Chen v General Finance Limited
[2023] NZHC 2157
•10 August 2023
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-548
[2023] NZHC 2157
BETWEEN LIYUN CHEN
First Applicant
ROYALL FAMILY TRUST
Second ApplicantAND
GENERAL FINANCE LIMITED
Respondent
Hearing: 10 August 2023 Appearances:
Ms Chen in person with Mr Lau (McKenzie Friend) and Mr Chang (Interpeter)
M Martin for the Respondent
Judgment:
10 August 2023
ORAL JUDGMENT OF BECROFT J
[As to leave to appeal]
Solicitors:
Martelli McKegg, Auckland Copy to: Ms L Chen
CHEN v GENERAL FINANCE LTD [2023] NZHC 2157 [10 August 2023]
The application
[1] Ms Liyun Chen applies for leave to appeal a judgment of Gordon J of 31 May 2023. That judgment refused an application for leave to commence proceedings by way of originating application under r 19.5 of the High Court Rules 2016.
[2] In very brief terms, the originating application was sought as a means to challenge the legality of a Property Law Act notice; a proposed sale of a mortgaged property; and, to form the basis of an application for an interim injunction.
[3] At the same time, Ms Chen applied for a stay to execute the judgment. Self- evidently, Gordon J’s judgment refused the leave sought. It made no other directions. With great respect, there was, and is, nothing to stay. But more on that later.
[4] Ordinarily, given that it was her judgment, Gordon J would decide whether an application for leave to appeal to the Court of Appeal would be granted. Her Honour, however, is unavailable and out of New Zealand. It is considered appropriate that a different Judge, in these circumstances, hears this application.
[5] I also note that Ms Chen is self-represented, and that she requires the assistance of a skilled and senior interpreter. She has also been assisted by a McKenzie Friend, a Mr Lau who, as I understand it, is in, or at some stage has been involved in, a relationship with Ms Chen. He has a very good command of English.
Background
[6] By way of very brief background, General Finance Limited (General Finance) provided a single mortgage loan to the Royall Family Trust (the second applicant). Ms Chen was the personal guarantor of the loan.
[7] There is no need for me to set out all the facts. They have been traversed in several previous judgments, including the judgment in respect of which leave to appeal is sought.
[8] Suffice to say, the allegation is that the loan was in default. A Property Law Act notice was issued. There has been a mortgagee sale. The property is the subject of an unconditional Agreement for Sale and Purchase with settlement scheduled for 17 August 2023. That settlement, however, is currently blocked by a caveat lodged by Mr Lau (the McKenzie Friend in Court today). Its removal is the subject of a separate application being heard today in another courtroom in the Auckland High Court.
[9] It is also worth noting that Ms Chen has filed a substantive proceeding against General Finance in which the relief sought includes damages in the sum of $9,500,000.
[10] Since the application for leave to commence an originating application was declined, an injunction has been sought by Ms Chen and dismissed by Davison J in a decision dated 6 July 2023. And a subsequent application for an injunction was also heard and dismissed by Davison J on 10 July 2023. To that extent, the reasons said to justify beginning proceedings under an originating application have now disappeared. And, the property has been sold.
[11] Given that background, as I observed to Ms Chen perhaps, unfortunately in the New Zealand vernacular, that, in respect of this leave for appeal application, the “horse has already bolted, and the stable door has been well and truly closed”. When the meaning of that comment was explained to Ms Chen, her view was that she still wanted leave to appeal so that she could have permission to bring an originating application for what appeared to be another and third attempt to obtain the injunction which she has twice been refused.
[12] As Mr Martin observed, surely that would amount to an abuse of the Court’s process.
[13] I also note that earlier this morning I have heard a parallel and virtually identical application for Ms Chen in respect of a virtually identical decision by Gordon J involving a different defendant, Tawa Trade Finance Limited (Tawa).
[14] One of Ms Chen’s concerns, which I will come to in a moment, is that the Courts have erroneously conflated the two parallel cases and confused the facts between both. Therefore, I think it prudent, appropriate and fair to deliver an entirely separate judgment in respect of this application; even though it is, for all intents and purposes, identical.
The decision from which leave to appeal is sought
[15] Gordon J’s decision was a detailed and comprehensive analysis of the facts leading her, it seemed to me, inexorably to the conclusion that the interests of justice would not be served to allow Ms Chen’s foreshadowed claims to be the subject of an originating application.
[16] As is well known, originating applications are a separate species of proceedings provided for under the High Court Rules. Ordinarily, they are specified to apply to a wide variety of relatively narrow and focussed issues listed in rr 19.2,
19.3 and 19.4. But leave can be granted under r 19.5 for other types of issues, given as I say, that the interests of justice test is satisfied. Normally, originating applications are said to be appropriate in the case of narrow focussed issues, with no deep factual disputes, to ensure fast, speedy and prompt justice.
[17] Clearly Gordon J came to the view that the factual disputes were here so deep, that it would not be in the interests of justice to use the originating application procedure. Indeed, she went much further. In an endeavour to understand and support Ms Chen, being self-represented, her Honour spent some time, with the consent of counsel, addressing what the Court’s response would be if Ms Chen’s application was treated as an application for interim injunction. Gordon J clearly came to the view that the test for an interim injunction would not be met. She went as far to say, that not only would an originating application be inappropriate, but on the merits, as a whole, Ms Chen’s foreshadowed application could not succeed.
[18] Against that background, it is worth noting that an application for leave to appeal such as this is governed by s 56(3) of the Senior Courts Act 2016.
[19] I accept that a clear set of principles have emerged in considering whether to grant leave, particularly given the relevant cases of Greendrake v District Court of New Zealand1 and Ngai Te Hapu Incorporated and Nga Potiki A Tamapahore Trust v Bay of Plenty Regional Council2 set out in paragraph [5] of Mr Martin’s very helpful and focussed submissions:
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;
(d)the significance or implications of such error either for the particular case or for the applicant or as a matter of precedent must warrant incurring further delay; and
(e)the ultimate question is whether the interests of justice are served by granting leave.
[20] An applicant, such as Ms Chen, faces a second hurdle here given that a decision about leave to permit commencement of an originating application is discretionary. In such a case, there are very limited grounds for a successful appeal as set out by the Supreme Court in Kacem v Bashir:3 They are:
(a)error of law or principle;
(b)taking account of irrelevant considerations;
(c)failing to take account of a relevant consideration; or
(d)the decision is plainly wrong.
[21] So, as I explained to Ms Chen, she has a particularly difficult job in this case in seeking leave to appeal.
1 Greendrake v District Court of New Zealand [2019] NZHC 1680.
2 Ngai Te Hapu Incorporated and Nga Potiki A Tamapahore Trust v Bay of Plenty Regional Council
[2018] NZCA 291.
3 Kacem v Bashir [2010] NZSC 112 at [32].
Grounds for leave to appeal
[22] Ms Chen’s grounds are difficult to discern in her short, 10 paragraph written memorandum. However, with the help of her interpreter and her McKenzie Friend, three grounds, in particular, emerged. I will deal with them separately.
First ground
[23] First, that material provided by General Finance, or at least recorded in previous judgments, both from Gordon J and repeated by Davison J, are erroneous and factually incorrect and have led the Court previously into error. And in particular, the Tawa decisions have been tainted by those errors.
[24] Ms Chen also points to two sets of parallel submissions by counsel that are said to mutually reinforce each other and, that it may well be they are in cahoots with each other in perpetuating false factual narratives. That is why I am delivering a separate decision in the case of each separate defendant and each separate application for leave to appeal.
[25] I see nothing in this point. Naturally, the arguments for both this defendant and also Tawa will be similar (if not identical) because they are addressing similar, if not identical, legal situations. There are, of course, clear factual differences between the two in the way of the number of loans, their history and the relevant details attaching to each. But I see nothing in Ms Chen’s argument to cause any concern.
[26] If there are factual errors, particularly in the two injunction decisions given by Davison J, about which I express no opinion, then Ms Chen has other legal avenues open to her. But one of those avenues is assuredly not to seek leave for an originating application to enable Ms Chen to do precisely that which she has done i.e. seek an injunction in respect of which she failed. In my view, that would be to abuse the Court’s process.
Second ground
[27] Her second ground of appeal is that there has been incorrect reliance on the wrong mortgage documentation. It is said that the mortgage relied upon by the Court
and, quoted by the Court, is one that allowed for the lodgment and maintenance of a caveat, whereas the correct condition contains no such express right.
[28] I cannot get to the bottom of that on the photocopied material that has been provided to me. Neither is it appropriate for me to do so. Two things can be said:
[29] First, the issuing of a caveat or otherwise is quite irrelevant to this application especially given that the issue regarding the legality of caveats lodged over the property in question here, is the subject of argument occurring in another courtroom as I deliver this oral judgment.
[30] Second, it does more than serve to emphasise the deep factual disputes that exist between Ms Chen and General Finance and underline the inappropriateness, in this situation, of an originating application procedure being adopted.
Third ground
[31] Ms Chen’s third argument derives from a valuation dated 9 February 2022 and, in particular, page 12 of the valuation which refers to the mortgaged property as being “Residential”. In her view, it was thus inappropriate that the loan from General Finance was styled a business loan and, therefore, subject to higher finance and interest rates than would have been the case if it had been more provided on a residential basis.
[32] At any rate, the point Ms Chen makes is no business has ever been carried out on the property. It is not for business. It is for residential purposes and the loan is, therefore, in her view, inappropriately calibrated.
[33] I say two things about this. It is not fresh evidence because it pre-dated Gordon J’s decision by about 15 months. And, if at all relevant, could have been provided to Gordon J. Secondly, even allowing for its admission, it does not even seem remotely relevant to today’s argument which is one focussing on appropriate Court processes to be availed of by Ms Chen.
Discussion
[34] With great respect to Ms Chen, there is nothing in any of her arguments. Certainly nothing that reached the high standard required for leave to be granted. I can see no error of law in Gordon J’s decision. I can see no reliance on inappropriate considerations, nor a failure to take into account relevant considerations. Indeed, I cannot help but observe that Gordon J appears to have bent over backwards to assist and help Ms Chen and treat her application in the most favourable terms, as if it were an application for injunction.
[35] It is hard to imagine what more the Court have done in all these circumstances. The decision is not plainly wrong. With respect, in my view, it is in fact plainly right. There is absolutely no basis that I can see on which leave for any appeal should be granted. And in any case, given what has now elapsed, any originating application that might issue, would seem to be unnecessary and redundant. It would be akin to “lobbing shells into empty trenches”. That is, the issue has now moved on. The property in question has been sold. Even if the originating application were granted, nothing flowing from it could be usefully achieved.
[36] So, in all respects, I am clearly of the view that the application must fail. It fails by a very wide margin, Ms Chen, and I need to say that to you with great respect.
[37] In this case also, given that it is now 12.40pm, a significant amount of time has been taken up in a leave application for appeal that, frankly, was doomed from the very beginning. I need to tell you that very clearly Ms Chen. The Courts will, as Gordon J did, bend over backwards to help unrepresented litigants. The Courts have a duty to help those and assist those who are, for various reasons, unable to have legal representation.
[38] I have tried myself to explain very clearly at the start of this proceeding what a limited ambit this application must have. And I have resisted the seductive temptation to look at all the facts and analyse where there may have been factual errors. But any that Ms Chen has raised, would seem to me to be largely peripheral. And, in any case, if correction is needed, they need to be corrected in another forum. And, even then, there are two sets of substantive hearings that are still to be resolved.
And you will have your day in Court Ms Chen. I make this comment to her. The two sets of substantive or main proceedings are still to be heard. That’s when you can make all these points.
[39] Today it seems to me unarguable that costs should be granted – just as for the Tawa case where, as here, indemnity costs may have been justified. Here, I grant Mr Martin’s responsible application for costs at the 2B scale and disbursements as fixed and approved by the Registrar.
[40] Ms Chen, I also tell you as carefully, fairly and politely as I can that the time will come where counsel will argue that you have abused the Court’s process by proceeding with an appeal applications such as this. Especially when all the events have now developed to the point where what you seek, would be of no useful purpose. An appeal such as this cannot be used for the purpose of correcting what are said to be some factual errors mentioned by the Judge. And you will have your opportunity to raise all these issues at the two substantive parallel hearings.
[41] I cannot be your adviser, but I can at least recommend to you that you obtain legal representation for the two substantive hearings. I think you would find that of invaluable assistance. But I say no more.
Result
[42] The result is this. Your application for leave to appeal to the Court of Appeal is dismissed. Your application to stay the judgment is inappropriate and misconceived. There is nothing that the Court can stay. To the extent that I need to, that application, too, is dismissed.
[43] Full costs are awarded against you at the 2B level, the lowest possible in all the circumstances, as finalised and approved by the Registrar.
[44]There are orders accordingly.
Becroft J
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