Mao v Kim - [2021] NZCA 230

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA682/2020
[2021] NZCA 230

BETWEEN	JIAWEN MAO Appellant
AND	HYUN BIN KIM First Respondent DUK YOUNG LEE Second Respondent

Counsel:	Appellant in person C E Lewis for Respondents
Judgment: (On the papers)	8 June 2021 at 9.30 am

JUDGMENT OF COLLINS J
(Review of Deputy Registrar’s decision)

AThe application to review the Deputy Registrar’s decision is declined.
BSecurity for costs of $7,060 is payable no later than 24 June 2021.
CThe respondents are entitled to costs for a standard application on a band A basis.

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Introduction

Ms Mao applies for a review of a Deputy Registrar’s decision in which the Deputy Registrar declined Ms Mao’s application to dispense with security for costs in an appeal against a High Court costs decision.

Background

Ms Mao’s company defaulted on a debt owed to the respondents.
The debt was secured over the company’s land and, in due course, the respondents sold the company’s land to repay the debt, but this left a shortfall.
The debt was also guaranteed by Ms Mao. The respondents asked Ms Mao to pay the shortfall, but Ms Mao refused to do so.
The respondents then made two applications to recover the shortfall:
(a)They applied to the District Court for an order that Ms Mao pay the shortfall. Ms Mao did not file a defence, and the District Court granted the order, but Ms Mao still refused to pay.
(b)They applied to the High Court for an order that Ms Mao be made bankrupt. To avoid being made bankrupt, Ms Mao paid the shortfall, and the respondents withdrew their application.[1]
[1]Kim v Mao HC Auckland CIV-2019-404-1036, 27 October 2020.
The respondents then sought to recover their costs from Ms Mao. They claimed they were entitled to indemnity costs under the terms of Ms Mao’s guarantee and the Insolvency Act 2006.[2] Ms Mao did not file a defence, and the High Court ordered indemnity costs against her.[3]
[2]Section 274(1)(b).
[3]Kim v Mao, above n 1.
Ms Mao appeals against the High Court costs decision.[4]
[4]Ms Mao also applied for recall of the costs decision, which was declined in Kim v Mao HC Auckland CIV-2019-404-1036, 30 October 2020. Ms Mao also made other claims against the respondents, which were struck out in Mao v Best Capital Ltd [2021] NZHC 735.
Ms Mao’s grounds of appeal are that the respondents wrongly put her at risk of being made bankrupt because:
(a)The respondents paid GST on the sale of the company’s land when they did not need to, and this increased the shortfall she had to pay.
(b)The respondents put charging orders on her other properties, which caused her personal losses.
In this Court, Ms Mao was required to pay security for costs in the sum of $7,060. She applied for the Deputy Registrar to dispense with this security. The Deputy Registrar declined her application. Ms Mao now applies for a review of the…

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 Mao v Kim

Details

AGLC: Mao v Kim [2021] NZCA 230
Case: [2021] NZCA 230
Decision Date: 8 June 2021 at 9.30 am

CaseChat Overview and Summary

The appeal in Mao v Kim involves the appellant, Ms Jiawen Mao, challenging the refusal by the Deputy Registrar to waive the requirement for her to pay security for costs in relation to her appeal against a High Court decision concerning costs. The respondents, Mr Hyun Bin Kim and Mr Duk Young Lee, were represented by counsel while Ms Mao appeared in person. The Court of Appeal dismissed Ms Mao's application to review the Deputy Registrar’s decision and ordered her to pay the security for costs and awarded costs to the respondents.

The legal issue before the Court was whether the Deputy Registrar was correct in refusing Ms Mao's application to waive the requirement for her to pay security for costs in her appeal against the High Court costs decision. Under the Court of Appeal (Civil) Rules 2005, an appellant must generally pay security for costs, but there are exceptions where the appellant is granted legal aid or where the Registrar can dispense with security if the circumstances warrant it. Ms Mao sought to have the security for costs waived on the grounds of impecuniosity and public interest. The Deputy Registrar had previously denied her application, finding that she had not established she was impecunious and that her appeal had no public interest. Ms Mao sought a review of this decision.

The Court of Appeal found that Ms Mao had not provided sufficient evidence to establish she was impecunious, as she had failed to provide information on her assets, liabilities, sources of funding, financial circumstances of her relatives, attempts to borrow funding, and applications for legal aid. The Court also found that Ms Mao's appeal was devoid of merit, as she had not challenged the High Court's application of standard costs principles and had not raised her liability for the shortfall in the appropriate courts. As a result, the application to review the Deputy Registrar’s decision was declined, and Ms Mao was ordered to pay the security for costs of $7,060 by 24 June 2021. The respondents were also awarded costs for a standard application on a band A basis.

Orders