A former immigration minister has been ordered to pay almost half a million dollars to a Chinese national he acted as immigration adviser to in 2012.

Tuariki John Delamere has lost an appeal to thwart a High Court judgment ordering him to pay $459,209.87 to Yinheng Liu.

Liu enlisted the services of Delamere and his company TDA Immigration to help him achieve citizenship using a fast-track immigration pathway for entrepreneurs.

The pathway requires applicants to have invested at least $500,000 in a New Zealand-operated business that will hire at least three New Zealand citizens or permanent residents on a full-time basis for at least two years.

Liu and Delamere agreed the former would invest the money into a new branch of Delamere’s immigration advisory company and take on a director’s role, allowing him to receive commission if he found potential clients.

A written agreement gave Liu the right to veto any proposed use of the money he disagreed with, and gave him the option to sell his shares back to Delamere once he was granted permanent residency.

It appears that’s where things went south.

Liu was denied residency, with Immigration New Zealand unconvinced his $500,000 deposit was truly for the business’s use and saying the company had retained the services of two existing employees rather than creating the three new employment positions required in accordance with the Entrepreneur Plus scheme.

Liu then asked for his money back, but found more than $300,000 of it had been transferred to the company’s operating expense account. Despite the earlier written agreement, Delamere - or his company - were able to move the money out of Liu’s reach.

In the High Court, Liu accused Delamere and his company of breach of contract and not meeting the implied term of returning his money should he fail the residency application.

The defendants argued Liu had assumed an obligation of sourcing clients for the company which he had failed to fulfil, and had attempted to recover sunk costs.

In court, Delamere said Liu must have known the funds were needed to meet operating expenses and that the company needed to continue trading if his application for residency was to succeed.

The judge rejected this defence, saying the company had income from other clients.

He also rejected the idea the two obligations were mutually contingent as a joint venture: ※The obligations imposed on one party by one agreement did not depend on the other.§

The judge said the return of the money following a failed application should be implied, citing a case where a Belize-incorporated mining company contracted a New Zealand-based mining company, but then took the latter to court when the mining didn’t happen.

The High Court ordered Delamere to pay up, but he took the case to the Court of Appeal, where lawyer AC Beck argued against the judge’s findings that Liu could reasonably expect his money back.

Beck argued the ※strict necessity§ test for the money’s return being implicit was not met.

The Court of Appeal rejected this argument, saying the purpose of the arrangement was for Liu to get citizenship, not embark on a traditional joint venture with Delamere.

※It is very clear that he would have made no such investment but for his desire to progress his permanent residency application,§ the court documents read.

※It is equally clear that if the application were to fail there would have been no reason or justification for a continued involvement in the arrangements on his part.§

The appeal was dismissed, leaving Delamere on the hook for the money plus interest and legal costs.

Newsroom contacted Delamere on Friday for comment, but he was unable to comment before publication.

Delamere served in Parliament between 1996 and 1999 and served as Minister of Immigration.

He was a member of New Zealand First until 1998, when he resigned from the party but retained his portfolios as an independent.

He left Parliament in 1999 and established his own immigration consultancy the next year.

In 2007 he appeared in the High Court in Auckland on charges of fraud.

Crown prosecutor Simon Moore alleged the former MP had used his knowledge of immigration laws, many of which he had written himself, to help migrants beat the system.

The jury found him not guilty of all charges, after which Delamere called the trial a set-up orchestrated by the Serious Fraud Office.