland on trust for the firstrespondent.[59] The appellant is to pay one set of costs to the respondents for a standard appealon a band A basis and usual disbursements.Solicitors:Henley-Smith Law, Auckland for AppellantPrestige Lawyers Ltd, Auckland for Respondents