Fuati v Peng - [2020] NZHC 672

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000848

[2020] NZHC 672

UNDER Part 2 of the High Court Rules

BETWEEN

MUSABAYOUFU FUATI

First Plaintiff

AND

JUN KIN

Second Plaintiff

AND

YUCHEN PENG

First Defendant

AND

ZOURU JIN

Second Defendant

Hearing: 4 February 2020

Appearances:

N Scampion for Plaintiffs D Zhang for Defendants

Judgment:

1 April 2020

JUDGMENT OF WALKER J

This judgment was delivered by me on 1 April 2020 at 4.00 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

FUATI v PENG [2020] NZHC 672 [1 April 2020]

Introduction

[1] The plaintiffs, Mr Fuati and Mr Jin, claim that the first respondent, Ms Peng, borrowed RMB 4.2 million (approximately NZD 850,000) from them with an obligation to repay on or before 4 April 2018, together with interest. The claim asserts that, except for the sum of NZ$156,942.54, the balance borrowed remains outstanding. The plaintiffs obtained without notice freezing and ancillary disclosure orders in May 2018. The result of those orders was that the bank accounts of Ms Peng and Wanda International Limited (WIL), a company of which Ms Peng is the sole director and shareholder, were frozen.1

[2] The defendants sought to vary the freezing order. On 17 August 2018, Courtney J varied the ancillary orders, dismissed the application for an order requiring Ms Peng to answer interrogatories but held that the freezing orders should remain in place until further order of the Court.2 This was on the basis that the plaintiffs were able to show that they have a good arguable case on their substantive claim and there was a real risk of dissipation or disposal of the assets.

[3] There have been significant other interlocutories fought throughout this heavily contested proceeding. By way of example, on 23 October 2018 the plaintiffs obtained a without notice freezing order against the second defendant on the basis of alleged transfers between Ms Peng and the second defendant. That order was discharged by Toogood J on 1 August 2019.3 Ms Peng asserts that the discharge provided a means for Ms Peng to take more vigorous steps to defend her position.

[4] Ms Peng not only denies that the alleged debt is owing to the plaintiffs but has filed a counterclaim. The gist of Ms Peng’s defence is that she asserts that she and the plaintiffs were together conducting a currency exchange business. In the course of that business, she deposes that the flow of funds from her to the plaintiffs exceeded any transfers of funds to her.

1      WIL was de-registered on 4 April 2018.
2      Fuati & Anor v Peng & Anor [2018] NZHC 2134.
3      Fuati & Anor v Peng & Anor [2019] NZHC 1859.

[5] The plaintiffs in turn deny they were operating a currency exchange business. They acknowledge that Ms Peng paid significant sums of money to them but assert that those payments were unconnected with the money they had loaned 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 Peng

Details

AGLC: Fuati v Peng [2020] NZHC 672
Case: [2020] NZHC 672
Decision Date: 1 April 2020

CaseChat Overview and Summary

The High Court of New Zealand, Auckland registry, dealt with an application for further and better or particular discovery and substituted service made by the defendant, Ms Peng, in proceedings between the plaintiffs, Mr Fuati and Mr Jin, and the defendants, Ms Peng and Mr Jin, concerning an alleged loan of RMB 4.2 million (approximately NZD 850,000) with an obligation to repay on or before 4 April 2018, together with interest. The plaintiffs claim that the balance borrowed remains outstanding, except for the sum of NZ$156,942.54. Ms Peng denies that the alleged debt is owing to the plaintiffs and has filed a counterclaim. The plaintiffs deny they were operating a currency exchange business. The case involved heavily contested proceedings and significant interlocutories. The court heard an application for further and better or particular discovery and substituted service. The plaintiffs did not comply with the directions timetable and their application was deemed abandoned. The court found that there were grounds for believing that the plaintiffs had not discovered one or more documents or a group of documents and made orders for further and better or particular discovery. The court also found that orders for substituted service were warranted and made orders for substituted service.

The legal issues the court had to decide were whether the documents sought by the defendants were relevant and whether there were sufficient grounds for believing that the documents sought existed and whether an order for discovery was proportionate. The court had to consider the pleadings and evidence filed in the proceedings and the nature of the relationship between the parties and whether the plaintiffs were operating a currency exchange business in conjunction with Ms Peng. The court also had to consider the application for substituted service and whether reasonable efforts had been made to serve a document and either the document had come to the knowledge of the person to be served or it could not be promptly served. The court had to consider the practical problem of serving the non-parties and whether the plaintiffs' own pleading provided a workable solution.

Orders