Jin v Fuati - [2022] NZHC 718

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-26

[2022] NZHC 718

UNDER
the Insolvency Act 2006 and

Rule 24.8 of the High Court Rules 2016

BETWEEN

ZUORU JIN

Judgment Creditor

AND

MUSABAYOUFU FUATI

Judgment Debtor

Hearing: 21 March 2022

Appearances:

Daniel Zhang/Ezra Tie for the Judgment Creditor Paul Murray for the Judgment Debtor

Judgment:

11 April 2022

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

This judgment was delivered by me on 11 April 2022 at 3:00pm
pursuant to Rule 11.5 of the High Court Rules

………………………….
Registrar/Deputy Registrar

Solicitors:
Advent Ark Lawyers (Daniel Zhang/Ezra Tie), Auckland,f or the Judgment Creditor Nigel L Faigan, Auckland, for the Judgment Debtor
Counsel:
Paul Murray, Auckland, for the Judgment Debtor

ZUORU JIN v FUATI [2022] NZHC 718 [11 April 2022]

Introduction

[1] Mr Zuoru Jin (Zuoru)1 applies for Mr Musabayoufu Fuati to be adjudicated bankrupt. Zuoru says Mr Fuati has defaulted in paying a judgment debt in the sum of
$25,721.90.

[2] Mr Fuati is subject to a pending criminal proceeding in relation to alleged money laundering. The Commissioner of Police (Commissioner) has obtained restraining orders over his assets. Mr Fuati says that, but for those orders, he would be able to pay the amount Zuoru claims in this proceeding.

Background

[3] In 2018, Mr Fuati and Mr Jun Jin (Jun)1 brought a proceeding against Zuoru and Ms Yuchen Peng (CIV-2018-404-848). They alleged that they had advanced over CNY 4 million (or around NZD900,000) to Ms Peng as a loan for her currency exchange business. The loans were said to have been made through a series of transactions from an account held by a third party, Mr Wei Wang.

[4]Mr Fuati and Jun alleged that Ms Peng had only made a partial repayment of

$150,000, and that she had transferred large amounts of their money to Zuoru. Zuoru and Ms Peng denied the claims and defended the proceeding against them. Ms Peng’s defence was that Mr Fuati and Jun were in fact part of the currency exchange business, so those transactions were not loan advances at all, but transactions in the course of operating the currency exchange business. Zuoru said he had engaged Ms Peng to provide currency exchange services, and money that he received from Ms Peng was pursuant to fulfilment of the terms of that agreement. He said he knew nothing about the business arrangements between Ms Peng and Mr Fuati/Jun.

[5] The CIV-2018-404-848 proceeding has involved multiple interlocutory applications by both parties, including, but not limited to:

(a)Jun and Mr Fuati’s successful application for, and renewal/continuation of, a freezing order against Ms Peng;

1 I will use first names to avoid confusion between the common surnames.

(b)an application for a freezing order against Zuoru’s bank accounts. Zuoru successfully opposed the continuation/renewal of the freezing orders made against him and obtained costs of $25,721.90 against Mr Fuati and Jun. That costs order now forms…

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 Jin v Fuati

Details

AGLC: Jin v Fuati [2022] NZHC 718
Case: [2022] NZHC 718
Decision Date: 11 April 2022

CaseChat Overview and Summary

Zuoru Jin applies for Musabayoufu Fuati to be adjudicated bankrupt, alleging that Mr Fuati has defaulted in paying a judgment debt of $25,721.90. Mr Fuati is subject to a pending criminal proceeding in relation to alleged money laundering. The Commissioner of Police has obtained restraining orders over his assets. The Commissioner's restraining orders prevent Mr Fuati from paying the amount Zuoru claims in this proceeding.

The court was required to determine whether the judgment creditor had made out the requirements of s 13 of the Insolvency Act, whether the restraining order under the Criminal Proceeds (Recovery) Act 2009 operated as a stay, whether Mr Fuati has an arguable case as a claimant against Ms Peng and Zuoru, and whether it was just and equitable that the adjudication order be made.

The court found that the requirements of s 13 were made out. It found that it was arguable that the restraining order obtained under the CPRA operates as an implied stay for the purposes of s 17(1)(b) of the Insolvency Act, but that there was no evidence before the Court to show what assets of Mr Fuati were restrained and, if he had access to those assets, he would be able to pay the debt. The court also found that there was not sufficient evidence before the Court for it to form a view that Mr Fuati has an arguable case against Ms Peng and Zuoru.

The court made the order adjudicating Mr Fuati bankrupt and awarded costs to the judgment creditor on a 2B basis.

Orders