Du v M5 Holdings Limited

[2018] NZHC 716

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-2124

[2018] NZHC 716

UNDER

the Companies Act 1993, Contractual Remedies Act 1979, Contractual Mistakes Act 1977, the common law of torts and equity

IN THE MATTER

of claims and remedies and relief

BETWEEN

JIANYING DU

Plaintiff

AND

M5 HOLDINGS LIMITED

First Defendant (discontinued)

DAVID COTTER
Second Defendant (discontinued)

YUE YANG
Third Defendant (discontinue)

FENG SHI

Fourth Defendant

Hearing:	On the papers
Counsel:	D Zhang for plaintiff
Judgment:	18 April 2018

JUDGMENT OF KATZ J

This judgment was delivered by me on 18 April 2018 at 4:15pm pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors:               Amicus Law, Auckland

DU v M5 HOLDINGS LIMITED [2018] NZHC 716 [18 April 2018]

[1]                 On 9 March 2017, I entered judgment in favour of the plaintiff, Ms Du, following a formal proof hearing.1 Ms Du claimed a breach of an agreement by the fourth defendant, Mr Shi. Ms Du had discontinued her claim against the other defendants prior to the hearing.

[2]                 Mr Shi had covenanted that he had the capacity to sell a 22.5 per cent shareholding in the first defendant company, M5 Holdings Limited, to Ms Du, and that he had complied with the pre-emptive rights provisions in the company’s constitution. Ms Du paid Mr Shi the full purchase price of the shares, but he failed to transfer the shares to her, in breach of their agreement.

[3]                 I found that Mr Shi had been unable to legally transfer his shareholding to Ms Du for a number of reasons, including in particular his failure to comply with the company’s pre-emptive rights provisions. Having found in favour of Ms Du, I made various orders, including an order that Mr Shi reimburse Ms Du for all costs, losses and expenses incurred by her as a result of his breaching the agreement between them. That order was made on an indemnity basis, pursuant to cl 4.8 of the agreement between the parties. I reserved leave for a memorandum to be filed regarding the quantum of costs to be awarded. That memorandum was filed on 8 May 2017. Unfortunately, due to an oversight in the Registry, it was not referred to me until recently. I accordingly apologise for the delay in delivery of this judgment.

[4]                 Mr Zhang, counsel for Ms Du, seeks costs relating to the proceeding against Ms Shi, including disbursements, in the sum of $28,674.99. Supporting invoices have been provided.

[5]                 Mr Zhang’s memorandum confirms that Ms Du is only seeking costs against Mr Shi for the steps she has taken against him. Based on the invoices provided, however, there is one attendance that does not appear to be relevant to the claim against Mr Shi. On 19 November 2015, there was an attendance answering a “call from immigration, confirming receipt of [a] letter re Yang”. Presumably this is in reference to the third defendant, against whom proceedings were discontinued. The relevant

1      Du v Shi [2017] NZHC 409.

amount is $20.00 or ($23.00 including GST). It is therefore appropriate to deduct this from the total costs claimed, leaving a balance of $28,651.99.

Result

[6]                 Mr Shi is ordered to pay indemnity costs (and disbursements) to Ms Du in the sum of $28,651.99.

Katz J