Liu v Jiang pka Kang - [2025] NZHC 1911

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-1018

[2025] NZHC 1911

UNDER Rule 17.29 of the High Court Rules 2016

BETWEEN

MINYING LIU

First Plaintiff

YUHUAN LI
Second Plaintiff

AND

KUPE HEYOKA JIANG (previously Wetex Kang)

First Defendant

Continued…

Hearing: 9 July 2025

Appearances:

G J M Chan for the plaintiffs

A S Ahmed for the first defendant

Judgment:

14 July 2025

JUDGMENT OF BLANCHARD J

This judgment was delivered by me on 14 July 2025 at 11.00 am pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar

Solicitors:
Norling Law Ltd, Auckland Little Hen Ltd, Auckland

LIU v JIANG [2025] NZHC 1911 [14 July 2025]

MANUKA WHENUA HOLDING LIMITED
Second Defendant

1668 HONEY LIMITED (IN LIQUIDATION)
Third Defendant

HONEY SCIENCE MANUKA HONEY LIMITED (IN LIQUIDATION)
Fourth Defendant

1201 OKAU ROAD LIMITED
Fifth Defendant

NORTH HONEY LIMITED (IN LIQUIDATION)
Sixth Defendant

[1] In this proceeding, Mrs Liu and Mr Li are bringing claims against Mr Jiang and others for shareholder oppression, breach of fiduciary duty and breach of contract. On 31 October 2024, Mr Jiang was ordered by the Court to pay costs of $9,993.20 to Mrs Liu and Mr Li. He did not pay the costs. Instead, he applied for a stay of enforcement of the costs order under r 17.29 of the High Court Rules 2016. In this judgment, I resolve that application which is opposed by Mrs Liu and Mr Li.

The costs order

[2]Mrs Liu and Mr Li commenced the proceeding in May 2023.

[3] In February 2024, Mrs Liu and Mr Li applied to strike out Mr Jiang’s statement of defence on the ground that it was inadequately pleaded.

[4] The strike out application was allocated a hearing on 10 July 2024, but on 1 July 2024, Mr Jiang applied for an adjournment of the hearing. The adjournment application was dealt with by Gault J. Following a telephone conference on 5 July 2024, Gault J issued a minute dated 8 July 2024, in which he:

(a)vacated the hearing on 10 July 2024;

(b)ordered Mr Jiang to file a more explicit statement of defence that complies with the High Court Rules by 16 August 2024; and

(c)if the parties could not reach agreement on costs in relation to the strike-out application, directed them to file memoranda on costs by 5 August 2024.

[5] No agreement was reached on costs. On 9 August 2024, Mrs Liu and Mr Li filed a memorandum seeking costs. Mr Jiang did not file a memorandum.

[6] On 31 October 2024, Gault J ordered Mr Jiang to pay costs on a 2B basis, together with disbursements. As a result, Mr Jiang became liable to pay the costs of $9,993.20 that are the subject of the stay application.

[7]On 21 February 2025, the costs order was sealed.

[8] On 3 March 2025, a bankruptcy notice was issued by the Court requiring payment of the costs.

[9] On 1 April 2025,…

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: [2025] NZHC 1911
Decision Date: 14 July 2025

CaseChat Overview and Summary

In the High Court of New Zealand, Minying Liu and Yuhuan Li, the plaintiffs, sought relief against Kupe Heyoka Jiang and others for shareholder oppression, breach of fiduciary duty, and breach of contract. The primary dispute arose from Jiang's failure to pay costs amounting to $9,993.20, which were ordered on 31 October 2024. Instead of complying with the costs order, Jiang applied for a stay of enforcement under Rule 17.29 of the High Court Rules 2016, a request opposed by the plaintiffs. The court had to decide whether granting the stay would result in a substantial miscarriage of justice and whether Jiang had demonstrated that non-compliance would lead to such an outcome.

The legal issues the court addressed included the burden on Jiang to show that a substantial miscarriage of justice would occur if the costs order were enforced, the definition of "substantial miscarriage of justice," and the ability of Jiang to meet the judgment. Jiang argued that bankruptcy would prevent him from meeting his family's basic expenses, bring shame, and hinder his ability to defend against the claims and pursue a counterclaim. However, Jiang failed to provide a statement of assets and liabilities or a statement of income and expenses, and his arguments did not sufficiently demonstrate that he would be unable to pay the costs. Additionally, the court found that Jiang's counterclaim was invalid as it pursued costs issues already determined by the Court and issues within the scope of a strike-out application. The court also noted that the plaintiffs would be prejudiced by the delay in payment, and Jiang's claim of eventual payment was unlikely if his defence failed.

The court determined that Jiang had not discharged the onus to show that a substantial miscarriage of justice would likely result from enforcing the costs order. It found that Jiang's inability to pay the costs and subsequent bankruptcy did not equate to a substantial miscarriage of justice. The court also dismissed Jiang's argument that the plaintiffs' failure to provide security for costs influenced the obligation to pay the ordered costs. The court concluded that the stay application was without merit and ordered Jiang to pay costs to the plaintiffs with a 50 per cent uplift, categorising the proceeding as a category 2 matter with Time band B for each step in the proceeding, along with reasonable disbursements.

In summary, the court dismissed Jiang's application for a stay of enforcement of the costs order. It ordered Jiang to pay costs to the plaintiffs with a 50 per cent uplift, reflecting the lack of merit in his application, and directed that reasonable disbursements be paid. The court's decision underscored the importance of substantiating claims of substantial miscarriage of justice and the consequences of failing to comply with court orders.

Orders