Du v Gu - [2012] NZHC 1536

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2009-404-5577 [2012] NZHC 1536

BETWEEN XING HUA (DAVID) DU Plaintiff

ANDMING GU Defendant

Hearing: 21 June 2012

Counsel: W Grove for the Plaintiff
G Blanchard for the Defendant

Judgment: 26 June 2012

RESERVED JUDGMENT OF ELLIS J

This judgment was delivered by me on 26 June 2012 at 4.30 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors: Ross Holmes Lawyers, PO Box 33009, Takapuna
Butelaw, PO Box 35563, Auckland

Counsel: G P Blanchard, PO Box 1235, Auckland

DU V GU HC AK CIV-2009-404-5577 [26 June 2012]

[1] In an earlier judgment I upheld the validity of what was termed a “joint venture” agreement entered into between Mr Du and Madam Gu in relation to the development of a property owned by Madam Gu.[1] In essence that agreement provided that in return for Mr Du contributing 50 percent of the mortgage (including arrears) and 50 percent of development costs, a 50 per cent share in the property would be transferred to Mr Du in the event that he asked for a transfer to be effected, and that the parties would have 50 per cent ownership of the land and 50 per cent of the benefits and related risks of the development on the land. I declined to order
specific performance but said that Mr Du was entitled to damages for Madam Gu’s

breach of the agreement.

[1] Du v Gu HC Auckland CIV-2009-404-5577, 7 December 2010.

[2] On 16 November 2011, the Court of Appeal held that I was wrong in that finding because at the time the agreement was entered Mr Du remained engaged as a real estate agent to sell the property on behalf of Madam Gu.[2] Because he had not complied with s 62 of the Real Estate Agents Act 1976, Madam Gu was entitled to avoid the agreement under s 63 of that Act. That issue turned on whether reasonable notice of termination of the agency agreement had been given by Mr Du. The Court of Appeal held that 14 days notice was required whereas Mr Du had given only
11 days notice.

[2] Gu v Du [2011] NZCA 577.

[3] Leave to appeal to the Supreme Court was sought by Mr Du, but denied.[3]

[3] Du v Gu [2012] NZSC 13.

[4] It has always been agreed by Madam Gu that, in the event that Mr Du was not successful in his claim, he should receive back the money that he had paid pursuant to the (avoided) contract, even though there was no pleading to that effect. However for the reasons set out in my earlier judgment it was not possible at trial to determine the amount of those payments.

[5] For these reasons the Court of Appeal said:

Ms Gu has voided the agreement and Mr Du will need to make a new claim for repayment of the amounts he contributed to the property. He will need to

file…

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 Du v Gu

Details

AGLC: Du v Gu [2012] NZHC 1536
Case: [2012] NZHC 1536
Decision Date: 26 June 2012

CaseChat Overview and Summary

In the case of Du v Gu, the plaintiff, Xing Hua (David) Du, sought to amend his statement of claim after the Court of Appeal had previously held that he was not entitled to damages for breach of a joint venture agreement with the defendant, Ming Gu. The original joint venture agreement provided for Mr Du to contribute 50% of the mortgage and development costs in exchange for a 50% share in the property. The Court of Appeal ruled that the agreement was voidable under the Real Estate Agents Act 1976 as Mr Du had not given adequate notice of termination of his agency agreement with Madam Gu. Consequently, Mr Du was required to file a new claim for restitution of his contributions.

The legal issues before the court were whether Mr Du should be granted leave to amend his statement of claim to include new causes of action, namely a claim under the Illegal Contracts Act, a claim for equitable restitution, and a claim for promissory estoppel. These new claims aimed to allow Mr Du to recover not only his contributions but also a proportionate share of any increase in value of the property attributable to those contributions. Madam Gu opposed the amendment, arguing that it went beyond what was contemplated by the Court of Appeal and that the new claims were legally unmeritorious and factually complex.

The court denied leave to amend beyond the scope of the Court of Appeal’s direction. The reasoning included the importance of finality in litigation, the principle that a plaintiff cannot relitigate matters that should have been raised earlier, and the potential for further costs, appeals, and factual complexity. The court found that the new claims would require further evidence beyond the existing invoices and payments, likely necessitating expert assistance. The court ordered Mr Du to file an amended claim for moneys had and received within ten working days and directed counsel to outline the necessary steps to resolve the matter.

Orders