Golden Garden Ltd v Zhao - [2017] NZCA 227

IN THE COURT OF APPEAL OF NEW ZEALAND

CA496/2016
[2017] NZCA 227

BETWEEN	GOLDEN GARDEN LIMITED Appellant
AND	HONGWEI ZHAO AND ZHIDONG HUANG Respondent

Hearing:	2 May 2017
Court:	Miller, Gilbert and Katz JJ
Counsel:	W McCartney for Appellant M Lenihan for Respondents
Judgment:	31 May 2017 at 11.00 am

JUDGMENT OF THE COURT

AThe application for leave to adduce further evidence is granted.
BThe appeal is allowed. The judgment entered in the High Court is set aside.
CThe appellant is entitled to costs as for a standard appeal on a band A basis
and usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Gilbert J)

Introduction

Golden Garden Ltd appeals against a decision of Associate Judge Bell granting summary judgment on a claim by Hongwei Zhao and Zhidong Huang (the vendors) for the sum of $730,000, being the deposit payable under an unconditional agreement for sale and purchase of a property in Kumeu for $7.3 million.[1] Golden Garden contends that the vendors’ agent knew that it was only prepared to purchase the property subject to conditions as to finance and due diligence and the agent misled it into believing that the agreement she presented for signing contained these conditions. Golden Garden claims that the vendors are not entitled to enforce the agreement in these circumstances.
[1]Zhao v Golden Garden Ltd [2016] NZHC 2204.
The Associate Judge found that Golden Garden did not have an arguable defence to the claim based on the plea of non est factum, concluding that the evidence filed on its behalf could be disregarded as being implausible and the defence would be precluded by negligence in any event.[2]
[2]At [29] and [37].
There are two principal issues to consider:
(a)If Golden Garden’s evidence were to be accepted at trial, would it provide an arguable defence to the claim?
(b)If so, does Golden Garden’s evidence meet the threshold of credibility such that it cannot safely be disregarded and judgment entered without a trial?
Golden Garden has applied for leave to adduce further evidence in support of its appeal, and this evidence is relevant to both questions.
We start by summarising the evidence given on behalf of Golden Garden in the High Court and the Associate Judge’s reasons for concluding that there was no arguable defence to the claim. We then consider the application to introduce further evidence in support of the appeal. Finally, we assess whether there is an arguable defence to the claim by considering the two questions posed above.

Golden Garden’s evidence in the High Court

Meihong Kong is the sole director of Golden Garden. She was referred to in the correspondence and in the High Court by her married name, Mrs Liang. We will do the same.
Mrs Liang completed the only substantive affidavit filed in the High Court in opposition to the application for summary judgment. The affidavit is written in Mandarin and was prepared based on instructions Mrs Liang gave to her solicitor in Mandarin as translated through an…

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: [2017] NZCA 227
Decision Date: 31 May 2017 at 11.00 am

CaseChat Overview and Summary

Golden Garden Ltd appeals against the decision of Associate Judge Bell granting summary judgment on a claim by the vendors, Hongwei Zhao and Zhidong Huang, for the deposit payable under an unconditional agreement for sale and purchase of a property in Kumeu for $7.3 million. The central issue is whether Golden Garden Ltd can rely on the plea of non est factum to defend the claim, arguing that the vendors' agent misled it into believing that the agreement contained conditions as to finance and due diligence. The Court of Appeal considered two principal issues: whether Golden Garden Ltd's evidence would provide an arguable defence if accepted at trial, and if the evidence met the threshold of credibility to warrant a trial. The Court granted Golden Garden Ltd leave to adduce further evidence, which included affidavits supporting the claim that the sole director, Mrs Liang, could not speak, read, or write English. The Court found this evidence credible and cogent, countering the Associate Judge's finding that Mrs Liang had an adequate command of English. The Court concluded that if all of Golden Garden Ltd's evidence were accepted, it would provide an arguable defence to the claim based on non est factum. Additionally, the Court found that the evidence met the threshold of credibility and could not be summarily dismissed. The Court of Appeal allowed the appeal, set aside the judgment of the High Court, and ordered that Golden Garden Ltd is entitled to costs as for a standard appeal on a band A basis and usual disbursements.

Orders