Huang v Chen - [2021] NZHC 3232

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-000304

[2021] NZHC 3232

BETWEEN
HONGZHAO HUANG

First Plaintiff

JEYU LU
Second Plaintiff

MATAKANA WINES LIMITED
Third Plaintiff

AND

CHRIS CHEN

First Defendant

WAIHOPAI VALLEY VINEYARD LIMITED

Second Defendant

……………………………………Contd/2

Hearing: 25 November 2021

Appearances:

M O’Brien QC and M Pascariu for Plaintiffs T J Herbert for Defendants

Judgment:

29 November 2021

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Monday, 29 November 2021 at 4:30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors: Anderson Creagh Lai (M Pascariu), Auckland Counsel: M O’Brien QC, Auckland
T J Herbert, Auckland

HUANG v CHEN [2021] NZHC 3232 [29 November 2021]

YI LU
Third Defendant

DON CHEN
Fourth Defendant

JINPING HUANG
Fifth Defendant

QI YANG
Sixth Defendant

ADELAIDE EDUCATION GROUP PTY LIMITED
Seventh Defendant

[1] This proceeding has a three-week fixture which has been set down for hearing commencing on 16 May 2022.

[2] On 22 July 2021, the first defendant, Mr Chen, filed a second amended statement of defence and counterclaim, which included five counterclaims.

[3] The plaintiffs object to the jurisdiction of the Court to hear and determine Mr Chen’s first and fifth counterclaims. They seek orders staying the first counterclaim on the basis that New Zealand is forum non conveniens and the People’s Republic of China is the proper forum for determination of the claim and striking out the fifth counterclaim on the basis that it is an “employment relationship problem” that the High Court has no jurisdiction to determine.

Relevant background

[4] The following relevant background is largely taken from the synopsis of submissions by plaintiffs’ counsel.

[5] The parties entered into a joint venture agreement in China on 19 April 2012. The joint venture agreement:

(a)Is expressly governed in accordance with the laws of China;

(b)Concerned the purchase and operation of land and an associated winery in Matakana, Auckland;

(c)Provided that the parties would incorporate a company through which the winery would operate, namely Matakana Estate Limited;

(d)Provided that Mr Chen was to be the Chief Executive Officer of Matakana Estate Limited; and

(e)Provided that a wholly owned subsidiary of Matakana Estate Limited would be incorporated in China.

[6] Although the joint venture agreement referred to Matakana Estate Limited, the parties ultimately decided to use the third plaintiff, Matakana Wines Limited (MWL), for that purpose. MWL had been earlier incorporated by Mr Chen, who initially held all the shares in the company and was its sole director.

[7]Pursuant to the joint venture agreement:

(a)On 28 June 2012, the second plaintiff, Ms Lu, was appointed a director of MWL and became its managing director in September 2012;

(b)On 1 September 2012, Mr Chen was appointed as the general manager of MWL pursuant to an employment agreement of the same date, although Mr Chen says he was the Chief Executive Officer; and

(c)On 10 September 2012, Mr Chen transferred 100 per cent of the…

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 Huang v Chen

Details

AGLC: Huang v Chen [2021] NZHC 3232
Case: [2021] NZHC 3232
Decision Date: 29 November 2021

CaseChat Overview and Summary

Huang v Chen was a proceeding heard by Woolford J in the High Court of New Zealand. The plaintiffs, Hongzhao Huang, Jeyu Lu, and Matakana Wines Limited, brought an action against Chris Chen, Waihopai Valley Vineyard Limited, and others. The plaintiffs objected to the court’s jurisdiction over two counterclaims filed by the first defendant, Mr Chen. The first counterclaim related to an alleged agreement concerning a 40 per cent interest in Matakana Zhongshan, a Chinese company. The plaintiffs sought a stay on the basis that the People’s Republic of China was the proper forum. The fifth counterclaim related to an alleged breach of an employment agreement concerning Mr Chen's role as the Chief Executive Officer of MWL. The plaintiffs sought to have the counterclaim struck out on the basis that it was an employment relationship problem that the court lacked jurisdiction to determine.

The court considered whether the first counterclaim could proceed in New Zealand. The joint venture agreement was governed by Chinese law, but the plaintiffs had pled it in the New Zealand proceeding. The court found that, considering cost and convenience, New Zealand was the appropriate forum. The court dismissed the application to stay the first counterclaim. The court also considered whether the fifth counterclaim was an employment relationship problem. The court found that the counterclaim concerned a matter of employment and therefore must be brought before the Employment Relations Authority. The court granted the application to strike out the fifth counterclaim.

The court ordered that the first counterclaim could proceed, and the fifth counterclaim was to be struck out. The parties were ordered to bear their own costs.

Orders