Feng v Sea Tx Property Limited - [2024] NZHC 779

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-2733

[2024] NZHC 779

BETWEEN
YANLANG FENG AND CHENGPIN CAI

Plaintiffs

AND

SEA.TX PROPERTY LIMITED

First Defendant

LING NING
Second Defendant

BARFOOT & THOMPSON

Third Defendant

Hearing: 15 March 2024

Counsel:

S Lu for Plaintiffs

T A Hwang for First Defendant
E R Harrison and C A Twyman for Second and Third Defendants

Judgment:

12 April 2024

JUDGMENT OF RADICH J

(First defendant’s application for leave to appeal out of time)

[1] I gave my decision in this proceeding on 4 August 2023.1 In it, I ordered rectification of an agreement between the plaintiffs and the first defendant and ordered the payment of damages that arose as a consequence.

[2] On 20 December 2023, I issued a further judgment in which, on the application of the plaintiffs, I recalled the substantive judgment in order to add interest to the

1 Feng and Cai v Sea.TX Property Ltd [2023] NZHC 2067, (2023) 24 NZCPR 434.

FENG AND CAI v SEA.TX PROPERTY LIMITED [2024] NZHC 779 [12 April 2024]

damages award.2 The application was supported by the second defendant and was, essentially, unopposed by the first defendant.

[3] On 7 March 2024, the first defendant applied for leave to appeal, out of time, from my recall decision. The grounds of appeal relate to the substantive decision. The first defendant says that it can seek to appeal the substantive decision through the recall decision because the recall decision affects the substantive decision.

[4] For the reasons I come on to give, I see this as being the wrong procedural pathway for the first defendant to take to appeal the substantive decision. There was an appeal as of right available from that decision, exercisable by 1 September 2023. Leave to appeal, out of time, can still be obtained from the Court of Appeal.

[5] But I do not see an appeal from the recall decision as enabling the first defendant to raise the points that it wishes to raise on appeal about the substantive decision.

The substantive decision, the recall decision and the appeal

[6]In the substantive decision, I made orders:

(a)rectifying an agreement for sale and purchase between the plaintiffs, as purchasers, and the first defendant, as vendor, to give effect to the parties’ common intention that the purchase price for a property was to be $1.58 million including GST, rather than $1.58 million plus GST;

(b)requiring the sum of $237,000 (reflecting the value of the GST on the
$1.58 million purchase price that had been held in trust pending the outcome of the case) to be repaid to the plaintiffs as damages; and

(c)requiring the first defendant to pay to the plaintiffs the sum of $66,447 (being interest paid by the plaintiffs on the loan that was required to fund the payment of $237,000).

2 Feng and Cai v Sea.TX Property Ltd [2023] NZHC 3825.

[7] The plaintiffs sought to recall 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: [2024] NZHC 779
Decision Date: 12 April 2024

CaseChat Overview and Summary

In Feng v Sea Tx Property Limited, the first defendant, Sea.Tx Property Limited, sought leave to appeal the High Court's decision to recall its substantive judgment. The substantive judgment had ordered the rectification of a sale agreement and the payment of damages. The recall decision added interest to the damages award. The first defendant argued that it could appeal the substantive decision through the recall decision as it affected the substantive decision. The court found that the first defendant had taken the wrong procedural pathway, as an appeal as of right from the substantive decision was available and could still be pursued by applying for leave to appeal out of time from the Court of Appeal. The recall decision was an interlocutory decision, and appealing it would not allow the first defendant to raise points about the substantive decision.

The court examined the legal issues surrounding the application for leave to appeal from the recall decision. It found that the recall decision was an interlocutory decision requiring leave to appeal under s 56(3) of the Senior Courts Act 2016. The court applied the test from Greendrake v District Court of New Zealand, which required the first defendant to show an arguable error of law or fact of sufficient importance, circumstances warranting further delay, and whether the interests of justice were served by granting leave. The court determined that the first defendant's proposed grounds of appeal related to the substantive decision and not the recall decision, which amounted to an abuse of process. The interests of justice were not served by allowing an appeal from the recall decision to challenge the substantive decision.

The court reasoned that the first defendant's application for leave to appeal the recall decision should be dismissed. The appeal as of right from the substantive decision was available and should have been pursued. The first defendant's application for leave was also out of time, though the court proceeded to assess it on the merits. The affidavit filed by the first defendant's director was deemed admissible but irrelevant to the application for leave to appeal from the recall decision. The court awarded costs to the plaintiffs and the second and third defendants on a 2B basis for the filing and hearing of the application, but declined to grant increased or indemnity costs.

Orders