Huang v Huang - [2021] NZHC 7

IN THE HIGH COURT OF NEW ZEALAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2519

[2021] NZHC 7

BETWEEN
PEIXIAN HUANG

First Applicant

HUAIJIAN HUANG
Second Applicant

POY TONG WONG
Third Applicant

AND

JIEHAO HUANG

Respondent

Hearing: 13 January 2021

Appearances:

R J Katz QC and S F Gazley for Applicants R E Harrison QC and D Liu for Respondent

Judgment:

13 January 2021

JUDGMENT OF LANG J

[on application for interim relief]

This judgment was delivered by me on 13 January 2021 at 3 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date……………

Solicitors:
Lane Neave, Auckland

HUANG v HUANG [2021] NZHC 7 [13 January 2021]

[1] In this proceeding the applicants seek to recover a share of the proceeds of sale of two properties in which they say they have a beneficial interest. The properties were sold on 15 August 2019. The applicants contend the respondent holds their share of the sale proceeds on their behalf in a fiduciary capacity. They believe the sum involved amounts to more than $9 million.

[2] The applicants have applied under Part 32 of the High Court Rules 2016 for freezing orders over the respondent’s assets to protect them for any judgment they might ultimately obtain against him. The assets in question are bank accounts in the respondent’s name that the applicants have identified as containing credit balances.

[3] The applicants initially applied for freezing orders on a without notice basis under r 7.23. In a minute issued on 23 December 2020 Jagose J directed the applicants to serve the proceeding on the respondent and two other persons who also appear to hold beneficial interests in the sale proceeds. The applicants arranged for those parties to be served with copies of the proceeding on 23 and 24 December 2020.

[4] When the hearing commenced today Mr Katz QC asked me to make freezing orders on the basis of the material filed by the applicants in support of the application. I declined to take that step because I am satisfied the respondent and the other two parties who have been served ought to have a proper opportunity to file documents in response. The time that has elapsed since the documents were served is plainly insufficient for that to occur. Furthermore, the respondent is currently in China and this poses obvious difficulties so far as the filing and service of documents in opposition to the application is concerned.

[5] Matters are further complicated by the fact that the respondent has now filed and served an appearance under protest to the jurisdiction of this Court to hear and determine the proceeding. He contends the proceedings were not validly served on him and that this Court has no jurisdiction to hear and determine the applicants’ claims. Alternatively, he contends the dispute could be more conveniently heard by the courts in China.

[6] Mr Harrison QC appeared on the respondent’s behalf when the matter was called today. He acknowledges 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.

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Details

Case: [2021] NZHC 7
Decision Date: 13 January 2021

CaseChat Overview and Summary

The applicants in the case of Huang v Huang sought to recover a share of the proceeds from the sale of two properties, which they claimed amounted to over $9 million. They applied for freezing orders to protect their share of the sale proceeds from being disposed of by the respondent, Jiehao Huang, who they claimed held the money in a fiduciary capacity. The applicants sought these orders under Part 32 of the High Court Rules 2016, aiming to freeze the respondent’s bank accounts identified to contain credit balances. The court had to determine whether interim freezing orders should be granted while the substantive application was being prepared.

The legal issues the court needed to resolve included whether the applicants had established a good arguable case for the presence of a beneficial interest in the sale proceeds, the appropriateness of granting interim relief despite a protest to jurisdiction, and the necessity of protecting the applicants’ position pending the substantive application. Additionally, the court had to consider the respondent's undertaking not to dispose of the funds and the jurisdictional challenges raised by the respondent.

The court found that the applicants had made a good arguable case for the presence of a beneficial interest in the sale proceeds, and interim relief was necessary to protect their position. The court declined to rely solely on the respondent's undertaking due to his residence in China, which made enforcement difficult. Lang J concluded that interim freezing orders were appropriate to ensure the funds remained in the accounts until the substantive application could be heard. These orders restrained the respondent from dealing with or disposing of the funds in specified accounts but allowed him to access funds for ordinary living expenses, legal costs, and ordinary business expenses. The respondent was granted leave to apply to vary or discharge the orders on three working days' notice.

The court scheduled a mention for 17 February 2021 to determine whether the substantive application for freezing orders and any application to dismiss the proceeding should be heard together. Lang J further directed that the respondent should be able to file his documents in opposition to the freezing order application and in support of any application to dismiss the proceeding within one month from the hearing date.

Orders