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Fuati v Jin

Fuati v Jin

Case [2023] NZCA 165 11 May 2023

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IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA219/2022
[2023] NZCA 165

BETWEEN	MUSABAYOUFU FUATI Appellant
AND	ZUORU JIN First Respondent OFFICAL ASSIGNEE Second Respondent

Hearing:	22 February 2023
Court:	Gilbert, Ellis and Davison JJ
Counsel:	P C Murray for Appellant D Z Zhang and E T Tie for First Respondent No appearance for Second Respondent D M A Wiseman and C R Purdon for Commissioner of Police as Intervener
Judgment:	11 May 2023 at 9.30 am

JUDGMENT OF THE COURT

The appeal is dismissed.

____________________________________________________________________

REASONS OF THE COURT

(Given by Ellis J)

On 24 August 2020, in the context of litigation between them, the High Court made a costs award against Mr Fuati. The upshot was that Mr Fuati owed a judgment debt of $25,271.90 to Mr Zuoro Jin.[1]
[1]Fuati v Peng [2020] NZHC 2150.
A few months later, the Commissioner of Police (the Commissioner) commenced High Court proceedings against Mr Fuati and others under the Criminal Proceeds Recovery Act 2009 (CPRA).[2] In November 2020, the Commissioner obtained without notice restraining orders against specified property said to be owned or under the control of Mr Fuati and his wife, Tayier Suliya, under ss 24 and 25 of the CPRA. These orders were confirmed on an on notice basis in December 2020 and have been consistently renewed (with some variation) since then.
[2]The Commissioner alleges that Mr Fuati, together with Mr Daniel Hu, operated a large-scale money laundering operation, involving the informal transfer of funds between New Zealand and China.
The statutory effect of these restraining orders is that the property specified in them is under the Official Assignee’s custody and control and is not to be disposed of, or dealt with, by any person other than as provided for in the orders.
On 11 April 2022, Associate Judge Taylor adjudicated Mr Fuati bankrupt, on the petition of Mr Jin.[3] Mr Fuati now appeals that decision on the basis that he has not committed an act of bankruptcy. More particularly, he maintains (as he did unsuccessfully in the High Court) that the restraining orders operate as an implied stay of execution upon the earlier judgment debt and that he has an arguable cross-claim against Mr Jin making it just and equitable that he not be adjudicated bankrupt.

Background

The claim giving rise to the judgment debt

[3]Jin v Fuati [2022] NZHC 718 [High Court judgment].

In 2018, Mr Fuati and another man brought a claim in the High Court against Mr Jin and Ms Yuchen Peng in which the plaintiffs said they had loaned Ms Peng over 4,000,000 Chinese Yuan (or around NZD 900,000) for her currency exchange business. The loans were said to have been made through a series of transactions from an account held by a third party, Mr Wei Wang.
Mr Fuati alleged that Ms Peng had only made a partial repayment of the NZD 150,000, and that she had transferred large amounts of their money to…

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 Fuati v Jin

Details

AGLC: Fuati v Jin [2023] NZCA 165
Case: [2023] NZCA 165
Decision Date: 11 May 2023 at 9.30 am

CaseChat Overview and Summary

The Court of Appeal of New Zealand heard an appeal from Mr Fuati, who sought to resist his adjudication as bankrupt by Mr Jin. The central issues were whether the restraining orders made by the Commissioner of Police under the Criminal Proceeds Recovery Act 2009 operated as an implied stay of execution on the judgment debt, and if Mr Fuati had an arguable cross-claim against Mr Jin. The Court of Appeal dismissed the appeal and confirmed Mr Fuati’s adjudication as bankrupt. The Court held that the restraining orders did not operate as an implied stay of execution on the judgment debt. The Court found that the Criminal Proceeds Recovery Act did not take precedence over the Insolvency Act 2006, and that a proper application of the former Act rendered any argument for an implied stay unnecessary. The Court also found that Mr Fuati did not have an arguable cross-claim against Mr Jin, as his proposed reactivated claim did not meet the threshold of a genuine triable demand and he had not paid the costs ordered in the previous proceeding. As a result, Mr Fuati’s adjudication as bankrupt was confirmed, and the appeal was dismissed.

Orders