Evertop Group Limited (in liquidation) v Guo - [2025] NZHC 113

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1513

[2025] NZHC 113

BETWEEN EVERTOP GROUP LIMITED (IN LIQUIDATION)
Plaintiff

AND

HAI GUO

Defendant

Hearing: 21 November 2024

Appearances:

Howard Thompson for the Plaintiff Andrew Peat for the Defendant

Judgment:

12 February 2025

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for security for costs]

This judgment was delivered by me on 12 February 2025 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

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

Solicitors:
McMahon Butterworth Thompson (Howard Thompson), Auckland, for the Plaintiff D B Hickson, Auckland, for the Defendant
Copy for:
Andrew Peat, Shortland Chambers, Auckland, for the Defendant

EVERTOP GROUP LIMITED v HAI GUO [2025] NZHC 113 [12 February 2025]

Introduction

[1] The defendant in this proceeding, Mr Hai Guo (Mr Guo) seeks an order requiring Evertop Group Ltd (in liquidation) (Evertop) to pay security for costs.

Background

[2] Between 8 and 9 October 2020, Evertop transferred a total of $711,000 to SJ Lawyers trust account by way of three separate electronic payments.

[3]On 9 October 2020, on Mr Guo’s instructions, SJ Lawyers transferred

$710,344.69 of the funds to the solicitors, Queen City Law for the purposes of settling Mr Guo’s purchase of a property at Unit 321, 3 Kaipiho Lane, Albany (the Property). Consequently, the Property was transferred into Mr Guo’s name, and he became the registered owner of the Property.

[4] Evertop claims to have funded the purchase of the Property with the mutual intention that it would be the beneficial owner of the Property under a resulting trust. Mr Guo denies this and says there was no intention for Evertop to have any interest in the Property.

[5] On 21 June 2023, Evertop’s liquidator sent a letter to Mr Guo through his lawyers. The letter required Mr Guo, as the trustee for Evertop, to transfer the Property to Evertop. Mr Guo has not transferred the Property and expressly denies holding it on trust for Evertop.

[6] Mr Guo says Evertop does not appear to have any assets and the proceeding is understood to be funded by the liquidator, Mr Digby Noyce (Mr Noyce). Mr Guo therefore seeks security for costs and stay of the proceeding until Evertop has paid the initial security for costs amount.

Mr Guo’s application for security for costs

[7]Mr Guo seeks orders, in summary:

(a) That Evertop provide security for costs in the amount and in the manner specified in his application.

(b) Alternatively, that Mr Noyce provide security for costs (as above) or an undertaking that he:

(i)has sufficient unencumbered assets to meet any costs awarded against Evertop; and

(ii)will pay any adverse costs awarded against Evertop.

(c)That the proceeding be stayed until:

(i)Evertop pays the initial security for costs amount; or
(ii)Mr Noyce pays the initial security for costs amount or provides the undertaking set to at [7](b)(i) and (ii).

[8]The grounds on which the orders…

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: [2025] NZHC 113
Decision Date: 12 February 2025

CaseChat Overview and Summary

This case involves an application by the defendant, Hai Guo (Mr Guo), for an order requiring Evertop Group Limited (in liquidation) (Evertop) to provide security for costs. Evertop, represented by Howard Thompson, opposes the application. The central dispute revolves around the ownership of a property at Unit 321, 3 Kaipiho Lane, Albany. Evertop claims it funded the purchase of this property with the intention of holding it on a resulting trust, while Mr Guo denies any such intention. The legal issues before the court are whether Evertop should provide security for costs, the appropriate amount of such security, and whether the proceedings should be stayed pending payment of the security. The court assesses the application under Rule 5.45 of the High Court Rules 2016, balancing the defendant's need for protection against the plaintiff's right to access justice. The court finds that Evertop, being in liquidation and insolvent, satisfies the threshold for security. It rejects Evertop's argument that the liquidator's role as a funder should be distinguished from commercial litigation funders, holding that the principles governing security for litigation funders apply. The court also finds that Evertop's claim lacks merit, and the presence of funding strongly supports ordering security. The court orders Evertop to provide security for costs in the amount of $70,000, payable in three instalments, and stays the proceedings until the initial payment is made. Costs are awarded to Mr Guo.

Orders