Fuati v Peng - [2018] NZHC 2134

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000848

[2018] NZHC 2134

UNDER Part 32 of the High Court Rules

BETWEEN

MUSABAYOUFU 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
and WESTPAC NEW ZEALAND LIMITED

Sixth Respondent/Non-party

Hearing: 20 June 2018

Appearances:

N J Scampion for Applicants D Zhang for First Respondent

Judgment:

17 August 2018

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney

on 17 August 2018 at 4.15 pm (re-issued 5 September 2018) pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar
Date………………………

FUATI & OR v PENG & ORS [2018] NZHC 2134 [17 August 2018]

Introduction

[1] The applicants, Mr Fuati and Mr Jin, allege that the first respondent, Ms Peng, borrowed a total of NZ$900,000 from them on the basis that she would repay that sum on or before 4 April 2018, together with interest at 18 per cent per annum. They say that Ms Peng repaid NZ$156,942.54 but the balance remains outstanding. In May 2018, Mr Fuati and Mr Jin applied without notice for freezing and ancillary disclosure orders against Ms Peng and Wonder International Ltd (WIL) of which Ms Peng is the sole director and shareholder.

[2] Moore J made freezing orders in respect of Ms Peng’s and WIL’s assets and ordered ancillary disclosure by Ms Peng, WIL and four New Zealand banks to ascertain the existence, value, and whereabouts of assets falling within the scope of the freezing order.1 The banks complied with the disclosure order but Ms Peng and WIL did not.

[3] The freezing order was due to expire on 20 June 2018 (having been extended twice). The matter came before me on that day with the following matters to deal with:

(a)Mr Fuati’s and Mr Jin’s applications for:

(i)a continuation of the freezing order until further order of the Court (I granted a further continuation pending my reserved decision);

(ii)an order that the banks provide limited further disclosure in relation to the alleged breach;

(iii)an order under r 8.38 requiring Ms Peng to answer questions about an alleged breach of the freezing order.

(b)Ms Peng’s and WIL’s applications for:

(i)a discharge of the freezing order;

1 Minute of Moore J 10 May 2018.

(ii)a variation of the disclosure order to reduce its scope and/or allow more time for compliance; or alternatively a stay of the disclosure order.

Should the freezing order be continued or discharged?

Relevant principles
[4]The criteria for the grant of a freezing order are:2

(a)The applicant must show that he or she has a good arguable case on their substantive claim;

(b)There must be assets of the defendant within the jurisdiction to which the orders can apply; and

(c)The applicant must show there is a real risk of dissipation or disposal of…

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 [2018] NZHC 2134
Case: [2018] NZHC 2134
Decision Date: 17 August 2018

CaseChat Overview and Summary

The case of Fuati v Peng involves a dispute between the applicants, Mr Fuati and Mr Jin, and the first respondent, Ms Peng, regarding a loan of approximately NZ$900,000. The applicants allege that Ms Peng borrowed the money with an agreement to repay it by 4 April 2018, together with interest. They claim that while Ms Peng repaid NZ$156,942.54, the remaining balance remains outstanding. In May 2018, Mr Fuati and Mr Jin applied for freezing and ancillary disclosure orders against Ms Peng and Wonder International Limited (WIL), of which Ms Peng is the sole director and shareholder. Moore J initially granted these orders, but the matter was brought before Justice Courtney to address the continuation of these orders, further disclosure, and an order requiring Ms Peng to answer questions about an alleged breach of the freezing order.

The key legal issues before the court were whether the freezing order should be continued or discharged, whether the ancillary disclosure order should be varied, and whether an order should be made for Ms Peng to answer interrogatories. The court had to consider the criteria for granting a freezing order, the overall justice in the circumstances, and the principles governing ancillary orders and interrogatories.

Justice Courtney held that the prerequisites for the freezing order remained satisfied, and it was in the overall interests of justice that it continue. The court found that the evidence showed a good arguable case that Mr Fuati and Mr Jin lent Ms Peng the money over and above other transactions between them. The ancillary disclosure order was varied to the extent that certain orders were discharged, but the application for an order requiring Ms Peng to answer interrogatories was dismissed. The freezing and ancillary orders would remain in place until further order of the court, with leave reserved for Ms Peng to apply for variation if disclosure suggested that the scope of the freezing order was excessive.

In conclusion, the freezing orders will remain in place until further order of the Court, the ancillary orders are varied by discharging certain orders, and the application for an order requiring Ms Peng to answer interrogatories is dismissed. Leave is reserved for Ms Peng to make a further application for variation of the freezing order if necessary.

Orders