Cornwall Park Trust Board Inc v Chen - [2014] NZHC 792

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV2013-404-000008 [2014] NZHC 792

BETWEEN
THE CORNWALL PARK TRUST

BOARD INC Plaintiff

AND

YONG XIN CHEN Defendant

Hearing: 14 April 2014

Appearances:

J G H Hannan and C M Moody for the Plaintiff
J A Wickes for the Defendant

Judgment:

15 April 2014

JUDGMENT OF GILBERT J

This judgment is delivered by me on 15 April 2104 at 4.30 pm pursuant to r 11.5 of the High Court Rules.

..................................................... Registrar / Deputy Registrar

THE CORNWALL PARK TRUST BOARD INC v CHEN [2014] NZHC 792 [15 April 2014]

Introduction

[1] The plaintiff applies for continuation of an order freezing the defendant’s assets. An interim freezing order was initially made on a without notice basis by Keane J on 5 March 2014. The order was temporarily extended on 3 April 2014 by Toogood J and is now due to expire at midnight on 16 April 2014 unless it is further extended.1 The plaintiff claims that unless the order is extended, there is a danger that any judgment it may obtain in this proceeding will be wholly or partly unsatisfied because the defendant may dissipate her assets in the meantime.

[2] The plaintiff is a charitable trust which owns and operates Cornwall Park. Much of its funding is derived from ground rent receivable from 110 residential properties bordering the park. These properties are leased on 21 year perpetually renewable leases.

[3] The defendant was formerly a lessee of one of these properties, being the property at 21 Maungakiekie Avenue, Greenlane, Auckland (“the Maungakiekie property”). The last lease term for this property expired on 29 March 2009. The ground rent is reviewed at the expiry of each term and the lessee then has the option of renewing the lease at the new rental. The new rental was not fixed by arbitration until December 2010. The defendant chose not to renew her lease and she surrendered possession of the property on 16 November 2011.

[4] There are three components to the plaintiff’s claim in this proceeding. The first is a claim for $173,323, being the difference between the old rent that continued to be paid by the defendant until she surrendered her lease and the new rent for the period from 30 March 2009 to 16 November 2011. The plaintiff also claims reinstatement costs which it now assesses at approximately $135,000.2 The plaintiff has already obtained summary judgment for the third component of the claim being the costs of marketing and auctioning the property following the defendant’s election not to renew the lease at the new rent.3 The two outstanding claims are due to be
determined at a trial commencing on 19 May 2014.

1      The Cornwall Park Trust v Chen [2014] NZHC 665.
2      Affidavit of Anthony John Larsen sworn on 4 March 2014.
3      The Cornwall Park Trust v Chen [2013] NZHC 1067.

[5] There is no dispute that the plaintiff has a good arguable case against the defendant and 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.

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Details

Case: [2014] NZHC 792
Decision Date: 15 April 2014

CaseChat Overview and Summary

The Cornwall Park Trust Board Inc sought to continue an interim freezing order over the assets of Yong Xin Chen. The interim order had been made without notice by Keane J on 5 March 2014 and was temporarily extended by Toogood J on 3 April 2014. The plaintiff claimed that unless the order was extended, there was a danger that any judgment it may obtain in the proceeding would be wholly or partly unsatisfied because the defendant may dissipate her assets in the meantime. The plaintiff is a charitable trust which owns and operates Cornwall Park, much of its funding is derived from ground rent receivable from 110 residential properties bordering the park. The defendant was formerly a lessee of one of these properties and had surrendered possession of the property on 16 November 2011. The plaintiff claims that the defendant has failed to pay the difference between the old rent and the new rent for the period from 30 March 2009 to 16 November 2011 and it also claims reinstatement costs. The critical issue was whether the plaintiff had established that there was a risk that the defendant would dissipate her assets unless the freezing order was continued. The court found that the plaintiff had not demonstrated that there was a risk that the defendant would dissipate her assets before this proceeding was determined. The freezing order made by Keane J on 5 March 2014 and extended by Toogood J on 3 April 2014 was discharged.

Orders