By Jeremy Wilkinson, Open Justice multimedia journalist, Palmerston North of 
Photo: 123RF
When Jackie Liu noticed $400,000 missing from the construction company's accounts he could have gone to the police. Instead, the company director confronted employee Hua Wu, who agreed to pay the missing money to the business.
Wu also signed a document agreeing to pay more money, in a deal a judge has essentially found he was blackmailed into.
In February 2018, Wu was employed as the general manager of Timber King, also known as Three Brothers Building Centre, in Auckland when Liu noticed the large irregularity in its accounting and payments systems.
Wu later claimed that Jackie Liu blackmailed him and threatened to go to the police, Inland Revenue and Immigration if he didn't pay Liu the money that was missing from the company coffers.
However, that wasn't the end of the matter. Over the next four months Jackie and his father, Jinxing Liu, hashed out a deal between the business and Wu where he would pay them a further $1.2 million by the end of the year.
Wu agreed to transfer ownership of a property he owned in Māngere to Jinxing, while a further $600,000 was to be paid by November 2018. Wu's wife, Crystal Wang, guaranteed his debt and sold one of her own properties to fund the remaining half of what was owed.
In March 2022, Wu launched a case in the High Court where he sought to recover the $400,000 he paid to Timber King as well as a further $1.2m he paid to Jinxing.
However, shortly before the trial began last month, Wu abandoned his claim to recoup the $400,000, choosing instead to focus on reclaiming the $1.2m.
As part of that claim, Wu also says Timber King's allegation he had stolen money from the business was false.
"I was blackmailed and threatened by Jinxing and Jackie," Wu said in evidence to the court.
"Fundamentally, they believed or claimed, as above, that I had committed various sorts of fraud against Timber King, totalling about $400,000."
Wu's evidence goes on to claim that Timber King's directors called his parents in China and threatened to send "Mafia-type" debt collectors to their home.
"They spread false rumours about me and defamed me, saying that I was a liar and had stolen Timber King and their property and money. This destroyed my reputation in Chinese business circles in New Zealand," Wu claimed.
Wu alleged that threats from the two company directors prompted him to pay two instalments of $200,000, but instead of resolving the issue their "threats and intimidation" escalated to a point where he was pressured to sign over one of his properties as well as a further $600,000.
Jinxing and Jackie dispute Wu's version of events regarding the extra $1.2m Wu claims he was forced to pay.
They claim this figure was based on a decade-old debt Wu had taken from Jinxing and promised to repay but never did.
In a recently released ruling from the High Court at Auckland, Justice Graham Lang found that position "inherently unlikely" and that the $1.2m Wu agreed to pay was clearly recompense for the money he'd allegedly taken from Timber King.
Justice Lang said a covert recording Wu made of a conversation between himself, his wife and Jinxing, proved this "beyond question".
The judge said it was clear Wu and Crystal must have had a good reason to make payments of more than a million dollars, and it was clear pressure had been placed on them by Jackie and Jinxing.
"Mr Wu had repaid the sum of $400,000 but Jackie and Jinxing were obviously not satisfied this was adequate recompense. They wanted more," Justice Lang said.
"It is not possible to ascertain with any certainty what Jackie and Jinxing told Mr Wu and Crystal they would do if their demands were not met. I am not prepared to find that the pressure involved threats of physical violence against either Mr Wu or his family in China."
However, Justice Lang said the pressure must have been significant to cause Wu to part with assets of such great value.
"In all likelihood, it involved, at the least, threats to report the thefts from Timber King to the police or the immigration authorities. Jinxing and Jackie may not have spread rumours about the thefts themselves, but any investigation by the police or immigration authorities would obviously have carried significant reputational and criminal risk for Mr Wu," Justice Lang's ruling reads.
"It follows that I am satisfied that Mr Wu and Crystal entered into the deed as a result of the threats made by Jackie and Jinxing after they discovered that Mr Wu had stolen money from Timber King."
Justice Lang said the pressure "amounted to blackmail" and that Jackie and Jinxing had no legal right to use Wu's actions in stealing from Timber King to financially benefit from themselves.
However, despite his finding that serious pressure had been applied to Wu and that he entered into a signed agreement to pay $1.2m under duress, Justice Lang found that Wu was apparently content to be bound by its terms for over three years.
The judge said Wu's lack of action between November 2018 and March 2022 indicated he was happy to abide by the agreement. The judge dismissed Wu's claim.
It was Wu's evidence at the hearing this year that Jinxing's threats lost their potency and Wu began to question Jinxing's power and influence as an alleged loan shark in China.
It was for these reasons, as well as "an amalgam of complex circumstances that unfolded over time", including lack of finances to fund litigation, that he claimed were behind the delay, rather than his being happy with the agreement he'd signed.
Part of his claim was also against Yuhua Liu, the niece of Jinxing Liu, as she eventually purchased the property Wu had transferred as payment from her uncle.
Wu claimed Yuhua was aware of how her uncle had acquired the property and was therefore also at fault. Justice Lang dismissed this claim on the basis that it was tied to Wu's failed claim against Jinxing, though the judge did note that it would have failed on its own regardless.
Jackie and Jinxing Liu declined to provide comment for this article.
Wu also declined to comment on the ruling, but said through his counsel that he was considering his rights to appeal it.
* This story originally appeared in the New Zealand Herald.
