Fuati v Peng

[2018] NZHC 3283

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2018-404-0848

[2018] NZHC 3283

BETWEEN

MUSABA YOUFU FUATI and JUN JIN

Applicants

AND

YUCHEN PENG

First Respondent

WONDER INTERNATIONAL LIMITED
Second Respondent

ASB BANK LIMITED
Third Respondent (Non-Party)

ANZ BANK NEW ZEALAND LIMITED
Fourth Respondent (Non-Party)

BANK OF NEW ZEALAND
Fifth Respondent (Non-Party)

WESTPAC BANKING CORPORATION

Sixth Respondent (Non-Party)

Hearing:

13 December 2018

Appearances:

N J Scampion for the applicants

D Zhang for the first and second respondents No appearance for the third to sixth respondents

Judgment:

13 December 2018

JUDGMENT OF JAGOSE J

This judgment is delivered by me on 13 December 2018 at 10.00 am pursuant to r 11.5 of the High Court Rules.

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Registrar / Deputy Registrar

Counsel/Solicitors:           N J Scampion, Barrister, Auckland

Amicus Law, Auckland

FUATI v PENG [2018] NZHC 3283 [12 December 2018]

Background

[1]    On 11 May 2018, the applicants obtained orders freezing, in particular, the first and second respondents’ funds in identified New Zealand and Chinese bank accounts. The first respondent, Yuchen Peng, had notice of those orders by 14 May 2018.

[2]    Ms Peng’s response to the applicants’ ancillary disclosure orders illustrated, on 14 May 2018, she transferred substantial sums to third parties, including to her boyfriend, Zuoru Jin. (Freezing orders have extended to Mr Jin’s accounts.) The applicants apprehend further transfers are being made from her Chinese bank accounts.

[3]    The applicants have applied for Ms Peng accordingly to be held in contempt, as a means of coercing compliance with the freezing orders. They seek ancillary disclosure orders against the third to sixth respondents (the “Banks”) as to their particular information and documents relating to Ms Peng’s activities on 14 May 2018. The Banks have not taken any step in relation to the sought orders, and the first and second respondents abide my decision.

Discussion

[4]    Under HCR 32.3(1), I may make an order ancillary to a freezing order if I ‘consider it just’. Such orders generally are “to ensure the freezing order can be properly policed and is effective”.1 I am not entirely convinced the present ancillary order sought can be said to assist with the freezing order’s supervision and efficacy, but it may have that derivative quality if there is a basis to ground disciplinary pursuit of the contempt application. Given the lack of opposition to its making, I will make that order.

[5]    I therefore do not need to consider the applicants’ alternative application for variation of the disclosure order against Ms Peng to require her to provide such information and documents. I record Ms Peng indicates she would resist compliance with such orders on grounds of her privilege against self-incrimination, which the

1      Monasterio v Bujak HC Christchurch, CIV 2008-409-1901, 21 August 2009 at [26].

applicants contend she has waived. But, as I observed to counsel, I am not prepared to determine those claims and contentions in the abstract.

[6]    The applicants also seek directions regarding the level of Ms Peng’s maximum monthly spending under the freezing order and its monitoring (along with ‘reasonable’ legal expenses). Ms Peng says her monthly ordinary living expenses are approximately

$6,700. The applicants say that is excessive for her circumstances. Be that as it may, the applicants have no evidence to dispute Ms Peng’s contention. I accept her evidence presently as uncontested.

[7]    However, I acknowledge – for so long as the freezing orders apply, but the accounts subject to them may be drawn upon by the first and/or second respondents – there should be some means by which the applicants are able to monitor the accounts subject to the orders. I propose the simplest way for that to occur is for each subject bank contemporaneously to provide a copy of the account’s periodic statements to the applicants. As I have not heard from any party on such an order, each will have leave to apply for its discharge or variation.

Orders

[8]    I therefore further vary the 11 May 2018 ancillary orders to require the third to sixth respondents:

(a)within five working days of notice of these orders or such larger time as may be agreed with the applicants, to file and serve affidavits as to information and/or documents within each of their control relating to:

(i)Ms Peng’s visit/s to her bank branch on 14 May 2018 (including the time of visit, the identity of the bank/branch, and the information and/or documents provided to her during that visit);

(ii)the fund transfers (or attempts to transfer) made by Ms Peng and WIL from their New Zealand and Chinese bank accounts on 14 May 2018;

(iii)Ms Peng’s communications and interactions with her New Zealand and Chinese banks on 14 May 2018, as they relate to the Freezing Order and/or fund transfers;

(iv)Ms Peng’s knowledge of the Freezing Orders at the time she transferred funds from her / WIL’s New Zealand and Chinese bank accounts on 14 May 2018;

(v)the allegations that Ms Peng transferred funds in breach of the Freezing Order on 14 May 2018, and breached the Freezing Order after that date;

and to make such information and/or documents available to the applicants and the first and second respondents; and

(b)to provide the applicants with contemporaneous copies of their periodic statements of accounts subject to the 11 May 2018 freezing orders.

[9] I reserve leave to all parties to apply to discharge or vary my order set out at [8](b) above.

[10]   Costs are reserved for determination in conjunction with the applicants’ contempt order application.

—Jagose J