One of the world’s richest men, Hong Kong property magnate Samuel Tak Lee, has lost his appeal against a high court ruling that he gave his former lover two London properties bought for a total of more than £3million.
In July last year, Norris J found that Mr Lee – who he described as “one of the world’s truly super rich” – lied when he claimed that masseuse Fuk Fei Wu was only his employee, and not his mistress.
Though married, Mr Lee did not appeal that finding. He claimed that the judge wrongly focussed on the relationship and should have concentrated on contemporaneous legal documents in deciding his claim to beneficial ownership of 66 and 64 Avonmore Road, London, W14, which he bought for £1.5m and £1.6m respectively in 2008.
However, McCombe LJ today dismissed the appeal, ruling: “The nature of the entire case, and ultimately the rival cases about the disputed properties, was coloured by Mr Lee’s untruthful and dishonest account of his relationship with Ms Wu. Its true nature gave the explanation for the acquisition of these properties.”
Norris J found that although No 66 was undoubtedly purchased with Mr Lee’s money, he did so in the name of Ms Wu’s Seychelles-based company, Favour Easy Management Ltd, and intended it as a gift for her benefit.
And he ruled that Ms Wu purchased No 64 as a personal venture using borrowings, without Mr Lee’s involvement, and that although she subsequently used money paid into her bank account by Mr Lee to pay off part of the borrowing, this did not entitle him to a constructive trust. He said that it was clear that, when he paid the money, he intended it as a gift.
Mr Lee appealed the ruling, claiming that it was agreed that he would fund the purchase of a hotel in January 2008, and No 64 later, for a total of more than £3m, and that Ms Wu would run the enterprise as part of his property empire under the complex and secretive business model known as “Zho Wen Xuan”, named after a Chinese businessman from Ms Wu’s hometown.
He argued that, after the judge found that both parties were “less than straightforward people”, he should have decided the case solely on the basis of the contemporaneous documents, which he claimed demonstrated a clear intention that he would retain ultimate ownership and control of the properties.
However, dismissing the appeal, McCombe LJ said that the judge was not bound simply to construe the documents “in isolation from the realities of the case”.
He said that the judge was correct to have regard to the whole of the evidence in the case.
He said: “For reasons that the judge explains at substantial length, he found that the relationship between Mr Lee and Ms Wu was not as Mr Lee contended. The relationship was one of companionship and was sexual in its nature. This was clearly a significant feature of the case to which the judge quite properly gave weight.”
He said that Mr Lee had lavished “large sums, which to ordinary people would seem extraordinary” on Ms Wu, providing jewels, watches and furs to the value of some £123,000 on top of money and properties.
He continued: “The fact that Mr Lee had lied so compendiously about this relationship and this type of expenditure, as the judge quite properly found on the evidence before him, was obviously highly relevant to the issues in the case. These matters put the property acquisitions in context.
“I reject entirely the submission for Mr Lee that these matters were of no relevance at all and that all one had to do was to construe, in a formalistic legal fashion, the language of the solicitors’ documents and certain individual remarks taken from a series of confused and confusing telephone conversations.”
The court ordered Mr Lee to pay Ms Wu’s legal costs, and make a £50,000 interim payment.
Favor Easy Management Ltd and another v Wu and another Court of Appeal (Ward, Lloyd and McCombe LJJ) 21 November 2012
Anthony Trace QC, Ciaran Keller and Jonathan Allcock (instructed by Stephenson Harwood) for the claimants
Peter Crampin QC and Ulick Staunton (instructed by kamberley Solicitors) for the defendants
