Hu v MA
[2025] NZHC 282
•25 February 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2022-404-1731
[2025] NZHC 282
BETWEEN DEAN HU
Plaintiff
AND
TAO MA
First Respondent
YANG YANG
Second Respondent
Hearing: On the papers Judgment:
25 February 2025
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on 25 February 2025 at 2.00 pm pursuant to r 11.5 of the High Court Rules.
Registrar/Deputy Registrar
Solicitors/Counsel:
Capstone Law Limited, Auckland S Jeffs, Barrister, Auckland
HU v MA & YANG [2025] NZHC 282 [25 February 2025]
Overview
[1] This is a without notice application by Mr Hu seeking a pre-judgment freezing order.
[2]The orders are sought in respect of Mr Ma’s:
(a)property interests of the first respondent, including a property located at 23 Silver Moon Road, Albany Heights, Auckland 0632, record of title 496061 (Silver Moon Property); and
(b)bank accounts and similar.
[3] Based primarily on Mr Ma’s transfer away of his registered interest in the Silver Moon Property during December 2024, and his non-engagement in this proceeding since failing to pay his solicitors (who have now withdrawn), the applicant believes Mr Ma is attempting to render himself “judgment-proof”. This application is made on an urgent and without notice basis to address those concerns.
Factual background
Contract
[4] In or around 2018, Mr Hu entered into a contract with Mr Ma and/or Mender Construction Ltd (Mender). Mr Ma was:
(a)the sole director and 50 percent shareholder of Mender; and
(b)the builder who was to carry out the contracted works.
[5] The contracted works related to a construction project at 249B Wright Road, Dairy Flat to:
(a)undertake earthworks;
(b)place and compact the fill material of a retaining wall; and
(c)place and compact the fill material for the foundations.
Court proceedings
[6] On 13 September 2022, Mr Hu commenced proceedings against Mender, Mr Ma and two other defendants for alleged breaches arising under or in connection with the above agreement. Mr Hu claims that he thereby suffered losses of approximately $1,658,000.
[7] The defendants filed statements of defence in the proceeding and by May 2024 the parties had provided discovery to each other (with some issues still outstanding).
[8] By a minute dated 2 June 2024, Taylor AJ made timetable directions and allocated a seven day trial to commence on 31 March 2025.
[9] Subsequently, on 11 September 2024, Mr Ma’s solicitors filed an application seeking leave to withdraw on the grounds that there were outstanding solicitor’s fees and Mr Ma had also failed to pay their retainer. The Court granted that application, allowing Mr Ma’s solicitors to withdraw.
[10] Since then, Mr Ma has not responded to any email correspondence from Mr Hu’s counsel or the Court.
Silver Moon Property
[11] In addition to the concerns that arise from non-payment by Mr Ma of his solicitor’s fees, the present application is made because in December 2024 Mr Ma transferred away his registered interest in the Silver Moon Property.
[12] On 21 September 2016, Mr Ma’s wife Yang Yang registered notice of claim of interest pursuant to s 42(2) of the Property (Relationships) Act 1976.
[13] On 9 December 2024 the existing mortgage was discharged, Yang Yang’s notice of claim withdrawn, Mr Ma transferred his registered ownership in the Silver
Moon Property to his wife Yang Yang, and a new mortgage was registered in favour of Basecorp Finance Ltd. The plaintiff is concerned that these steps were taken to dissipate assets and attempt to render Mr Ma judgment proof in the face of the pending hearing and determination of the claims in this proceeding.
[14] Mr Hu’s solicitor has undertaken a search to identify whether Tao Ma owns any other properties. This has identified there are eight properties that have a person named “Tao Ma” as a registered owner, but it is uncertain whether some or all of these might be different people with the same name.
Legal principles
[15] The general principles are well settled. For freezing orders to issue, there must be:1
(a)a good arguable case on the applicant’s substantive claim;
(b)assets of the respondents to which the orders can apply;
(c)a real risk the respondents will dissipate or dispose of those assets to defeat any judgment.
[16] Finally, it must be in the interests of overall justice that the orders be granted. The Court weighs the interests of justice so as to strike a balance between the need to protect the applicant, and to avoid undue prejudice or hardship to the respondents or any third parties.
Analysis
Good arguable case
[17] The grounds for a good arguable case against Mr Hu are set out in the substantive pleadings and in the supporting affidavits for this application. For the
1 Bank of New Zealand v Hawkins [1989] 1 PRNZ 451, subsequently approved by the Court of Appeal in Shaw v Narain [1992] 2 NZLR 544.
purpose of these without notice orders, I accept that there is a good arguable case, due to be heard in a seven day fixture set down for 31 March 2025.
Assets of the respondents to which the orders can apply
[18] The freezing orders are sought against any estate or interest in real property that Tao Ma might have (including the Silver Moon Property transferred to his wife), and any bank account or deposit in his name or over which he has control, or in which he has any beneficial interest.
[19] The second respondent is joined as the current legal owner of the Silver Moon Property, following the transfer in December 2024. I accept, given the background circumstances described above, there is a good arguable case that the property may have been disposed of with the intent of prejudicing Mr Hu’s actions against him in this proceeding, in breach of ss 347 and 348 of the Property Law Act. I accept that the timing of the transfer, shortly before the substantive hearing of the claims after Mr Ma ceased paying his lawyers and stopped communicating in the proceeding, raises a suspicion and gives rise to a reasonable inference that the purpose of the transfer was to defeat creditors’ interests. There is jurisdiction under r 32.5(5)(b) of the High Court Rules to make the freezing order against Yang Yang, because she may be obliged to disgorge the Silver Moon Property or contribute towards satisfying the prospective judgment. In particular, the applicant may have grounds to set aside the disposition under s 348 of the Property Law Act 2007. It is sufficient in terms of the present application if the applicant has a real case to be investigated.2
[20] The evidence sets out a list of other properties in which Mr Ma may have an estate or interest, but those facts are yet to be confirmed. It appears that Mr Hu does not have any information about any bank accounts or deposit accounts that might be held by or on behalf of the first respondent, but I accept it is likely that there will be one or more such accounts.
2 Primary Services New Zealand Ltd v Colombo Projects Ltd [2020] NZHC 101 at [16]–[18] and [30].
Risk of dissipation
[21] As already addressed in the facts outlined above, there is a real risk that Mr Ma has undertaken the transfer of the Silver Moon Property to defeat creditors, and his disengagement with the legal process further raises concerns that he is taking steps of this nature.
Application made without notice
[22] I accept that it is necessary for the freezing order to be sought without notice, given the nature of the concern that Mr Ma is seeking to dissipate assets and could take further steps to dispose of any interests in property or accounts if notified in advance of the freezing orders being sought.
Balance of convenience and overall justice
[23] I accept the balance of convenience favours the freezing orders that have been sought:
(a)Mr Hu has a good arguable claim against Mr Ma and his wife Yang Yang;
(b)Mr Hu has given an undertaking as to damages;
(c)The orders sought allow for the respondents and any other affected parties to apply to vary the orders on short notice; and
(d)The freezing orders expressly do not prohibit the respondents from dealing with their assets for the purposes of paying ordinary living expenses, legal costs or otherwise carrying out ordinary course of business transactions.
Return date
[24] In granting these orders, I must set a return date to be “as early as practicable after the freezing orders are made”. I set the return date as the Duty Judge’s list on 5 March 2025 at 10 am.
Result
[25] I grant the orders as set out in the draft orders attached to the application, subject to the insertion of:
(a)the words “of the first respondent” and the end of paragraph 4(a); and
(b)the return date set out above in paragraph 7.
O’Gorman J
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