Choi v Hong - [2013] NZHC 2973

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-003035 [2013] NZHC 2973

BETWEEN JAE HOON CHOI Plaintiff

ANDIL LIB HONG Defendant

Hearing: 11 November 2013

Appearances: B Gustafson for Plaintiff
J B Murray for Defendant

Judgment: 11 November 2013

ORAL JUDGMENT OF VENNING J
granting injunction

Solicitors: Turner Hopkins, Auckland
Vallant Hooker, Auckland

Copy to: B D Gustafson Auckland

CHOI v HONG [2013] NZHC 2973 [11 November 2013]

Introduction

[1] This case involves a dispute between the parties concerning the control of a company, Twin Oaks Golf Ranges Limited (Twin Oaks). The matter before the Court this morning is an application by the plaintiff Mr Choi for interim injunction orders preventing the defendant Mr Hong from selling or otherwise dealing with shares in Twin Oaks and preventing Mr Hong from selling or otherwise dealing with the property owned by or held in the name of Twin Oaks at Paerata Road, Pukekohe. Leave is also sought to bring the matter back on three working days’ notice for variation of the above orders (if granted).

Background

[2] I take the background from the statement of claim and counsels’ submissions

acknowledging that the position is not necessarily accepted by Mr Hong.

[3] Twin Oaks is the registered owner of a property at 994C, State Highway 22, Paerata Road, Pukekohe. It is a golf range and cafe. Currently it is not being operated.

[4] Initially the shares in Twin Oaks were owned by Mr Hong or interests associated with him. Mr Hong and Mr Choi have entered two agreements in relation to the shares, first on 14 November 2011, the second on 10 August 2012.

[5] Those two agreements have been the focus of this morning’s hearing.

[6] It appears that Mr Choi advanced moneys to Twin Oaks and/or Mr Hong and in exchange Mr Hong agreed to transfer shares in Twin Oaks to Mr Choi. The two agreements deal with those issues. There is a further company interested in the property owned by Twin Oaks. That company is GWM Limited. It apparently claims an interest of 20 per cent in the property as well. For present purposes I put that claim to one side.

[7] It appears that both parties agree that the property owned by Twin Oaks should be sold. The current dispute arises because they are unable to agree which of

them should control the sale and ultimately what should happen to the proceeds of sale.

[8] Twin Oaks had granted a mortgage to ASB Bank. When the Bank moved to take steps to exercise its security Mr Choi bought out the Bank’s interest. Mr Choi now holds a security over the property owned by Twin Oaks.

[9] The last piece of the picture for present purposes is that I am advised Mr Hong has received an offer for $1.5 million for the property. It is a conditional offer and has not yet been accepted. The offer is apparently not acceptable to Mr Choi or at least not until the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Choi v Hong

Details

AGLC: Choi v Hong [2013] NZHC 2973
Case: [2013] NZHC 2973
Decision Date: 11 November 2013

CaseChat Overview and Summary

The dispute between Jae Hoon Choi and Il Lib Hong involves control over Twin Oaks Golf Ranges Limited (Twin Oaks) and the property owned by Twin Oaks at Paerata Road, Pukekohe. The plaintiff, Mr Choi, sought interim injunction orders to prevent the defendant, Mr Hong, from selling or otherwise dealing with the shares in Twin Oaks and the property. Additionally, Mr Choi sought leave to bring the matter back for variation of these orders.

The primary legal issues before the Court were whether Mr Choi met the threshold for a serious case on trial and whether the balance of convenience favoured the grant of the interim injunctions. The Court examined the agreements between the parties dated 14 November 2011 and 10 August 2012. Mr Choi argued that based on the August 2012 agreement, Mr Hong was obliged to retransfer the 80% shareholding in Twin Oaks to him. Conversely, Mr Hong relied on the November 2011 agreement, which had expired by the time of the hearing. The Court found that Mr Choi satisfied the threshold for a serious case, as the August 2012 agreement suggested that Mr Hong held the shares for Mr Choi. Regarding the balance of convenience, the Court noted that Mr Hong lacked significant assets in New Zealand and might be unable to meet any judgment against him if Mr Choi succeeded. Conversely, Mr Choi had already invested over $600,000 in the ASB Bank mortgage on the property, risking further loss if the injunctions were not granted. The Court therefore granted the injunctions to prevent Mr Hong from dealing with the shares and the property, and ordered both parties to file a joint memorandum outlining a timetable for interlocutory steps.

The final orders included prohibiting Mr Hong from selling, transferring, encumbering, or otherwise dealing with the shares in Twin Oaks and the property at Paerata Road, Pukekohe. Additionally, the Court granted leave for either party to bring the matter back for variation of these orders. Costs were fixed on a 2B basis for the application and hearing.

Orders