IBuy Property Limited v He - [2023] NZHC 2847

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2023-409-181

[2023] NZHC 2847

BETWEEN
IBUY PROPERTY LIMITED

Plaintiff

AND

XIAOMING HE

First Defendant

CHUNYUE YE

Second Defendant

SAYED MOHSEN MOSADI

Third Defendant

GT CAR DETAILING LIMITED

Fourth Defendant

Hearing: 14 September 2023

Appearances:

A N Riches for Plaintiff

S D McIntyre and P-Y Liu for Second Defendant

Judgment:

11 October 2023

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

This judgment was delivered by me on 11 October 2023 at 11.45 am pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:

IBUY PROPERTY LIMITED v HE [2023] NZHC 2847

[1] IBuy Property Ltd (IBuy) brings this proceeding for summary judgment to obtain possession of a property at 377 Selwyn Street, Christchurch that it acquired at auction by the Sheriff pursuant to a sale order.1

[2] The former owner of the property, Xiaoming He (Mr Xiaoming), and the third and fourth defendants are occupying the property but it is only the second defendant, Chunyue Ye (Ms Chunyue), who opposes summary judgment.

[3] Ms Chunyue says she loaned Mr Xiaoming a large sum of money and, as security for repayment of the loan, he granted her an (unregistered) lease of the property that she now sublets to Mr Xiaoming and the third and fourth defendants. Ms Chunyue says IBuy is not entitled to an order for possession of the property as it acquired it subject to existing tenancies, and it would be fraudulent or unconscionable if it did not recognise her lease.

[4] IBuy says Ms Chunyue does not have a valid lease and that it is simply a device to keep Mr Xiaoming in possession of the property. In any event, it says it acquired the property free of any interest Ms Chunyue may have under the lease.

[5]The issues that arise are:

(a)Is the lease a sham?

(b)Has IBuy acquired its title through fraud within the meaning of ss 6 and 52 of the Land Transfer Act 2017?

(c)Is the lease enforceable against IBuy in the court’s in personam jurisdiction?

1 High Court Rules 2016, pt 17 sub-pt 6.

What happened

[6] Mr Xiaoming and Ms Chunyue were formerly married, and it appears they are on good terms.

[7] For many years Mr Xiaoming was the sole registered owner of 377 Selwyn Street. He still lives at the property and runs a dairy business from it.

[8] The third and fourth defendants presently run a carwash business from the rear of the property.

[9] Following the Canterbury earthquakes, Mr Xiaoming pursued litigation against the Earthquake Commission and insurers in the High Court, the Court of Appeal and Supreme Court in respect to damage he claimed had been suffered by the property.2 He was largely unsuccessful. The litigation was brought to an end when he was refused leave to appeal by the Supreme Court. Large costs awards were made against him in those proceedings, which he did not pay.3

[10] Ms Chunyue says…

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: [2023] NZHC 2847
Decision Date: 11 October 2023

CaseChat Overview and Summary

IBuy Property Limited filed a summary judgment application against Xiaoming He, Chunyue Ye, Sayed Mohsen Mosadi, and GT Car Detailing Limited for possession of a property at 377 Selwyn Street, Christchurch. The property was acquired by IBuy at auction under a sale order. Chunyue Ye opposed the application, arguing that she had an unregistered lease over the property, and IBuy was not entitled to an order for possession as it acquired the property subject to existing tenancies. The court was required to decide whether the lease was a sham, whether IBuy acquired its title through fraud, and whether IBuy was liable in personam for unconscionable conduct. The court found that the lease was a sham, IBuy did not acquire its title through fraud, and IBuy was not liable in personam. Consequently, IBuy was granted summary judgment, and an order was made for the defendants to deliver up possession of the property to IBuy. IBuy was also entitled to costs against the defendants.

The court held that the lease between Xiaoming He and Chunyue Ye was a sham, as there was no intention to create a valid lease, and they had not acted in a manner consistent with there being a valid lease. The lease was a device to ensure that Xiaoming retained possession of the property against his creditors. The court found that IBuy did not acquire its title through fraud, as it did not have actual knowledge or wilful blindness combined with an intention to defeat the unregistered interest. The court also held that Chunyue Ye did not have an arguable in personam claim against IBuy, as clause 14 of the conditions of sale was not intended to create a contractual promise to take the property subject to existing tenancies. Therefore, IBuy was granted summary judgment, and an order was made for the defendants to deliver up possession of the property to IBuy. IBuy was also entitled to costs against the defendants.

Orders