Liu v Wei
[2025] NZHC 2584
•26 September 2025
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2024-404-2520
[2025] NZHC 2584
BETWEEN CHANGLING LIU
Plaintiff
AND
CHENYANG WEI
Defendant
Hearing: 3 April 2025 Appearances:
K Morrison and R Zhou for the Plaintiff T Hu and Y Zhang for the Defendant
Judgment:
26 September 2025
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 26 September 2025 at 4 pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors:
Meredith Connell, Auckland Zhang Law, Auckland
LIU v WEI [2025] NZHC 2584 [26 September 2025]
Introduction
[1] The plaintiff, Changling Liu, seeks summary judgment against the defendant for the amount outstanding on 10 short-term loans, each recorded in a term loan agreement, dated between 18 August 2022 and 5 December 2023.
[2]Ms Liu is claiming the total principal sum owing under the loan agreements of
$1,470,000 plus interest as at 30 September 2024 of $1,162,204.11. Interest continues to accrue. In addition, legal costs are claimed under the loan agreements on an indemnity basis which, as at 30 September 2024, amounted to $25,265.85.
[3] The defendant, Chenyang Wei, has filed a statement of defence and pleads affirmative defences of estoppel, non est factum and, in respect of one loan, oppression under the Credit Contracts and Consumer Finance Act 2003 (CCCFA).
[4]Mr Wei does not deny the existence of the loan agreements but deposes that:
Before [Ms Liu] provided [Mr Wei] with the first of these loans, [Mr Wei] had a conversation with Ms Liu and her husband. [They] agreed that the money would be loaned on the following terms (the Terms):
(a)The interest repayment amount was to be a percentage amount of the loan principal, equivalent to the profit margin on the development after completion and sale, grossed up to account for tax obligations Ms Liu had to pay (the development margin).
(i)For example, if a project cost $3 million to build, and sold for
$4 million, the project would have generated a 25 per cent profit. If Ms Liu had lent $1 million on this project, she would be entitled to receive a net return on her principal of 25 per cent of $1 million. This 25 per cent figure is not a per annum rate but is a fixed percentage of the principal regardless of how long the loan took to repay.
(ii)Ms Liu anticipated she had to pay tax on the amount she received. So the nominal 25 per cent interest rate needed to be grossed up to ensure she received 25 per cent on a net basis (after she had paid all tax owing to the IRD). The actual interest payable would have been higher than 25 per cent.
(b)If the project did not make any profit, then no interest was payable.
(c)The principal amount was always guaranteed to be repaid, even if the project was not ultimately profitable.
(d)Both interest and principal would only be repaid upon the completion and sale of the projects. Repayment would be made from the proceeds of sale.
[5] I refer to the above as the Defendants’ Terms. Mr Wei’s evidence is that these terms applied to the loans that were the subject of the loan agreements, rather than the written terms. Mr Wei’s position is that the developments have not yet been sold so the loans are not yet due.
[6] Mr Wei contends that the evidence before the Court shows a pattern of conduct where the parties do not treat the documented loan expiry dates or the written terms as having any importance.
[7] In Mr Wei’s submission, he should be allowed the opportunity to ventilate his defence at a hearing where all parties can be cross examined, as the question of whether the Defendants’ Terms applied cannot be determined on the basis of the selective compilation of WeChat messages and incomplete loan history that have been annexed to affidavits filed by Ms Liu or in support of her application.
Preliminary issue regarding affidavits in reply
[8] Mr Wei filed a further affidavit dated 27 March 2025, together with an affidavit of a translator dated 26 March 2025, in reply to the plaintiff’s evidence in reply. Mr Wei sought leave to do so on the basis that the reply evidence of both Ms Liu herself and the plaintiff’s expert accountant, Michael Lowe, annexed a number of new documents and raised new issues. The plaintiff did not oppose the filing of these affidavits. I accept that the reply affidavits for the plaintiff raised new issues and annexed new documents and so were not strictly in reply. I therefore grant leave as sought.
[9] One of the documents annexed to the affidavit filed by Mr Lowe is an Excel spreadsheet that Mr Lowe says was provided to him by Ms Liu. Mr Lowe refers to the spreadsheet as being entitled “The Complete History and Corresponding Payment Records for Each Loan”. This spreadsheet had not previously been annexed, nor its contents described, in earlier affidavits by Ms Liu. The spreadsheet lists loans numbered from 2 to 59, with start dates from January 2022 through to December 2023.
It includes the 10 loans for which summary judgment is sought, being numbered loans 17, 46, 47, 48, 50, 54, 56, 57, 58, and 59 (Outstanding Loans). I adopt Mr Lowe’s description of this spreadsheet as the Loan History.
Summary judgment principles
[10]Rule 12.2(1) of the High Court Rules 2016 provides:
The court may give judgment against a defendant if the plaintiff satisfies the court that the defendant has no defence to a cause of action in the statement of claim or to a particular part of any such cause of action.
[11] The principles applying to a plaintiff’s application for summary judgment were set out by the Court of Appeal in Krukziener v Hanover Finance Ltd and are well established.1
[12] The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried.2
[13] The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated.3
[14] The court will not normally resolve material conflicts of evidence or assess the credibility of deponents. However, it need not accept uncritically evidence that is inherently lacking in credibility—for example, where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable.4
[15] In the end, the court’s assessment of the evidence is a matter of judgment. The court may take a robust and realistic approach where the facts warrant it.5 I accept counsel for the defendant’s submission that such an approach should not be allowed to operate in an oppressive manner, with the Court of Appeal in Doyles Trading Co v
1 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26]–[27].
2 Pemberton v Chappell [1987] 1 NZLR 1 (CA) at 3.
3 MacLean v Stewart (1997) 11 PRNZ 66 (CA) at 69.
4 Eng Mee Yong v Letchumanan [1980] AC 331 (PC) at 341.
5 Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
West End Services Ltd commenting that the Court ought to be wary of allowing the rule to deny parties a fair hearing unless the Court is sure that there is no real defence.6
[16] A defendant is under an obligation to lay a proper evidential foundation for their defence in the affidavits filed in support of the notice of opposition.7
[17] Counsel for the plaintiff emphasised that where a clear-cut issue is raised on a summary judgment application and the point can be decided as well on the application as at trial, there is no reason why the Court should not deal with the whole matter on the application.8
Estoppel
[18] The first issue is whether Mr Wei has a reasonably arguable defence relying on estoppel. The elements are not in dispute. To establish an estoppel by representation, the party seeking to rely on the doctrine must establish four elements:9
(a)a belief or expectation has been created or encouraged through some action, representation, or omission to act by the party against whom the estoppel is alleged;
(b)the belief or expectation has been reasonably relied on by the party alleging the estoppel;
(c)detriment will be suffered if the belief or expectation is departed from; and
(d)it would be unconscionable for the party against whom the estoppel is alleged to depart from the belief or expectation.
6 Doyles Trading Co v West End Services Ltd [1989] 1 NZLR 38 (CA) at 41.
7 Middleditch v New Zealand Hotel Investments Ltd (1992) 5 PRNZ 392 (CA) at 394.
8 Verrall v Great Yarmouth Borough Council [1981] QB 202 (CA) at 218.
9 James Every-Palmer in Andrew Butler (ed) Equity and Trusts in New Zealand (2nd ed, Thomson Reuters, Wellington, 2009) 601 at 613–618; and Hawke v B R Metcalfe Construction Ltd HC Hamilton AP131/90, 5 June 1992 at 4–5.
[19] The key issue between the parties is in respect of (a) above: whether a belief or expectation has been created by Ms Liu, through some action, representation or omission to act, that the written terms of the 10 loan agreements would not be relied upon.
[20] The plaintiff submits that the defendant has failed to produce any evidence of any communication showing that the plaintiff made any representation that the terms recorded in the written agreements relating to the Outstanding Loans or the earlier loans would not apply and that other terms in fact governed the dealings between the parties.
[21] Counsel for Ms Liu submits that, in commercial transactions, contracts are commonplace and easily accessible to parties who wish to protect their expectations. Counsel submits that the courts are therefore “careful to conserve relief so that they do not, in commercial matters, substitute lawyerly conscience for the hard-headed decisions of business people”.10 In Ms Liu’s submission, reliance on a non-contractual representation or promise will only be reasonable if it was clear and unequivocal,11 made in relatively formal circumstances, and such that a reasonable person in the representee’s shoes must have understood that it was intended to be acted on.12
[22] Mr Wei in response submits that there is documentary and contextual evidence supporting Mr Wei’s evidence that Ms Liu did make the representations set out in the Defendant’s Terms.
[23] Mr Wei points to the fact that there is evidence that the parties entered into at least one loan on the Defendant’s Terms; a loan entered into in in 2019 between Zero Design Ltd (an entity associated with Ms Liu and her husband) and Yiyi Family Ltd (an entity associated with Mr Wei), a copy of which is annexed to Ms Liu’s reply affidavit (Zero Design Loan Agreement). The loan is recorded as being for a project in Davey Crescent in Silverdale, Auckland, with the interest rate recorded on the loan
10 Austotel Pty Ltd v Franklins Selfserve Pty Ltd (1989) 16 NSWLR 582 (NSWCA) at 585 per Kirby P.
11 Woodhouse AC Israel Cocoa Ltd SA v Nigerian Produce Marketing Co Ltd [1971] 1 All ER 665 (CA) 672.
12 Commonwealth of Australia v Verwayen (1990) 170 CLR 394 (HCA) at 445 per Deane J.
agreement as being “based on the project” with a “high interest rate” of 25 per cent per annum. In addition, the expiry date is recorded as being “the sale completion date of the project”, and the principal and interest are recorded as being payable together in full on the expiry date.
[24] Mr Wei deposes in his original affidavit in opposition that how Mr Wei repaid the loan depended on whether the loan was repaid person to person or company to company. Mr Wei says that when it was company to company, Ms Liu’s entity would issue a tax invoice and that he recalled that one of these companies was Zero Design Ltd. Mr Wei says that he was trying to locate these invoices and would file an updating affidavit when he did. Ms Liu then filed an affidavit in reply, attaching the Zero Design Loan Agreement and saying that loan was on entirely different terms to what she agreed with Mr Wei for the loans advanced to him. Mr Wei’s evidence in reply to this is that he and Ms Liu signed the Zero Design Loan Agreement after they had the conversation agreeing to the Defendant’s Terms and that:
8.Ms Liu later asked that we stop documenting the loans this way, so we did. She said this was for tax reasons (I understand she has an accounting background and used to work at PwC). She did not want to be classified as being in a joint venture or in partnership with me, because of the tax consequences. But our agreement was always that, no matter what the documents said, the loans were repayable based on the Terms, unless it was agreed otherwise down the track.
[25] For subsequent loan agreements, Mr Wei’s evidence is that Ms Liu told him that the interest repayment figures, interest percentages, and loan expiry terms were all placeholders, and not intended to be relied upon. Mr Wei deposes that the purpose of the written agreements was only to allow Ms Liu to protect the loan principal upon the property developments completing and that the Defendant’s Terms still prevailed, no matter what the documentation said, unless the parties agreed otherwise. Mr Wei says that he signed the written loan agreements (including those for the Outstanding Loans) on that basis.
[26] The Zero Design Loan Agreement shows that there was at least one prior occasion on which a loan was entered into on the Defendant’s Terms.
[27] Furthermore, Ms Liu does not expressly deny Mr Wei’s evidence that earlier loans were provided to him on the Defendants’ Terms. Mr Wei’s evidence is that:
8.The earlier loans were all provided to me on the Terms. They were for five developments at the following addresses: 84 Fairview Height Avenue, Albany; 35B Park Road, Glenfield; 35 and 37 Davey Crescent, Millwater; 160A Sunset Road, Unworth Heights. There were delays with all of these developments, because the Auckland Council delayed in issuing the Code Compliance Certificate (CCC). Ms Liu did not push for any repayments prior to the sale of the properties, which sold around the time of the Covid-19 pandemic. I calculated the profit margin after the properties in a development had settled, and I nominated that figure to Ms Liu over WeChat. She would always just accept that figure. All the principal amounts were repaid. All the projects were profitable, so Ms Liu received interest payments on the basis described in the Terms.
9.I repaid these earlier loans to Ms Liu via bank transfer. The payees would differ depending on Ms Liu's request. Sometimes this was from one of my companies’ bank accounts, and or my personal bank account, to her personal bank account. Sometimes it was to her friends’ or relatives’ bank accounts. Sometimes it was to companies she nominated. At the payment stage, she requested that we vary the Terms slightly, depending on whether it was paid person to person, or company to company.
[28]Ms Liu in response simply says:
Paragraphs 8-9
8. I was unaware of the existence of most of these projects, and Mr Wei certainly never informed me about the profit details of his projects.
[29] Ms Liu does not therefore clearly deny the earlier loans were paid according to the Defendant’s Terms. I accept Ms Liu deposes earlier in her affidavit in response to Mr Wei’s paragraph setting out the Defendant’s Terms, as set out in paragraph [4] above, that she never agreed to provide the loans on the terms alleged by Mr Wei. She also deposes at the beginning of her reply affidavit that she does not reply to every paragraph of Mr Wei’s affidavit as some of the allegations are repetitive and that where she does not provide a response, it does not mean Ms Liu accepts the allegation made by Mr Wei. However, taking these earlier statements into account, there is still not a clear denial of Mr Wei’s evidence in paragraphs 8 and 9 as set out above.
[30] Turning to the Loan History spreadsheet provided by Ms Liu to her expert, Mr Lowe, Mr Wei’s evidence in reply is that despite it setting out 58 loans between
the parties, the spreadsheet does not represent all of the loans between them but only transaction data from Ms Liu’s personal bank account, and no transactions prior to 13 December 2021. Ms Liu has not had an opportunity to reply to this evidence. However, Mr Lowe, her expert, only refers in the list of documents that he reviewed to bank statements for two personal bank accounts of Ms Liu and only for the period from 13 December 2021 to 10 October 2022 for one account and from 18 August 2022 to 30 September 2024 for the other. There is no explanation by Mr Lowe as to why only these bank accounts and time periods were reviewed, other than that these were the bank accounts and time periods for which transaction data was provided.
[31] I note that this is despite Mr Wei’s original affidavit, which is included in the list of documents that Mr Lowe says he has reviewed, referring to repayments being made to various parties, including friends, relatives or companies that Ms Liu nominated. Ms Liu does not expressly deny Mr Wei’s evidence on this point.
[32] By contrast in terms of Mr Wei, Mr Lowe describes the analysis he has undertaken as including identifying amounts “relating to Mr Wei or his related companies, Yiyi Construction Limited and Yiyi Family Limited”.
[33] In any event, the Loan History shows that many of the loans that are still outstanding are loans which have been rolled over from early 2022. As noted above at [9], the 10 loans in issue are loans 17, 46, 47, 48, 50, 54, 56, 57, 58, and 59.
[34] One of the Outstanding Loans, Loan 47, for example, is documented as a short-term loan of six months (4 May 2023 – 3 November 2023). However, once it is traced back through the spreadsheet, it in substance contains the principal from Loan 3. The spreadsheet relevantly records:
(a)Loan 47 is for $300,000 with a start date of 4 May 2023. The column in the spreadsheet headed “Note1–Difference between payment and principal”13 records “300k from loan 34 principal”.
13 The spreadsheet uses “principle” throughout but I correct this to “principal”.
(b)Loan 34 was for $300,000, was advanced on 3 March 2023 and was due to be repaid on 3 May 2023. The “Note1–Difference between payment and principal” column records “300k from loan 5 principal”.
(c)Loan 5 was for $300,000, was advanced on 3 March 2022 and was due to be repaid on 3 March 2023. The “Note1–Difference between payment and principal” column records “300k=50k (from loan 3 principal) + 60k (from loan 4 principal) + 70k payment + 20k payment
+ 100k payment”. In the “interest at maturity” column, it records the interest of $150,000 became Loan 31.
(d)Loan 3 was first advanced on 19 January 2022 for $100,000 for two months, with interest of $3,000 payable. It records in the “Whether to repay the principal at maturity” column that “principal 50k transfer into loan 5 + principal 50k transfer into loan 6”. The “interest at maturity” column records “interest [of $3000] deducted from loan 6 principal payment, so loan6 paid $47,000”.
(e)Loan 4 was for $60,000 and was advanced on 16 February 2022. It records in the “Whether to repay the principal at maturity” column that “principal 60k transfer into loan 5”.
[35] The above arguably shows that Loan 47 may not be the short-term loan it is documented as. It is arguable that Loans 3, 4, 5, 34, and 47, taken together, show a loan that was advanced on 19 January 2022, and not repaid on any of the documented due dates.
[36] In addition, working through the Loan History, in terms of the amount recorded as owing under each of the loan agreements, principal of $7,554,000 was allegedly loaned. Only copies of the ten agreements for the Outstanding Loans are in evidence, plus the loan agreement relating to Loan 2 and the Zero Design Loan Agreement, so this total amount cannot be verified. In any event, Mr Lowe deposes that only
$1,946,050 was in fact advanced. Furthermore, on a rough calculation, while the Loan
History recorded interest of approximately $900,000 as apparently being payable, approximately $300,000 of that interest appears to have been capitalised.
[37] Counsel for Ms Liu submits that the fact that interest was capitalised directly contradicts Mr Wei’s assertion that interest was not fixed and payable. However, Mr Wei’s evidence is that he never agreed to “refinance” any loans or to capitalise any interest and that he understood that Ms Liu wanted written loan agreements to protect the principal loan amounts. His evidence is that Ms Liu needed the documents signed, including those showing capitalisation of interest, for the sake of her investors.
[38] Given the number of times interest was capitalised, an argument appears to be available that interest may not have been payable in accordance with the written terms of the Outstanding Loan agreements as Mr Wei deposes.
[39] One of the columns included in the Loan History spreadsheet is a column headed “Note2–Evidence”. This column records whether there is WeChat or other evidence of the loan being rolled over. For many of the loans, there is no evidence referred to, with the spreadsheet simply recording “n/a”.
[40] Mr Wei submits that Ms Liu’s willingness to let loan expiry dates slide, and the documenting of the “extension” of the loan after it ostensibly expired, is consistent with Mr Wei’s account of the underlying agreement—that the loans were ultimately not repayable until the properties had sold.
[41] I accept as submitted for Ms Liu that it could simply be that, in practice, matters were documented a few days or weeks after the due date, but it is significant that often no reference is made in the “Note2–Evidence” column to WeChat messages or other evidence confirming agreement. This appears to indicate the loans were rolled over without reference to Mr Wei. If there is no evidence that Ms Liu communicated the “rolling over” to Mr Wei, then this supports Mr Wei’s position that the loans were not in fact payable in accordance with their written terms.
[42] Counsel for the plaintiff advised in the hearing that they had not verified the “Note2–Evidence” column in the spreadsheet but submitted that it is not for the
plaintiff to prove all of the loans, but only the 10 Outstanding Loans, other than as needed to satisfy the Court that there is no scope for Mr Wei’s defence. However, where Mr Wei’s defence is that there was a prior agreement that applied in respect of the Outstanding Loans and that the terms were not as set out in the written agreements, then it is necessary to show that the loans were not just rolled over without reference to Mr Wei or to provide an alternative explanation. This is particularly the case where the Loan History was prepared by Ms Liu and provided to her expert, Mr Lowe. It is not a case where the expert has not been provided with the necessary documents to fill in this column—this column was completed by Ms Liu herself.
[43] The plaintiff relies on the fact that there is no reference in the WeChat messages before the Court to the principal being repayable on completion, or interest not being payable until the profit was determined, as evidence that there is no proper foundation for Mr Wei’s defence.
[44] In response, Mr Wei submits that the plaintiff has not deposed that the WeChat messages annexed to her affidavits are the full WeChat conversations either in respect to the ten Outstanding Loans themselves or in respect of the dealings between the parties. Mr Wei has given evidence that he has changed phones and no longer has access to his WeChat messages from the relevant time. The defendant therefore says that, at this stage, how the arrangement is interpreted is a question of credibility and that, before the Court finds that Mr Wei has lied on oath, there needs to be more than the small booklet of WeChat messages that the plaintiff relies on.
[45] In any event, if the loan agreements were entered into for tax purposes, as the defendant submits, it is unlikely the parties would refer in written correspondence to any other terms that might apply, as that would appear to defeat the purpose of the written loan agreements as described by Mr Wei.
[46] Furthermore, the fact that Mr Wei may have gone along with any false recording of the loans for tax purposes does not mean that his defence ought not to be treated as arguable. As the Supreme Court held in Deng v Zheng, if both parties are
involved in irregularities, there is no good reason to bring those irregularities into account against one party only.14
[47] The plaintiff has not yet replied to Mr Wei’s evidence that the written loan agreements were entered into for tax purposes as it was in Mr Wei’s evidence in reply to the Ms Liu’s reply. This is a matter that needs to be further explored in a full hearing.
[48] Mr Wei stated in his primary affidavit that the “earlier loans” (between December 2020 and 7 January 2022) were entered into on the Defendant’s Terms and were paid according to those terms, and that Ms Liu did not push him for early repayments. Mr Wei’s evidence is that these earlier loans predate the loans appearing on the Loan History.
[49] In reply, Ms Liu produces WeChat conversations that she says record his acknowledgements and repayments in respect of these earlier loans. However those WeChat conversations are dated from 15 February 2022 onwards, and most can be linked back to loans on the Loan History (listed as starting after 10 January 2022). These conversations were therefore not in relation to the “earlier loans” Mr Wei was referring to.
[50] The WeChat messages annexed may also be consistent with Mr Wei’s evidence as they appear to show that Ms Liu was prepared to rollover the loans, with her concern apparently being to repay investors rather than have the loans repaid on their terms.
[51] Mr Wei further deposes that when Ms Liu asked specifically for payments of interest, and Mr Wei had the cash to pay this, he would voluntarily pay this to her because he trusted her and wanted to preserve their relationship. Mr Wei’s evidence is that the interest pre-payments she wanted were generally manageable amounts. However, Mr Wei says that it was always agreed that any payments made would be deducted from the ultimate figure payable upon completion of the projects, once they knew how profitable the projects were.
14 Deng v Zheng [2022] NZSC 76, [2022] 1 NZLR 151 at [73].
[52] There is also a dispute about the English translation of two of the WeChat messages in November 2022, with the plaintiff contending that Ms Liu’s messages are “Don’t let the funding chain break” and that her “main concern is the funding chain” whereas Mr Wei’s translator says “funding chain” is more accurately translated as “cash flow”.
[53] The evidence is by no means straightforward, with a number of questions remaining in terms of Ms Liu’s knowledge of the projects (if this was in fact required in terms of their arrangements), any on-lending by Mr Wei and security being agreed to by Mr Wei but in respect of a property he did not own. But in the circumstances of a complex, longstanding relationship between the parties with a considerable number of loans in addition to those allegedly outstanding, I consider that it is arguable on the evidence before the Court that the plaintiff represented that she was not going to rely on the written terms of the Outstanding Loan agreements. It is therefore arguable that the first element of estoppel can be made out.
[54] In these circumstances, if the representation was made, the second element of estoppel, that the expectation has been reasonably relied on, is also arguable. The remaining two elements—that there will be detriment suffered and that it would be unconscionable for Ms Liu to rely on the strict terms of the agreements—would also be arguable. The plaintiff has not therefore established that an estoppel defence is not arguable. As a result, summary judgment cannot be granted.
[55] Because of the view I have reached on this first affirmative defence, it is unnecessary to consider the remaining defences put forward. I do so briefly for completeness.
Non est factum
[56] The parties are again in agreement as to the principles that apply and that there are five essential ingredients to establish a defence based on non est factum:15
1. the person raising the plea (the proponent) must have signed the document believing it to have a particular character or effect;
15 Bradley West Solicitors Nominee Co Ltd v Keeman [1994] 2 NZLR 111 at 120–121.
2. the document must in reality have a radically different character or effect thus creating a wholly different result from that which was understood by the proponent;
3. the proponent's mistaken belief must have resulted from an erroneous explanation or description of the document given to him by someone else;
4. the proponent must be able to show that, notwithstanding his error, he acted with all reasonable care in the circumstances; and
5. if the proponent’s mistaken belief arises because, acting in reliance upon a trusted adviser such as a solicitor, he did not take steps to read and understand the document prior to signing it, the plea is not available.
[57] Whether the representation was made by Ms Liu, as discussed in relation to the estoppel defence, will also be relevant to a defence based on non est factum.
[58] Counsel for Mr Wei further submits that whether he took all reasonable care, as required by the fourth element for this defence, needs to be assessed against the fact that Ms Liu told Mr Wei that he did not need to see a lawyer about the written agreements with the placeholder figures.
[59] Mr Wei deposes that Ms Liu represented to him that she did not need to consult a lawyer about the first agreement and, by extension, neither did he. Ms Liu’s evidence in reply, she deposes that she engaged a lawyer to prepare the first loan agreement, informed Mr Wei that she had paid for it and that Mr Wei requested that she send him the agreement template so he could use it when lending funds to others.
[60] In addition to the fact that the WeChat correspondence annexed to her reply affidavit in support of this is dated 29 March 2022—some time after the first loan agreement was entered into (based on the Loan History spreadsheet, Loans 2, 3, 4, 5, 6, and 7 had already been advanced)—Ms Liu does not actually deny Mr Wei’s evidence that Ms Liu told him it was unnecessary to seek legal advice about the placeholder figures in the loan agreements.
[61] A defence based on non est factum may be more difficult to make out but because of the view I have reached in relation to the estoppel defence, I do not need to determine whether it is arguable or not. I therefore refrain from doing so.
CCCFA—oppression
[62] The final defence raised based on oppression under the CCCFA only relates to Loan 49 as there is a one year limitation period in s 125(1)(c) of the CCCFA,
[63] The defendant asserts that a 60 per cent per annum interest rate is excessive, particularly where security has been offered. Whether that security was effective is a separate issue. On its face, the loan document was for a loan secured over an unoccupied house.
[64] Counsel for Mr Wei accepted that no evidence of comparable loan arrangements had been adduced but submits that the defendant only has to show that there is a reasonably arguable defence. On that basis, the defendant submits the terms of Loan 49 are clearly problematic and so arguably meet the threshold for oppression.
[65] The plaintiff however points to a WeChat message from Mr Wei seeking a loan that Mr Wei says was for another party when Ms Liu and Mr Wei were considering the possibility of jointly establishing a long-term lending business.
[66] Mr Wei’s request was for a short-term loan at an effective rate of 60 per cent per annum, so on this basis the plaintiff says the defendant cannot assert that the rate charged for Loan 49 is oppressive.
[67] It is again unnecessary to reach a view on this defence, given the conclusion I have reached in respect of the estoppel defence. In addition, the defence only relates to one of the loans for which summary judgment is claimed. I therefore again refrain from determining whether this defence is arguable.
Result
[68]The application for summary judgment is declined.
Costs
[69] The usual position where a plaintiff’s summary judgment is declined is for costs to be reserved until determination of the substantive proceedings for the reasons
set out in NZI Bank Ltd v Philpott.16 There appears to be no reason to depart from this in the circumstances of this case and so I reserve costs in the usual way.
Associate Judge Sussock
16 NZI Bank Ltd v Philpott [1990] 2 NZLR 403 (CA).
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