Chen v Auckland Weihao Investment Ltd

[2020] NZHC 2936

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-1236

[2020] NZHC 2936

BETWEEN

LIYUN CHEN

Plaintiff

AND

AUCKLAND WEIHAO INVESTMENT LTD

Defendant

On the papers:

Submissions:

The Plaintiff in Person

J A Wickes for the Defendant

Judgment:

9 November 2020

JUDGMENT OF HINTON J

[Leave to appeal and costs]

This judgment was delivered by me on 9 November 2020 at 11:30 am pursuant to Rule 11.5 of the High Court Rules

…………………………………………………………………… Registrar/Deputy Registrar

Solicitors/Counsel: Loo & Koo, Auckland

Copy to: The Plaintiff

CHEN v AUCKLAND WEIHAO INVESTMENT LTD [2020] NZHC 2936 [9 November 2020]

[1]                  On 30 September 2020, I gave judgment dismissing two interlocutory applications by the plaintiff, Ms Chen.1 The defendant, Auckland Weihao Investment Ltd, now seeks costs in respect of those applications. Ms Chen opposes an award of costs to Weihao, and also applies for leave to appeal to the Court of Appeal against my judgment.

Background

[2]                  This proceeding relates to a property at Flat Bush, Auckland. More particularly, it relates to an agreement for the sale and purchase of that property between Ms Chen as purchaser and Weihao as vendor, and a related term loan agreement between the parties. Ms Chen claims that Weihao breached the term loan agreement. The factual background is set out in greater detail in my judgment of 30 September 2020.2

[3]                  As noted above, at the conclusion of that judgment, I dismissed two interlocutory applications made by Ms Chen.

[4]                  The first of these was for orders for particular discovery against the defendant and seven non-parties, including the Chinese Consulate at Auckland. These orders would have required the eight parties to file and serve affidavits stating whether each had in its possession documents relevant to the qualification of Nengyi Chen, sole director of the defendant, to be a director. The plaintiff also appeared concerned to see if she could establish a breach by the defendant of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AMLCFT Act).

[5]                  Whether Ms Chen is qualified to be a director of the defendant company is not at issue in the proceeding, nor is whether the defendant is in breach of the AMLCFT Act. Even if the documents described by the plaintiff exist, they would not be relevant to issues in the proceeding, and therefore not discoverable. Nor, so far as I can tell, are there even potential claims available to Ms Chen under these headings. Accordingly, I dismissed the first application.3

1      Chen v Auckland Weihao Ltd [2020] NZHC 2564.

2      At [3]-[14].

3 At [20].

[6]                  The second was an “application to set aside [a] settlement notice”, which notice Weihao had served on Ms Chen on 1 July 2020, following her failure to settle the purchase of the Flatbush property. It appeared this was designed to give her another chance to settle under the sale and purchase agreement by allowing her brother and father to enter New Zealand and to transfer her funds with which she could complete the purchase.

[7]                  As I noted, I had no jurisdiction to do that, and especially not on an interim basis. In any event, a claim for relief of that type was inconsistent with Ms Chen’s statement of claim, which seeks return of the deposit paid by her under the sale and purchase agreement, not specific performance of the agreement. Accordingly, I dismissed the second application.4

[8]                  Weihao having succeeded, it sought costs on a 2C basis. I directed that memoranda as to costs be filed and served.

[9]                  Ms Chen then applied to recall my judgment dismissing the two interlocutory applications. By Minute dated 21 October 2020 I dismissed that application for recall. That application was made on the basis that I said in my judgment that Weihao had applied on 21 July 2020 for a caveat lodged by Ms Chen against the Flatbush property to lapse when, Ms Chen says, it was in fact made on 16 July 2020. She referred me to a letter from Land Information New Zealand dated 16 July 2020 in support of her application for recall.

[10]              As I noted in my Minute of 21 October 2020, whether Weihao had made that application on 16 or 21 July is irrelevant in the context of this proceeding. Also, the judgment of 30 September 2020 had already been sealed, so recall would have been impossible. For these reasons, I dismissed the application for recall.

[11]              I also directed that Ms Chen file and serve her memorandum in reply to the costs memorandum for Weihao dated 1 October 2020 no later than 5 pm on 23 October.

4 At [25].

[12]              Ms Chen filed her costs memorandum on 27 October 2020, clearly late. This was accompanied by an application for leave to appeal to the Court of Appeal against my judgment of 30 September 2020. Within that latter application, Ms Chen also asserts that “the costs award to defendant should be stay or dismissed”. Given that, I consider the leave application first.

Application for Leave to Appeal

[13]              So far as Ms Chen’s application for leave to appeal admits of understanding, her proposed grounds of appeal relate to her allegations:

(a)that Nengyi Chen is not eligible to be a director of Weihao;

(b)of breaches of the AMLCFT Act by Weihao; and

(c)that Weihao has attempted to mislead the Court by filing an affidavit in which Nengyi Chen deposes Weihao’s application to lapse Ms Chen’s caveat was filed on 16 July 2020 and not 21 July 2020.

[14]              Section 56(3) of the Senior Courts Act 2016 applies, such that Ms Chen requires leave to appeal. To obtain leave she must demonstrate that the further delay associated with allowing an appeal would be warranted. In particular, she must demonstrate that my judgment contains an arguable error:5

of general or public importance that requires determination, or otherwise be of sufficient importance to the applicant to outweigh the lack of any general or precedential importance

[15]              For the reasons summarised at [5], [7], and [10] above as first set out in my judgment of 30 September 2020 at [19]-[22] and [25]-[26] and in my Minute of 21 October 2020 at [5]-[6], that is plainly not the case. Any error would not be of sufficient importance in this proceeding, nor generally, to warrant the delay a further

5      Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [9], citing A v Minister of Internal Affairs [2017] NZHC 887. See also [10]-[14]. See also Ngai Te Hapu Incorporated v Bay of Plenty Regional Council [2018] NZCA 291 at [17]; and Western Joinery Ltd v Commissioner of Inland Revenue [2017] NZHC 3297 at [9], citing Sandle v Stewart [1982] 1 NZLR 708 (CA) at 715.

appeal would cause. For these reasons, Ms Chen’s application for leave to appeal is dismissed.

Costs on Ms Chen’s Unsuccessful Interlocutory Applications

[16]              It follows there is no basis to adjourn consideration of the question of costs in relation to my judgment of 30 September 2020; nor to stay any judgment for costs now made. Ms Chen’s informal application to that effect is dismissed.

[17]              As noted, Weihao seeks costs on a 2C basis and disbursements in respect of its successful opposition to Ms Chen’s interlocutory applications, in the total amount of

$18,176. As I understand it, Ms Chen says the claimed costs are unreasonable, given Weihao’s reliance on affidavits, submissions, and the case book filed in respect of the caveat proceedings referred to above.6

[18]              As Ms Wickes, counsel for Weihao, notes, when the applications were first called before Downs J on 26 August, the Judge obtained Ms Chen’s consent to the documents filed by Weihao in the caveat proceedings also being used in this proceeding. Also, Ms Chen herself made use of an affidavit she filed in the caveat proceeding in support of her applications.

[19]              However that is not Ms Chen’s point as I understand it. Her point is Weihao was able to rely on documents already filed in a separate proceeding and should not be able to claim costs in respect of preparation of those documents in this proceeding. I agree.

[20]              Also, I do not consider it appropriate to allow recovery on a 2C basis in respect of Weihao’s defence of the applications. No more than a normal amount of time would reasonably have been required.7

[21]              Accordingly, I make an award of costs on a 2B, not 2C basis, and only in respect of Weihao’s filing of its notice of opposition, appearances, and preparation of

6      CIV-2020-404-1200.

7      High Court Rules 2016, r 14.5(2)(b).

orders for sealing.    Otherwise adopting Ms Wickes’ approach, I calculate these, together with disbursements, as being $5,031 in total.

Result

[22]Ms Chen’s application for leave to appeal is dismissed.

[23]              Ms Chen is to pay Weihao’s costs on a 2B basis on her unsuccessful interlocutory applications (determined in my judgment of 30 September 2020), and disbursements, in the total amount of $5,031.

Hinton J