Gao v Jia - [2022] NZHC 3006

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-000828

[2022] NZHC 3006

BETWEEN
SEN GAO

Applicant

AND

XINHONG JIA

Respondent

Hearing: 19 October 2022

Appearances:

K Sun and I Sugimoto for Applicant

B J Norling and W M Alexander for Respondent

Judgment:

17 November 2022

JUDGMENT OF VENNING J

This judgment was delivered by me on 17 November 2022 at 3.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

Solicitors: Capstone Law Ltd, Auckland
Heritage Law, Auckland

GAO v JIA [2022] NZHC 3006 [17 November 2022]

Introduction

[1] Sen Gao seeks summary judgment against Xinhong Jia in the sum of $1.5 million together with interest.

[2] Mr Gao advanced the $1.5 million to Mr Jia in 2015. Mr Jia acknowledges that he received the money but says that the debt was effectively assigned to Mr Gao’s partner, Ms Yang, and it was then taken into account in fixing Ms Yang’s shareholder’s current account with Winter Forest Holdings Limited (WFHL), a company which Mr Jia established to take over and complete a development project that Mr Gao had substantially financed.

Background

[3] On 15 October 2014, Mr Jia incorporated Wanqi Business Holdings Limited to acquire and develop land at 4 Bute Road, Browns Bay, Auckland into apartments and commercial offices (the development project). On 19 March 2015, the company name was changed to Browns Bay Seaview Limited (BBSL).

[4] In or about early 2015, the plaintiff visited New Zealand with his partner Yuling Yang and their son. They met a real estate agent, Baofeng Guo (Alan). Alan introduced them to the defendant, Mr Jia.

[5] On 23 May 2015, Mr Gao agreed to lend Mr Jia $1.5 million which Mr Jia needed for the development project. Mr Gao and Mr Jia entered a loan agreement (written in Chinese) to record the arrangement. The money was advanced to Mr Jia in three tranches. The agreement provided the principal was repayable on or before 20 November 2017.

[6] Mr Jia put the $1.5 million into the development by BBSL. It was reflected in his current account as a shareholder’s advance.

[7] Mr Jia did not repay the loan when it fell due in November 2017. Despite that, at Mr Jia’s request, Mr Gao agreed to substantially finance BBSL’s development project.

[8] Ultimately, Mr Gao agreed to invest approximately $16 million in the development project through his partner, Ms Yang.

[9] The parties discussed Mr Gao’s further involvement in the ongoing development project and the appropriate structure for some time. In March 2020, Mr Jia and Ms Yang completed a number of documents recording the restructured arrangements involving WFHL’s take-over of the development project from BBSL. It is the detail of those discussions and the arrangements regarding the restructuring of the development project which Mr Jia relies on to oppose Mr Gao’s application for summary judgment.

[10] On 17 May 2021, Mr Gao’s former solicitors issued a letter…

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 Gao v Jia

Details

AGLC: Gao v Jia [2022] NZHC 3006
Case: [2022] NZHC 3006
Decision Date: 17 November 2022

CaseChat Overview and Summary

Gao v Jia involves Sen Gao, the applicant, seeking summary judgment against Xinhong Jia, the respondent, for the repayment of a $1.5 million loan advanced in 2015. The court was required to decide whether the defendant had a defence to the claim, specifically if the $1.5 million loan had been effectively assigned to the applicant's partner, Yuling Yang, as part of a larger restructuring arrangement involving the development project. The court examined the principles of equitable assignment and the arguments presented by both parties regarding the intentions and understanding of the loan agreement and subsequent arrangements.

The court considered the evidence provided by both parties, including the loan agreement, the restructuring documents, and the testimonies of the involved parties. The court found that there was an arguable case that the $1.5 million loan had been assigned to Yang as part of Gao's investment in the development project. The court was not convinced that Gao had completed the assignment, but the possibility could not be ruled out. The court dismissed Gao's application for summary judgment, noting that the matter required further exploration at a substantive hearing.

The court reserved costs, indicating that they would be considered at the substantive hearing. This decision allows for a full examination of the merits of the case, including the validity of the equitable assignment and the overall financial arrangement between the parties.

Orders