Arranmore Developments Limited v Zhou

[2017] NZHC 962

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-005440 [2017] NZHC 962

BETWEEN

ARRANMORE DEVELOPMENTS

LIMITED Plaintiff

AND

JIANMING ZHOU Defendant

Judgment:                11 May 2017

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 12 May 2017 at 2.30 pm

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date…………………………

ARRANMORE DEVELOPMENTS LTD v ZHOU [2017] NZHC 962 [11 May 2017]

[1]      In my decision dated 20 March 2017 I dismissed the plaintiff’s claim and

directed that memoranda on costs be filed.

[2]      The defendant seeks costs of $84,913.50 (this figure having been increased from an initial claim of $68,572.50).  The plaintiff submits that the increased claim ought not be allowed and, further, that the original claim ought to be decreased because of the defendant’s own conduct in contributing to the cost of the proceeding.

[3]      The first ground relied on as justifying a decrease in costs is an assertion made by the defendant in an affirmation dated 19 March 2015 that:

I have never given authority to anybody, including my daughter, to act on my

behalf as an agent and to sign any agreement for me as an agent …

[4]      A  central  issue  in  the  case  was  whether  (as  the  plaintiff  asserted)  the defendant’s daughter had been authorised to act as her agent in entering into the sale and purchase agreements that were the subject of the proceeding.  Mr Fisher, for the plaintiff, argued that this statement was false and, as a result, the plaintiff was put to additional time and expense in establishing the falsity of it i.e. by establishing that, in relation to a much later property purchase (Kipling Avenue), the defendant had granted her daughter power of attorney to act on her behalf in relation to a purchase of the property.

[5]      In response, Ms Lim, for the defendant, submitted that the statement was not false and that, read in the context of the surrounding paragraphs, it can be properly understood to relate to the defendant’s denial of having authorised her daughter to enter into the earlier sale and purchase agreements.  I accept this submission. At that point the issue of agency had only ever been raised in relation to the earlier sale and purchase agreements.  Events subsequent to those agreements were not in issue and, indeed, were of doubtful relevance even at trial.

[6]      The second aspect raised by the plaintiff is the defendant’s failure to comply with orders for discovery as a result of which the plaintiff was compelled to make various applications for non-party discovery.  Related to the perceived issue arising from the defendant’s 19 March 2015 affirmation, the plaintiff obtained discovery of

documents relating to the defendant’s purchase of the Kipling Avenue property.   I have  already expressed  my doubts  over  the  relevance of  that  issue  and  do  not consider that a reduction in costs is justified on that account.

[7]      The plaintiff also made an application for a non-party discovery against the ASB and against the defendant’s daughter, both directed towards establishing that the defendant had a bank account in New Zealand in 2008 and had used funds from that account to pay for the deposit on the two properties in respect of which she was being sued.  Clearly, this was highly relevant and these documents should have been discovered.  But the defendant takes the position that she genuinely believed that she did not have a bank account and that she twice made enquiries with the ASB and was told that she did not have an account during that period.   In these circumstances, which I accept, the plaintiff’s application was inevitable in any event.

[8]      Thirdly, non-party discovery was sought from the solicitors who acted for the purchasers under the sale and purchase agreements being sued on.    The solicitors had taken the position that they did act for the defendant but it is apparent from my findings that the defendant never gave the solicitors instructions.   Strictly, the solicitors files were not under the defendant’s power to produce.

[9]      I am not satisfied that there is a basis for reducing the 2B costs claimed.  I do not, however, consider that there is any basis for the additional amounts claimed by the defendant.  I allow costs on a 2B basis as originally calculated by the defendant

of $68,572.50, together with disbursements of $5,219.89.

P Courtney J