Neil Sands
Former immigration minister Tuariki John Delamere has been bankrupted in the latest twist of a long-running legal dispute with former client Yingheng Liu, a Chinese national who was trying to gain residency in New Zealand.
Delamere, who was immigration minister during 1998 and 1999 and became an immigration consultant after leaving Parliament, unsuccessfully opposed Liu’s application in the High Court at Auckland to declare him bankrupt.
In a written decision, Associate Judge Rachel Sussock said failing to declare Delamere bankrupt would be unjust for Liu, who has been waiting almost four years for full payment after a court ruled that he was owed $459,209.87.
“Mr Liu first obtained the High Court judgment on which the bankruptcy application is based in December 2021. Mr Delamere then appealed it unsuccessfully to the Court of Appeal and then to the Supreme Court. Against this background, a halt of the bankruptcy proceedings would operate unjustly on Mr Liu,” she said.
‘No merit’ in new claim
The saga began in 2012, when Liu engaged Delamere’s immigration consultancies, TDA Immigration and Student Service and TDA Immigration Mt Albert, to help him gain New Zealand residency via the Business Entrepreneur Plus fast-track procedure.
This meant Liu had to invest a minimum of $500,000 in a business operated in New Zealand and employ at least three New Zealand citizens full-time for two years or more.
He put $500,000 into a company set up by Delamere, comprising $150,000 earmarked for operational expenses and $350,000 in a term deposit, with Liu as sole signatory.
As part of the deal, Liu agreed to use his contacts to refer other Chinese nationals who wanted to move to New Zealand to TDA, in return for a commission.
Liu’s residency application was declined, an outcome which had not been anticipated in the agreement he had reached with Delamere’s TDA.
TDA refused to pay back the $350,000 term deposit and Liu subsequently discovered most of the money had been withdrawn because he was not the sole account signatory, as had been agreed.
The High Court found in Liu’s favour in December 2021, although Delamere appealed, arguing he was not personally liable to repay the funds and Liu had not met his obligation to refer clients to TDA.
Delamere lost in the Court of Appeal and the Supreme Court, paying $94,791.47 to Liu in December last year, which reduced his debt to $364,418.40.
His lawyers argued that no bankruptcy order should be made because he had now brought separate action against Liu alleging breach of contract, fraudulent misrepresentation, deceit, unjust enrichment and breaches of the Fair Trading Act.
Sussock was not convinced the action would succeed and said, in any case, it was not grounds to halt the bankruptcy action.
“There appears no merit in the new proceeding filed by Mr Delamere in December 2024,” she said. “In any event, making a bankruptcy order will not necessarily prevent Mr Delamere’s new claim progressing.
“The Official Assignee may decide it is appropriate to continue if Mr Delamere can convince the Assignee that there is merit in the claim or that the claim should be assigned to him. If the claim were then successful, an application to annul the bankruptcy order could be made.
“In these circumstances, it does not fairly balance the conflicting interests of the parties to halt the bankruptcy proceedings in the meantime.”
Read the decision here
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