He v Earthquake Commission

[2022] NZHC 191

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2013-409-1775

[2022] NZHC 191

BETWEEN

XIAOMING HE

Plaintiff/Judgment Debtor

AND

EARTHQUAKE COMMISSION

First Defendant/Judgment Creditor

AND

SYNDICATES OF LLOYD’S OF

LONDON SEVERALLY SUBSCRIBED TO COVERHOLDER CONTRACT
B0429CNG90466

First named Second Defendant/Judgment Creditor

AND

CERTAIN SYNDICATES OF LLOYD’S OF LONDON SEVERALLY SUBSCRIBED TO COVERHOLDER CONTRACT

B0429CNG110466

Second named Second Defendant/Judgment Creditor

Counsel:	O E Jaques, N L Walker and R Flinn for First Defendant and Second Defendants/Judgment Creditors
Judgment:	15 February 2022
(Determined on the papers)

JUDGMENT OF OSBORNE J

This judgment was delivered by me on 15 February 2022 at 4.30 pm pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date

HE v EARTHQUAKE COMMISSION [2022] NZHC 191 [15 February 2022]

Background: the charging orders

[1]                  The defendants obtained judgment against the plaintiff in the latter’s civil claim on 4 September 2017.1

[2]                  The defendants were subsequently awarded costs and disbursements to be paid by the plaintiff.2

[3]                  On 16 February 2018 the first defendant obtained a charging order over a property at 133 Poulson Street, Addington, Christchurch (the Property), of which the plaintiff was registered proprietor. That Property (and at the time another (Rotorua) property) were charged with payment of the costs judgment in a total sum of

$273,327.02.

[4]                  On 27 February 2018 the second defendant obtained a charging order over the Property and the Rotorua property.

[5]                  On 14 February 2020 this Court extended the effect of the charging orders for a period of two years (that is until 16 February 2022).

Present application

[6]                  The defendants now apply for the further extension of the charging orders over the Property for six months until 15 August 2022. (The charging order in relation to the Rotorua property will lapse as the defendants have since established that the plaintiff is not in fact the owner of that property).

[7]                  Because the existing charging orders will lapse tomorrow if not extended by tomorrow, the defendants seek an extension on a without notice basis initially, allowing time for the extension application to then be determined on an on-notice basis.

1      He v Earthquake Commission [2017] NZHC 2136.

2      He v Earthquake Commission [2018] NZHC 67.

Justification for extension

[8]                  The defendants’ application is supported by an affidavit of Amelia Cina, a solicitor employed by the first defendant’s solicitors. She referred the following matters:

(a)Although the costs judgment was issued in 2018, the litigation did not conclude until the Supreme Court refused leave to appeal in December 2019;

(b)both defendants wished to give the plaintiff the opportunity to pay the judgment debts and did so through correspondence up to December 2021;

(c)there was an issue as to the ownership of the Rotorua property which was resolved in December 2021 when the defendants were able to confirm that the Rotorua property is not owned by the plaintiff but instead by a different individual bearing the same name; and

(d)the Board of the first defendant has yet to make a final decision on whether to pursue enforcement, which decision will be able to be confirmed at a meeting in April 2022.

Legal regime

[9]Charging orders are issued under pt 17 High Court Rules.

[10]Rule 17.52 provides:

17.52   Lapse of charging order after 2 years

(1)A charging order no longer binds the land affected and is treated as discharged after 2 years from the date of the charging order unless it is extended under subclause (2).

(2)The court may within that period, if it thinks just, extend the effect of a charging order for any necessary period.

(3)      …

Discussion

[11]              I am satisfied that the extension sought (six months until 15 August 2022) is necessary in order to give the first defendant time to make a final decision concerning enforcement and, secondly, to allow either defendant to prepare and file an application for sale orders (or such other enforcement as they consider appropriate).

Orders

[12]I order:

(a)The effect of the orders over the property identified as CB3OF/1057, more particularly a fee simple estate in part rural section 72, Canterbury Registry, in favour of the first and second defendants and respectively made on 16 February 2018 and 27 February 2018, is extended for the period expiring on 15 August 2022;

(b)the plaintiff has leave to apply for relief under rr 17.44 or 7.49 of the High Court Rules, or otherwise;

(c)the defendants’ on notice application for extension of charging orders is to be served promptly upon the plaintiff, with the first call of the application to be in the Duty Judge List at 11.45 am, 14 March 2022 (Dunningham J).

Osborne J

Solicitors:

Russell McVeagh, Wellington Wotton Kearney, Wellington

Counsel: O Jacques, Barrister, Wellington