Gao v Cao - [2015] NZHC 1609

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2014-404-003080 [2015] NZHC 1609

BETWEEN
JING GAO

Plaintiff

AND

YANG CAO First Defendant

FENG QIANG CAO Second Defendant

YAN HUA LI Third Defendant

Hearing: 9 July 2015

Appearances:

A Manuson for Plaintiff
G Collecutt for Defendants

Judgment:

9 July 2015

ORAL JUDGMENT OF VENNING J

Solicitors: Prestige Lawyers Limited, Auckland
Simpson Dowsett Mackie, Auckland

Copy to: D G Collecutt, Auckland

GAO v CAO [2015] NZHC 1609 [9 July 2015]

[1] There are two applications before the Court. The first, an application for judgment by formal proof by the plaintiff and the second, a very late application by the first defendant for leave to file a statement of defence out of time.

[2] The plaintiff is the former mother-in-law of the first defendant. The first defendant was married to the plaintiff’s daughter. The second and third defendants are the parents of the first defendant. All parties to the proceeding are of Chinese origin.

[3] The plaintiff alleges that after the first defendant and her daughter, Ms Lu, married the first defendant proposed that she purchase an investment property in New Zealand. There was an initial agreement that the plaintiff and the first defendant’s parents, the second and third defendants, would together fund the purchase of an investment property in New Zealand with the intention that the first defendant and Ms Lu would be able to reside in the property rent free as long as they remained in New Zealand. The first defendant and Ms Lu identified a suitable property and entered an agreement for the purchase of a property at 343
Hillsborough Road in Auckland. The purchase price was $585,000.

[4] The plaintiff alleges that after the purchase agreement was signed the second and third defendants indicated they could not afford to provide their share of 50 per cent of the purchase price. The plaintiff says she agreed to provide additional funds to the purchase on condition that her interest in the property would be represented by her greater contribution. She says she transferred $436,900 to the bank account of the first defendant and Ms Lu to enable the purchase of the property to be settled. The property was purchased in the name of the defendant and Ms Lu.

[5] Unfortunately the relationship between the defendant and Ms Lu came to an end and the plaintiff now wishes her interest in the property to be recorded and for the property to be sold.

[6] The plaintiff also seeks the rental income, which since the first defendant and

Ms Lu left the property, has been received into their joint account between April

2012 and May 2013. Since May 2013 the plaintiff says she is unaware of whether the property is tenanted.

[7] Finally the plaintiff alleges that she advanced moneys to the first defendant for him to invest on her behalf. She says that he has failed to account fully to her following the termination of that investment. While she acknowledges the return…

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: [2015] NZHC 1609
Decision Date: 9 July 2015

CaseChat Overview and Summary

In the case of Gao v Cao, the plaintiff, Jing Gao, sought judgment by formal proof against Yang Cao, Feng Qiang Cao, and Yan Hua Li. Jing Gao, the former mother-in-law of Yang Cao, alleged that she funded the purchase of an investment property in New Zealand with the understanding that she would have an interest in the property. She sought a declaration of ownership, an order for the sale of the property, and compensation for rental income and investment losses. The first defendant, Yang Cao, made a late application for leave to file a statement of defence out of time.

The court considered whether Yang Cao's application should be granted. Key factors included whether Yang Cao had a substantial defence, whether the delay was reasonably explained, and whether Jing Gao would suffer irreparable injury if the application was granted. The court found that Yang Cao had an arguable defence based on the evidence presented, but his failure to take timely steps in the proceedings was unsatisfactory. The court also determined that Jing Gao would not be significantly prejudiced if Yang Cao were allowed to defend the matter, as her interest in the property was protected by a caveat.

The court concluded that the interests of justice supported granting Yang Cao leave to file a statement of defence, provided he complied with certain conditions, including filing a fully particularised statement of defence by a specified date and paying Jing Gao's wasted costs. Failure to comply would result in the debarment of Yang Cao from defending the proceeding and the reallocation of the case for a formal proof hearing. If the conditions were met, the parties would complete discovery and a case management conference would be scheduled for a full substantive hearing.

Orders