He v Chen - [2019] NZHC 2390

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-003369

[2019] NZHC 2390

BETWEEN
YAO WEI HE

Plaintiff

AND

ZHIXIONG CHEN

Defendant

Hearing: 14 February 2019

Appearances:

Plaintiff in Person

N Campbell QC and M Jiang for the Defendant

Judgment:

23 September 2019

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 23 September 2019 at 11.30 am pursuant to Rule 11.5 of the High Court Rules.
…………………………………
Deputy Registrar

Solicitors:

Glaistor Ennor, Auckland N Campbell QC, Auckland

HE v CHEN [2019] NZHC 2390 [23 September 2019]

Introduction

[1] Mr He and Mr Chen have been entangled in a long-running dispute since 2012 arising out of the collapse of an export business venture that was engaged in selling products produced and/or packaged in New Zealand into Hong Kong and mainland China.

[2] The current proceeding was brought by Mr He on 23 December 2014. Following various delays, Mr He filed a long and convoluted amended statement of claim on 14 March 2017. On 19 November 2018 Mr Chen applied for summary judgment or an order striking out the amended statement of claim. On 12 February 2019 Mr He filed a second amended statement of claim in response to Mr Chen’s application. It is substantially similar to the first amended statement of claim. It was filed with the Court on 12 February 2019 and reportedly provided to Mr Chen on 8 February 2019.

[3] At issue presently is whether grounds for strike-out or summary judgment in relation to the second amended statement of claim have been made out.

Background and prior litigation

[4] Mr He’s allegations against Mr Chen have their origins in the setting up and demise of the export business venture. To implement the venture, they incorporated a company called New Zealand Products International Ltd (NZ Products) in 2010. The company was put into liquidation by the Court on 22 May 2014 when the Official Assignee was appointed as liquidator.

[5] It appears both individuals were actively involved in the operation of the now defunct venture along with Mr Chen’s son (Mr Chen Jnr). Not long before the company was put into liquidation, the Court of Appeal dealt with an application by Mr He to bring a derivate action in the company’s name under s 165 of the Companies Act 1993 against the Chens.1 It is helpful to repeat the Court’s summary of the

1 He v Chen [2014] NZCA 153.

background to that litigation; and to reference some of its findings and observations about the grounds on which the Chens opposed the application. In relation to the background the Court set out the following:

Background

[2] NZPIL was incorporated on 18 June 2010. Mr He and Mr Chen Jnr are its de jure directors. Mr He and his wife hold 50 per cent of the shares in NZPIL. The balance 50 per cent of the shares are held by the Chen interests through a trustee…

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 He v Chen

Details

AGLC: He v Chen [2019] NZHC 2390
Case: [2019] NZHC 2390
Decision Date: 23 September 2019

CaseChat Overview and Summary

This is a dispute between Yao Wei He and Zhixiong Chen. The dispute has its origins in a business venture which collapsed. The venture involved exporting goods produced in New Zealand to China. The venture was conducted through a company, New Zealand Products International Ltd (NZ Products), which has since been wound up. The Court was required to determine whether Mr He’s second amended statement of claim should be struck out or whether summary judgment should be granted in favour of Mr Chen. The Court found that the second amended statement of claim was highly prolix, included evidentiary and seemingly-irrelevant material, and was difficult to follow and understand. The Court also found that the fraud allegations made by Mr He were insufficiently substantiated. The Court was not satisfied that the claim was so untenable that it could not succeed, but found that Mr He should be given a final opportunity to re-plead. Mr He was ordered to file an amended statement of claim by 22 November 2019 that coherently and succinctly set out the essential elements of each cause of action that he wished to rely on. If Mr He failed to do so, the Court would strike out his claim. The Court reserved the question of costs.

Orders