Elizabeth Zhong, pictured with her dogs in 2014. Photo: Stuff / Supplied
The wife of a millionaire who murdered his former business partner has failed in her quest to get $1.7m from the victim's company and has instead been ordered to pay costs by the Court of Appeal.
Jingqiu Tang's husband Fang Sun was driven by the loss of more than $26 million when he entered Elizabeth Zhong's home and stabbed her multiple times, nearly decapitating her. He's serving a life sentence and must spend at least 18 and a half years behind bars before he's eligible to apply for parole.
Last year Tang's business Sunbow Investment Ltd (SIL) went first to the High Court in an attempt to get $2,077,853.74 it claimed it was owed by Zhong's company Sunbow Ltd (Sunbow).
SIL argued the $2m was sought due to a settlement agreement executed on behalf of Sunbow by Zhong.
In December 2019, Sunbow entered into an "Acknowledgement of Debt and Settlement Agreement" with SIL and SILNZ.
Under the agreement, Zhong's business admitted the $2m debt owed to Tang's business SIL. The agreement would see Zhong sell a vineyard owned by her business to SIL and that the debt would be taken off the purchase price.
The High Court dismissed the case with Justice Kiri Tahana finding that Zhong only entered into the agreement "under duress and undue influence in circumstances where Zhong's life had been threatened" by Tang's husband Sun, making the agreement unenforceable.
SIL then appealed that decision to the Court of Appeal who recently released its decision.
In his decision, Justice Timothy Brewer noted that Tang's business SIL did not disagree with the High Court's finding that Zhong entered the agreement with Tang's business "under duress" and was therefore unenforceable.
Justice Brewer said evidence showed that prior to the agreement between the two businesses, Tang's business SIL had made payments to Zhong's business Sunbow which led to the agreement being drafted.
"These payments are repayable by Sunbow independent of the Agreement and it is submitted that Tahana J (High Court Justice) should have made an order accordingly."
SIL sought an order that Sunbow was liable to it in the sum of $1,742,187.50.
However, Sunbow management defended not paying the sum, instead launching an "illegality defence" saying a "man closely connected to SIL (and arguably, its controller)", murdered Zhong.
Fang Sun was sentenced to life imprisonment after being found guilty of murdering Elizabeth Zhong. Photo: Stuff / Lawrence Smith
"Sunbow submits that Ms Zhong's murder puts it at a material disadvantage and, given Mr Sun's connection to SIL, the illegality defence means that SIL's appeal must fail."
The key issue for the Court of Appeal to decide was whether the Settlement Agreement was binding and Sunbow was liable to owe SIL.
In Justice Brewer's judgement, he raised the fact the Court of Appeal were asked to go outside the case originally argued at the High Court.
"We decline to do so," Justice Brewer said.
He said the new matters raised at the Court of Appeal must be put before the High Court first.
"Likewise, whether the defence of illegality can be advanced is for the High Court."
Zhong's murder defence by her former business could only be heard in the High Court, Justice Brewer said.
He ordered SIL to pay the respondent costs.
Media and wine business ends in spying and murder
Zhong, who emigrated to New Zealand in 1997, was a proud businesswoman. She had been successful for many years - owning wineries and an entertainment business - but for reasons unknown, her businesses began to spiral.
She met Sun in 2013 and they became business partners the following year, investing about $28 million into several Kiwi companies. When Sun and his family were in New Zealand they would stay at Zhong's home.
But the relationship soured, with Sun accusing Zhong of misappropriating company funds for personal use.
The breakdown in the relationship came at a time when several of Zhong's businesses were struggling.
In 2019, Zhong's Waiheke vineyard was sold at a mortgagee sale, which devastated the businesswoman.
The following year, Zhong's visual effects and post-production company, DigiPost, was also sold at a mortgagee sale with a loss of $3m.
In the months before she was killed, most of Zhong's businesses and properties were sold to recover millions of dollars in debt.
But she pleaded with the bank not to sell the house she was eventually stabbed to death in, as it was her last asset.
She also told Bank of New Zealand staff that she was being threatened by her business partner with "gangsters".
"Fang Sun has threatened me that if I do not behave, he will kill me," she said in an affidavit filed to the High Court.
In February 2020, Sun went to police, alleging Zhong had misappropriated about $20m of investment funds.
The same month, Zhong and Sun met at BNZ with Peter Farrow, a senior credit manager, and Andrew McKay from BDO, who was the receiver of one of their wineries.
"Mr Sun appeared very angry and accused the receiver of colluding with Elizabeth to minimise the recovery, sell the assets for less than their value," Farrow said.
Fang Sun paid a PI to follow Elizabeth Zhong in the months before her death. Photo: Stuff
In April 2020, Zhong filed an online police report saying she was feeling "especially vulnerable" and "horrified by the ongoing threats" made by Sun and his associates.
She was increasingly concerned about the safety of her family and friends. By July 2020, Sun had hired a private investigator to follow and watch Zhong's movements.
In October 2020, Zhong took business associates down to Queenstown in the hope they might buy Carrick Winery.
That same month, Sun and his family moved into a house mere minutes away from the woman who had now become his nemesis.
In the month leading up to Zhong's death, as her money worries mounted up, her friends and family became increasingly concerned about her mental state.
On October 30, liquidators were appointed to her company DigiFilm and its shareholder, Sunbow Ltd.
That evening, Zhong tried to take her own life.
In an email seen by Stuff, dated November 18, 2020, Zhong told a lawyer acting for one of her creditors, Yi Nan, that she couldn't afford a solicitor any more.
In the email, Zhong went on to detail how she had been followed and how her and her family's lives had been threatened.
She also told the lawyer her Kenney Point vineyard sold at a loss of $2.5m.
"It may sound like a figure to you, but it's almost my whole life's hard work. It's my blood and tears."
Ten days later, Sun slipped into her east Auckland home and violently stabbed her to death.
- This story was first published by Stuff