Second would-be buyer loses deposit on property deal

Asecond Auckland buyer has lost a property deposit following the case of a $2.3 million deposit loss on a Mt Eden place. Civil earthworks contractor Keith Rogers said he put down a 20 per cent deposit of $287,000 on a Te Atatu¯ South property, which was being sold for $1.4m.

But settlement never occurred and after months of trying he can’t recover his deposit.

This is the second deposit loss the Herald has reported this month. Rogers said his situation had similarities to the first case, where the buyer lost her multimillion-dollar deposit.

In that case, Associate Judge Grant Brittain ruled in the High Court at Auckland in favour of would-be buyer Wejun (Renee) Ji, who sued Zhaohai Ding’s company.

She paid the $2.3m deposit to Ding’s residential property investment company Annecy Holding for the $2.9m purchase of a Dominion Rd house. This was far above the usual 10 per cent deposit, which she was told would lower the price.

But the court noted Annecy kept that $2.3m and never transferred the property, with Ding blaming a financier for non-settlement.

The judge said Ji was entitled to get her money back from Ding’s company but she indicated this week she still hadn’t been paid.

In the second deposit-loss case, Rogers said he contracted to buy a residential property at 235 Edmonton Rd for a housing development.

His contracting business, Dacan Civil, undertakes big earthworks jobs for clients, but this was to be Rogers’ first housing project.

So his business, Kan Trust, contracted to buy the property from Hui Luo’s Acadia Investment, which had originally planned to develop the site after buying it for $2.3m, with a $1.6m mortgage. Rogers noted he was buying at a huge discount to Acadia’s purchase just a few months before.

But the day before settlement, Rogers’ lawyer Nick Kearney of Davenports at Albany got an email from the conveyancing practitioner working for the vendor, asking for settlement to be deferred for “finance repayment reason”. Rogers and Kearney realised the deposit and purchase could be in danger.

Kearney expressed concern and asked the vendor how the balance of the deposit was utilised.

“This question was not answered. When questioned further about the reasons for deferring settlement, the conveyancing practitioner said that the lender/mortgagee was requiring a ‘huge early repayment fee’ and that was the reason for the delay,” Rogers said.

Kearney said Rogers even offered to pay that fee to get the matter settled, but the offer was ignored.

The civil earthworks contractor then took firmer action.

“On Nick’s advice, I registered a caveat against the title and started to prepare legal proceedings asking for specific performance of the contract by Acadia. I got about halfway through, then I decided not to proceed,” Rogers said, anticipating a dead end and no assets.

Kearney agreed there was no point pursuing it. The deposit had been released to Acadia when the contract became unconditional. The lawyer issued a settlement notice to Acadia, demanding Rogers’ entity get ownership within 12 working days.

That settlement notice had long expired without any resolution, leaving Rogers in the lurch.

“I have not yet cancelled the agreement. My caveat remains registered on the title,” a disappointed Rogers said yesterday.

He then began his own investigation, trying to find Lao but realised another man — Zhaohai Ding, also known as Wills Ding — had involvement in planning development work on the Edmonton Rd property.

Rogers realised that this was the very same Ding who was at the centre of court action, his company having been ruled as owing Ji the $2.3m Mt Eden deposit refund.

One of Ding’s companies had engaged a consultant to liaise on resource consenting to develop 235 Edmonton Rd, Rogers discovered.

“It was Wills Ding who has engaged [X] as the project manager to liaise with all RC consulting teams,” wrote a consultant in an email to Rogers and Kearney.

Rogers and Kearney said they had been unable to contact Luo or Ding.

Nor are they able to recover the deposit and nor do they think it’s practical to take legal action because no assets are available if action succeeds

Ding defended his actions in an open letter posted on WeChat after criticism of real estate agents involved in the Te Atatu¯ non-sale.

That WeChat was translated for Rogers and Kearney.

“Due to the drastic market changes causing investor panic, a major portion of the funds needs to be returned to the parent company to repay investors and meet their urgent needs,” Ding wrote.

He took offence at criticism of the companies keeping deposits and said: “Our goal has always been to do the right thing and to constantly examine and uphold integrity in our company’s practices.”

Ding cited the Mt Eden address, Te Atatu¯ South and other addresses, saying his company Grandstone Corporation had been involved.

“We have faced challenges and achieved accomplishments that go beyond mere profits and losses. We have endured the pandemic, violent interest rate hikes, cyclones and various natural disasters.

“We believe that with unwavering courage, we can start anew and thrive,” Ding wrote on WeChat in his defence.