Luo v Shiu
[2019] NZHC 2620
•15 October 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-706
[2019] NZHC 2620
BETWEEN ZHENLIN (ROBERT) LUO
First Plaintiff
KC BROTHERS LTD
Second PlaintiffANG YIP
Third PlaintiffMANFEI COMPANY LTD
Fourth Plaintiff
AND
XIONGLING (ANNIE) SHIU
First Defendant
R & G PHOENIX LTD
Second DefendantCSR POKENO LTD
Third Defendant
Hearing: 26 September 2019 Counsel:
A Barker QC for Plaintiffs
D R Bigio QC and H M Z Ford for Defendants
Judgment:
15 October 2019
JUDGMENT OF BREWER J
This judgment was delivered by me on 15 October 2019 at 2:30 pm pursuant to Rule 11.5 High Court Rules.
Registrar/Deputy Registrar
LUO v SHIU [2019] NZHC 2620 [15 October 2019]
Introduction
[1] Sometimes a defendant in a civil case is concurrently prosecuted on charges arising from the circumstances behind the civil suit. That is the situation for the first defendant in these proceedings, Ms Shiu.
[2] A potential problem for a defendant concurrently sued and prosecuted is that any evidence they offer in the civil case can be used against them in the prosecution. The problem will arise if the need to offer evidence in the civil case precedes the trial of the criminal charges. In this case, the plaintiffs have brought applications for summary judgment and for other interlocutory orders which require Ms Shiu to offer evidence in order to oppose them. On the current schedule Ms Shiu would need to offer her evidence before the trial of her criminal charges.1
[3] To avoid the problem, Ms Shiu applies for the plaintiffs’ applications to be stayed until after her criminal trial.2 This judgment determines Ms Shiu’s application.
Background
[4] The plaintiffs and Ms Shiu combined their efforts to purchase land in Pokeno and develop or re-sell it after rezoning. There are three single-page joint venture agreements.
[5] The statement of claim alleges breaches of the joint venture agreements by Ms Shiu and brings against her five causes of action:
(a)The first cause of action alleges current or intended breaches of the joint venture agreements. The relief sought is intended to ensure that a property known as 53 Munro Road will be used for the purposes of the joint ventures.3
1 Ms Shiu’s criminal trial has yet to be given a date in the District Court, but it will not be before March 2020 and could well be significantly later. Rule 12.9 of the High Court Rules 2016 will require her to file her notice of opposition and affidavit no less than three working days before the date of the hearing of the summary judgment application.
2 Ms Shiu’s application extends to staying the substantive case, but for practical purposes the interim procedures are the relevant ones.
3 I record, for the sake of completeness, there is also a prayer for damages and interest in an amount to be determined at trial.
(b)The second cause of action alleges breach of fiduciary duty. The relief sought is directed at 53 Munro Road in terms identical to the relief sought under the first cause of action.
(c)The third cause of action alleges Ms Shiu has refused to nominate a purchaser for three of the pieces of land concerned despite her being obliged to. The relief sought is orders that Ms Shiu nominate a named company (“Phoenix”) as the purchaser of the three pieces of land and requiring all defendants to take the steps necessary to complete the purchases of the pieces of land.
(d)The fourth cause of action alleges that Ms Shiu falsely represented to the first plaintiff, Mr Luo, that $500,000 in commissions had to be paid to a Mr Chase in his capacity as a real estate agent in respect of land being acquired pursuant to the joint ventures. Mr Luo paid the
$500,000. Mr Luo claims for the repayment of the $500,000 and for associated orders.
(e)The fifth cause of action seeks the removal of Ms Shiu as a director of Phoenix which, as sought in the third cause of action, should be nominated as purchaser of the three pieces of land. The allegations are breach of a fiduciary duty of loyalty and duty under s 131 of the Companies Act 1993. Particulars given include:
(c) She has misappropriated monies that Mr Luo paid by [sic] her on behalf of Phoenix pursuant to her representations that these were for necessary expenses for the Luo Joint Ventures.
The “misappropriated monies” include the $500,000 in commissions, as pleaded in the fourth cause of action.
[6] On 20 February 2019, prior to the filing of the civil proceeding, Ms Shiu was charged with two charges of obtaining a pecuniary advantage by deception.4 One of the charges relates to the $500,000 sought to be recovered in the fourth cause of action
4 Crimes Act 1961, s 240(1)(a), maximum sentence seven years’ imprisonment.
and to which the quoted portion of the fifth cause of action is relevant. The other charge relates to a payment of $100,000 commission by the third plaintiff, Ms Yip, which is not part of the civil case because it was repaid.
Summary judgment
[7] The plaintiffs filed their notice of application for summary judgment and other interim measures on 18 April 2019. Summary judgment is sought on the third, fourth and fifth causes of action.5
[8] As Ms Shiu submits, the interim relief applied for (in broad terms) seeks to restrain Ms Shiu and/or the third defendant, CSR Pokeno Ltd, from dealing with 53 Munro Road in a manner that would dispose of the property or prejudice the development of the other three properties subject to the joint ventures.
[9] The defendants (but really Ms Shiu) filed an application for a stay of proceeding on 28 May 2019:
1.The defendants will on 4 June 2019 at 9am apply to the Court for orders:
a.That the plaintiffs’ application for summary judgment dated 18 April 2019 (Application for Summary Judgment) be stayed pending determination of the criminal proceedings in The Queen v Xialoing Chen, CRI-2019-092-002052;
b.That the plaintiffs’ substantive proceeding, CIV-2019-404- 706, served on Saturday 4 May 2019 (Substantive Proceeding), be stayed pending determination of the criminal proceedings in The Queen v Xialoing Chen, CRI-2019-092- 002052;
c.That the question of costs on this application be reserved.
Developments at the hearing
[10] At the hearing Mr Bigio QC advised that the defendants do not seek to stay argument of the interim relief. Mr Bigio pointed out that on 4 June 2019 Gault J made orders for interim relief, by consent, pending the hearing of the defendants’ stay
5 There is also a claim for an order requiring Ms Shiu to provide a full account of the use made of the $500,000.
application. In essence, Mr Bigio’s advice is that an extension of those orders is not in issue.
[11] So far as the application for summary judgment is concerned, Mr Bigio seeks to stay the summary judgment application only in respect of the fourth and fifth causes of action. They are the ones which go directly to the criminal charges faced by Ms Shiu.
The defendants’ submissions
[12] The basis for Ms Shiu’s application is that at common law, and now as enacted by s 25 of the New Zealand Bill of Rights Act 1990 (NZBORA), she has in the prosecution of the charges against her trial rights which can be together called the right to remain silent. Ms Shiu is deemed to be innocent of the charges against her until such time as they are proved by the Crown beyond reasonable doubt.6 Ms Shiu cannot be required to make any statement about her involvement in the subject-matter of the charges.7 However, if the summary judgment application proceeds then in order to oppose it Ms Shiu will have to forfeit her right to silence by offering her statement of evidence as to the pertinent events.
[13] Mr Bigio acknowledges there is no right to a stay. Section 405 of the Crimes Act 1961 provides that:
No civil remedy shall be suspended on the ground that it relates to an act or omission that is a criminal offence.
[14] This provision does not, however, prevent the Court from staying civil proceedings pending determination of concurrent criminal proceedings on other grounds. Mr Bigio sets out in convenient summary form the well-established principles governing an application for stay in these circumstances:8
15.In McMahon v Gould, Wootten J reviewed the existing authorities in Australia and elsewhere (including Jefferson Ltd v Bhetcha) and set out the following guidelines for the Court on an application for stay:
6 New Zealand Bill of Rights Act 1990, s 25(c).
7 Section 25(d).
8 Citing principles set out in McMahon v Gould (1982) 7 ACLR 202 (NSWSC); and applied in cases such as Commissioner of Police v Burgess [2011] 2 NZLR 703 (HC); and Commissioner of Police v Wei [2012] NZCA 279. Citations are omitted from the excerpt itself.
(a)There is a rebuttable presumption that a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court. The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with;
(b)The court’s task is one of “the balancing of justice between the parties”, taking account of all relevant factors. Each case must be judged on its own merits;
(c)One factor to consider is the accused’s “right of silence” and the reasons that right exists. Some consequences of the right are not legitimate reasons for its existence and amount to mere tactical advantages which an accused may wish to avail himself of at a criminal trial. The court need not be concerned to preserve such advantages. Rather, the focus should be to avoid the causing of “unjust prejudice” through continuance of civil proceedings;
(d)Further, the plaintiff is not debarred from pursuing their action merely because to do so would, or might, result in the defendant (if he wishes to defend the action), having to disclose what his defence is likely to be in the criminal proceeding;
(e)The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings;
(f)In this regard factors which may be relevant to this case include:
(i)the proximity of the criminal hearing;
(ii)the possibility of a miscarriage of justice e.g. by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses;
(iii)the burden on the defendant of preparing for both sets of proceedings concurrently; and
(iv)whether the defendant has already disclosed his defence to the allegations.
[15] The problem for Ms Shiu, which Mr Bigio recognises, is that the Courts seldom grant a stay in circumstances such as these:
17.To date, this Court has placed little weight on the fact that a defendant may be required, in the course of civil proceedings, to disclose before a criminal trial his or her defence to the charges faced, and/or other information that he or she is not otherwise required to disclose in the criminal proceedings. In particular, the High Court has held that:
(a)There is no right not to disclose a defence;
(b)The right of silence is not directly engaged where the potential disclosure is to be made in civil proceedings. The right protects an accused from being compelled to disclose information. A civil defendant is under no legal compulsion to disclose any information as she can choose not to defend the civil claim;
(c)The ability of an accused to delay disclosure of her defence is a consequence of the right to silence that is a mere tactical advantage, the loss of which is not sufficient to merit a stay; [and]
(d)if the position of the defendant is that there is a positive defence to the criminal charges then any material disclosed in the civil proceedings is likely to be exculpatory, rather than incriminatory and there can be no prejudice in putting it forward. Also, the defendant has a privilege against self- incrimination.
(citations omitted)
[16] Mr Bigio submits this approach is outdated and incorrect because the impact of NZBORA in strengthening the rights of a defendant in a criminal case, including the right to silence, has not been fully considered. Mr Bigio refers to the decision of the Court of Appeal in Commissioner of Police v Wei.9 In that case the Court of Appeal reviewed and endorsed the approach taken by the High Court in two cases where interim stays to civil proceedings were granted.10 In each case, the Commissioner of Police was pursuing civil remedies under the Criminal Proceeds (Recovery) Act 2009 against defendants who were concurrently being prosecuted by the Crown for alleged offending arising from the same circumstances leading to the civil proceedings. Mr Bigio relies also on Commissioner of Police v Burgess where Asher J adjourned an examination order under the Criminal Proceeds (Recovery) Act 2009 until the conclusion of a related criminal trial.11
Mr Bigio notes the competing policy considerations:12
9 Commissioner of Police v Wei, above n 8.
10 The High Court decision in Wei v Commissioner of Police HC Auckland CIV-2010-404-5461, 24 November 2011; and Commissioner of Police v Corless HC Auckland CIV-2010-404-005585, 15 December 2011.
11 Commissioner of Police v Burgess, above n 8.
12 See Commissioner of Police v Corless, above n 10, at [23].
(a)the right of a plaintiff in a civil proceeding to advance his claim;
(b)the right of a defendant in a civil proceeding to defend the claim; and
(c)the need to ensure that the rights of a defendant in a criminal proceeding are given due effect.
[18] Mr Bigio submits a defendant facing criminal charges cannot be required to assist the Crown to achieve a guilty verdict. However, and quoting Asher J in Burgess, he emphasises that civil proceedings may “by a side wind … be used to change the established dynamics of the criminal trial and the procedural features ensuring equality of arms that have been worked out over the centuries”.13 Disclosure of the defence and other material the defendant might otherwise have withheld “may affect the fairness of the [criminal] trial by giving the Crown an advantage it did not previously have”.14 Further, cross-examination may elicit additional information that would assist a police inquiry which police would otherwise have no access to.15 This is a factor to be considered and given weight.16
[19] In Mr Bigio’s submission, these dicta have particular application to this case because the complainants in the criminal charges are the first and third plaintiffs, who, he submits, are working closely with Mr Chase, and all three are the prosecution’s key witnesses.
[20] Mr Bigio also seeks to qualify the recognised position that a defendant in a civil claim is not compelled to offer evidence. He submits that, practically, if Ms Shiu does not actively defend the summary judgment application she will likely face an adverse judgment. In order to achieve a fair outcome of the summary judgment application she would have to forfeit her right to remain silent in the criminal prosecution.
13 Commissioner of Police v Burgess, above n 8, at [47].
14 At [47].
15 See Commissioner of Police v Wei, above n 8, at [54]; Commissioner of Police v Corless, above n 10, at [29]; and Commissioner of Police v Burgess, above n 8, at [38]–[39].
16 Commissioner of Police v Burgess, above n 8, at [47]; discussed in Commissioner of Police v Corless, above n 10, at [32] and [45(b)].
[21]Mr Bigio concludes:
There is no reason in principle why the above approach should not be adopted when assessing an application for an interim stay of civil proceedings brought by a private plaintiff (as opposed to the Crown) particularly where that plaintiff is a complainant and principal Crown witness in the criminal proceedings.
[22] In his submissions Mr Bigio analyses in a general way the allegations in the substantive civil proceeding and the sort of material Ms Shiu would have to put forward to respond to them. The practical result of requiring Ms Shiu to defend the summary judgment application at this stage would be, it is submitted, inconsistent with her right to silence protected under NZBORA. This is more than a mere “tactical advantage” because it is a corollary of the right itself.
[23] This is, in Mr Bigio’s submission, precisely the sort of situation which will create the “side wind” identified as creating unfairness in Burgess and Corless. It would likely assist the Crown in its prosecution by putting it onto a train of inquiry. The Crown might also be enabled to adjust its case to meet in advance the anticipated defence. Ms Shiu’s right to require the Crown to establish its case against her without her assistance would be breached.
[24] Mr Bigio emphasises that, in considering the balance of the rights of the plaintiffs to advance their claims in a timely way with the right of Ms Shiu to defend both the civil and criminal proceedings, it is relevant the first and third plaintiffs are the complainants in the prosecution. The first and third plaintiffs are not, therefore, uninvolved parties being asked to compromise their interests because of a situation affecting the defendant which is unrelated to them. A further consequence of this relationship is that disclosure in the summary judgment application will provide the first and third plaintiffs with notice of Ms Shiu’s response to their evidence in the prosecution and therefore to her potential lines of cross-examination. Mr Bigio submits this provides an opportunity for the first and third plaintiffs to tailor their evidence in the prosecution and to restrict the possibility of effective cross- examination.
[25] In Mr Bigio’s submission, this risk extends to Mr Chase who is also a key Crown witness. Mr Chase, by reference to affidavits sworn in the civil proceeding by Mr Luo and Ms Yip, is closely associated with them on a continuing basis. Therefore, Mr Chase is also likely to achieve an unfair advantage in the prosecution by being made aware of Ms Shiu’s response to the summary judgment application.
[26] Again in terms of the balance, Mr Bigio submits there is no urgency to determine the summary judgment application and no prejudice to the plaintiffs would arise from an interim stay pending the resolution of the criminal prosecution. The joint venture properties are not due to settle until dates in the period 30 December 2020–18 December 2021. The third plaintiff has lodged caveats against the titles of each of the joint venture properties. Further, none of the pending applications for re- zoning have been granted and there is no reason to believe that re-zoning decisions will be reached prior to the criminal trial.17
[27] As to the property at 53 Munro Road, that is not due to settle until 1 May 2020. The first and third plaintiffs have lodged caveats against the title and, as I have already recorded, the defendants are content for the applications for interim orders to proceed on the basis they will not contest extensions of the orders already in place as a result of Gault J’s directions of 4 June 2019.
[28] Finally, Mr Bigio submits (with reasons I will not set out here) that this is not a case in which the plaintiffs are likely to succeed on summary judgment and thus it cannot realistically be said the plaintiffs are being denied the opportunity to obtain a swift resolution.
The plaintiffs’ submissions
[29] The overall submission by Mr Barker QC is that any stay will be to the significant prejudice of the plaintiffs.18 This will arise from substantial delay. Even if
17 Which, as I have noted, will not be before March 2020 and could well be later.
18 Mr Barker’s written submissions were, of course, directed to the defendants’ written application, which was for the stay of the entire substantive proceeding as well as for the stay of all the summary judgment and interim orders applications. The concessions made by Mr Bigio at the hearing reducing the scope of the defendants’ application mean that Mr Barker’s submissions can be truncated.
the criminal trial takes place in March 2020, resolving the summary judgment applications and the outstanding causes of action in the substantive proceeding would push the ultimate determination of the issues between the parties out to the end of 2021 at the earliest.
[30] Mr Barker submits that the factors the Court must consider in deciding the stay application are well established and the right of a plaintiff to advance its case in a timely way is very seldom overridden by the Court, because the choices faced by a person defending both civil claims and a related criminal prosecution are not choices which engage NZBORA.
[31] Mr Barker submits that the onus is on Ms Shiu to show the stay is necessary in the interests of justice. Here, Mr Bigio does no more than point to NZBORA as changing the rebuttable presumption against a stay to a rebuttable presumption in favour of a stay.
[32] Mr Barker submits that Commissioner of Police v Wei and Commissioner of Police v Burgess are distinguishable because both relate to claims where the Crown was both plaintiff and prosecutor. That is not the case here.
[33] Mr Barker maintains his submission even though the first and third plaintiffs are the complainants in the prosecution. Mr Barker’s submission is that this is commonly the situation in cases such as this.19 People who sue for civil redress for actions by the defendant which are also alleged to be criminal actions will frequently be the complainants in the resulting prosecution.
Discussion
[34] As I have said, Mr Bigio refined in his oral submissions the scope of Ms Shiu’s application. It is now confined to gaining an adjournment of those parts of the summary judgment application which seek resolution of the fourth and fifth causes of action.
19 See Wells v Lewis (1990) 3 PRNZ 454 (HC); ADT Securitas Ltd v Geange (1992) 6 PRNZ 100 (HC); General Distributors Ltd v Hilliard HC Auckland CIV 2008-404-1057, 16 July 2008; and Jefferson Ltd v Bhetcha [1979] 2 All ER 1108 (CA).
[35] Ms Shiu now accepts that the plaintiffs’ applications for interim relief may proceed.
[36] Ms Shiu also accepts that the plaintiffs’ application for summary judgment on the third cause of action may proceed.
[37] There is an effective (but without prejudice) withdrawal of Ms Shiu’s application to stay the plaintiffs’ substantive proceeding. This is because progression of the substantive proceeding cannot occur until the summary judgment applications have been determined.20 If the plaintiffs were to discontinue their application for summary judgment then Mr Bigio would renew Ms Shiu’s application to stay the substantive proceeding.
[38] My task is to achieve a balance of justice between the parties. This has to be done by considering the merits of the application against the framework of the law. The latter is well-settled unless I accept Mr Bigio’s submission that the Court’s approach to it is outdated and incorrect because the impact of NZBORA has not been fully considered.
[39] Mr Bigio cites Commissioner of Police v Wei. In that case the Court of Appeal determined appeals from two decisions of this Court where applications by the Commissioner of Police under the Criminal Proceeds (Recovery) Act 2009 (CPRA) were adjourned until criminal proceedings against the respondents had been completed.
[40] The CPRA applications were civil in nature. The Commissioner argued that the decisions under appeal, both of which emphasised that the State was effectively plaintiff and prosecutor, amounted to rulings that forfeiture applications in cases where a criminal trial was pending could never be heard in advance of the criminal trial.21 The Court of Appeal did not accept this submission:
[40] In our view that approach overstates the significance of the High Court decisions and effectively turns case-specific rulings into something they
20 Ms Shiu is not obliged to file a statement of defence in the substantive proceeding unless the plaintiffs’ application for summary judgment is dismissed in whole or in part: r 12.13.
21 Commissioner of Police v Wei, above n 8, at [39].
were not. In our consideration of the appeals, we keep ourselves firmly grounded in the nature of the decision under appeal in each case, namely a decision by a Judge about the time at which an application should be heard. This is a discretionary decision tailored to the facts of each case. It requires the Judge to undertake a balancing exercise, assessing the interests of each party, to reach a conclusion as to where the interests of justice lie. It is not an area where an appellate court should be making hard and fast rules.
(citations omitted)
[41] The Court then re-stated the law, but accepted the relevance of the factor of the State being both plaintiff and prosecutor:
[41] There is no general rule that civil proceedings must be adjourned if related criminal proceedings are pending. Equally, there is no rule that a civil plaintiff is entitled to a hearing before an impending criminal trial. In a case where the prosecuting agency is, in effect, the same party as the plaintiff in the civil proceeding, considerations of entitlement of a civil plaintiff to pursue his or her case without delay are obviously diluted substantially. In our view, the High Court Judges in the decisions under review were right to see the present cases as fact-specific and as calling for a balancing exercise.
(emphasis added; citations omitted)
[42]Later, the Court returned to this point:
[49] Mr Johnstone referred to the first of the guidelines given by Wootten J in McMahon v Gould, to the effect that a plaintiff in a civil action is prima facie entitled to have that action tried in the ordinary course of the procedure and business of the Court. He said that the Commissioner was entitled to rely on this. He took issue with the view expressed by Brewer J in Corless, to the effect that the Commissioner was not an ordinary civil plaintiff. Mr Johnstone said the Commissioner should be treated as any other litigant would be. We disagree. In our view Brewer J was right that the Commissioner is in a different position from that of an ordinary civil plaintiff, because he is directly associated with the criminal proceedings as well as being the plaintiff in the civil forfeiture proceedings. As Brewer J said, the Commissioner is not a plaintiff asserting a personal or corporate right to damages or to reinstatement that should not be delayed because the defendant faces criminal proceedings.
(citations omitted)
[43] The Court of Appeal did not feel it necessary to express a concluded view of whether the right to silence was engaged in the circumstances of the cases under appeal.22
22 At [53].
[44] In my view, Commissioner of Police v Wei is not authority for the proposition that the right to silence is to be given greater weight as a factor in cases such as this than previously because of the enactment of NZBORA. To the contrary, the Court of Appeal simply agreed that where the State is both plaintiff and prosecutor that is a factor which dilutes substantially the right of the State as plaintiff to pursue its civil case without delay.23 But, as is settled law, each case is fact-specific and the balance of justice between the parties must be assessed accordingly.
[45] The rights affirmed, protected and promoted by NZBORA are fundamental to our democracy. But they are the rights of the individual in relation to acts by the branches of the government or by public bodies and individuals performing public functions.24 NZBORA does not apply directly to the acts of private citizens. It is recognised that NZBORA does influence the development of the common law and can influence the determination of rights between private parties.25
[46] It follows I do not accept Mr Bigio’s submission that the Courts’ approach to cases of this sort is outdated and incorrect because the impact of NZBORA has not been fully considered. Ms Shiu has, as against her prosecutor, the rights compendiously called the right to silence. NZBORA affirms, protects and promotes those rights. The Courts will be influenced by the existence of the rights when a party to a civil case applies for a stay or adjournment because of a concurrent prosecution involving the same circumstances. It is a factor to be taken into account in considering the balance of justice between the parties, but it is not an overriding factor. NZBORA has not changed the way the right to silence is regarded so that, to use Mr Barker’s words, the rebuttable presumption against a stay is now a rebuttable presumption in favour of a stay.
[47] The fact that Mr Luo and Ms Yip are complainants in the prosecution does not affect their right to have their claim proceed as expeditiously as reasonable. They are not the prosecutor, they are witnesses. They are not agents of the State whose actions can be subject to NZBORA. They are asserting personal claims for redress. The dicta
23 At [41].
24 New Zealand Bill of Rights Act 1990, s 3.
25 See New Zealand Amalgamated Engineering, Printing and Manufacturing Union Inc v Air New Zealand Ltd [2004] 1 ERNZ 614 (EmpC) at [208].
in Commissioner of Police v Wei that “[i]n a case where the prosecuting agency is, in effect, the same party as the plaintiff in the civil proceeding, considerations of entitlement of a civil plaintiff to pursue his or her case without delay are obviously diluted substantially” do not apply to them.26
[48] I will now turn to whether Ms Shiu has discharged her onus to show that it is just and convenient that the plaintiffs’ ordinary rights should be interfered with.
[49]I find the relevant factors (in no particular order or ranking) to be:
(a)There is no date set for the criminal trial. At the earliest it will be March 2020, but it could be much later. There is the potential for considerable delay. A one-day hearing of the plaintiffs’ applications could, right now, be scheduled for February 2020.
(b)On the other hand, Ms Shiu now seeks an adjournment only of the applications for summary judgment bearing directly on the $500,000 sought to be recovered by Mr Luo. A partial adjournment could be granted so that the summary judgment on the third cause of action and the application for interim orders would proceed without delay.
(c)A partial adjournment would protect Ms Shiu’s right to silence on the charges on which she is being prosecuted.
(d)There is no particular prejudice claimed by the plaintiffs if there is a partial adjournment. Their case is that $500,000 was paid by Mr Luo through the exercise of deception in the belief it was payable under joint venture obligations. Mr Luo wants the money back, but he does not claim financial hardship or pending loss of opportunity. The plaintiffs would, however, not be able to argue the fifth cause of action which is closely related to the third cause of action.
26 Police v Wei, above n 8, at [41].
[50] In weighing these factors, I have to consider the reality of Ms Shiu’s position. If she is forced to offer evidence in the summary judgment application will she lose more than a tactical advantage? In other words, will there be real injustice?
[51] The charge against Ms Shiu in relation to the $500,000 is set out in the Crown Charge Notice as follows:
That [Ms Shiu] between 25 December 2016 and 14 December 2017 at Pokeno, by deception and without claim of right, obtained possession of a valuable consideration, namely a total of $500,000 from Zhenlin (Robert) Luo.
Particulars: By falsely representing that the funds had been requested by Eric Chase in relation to properties at Helenslee Road, Pokeno, with intent to deceive Zhenlin (Robert) Luo knowing that the representations were false in a material particular, namely that the said funds were not at the request or knowledge of Eric Chase.
[52] The charge encompasses the fourth cause of action. In the civil suit the first and third plaintiffs rely on various alleged oral representations to prove the pleaded deception. These are set out in Mr Bigio’s submissions as follows:
(a)The first plaintiff says the first defendant represented these fees were due to Mr Chase over various meetings and “communications” between late 2016 and July 2018;
(b)The third plaintiff says that the first defendant made similar representations during a series of meetings, phone conversations and text messages between May 2017 and November 2018;
(c)They rely on hearsay statements from a lawyer as to whether such fees could be claimed;
(d)They rely on hearsay statements from Mr Chase as to what his business relationship was with the first defendant;
(e)They rely on hearsay statements from the first defendant’s mortgage broker as to what his instructions from the first defendant were, and why.
[53]Mr Bigio submits:
26.The first defendant would, therefore, be required to respond to the allegations as to what was discussed and agreed between herself and the first and third plaintiffs; what was discussed with Mr Chase and the nature of their dealings; and what instructions were provided to Mr Bradley and why. In addition, the first defendant would be required to provide context to the written communications which allegedly support the plaintiffs’ claim.
27.The extent of the disclosure required in response is significant: covering years of alleged discussions with multiple persons and requiring a direct challenge to the evidence of the three key Crown witnesses (the first and third plaintiff and Mr Chase).
[54] Mr Bigio submits also that early disclosure of Ms Shiu’s exculpatory evidence in her defence would likely assist the prosecution by putting it on to a train of inquiry. Further, it would provide an opportunity to Mr Luo and Ms Yip to tailor their evidence in the prosecution and to prepare for cross-examination. Mr Chase, also a key witness in the prosecution, would have the same opportunity assuming he learned of Ms Shiu’s evidence from Mr Luo and/or Ms Yip.
[55] In my view there is little if any substantive prejudice, as opposed to loss of a tactical advantage, if Ms Shiu is required to respond to the summary judgment application on the fourth and fifth causes of action. The passages quoted from Mr Bigio’s submissions show that the prosecution case would rely on the accounts of Mr Luo, Ms Yip and Mr Chase as to what occurred in the context of what was required for the purposes of the joint ventures. Given the nature of the charges, the purpose of the evidence must be to the effect that Ms Shiu requested the money on the basis of a stated purpose within the joint ventures relating to Mr Chase, but the money did not go to Mr Chase because Mr Chase had not asked for the money and was not entitled to it. The inference to be drawn would be that Ms Shiu knew that. Mr Chase was not entitled to the money and she gained it by deceit for herself. Realistically, Ms Shiu is going to have to offer an explanation as to the basis on which she received the
$500,000 and what she did with it. If she does not, and the evidence of the prosecution witnesses establishes the elements required to be proved by the prosecution, then Ms Shiu will be convicted. So, disclosure of her evidence is a matter of timing.
[56] I do not put weight on Mr Bigio’s submission about the risks of Mr Luo and Ms Yip tailoring their evidence or providing Mr Chase with that opportunity. Standard criminal procedure in cases such as this means that Mr Luo, Ms Yip and Mr Chase have already made statements to the police. Those statements will have been, or will be, disclosed to Ms Shiu. If, following disclosure of Ms Shiu’s evidence in the civil proceeding, there is a shift or change in the prosecution witnesses’ evidence then that will be obvious and will go to credibility.
[57] I acknowledge the possibility that early disclosure of Ms Shiu’s evidence may lead the police to further lines of inquiry.
Decision
[58] I regard this as a closely balanced case because of the concessions made by Mr Bigio reducing the scope of the restrictions sought to be imposed on the plaintiffs.
[59] I have decided, however, that the tilt of the balance is against Ms Shiu’s application.
[60] Mr Luo has the right to seek repayment of the $500,000 without unreasonable delay. The plaintiffs have the same right to seek summary judgment on the fifth cause of action. I accept that if the criminal trial were to take place in March 2020 and all the plaintiffs’ applications could be heard in, say, April 2020 then that would not be an unreasonable delay in the context of this case. But no date has yet been set for the criminal trial and the indication that the earliest it could be heard is March 2020 is just an indication. I am aware the District Court schedules more than one case for each trial slot. I weigh this factor on the basis that granting Ms Shiu’s application is likely to lead to significant delay in resolving the plaintiffs’ applications for summary judgment on the fourth and fifth causes of action.
[61] Ms Shiu’s rights under s 25 of NZBORA are important rights. But it is not the plaintiffs’ obligation to give them effect. It is for the Court to take account of them if it can do so without causing injustice to the plaintiffs. Here, my evaluation is that Ms Shiu is very likely going to have to give an exculpatory explanation if she is to successfully defend the criminal charges. It would be the same exculpatory explanation she would offer to defend the application for summary judgment on the fourth cause of action and to counter the quoted particular contained in the fifth cause of action. In my view, the timing of the explanation goes to tactical advantage and that is not a reason for the right to silence.
[62] The theoretical possibility that the prosecution might be put onto a line of inquiry is not one I give weight in these circumstances.
[63]The defendants’ applications are dismissed.
[64] I will receive memoranda on costs no later than 31 October 2019. They are not to exceed three pages.
Brewer J
Solicitors:
Righteous Law (Auckland) for Plaintiffs
Pidgeon Law (Auckland) for First Defendant
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