Liu v Jiang pka Kang
[2025] NZHC 1911
•14 July 2025
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 PlaintiffAND
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, Mr Jiang filed his interlocutory application seeking a stay of enforcement. He also filed an interlocutory application to set aside the bankruptcy notice, which is due to be heard by the Court on 22 September 2025.
Legal principles
[10] Under r 17.29, a party liable under a judgment may apply for a stay of enforcement if “a substantial miscarriage of justice would be likely to result if the judgment were enforced”.
[11] The principles relating to this rule are well-established. In Bay Cities Real Estate Ltd v Re/Max New Zealand Ltd, they were summarised as follows:1
(a)The onus is on an applicant for the stay of enforcement to persuade the Court to exercise its discretion.
(b)A “substantial miscarriage of justice” must be involved, bearing in mind that “substantial miscarriage” means “something more than minor or insubstantial” and that it is not a substantial miscarriage of justice for a party that has had the use of another’s money to be required to repay that money or for a creditor to be able to take whatever steps it sees fit to pursue recovery.
(c)A substantial miscarriage of justice must be “likely to result” if the judgment was enforced. It is not sufficient that a miscarriage of justice “might” result. It must be “likely to result”, i.e. probably result.
1 Bay Cities Real Estate Ltd v Re/Max New Zealand Ltd HC Napier CIV-2010-441-134, 8 June 2011 at [19].
(d)The Court must seek to recognise and reconcile the conflicting interests of both parties in such manner as will best serve the overall interests of justice. A balancing exercise is involved.
(e)A miscarriage of justice is unlikely to result where a party is required to pay to another an amount that is owing to it and the paying party is free to pursue its claim against the other party in the normal way.
(f)Other factors which may be relevant include: the apparent strength or weakness of the claim; the ability of the applicant for the stay to meet the judgment that is being enforced; and the potential bankruptcy or liquidation of a party seeking to pursue an apparently strong claim.
Grounds for the stay application
[12] The main ground on which Mr Jiang relies is that, if a stay is not granted, he will be bankrupted. He says that this will result in a substantial miscarriage of justice because:
(a)he will not be able to meet his family’s basic living expenses;
(b)bankruptcy will bring shame to his family and an inability to travel and obtain credit; and
(c)it will prevent him from being able to defend Mrs Liu and Mr Li’s claims against him and pursue a counterclaim that he has against them.
[13] Mr Jiang also says that a stay will not cause any prejudice to Mrs Liu and Mr Li as the stay will only temporarily delay the payment of the costs. He will ultimately pay the costs.
[14] Finally, Mr Jiang says that a stay should not be granted because Mrs Liu and Mr Li have not paid security for costs of $5,200 they were ordered to provide by Associate Judge Brittain on 19 May 2025.2
Decision
[15] On the evidence before me, Mr Jiang has not discharged the onus on him to show that, if a stay is not granted, he will likely not be able pay the costs and therefore he will be bankrupted. I say this because:
(a)he has not provided a statement of assets and liabilities or a statement of income and expenses;
(b)all he has said about his financial position is that he is studying a Bachelor of Laws at Waikato University and has a limited income; and
(c)$9,993.20 is for a relatively small amount of money. For context, Mr Jiang says that he invested approximately $1.5 million in the companies that are the subject of the dispute with Mrs Liu and Mr Li. He also says that he sold 10 properties that he owned to raise these funds.
[16] Moreover, the mere fact that Mr Jiang will be bankrupted does not mean that there will be a substantial miscarriage of justice. If Mr Jiang cannot pay the costs order, he is insolvent. If he is insolvent, it is right that he is bankrupted.
[17] Bankruptcy may cause him and his family some embarrassment and it will affect his ability to travel and obtain credit. But this does not equate to a substantial miscarriage of justice.
2 Liu v Jiang [2025] NZHC 1212.
[18] If Mr Jiang is bankrupted, Mrs Liu and Mr Li’s claims against him will be automatically stayed.3 Further, Mr Jiang does not have a valid counterclaim. I say this for the following reasons:
(a)Mr Jiang purported to file a counterclaim on 2 April 2025. But on 1 May 2025, O’Gorman J directed the Registry not to accept the counterclaim for filing because it purported to pursue costs issues already determined by the Court and/or improperly sought to pursue issues already within the scope of a strike-out application by Mr Jiang, scheduled for hearing on 8 May 2025.
(b)The costs issues had been resolved in a minute of Gault J dated 11 November 2024. Mr Jiang was maintaining that he was entitled to costs in relation to unsuccessful freezing order applications that had been brought by the plaintiffs. But Gault J determined that no costs were payable.
(c)The strike-out application was heard by Associate Judge Brittain and determined by a judgment of 19 May 2025. The strike-out application was unsuccessful.
[19] I do not accept that Mrs Liu and Mr Li will suffer no prejudice if the stay is granted. They will be prejudiced by the delay in being paid. Also, Mr Jiang says he will ultimately pay the costs, but it seems likely he will not be able to do so if his defence of the claim fails.
[20] Finally, Mrs Liu and Mr Li have now provided the security for costs of $5,200. In any case, whether they have provided their security for costs is a separate matter and has no bearing on Mr Jiang’s obligation to pay the costs he has been ordered by the Court to pay.
[21]For these reasons, I am not prepared to grant the stay sought by Mr Jiang.
3 Insolvency Act 2006, s 76(1).
Costs
[22] Mrs Liu and Mr Li seek costs in relation to the application for stay, with an uplift of 50 per cent. The uplift is sought on the basis that the application was demonstrably without merit.
[23] I agree the application was without merit and an uplift of 50 per cent should be imposed.
Result
[24]I dismiss the application for a stay.
[25] I order Mr Jiang to pay costs to Mrs Liu and Mr Li with a 50 per cent uplift. This is a category 2 proceeding. Time band B is appropriate in relation to each step in the proceeding. Reasonable disbursements are also payable.
Blanchard J
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