Kim v Oh - [2020] NZHC 2985

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-000675

[2020] NZHC 2985

BETWEEN
CHONG CHU KIM and IN SUK KIM

Plaintiffs

AND

TAE LIM OH

First Defendant

YONG SOO CHOI

Second Defendant

Hearing: 13 October 2020

Appearances:

S Kang for the Plaintiffs

P C Murray for the Defendants

Judgment:

12 November 2020

JUDGMENT OF ASSOCIATE JUDGE GARDINER

This judgment was delivered by me on 12 November 2020 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

Solicitors:

Fairbrother Family Law, Napier CL Law, Auckland

P C Murray, Auckland

KIM v OH [2020] NZHC 2985 [12 November 2020]

Introduction

[1] The plaintiffs have brought proceedings against the defendants in relation to a loan agreement between them arising out of investments in Mongolian gold mines. The plaintiffs sought leave to apply for summary judgment of their breach of contract cause of action. The defendants object to the jurisdiction of the New Zealand courts to hear and determine that cause of action, pursuant to r 5.49 of the High Court Rules 2016. They rely on an alleged exclusive jurisdiction clause in the contract said to have been breached. They say that the courts of the Republic of Korea have exclusive jurisdiction over matters arising from the contract. The plaintiffs apply to set aside the defendants’ appearance and objection to jurisdiction.

Factual background

[2] The plaintiffs, Chong Chu Kim and In Suk Kim, are husband and wife. The first and second defendants, Tae Lim Oh and Yong Soo Choi respectively, are also husband and wife. The parties are of Korean ethnicity, but are New Zealand citizens and reside in Auckland, New Zealand.

[3] In February 2018, the first defendant, Mr Oh, introduced the plaintiffs to an investment opportunity in a Mongolian mining business operated by Wellich Mines LLC, a Mongolian company. It is alleged that Mr Oh showed the plaintiffs various photos and documents about the gold mines, including a table of investment and profit payments. The plaintiffs say that Mr Oh represented that their principal investment would be paid back within two to three months, and they would receive a 1,000 to 1,200 per cent profit within three years of their investment.

[4] On 12 February, 20 February and 23 March 2018, the first-named plaintiff, Mr Kim, entered into three investment contracts with Wellich Mines LLC to invest in Mines 14686A and 5582A. It is the third contract, dated 23 March 2018, under which Mr Kim agreed to invest USD$400,000 into Mine 5582A (“the Third Investment Contract”), that is at issue in this proceeding.

[5]Clause 8 of the Third Investment Contract provides:

Article 8 (Court jurisdiction, etc.) — The contractors shall undertake to solve any disagreement or doubt regarding matters not stipulated in this contract or regarding interpretation of this contract through mutual agreement in accordance with the [“conventions” / “commercial practice”]¹ of the Republic of Korea.

[6] The mining venture was unsuccessful. On 17 June…

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 Kim v Oh

Details

AGLC: Kim v Oh [2020] NZHC 2985
Case: [2020] NZHC 2985
Decision Date: 12 November 2020

CaseChat Overview and Summary

In Kim v Oh, the plaintiffs, Chong Chu Kim and In Suk Kim, sought leave to apply for summary judgment of their breach of contract cause of action against the defendants, Tae Lim Oh and Yong Soo Choi. The defendants objected to the jurisdiction of the New Zealand courts, claiming that an alleged exclusive jurisdiction clause in the contract provided that the courts of the Republic of Korea should have exclusive jurisdiction over matters arising from the contract. The plaintiffs applied to set aside the defendants' appearance and objection to jurisdiction.

The court considered several procedural issues raised by the plaintiffs, including whether the defendants' notice of appearance and objection to jurisdiction was filed out of time, and whether they followed the correct procedure for raising an objection to jurisdiction under r 5.49. The court found that the defendants' statement of defence was sufficient to notify the plaintiffs of their objection to jurisdiction. The court also rejected the plaintiffs' argument that the defendants could not rely on r 5.49 to object to the jurisdiction of a single cause of action, stating that it was proper for the defendants to bring their objection to jurisdiction for the first cause of action under that rule.

The court then turned to the substance of the defendants' objection to jurisdiction. The defendants argued that cl 8 of the Third Investment Contract was an exclusive jurisdiction clause and that this clause was an implied term of the Acknowledgment of Debt. The plaintiffs submitted that cl 8 was not an exclusive jurisdiction clause and that it was not reasonable or equitable to imply such a term into the Acknowledgment of Debt. The court accepted the plaintiffs' submissions, finding that cl 8 did not refer to the "law" or the "courts" of the Republic of Korea, and that the clause was not an exclusive jurisdiction clause but rather a provision for resolving disagreements and doubts through mutual agreement.

The court found that this case did not warrant the implication of cl 8 of the Third Investment Contract into the terms of the Acknowledgment of Debt, as the loan of USD$400,000 from Mr Kim to Mr Oh was unrelated to the Third Investment Contract, and cl 8 was not necessary to give business efficacy to the Acknowledgment of Debt. The court held that the New Zealand courts had jurisdiction to hear and determine the first cause of action and set aside the defendants' appearance and objection to jurisdiction.

The court ordered the plaintiffs to be entitled to their costs on a 2B basis on the application to set aside the defendants' appearance and objection to jurisdiction. The court also made timetable orders for the summary judgment applications and directed the parties to file agreed or separate memoranda of costs within two weeks.

Orders