Maraposa Limited v Wang

[2025] NZHC 1585

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2024-404-2559 [2025] NZHC 1585

BETWEEN  MARAPOSA LIMITED

Plaintiff

AND  LEI WANG

First Defendant

LXY INVESTMENT LIMITED
Second Defendant

YUNHAO LU
Third Defendant

Hearing:                   5 June 2025

Appearances:           Kellie B Arthur for the Plaintiff

Fulton Ryan for the Defendants

Judgment:                17 June 2025

JUDGMENT OF ASSOCIATE JUDGE C B TAYLOR

[Application for summary judgment and for specific performance]

This judgment was delivered by me on 17 June 2025 at 3:00pm

pursuant to Rule 11.5 of the High Court Rules

…………………………. Registrar/Deputy Registrar

Solicitors:

Alexander Dorrington (Denise Marsden), Auckland, for the Plaintiff

Brookfields (Tyrone Cooley/Fulton Ryan), Auckland, for the Third Defendant

Counsel:

Mark Colthart / Kellie B Arthur, FortyEightShortland Barristers, Auckland, for the plaintiff

MARAPOSA LIMITED v LEI WANG [2025] NZHC 1585 [17 June 2025]

Introduction

[1]    The plaintiff, Maraposa Limited (Maraposa), applies for summary judgment of its claim against Mr Lei Wang (Mr Wang), LXY Investment Limited (LXY) and Ms Yunhao Lu (Ms Lu), jointly and severally, for specific performance of an agreement for the purchase of a section (the Agreement). In the alternative, Maraposa seeks contractual damages.

[2]    Mr Wang is the director and majority shareholder of GWT NZ Limited (GWT). GWT was the original purchaser under the Agreement entered into with Maraposa. Mr Wang signed the agreement on behalf of GWT and personally as a guarantor. GWT nominated LXY as purchaser under the Agreement. At all material times, Ms Lu was the director of LXY and is also a guarantor of LXY’s obligations under the Agreement.

[3]    Neither Mr Wang nor LXY has opposed Mariposa’s application. LXY was removed from the Companies Register on 6 December 2024.

[4]    Ms Lu accepts that she provided a guarantee to Maraposa but does not accept that this was a guarantee to perform and observe the conditions and obligations of LXY as set out in the Agreement, and accordingly Maraposa is not entitled to an order of specific performance.

Background

[5]    On 18 October 2021, Maraposa agreed to sell, and GWT agreed to buy Lot 201 at 6 Stockmans Lane, Pukekohe (the Property) for $524,000 plus GST (if any) under the Agreement.

[6]    The Agreement was on the terms of the standard ADLS Agreement for Sale and Purchase for Real Estate, 10th edition, 2019(2). Further terms of sale provided, among other things:

(a)a deposit of 15 per cent of the purchase price (in three instalments of five per cent) was payable on certain milestones;

(b)the Agreement was conditional on:

(i)the purchaser’s solicitor’s approval of the form and content of the agreement within three working days of the date of the agreement. The purchaser could waive this condition.

(ii)Maraposa being granted such resource consents as required on or before 15 June 2022. Maraposa was able to extend the due date for this condition for up to six months and/or waive this condition.

(iii)Maraposa achieving a level of sales of lots and development finance on or before 15 June 2022. Maraposa was able to extend the due date for this condition for up to six months and/or waive this condition.

(c)The settlement date was five working days after Maraposa’s solicitor advised the purchaser’s solicitor that a record of title for the Property was available for searching in the Landonline database and the issue of title condition in clause 26.1 was satisfied or waived by Maraposa.

(d)in the event of default and non-compliance with a settlement notice, Maraposa was able to sue for specific performance.

[7]    Mr Wang signed the Agreement on behalf of GWT as purchaser, and personally as guarantor.

[8]    The Agreement allowed the purchaser to transfer (by “nomination, assignment, transfer, or otherwise disposing of or alienating”) its benefits under the Agreement with the prior written consent of Maraposa.

Deed of Nomination

[9]    On 7 November 2021, a document entitled “Deed of Nomination” was signed by Ms Lu, on behalf of LXY as well as personally as a guarantor, and by Mr Wang on behalf of GWT (the Deed of Nomination). In the Deed of Nomination, GWT was referred to as the “Nominator”, LXY as the “Nominee”, and Ms Lu as the guarantor.

[10]The Deed of Nomination provided:

(a)In consideration of LXY paying GWT the sums set out in the Deed of Nomination, GWT agreed to nominate LXY as purchaser of the Property under the Agreement, subject to Maraposa’s consent;

(b)GWT acknowledged that it had no interest in the Agreement whatsoever from the effective date of the nomination (Effective Date);

(c)LXY accepted that it had the full benefit and burden of the covenants in the Agreement as if it was a party to the Agreement from the Effective Date;

(d)LXY became responsible for paying the deposits payable to Maraposa’s solicitors due after the Effective Date by the due dates set out in the Agreement;

(e)LXY warranted that all GWT’s obligations under the Agreement will be complied with by LXY as from the Effective Date;

(f)LXY indemnified GWT against any cost, demand, claim, action or proceeding that GWT became liable for or incurred as a consequence of any breach of the warranty (at (e) above); and

(g)in consideration of the parties entering into the Deed of Nomination at the request of Ms Lu and Maraposa consenting to the Deed of Nomination, Ms Lu guaranteed to Maraposa and GWT the performance

of and compliance by LXY of GWTs’ obligations as purchaser under the Agreement from the Effective Date.

[11]   Maraposa consented to the nomination on 9 November 2021. On 10 November 2021, a Deed of Guarantee and Indemnity (the Guarantee) was signed by Ms Lu, as a director of LXY, and in her personal capacity as guarantor.

[12]Clause 26.20 of the Agreement provided that:

If a private company … is to complete settlement as purchaser (whether as nominee or otherwise), it shall procure:

… that at least two of its directors, if there is more than one … to enter into a personal guarantee in the form provided by the vendor to the effect that the nominated directors personally guarantee to perform and observe the conditions and obligations of Purchaser as set out in the Agreement and as set out in Schedule 7.

[13]The Guarantee provided by Ms Lu:

(a)guaranteed, jointly and severally, to Maraposa the performance by LXY of LXY’s obligations with respect to the Agreement; and

(b)indemnified and agreed to keep indemnified Maraposa against all losses, payments, claims which Maraposa may suffer or incur as a result of LXY’s breach of LXY’s obligations in respect of the Agreement.

[14]   Maraposa satisfied or waived all the vendor conditions under the Agreement and on 27 June 2024, notified LXY that title for the Property had been issued. In accordance with the Agreement, settlement then became due on 5 July 2025.

[15]   LXY failed to settle on the settlement date and on 8 July 2024, pursuant to cl 11 of the Agreement, Maraposa served settlement notices on both LXY and GWT. The notices stated that settlement was required within the timeframe specified in the Agreement, that is 12 working days after the date of service of the notice (24 July 2024).

[16]   The Agreement was never settled. Maraposa asserts that at all material times it has been ready, willing and able to settle.

Removal of LXY from the Companies Register

[17]   On 24 October 2024, Ms Lu, as sole director and majority shareholder of LXY, applied to remove LXY from the Companies Register on the grounds that LXY had ceased  doing business and had discharged  all liabilities to known creditors.   On     6 November 2024, these proceedings were served on LXY and Ms Lu, however LXY was removed from the Companies Register on 4 December 2024.

Legal principles

[18]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.

[19]   The relevant principles governing a summary judgment application are well established:1

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: Pemberton v Chappell. 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: MacLean v Stewart. The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent or is inherently improbable: Eng Mee Yong v Letchumanan. 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: Bilbie Dymock Corp Ltd v Patel.

[20]   The wording of r 12.2 “may give judgment” indicates a residual discretion. Having regard to the various authorities, the position appears to be as follows:2

1      Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26] (citations omitted).

2      Andrew Beck and others (eds) McGechan on Procedure (online ed, Thomson Reuters) at [HR12.2.11].

(a)The discretion implied by the use of the word “may” is to be restrictively applied. In a great majority of cases, once the court is satisfied the defendant has no defence, there is no room for the exercise of discretion.

(b)The residual discretion may be invoked to avoid oppression or injustice to the defendant where:

(i)The proceeding involves the actions or possible liability of a third party which is not before the court;

(ii)The proceedings are such that the opportunity should be given to allow discovery or other interlocutory applications to be concluded;

(iii)The circumstances of the case disclose very unusual features, the presence of which leads the court to conclude that the entry of summary judgment would be oppressive or unjust; or

(iv)The combination of complex issues of fact and law justify the dismissal of the application for summary judgment, either as a matter of discretion or because the court cannot be satisfied that the defendant has no defence.

(c)Even where the court is not satisfied that a defence has been made out, in exceptional circumstances the application may be adjourned to allow for other processes to be followed.

Submissions for Maraposa

[21]   Ms Arthur, for Maraposa, submits that the relationship between Maraposa and each of the defendants from 10 November 2021, when the Guarantee was signed, was one of assignment rather than nomination. She submits that:

(a)The Deed of Nomination, read in conjunction with the Agreement, amounts to more than a mere nomination. The language used in the documents manifests an intention to unconditionally assign all of a purchaser’s rights under the Agreement to the “nominee”.

(b)Under the Agreement, GWT had a right, with Maraposa’s written consent, to assign the rights of purchaser. The Agreement contemplated that an assignee would covenant with Maraposa that it was bound by the provisions of the Agreement provided that GWT, the original purchaser, at all times remained liable under the Agreement. Following an assignment by the purchaser, Maraposa contemplated that both the

assignee and the original purchaser would be liable to it for the purchaser’s obligations under the Agreement.

(c)By requiring the assignee’s guarantor to enter into a guarantee in accordance with clause 26.20, Maraposa considered that the guarantor personally guaranteed to perform and observe the conditions and obligations of the purchaser under the Agreement.

(d)Under the Deed of Nomination, LXY was bound to the Agreement “as if it had been a party”.3 LXY assumed not merely the rights, but also the obligations of GWT. GWT acknowledged that it was to have no interest in the Agreement whatsoever from the Deed of Nomination’s Effective Date.

(e)While a novation, rather than assignment, might have been contemplated as between GWT, LXY and Ms Lu, Maraposa did not consent to a novation and was not a party to the Deed of Nomination.

Ms Wang’s liability

[22]   As to Mr Wang’s and GWT’s liability, Ms Arthur submits they each remain liable under the Agreement as guarantor and purchaser respectively. Pursuant to Schedule 7 of the Agreement, Maraposa is entitled to treat Mr Wang as purchaser “for all purposes” and to take proceedings against Mr Wang before taking proceedings against GWT. She submits that accordingly Maraposa is entitled to seek summary judgment for specific performance against Mr Wang in relation to GWT’s failure to settle the Agreement, citing Maraposa v KWJ Construction Ltd.4

Ms Lu’s liability

[23]As to Ms Lu’s liability Ms Arthur submits:

3      Referring to clause 2.2 of the Deed of Nomination.

4      Maraposa Ltd v KWJ Construction Ltd [2025] NZHC 1114.

(a)Maraposa required her to sign the Guarantee in accordance with the covenants in clause 26.20 of the Agreement, and therefore Ms Lu guaranteed to personally perform the purchaser’s obligations under the Agreement.

(b)In accordance with ss 12 and 17 of the Contract and Commercial Law Act 2017, Maraposa is entitled to sue for and recover the benefits conferred to it under the Guarantee and the Deed of Nomination, and relief may not be refused on the ground that Maraposa, as a beneficiary under the Deed of Nomination, is not a party to the deed.5 Relief under s 17 includes specific performance.6

(c)While Ms Lu opposes the orders for specific performance due to an alleged financial inability to complete settlement, no evidential foundation for this has been filed and therefore Ms Lu has not discharged the evidential burden required to establish this as a defence. In addition, Ms Lu has not pleaded or provided evidence of a defence of impossibility of the performance of the Agreement, the standard of evidence required being set out in the following  statement  from  Ngai Tahu Property Ltd v Dykstra:7

Anything less than a very substantial probability that performance will be impossible is insufficient – anticipation of possible difficulties or even a demonstrated difficulty in finding the purchase money is unlikely to constitute a defence of impossibility. In such cases and subject to any other overriding equitable consideration a Court in equity is likely to order specific performance in the ordinary manner.

[24]   Ms Arthur submits that Ms Lu’s actions, in causing LXY to be removed from the Companies Register, has frustrated Maraposa’s ability to enforce its rights against that company.

[25]   As to the Court’s discretion, Ms Arthur submits that this is not a situation where damages would be an appropriate remedy as an award of damages instead of specific

5      Contract and Commercial Law Act 2017, s 17(2).

6      Section 17(3).

7      Ngai Taihu Property Ltd v Dykstra (2009) 10 NZCPR 734 at [12(c)].

performance would deprive Maraposa of the whole benefit of the Agreement, and that Maraposa should be able to divest itself of the Property and recover the agreed price under the Agreement.

[26]Ms Arthur submits:

(a)The defendants part-performed the Agreement. There is no proof that a grant of specific performance would cause great hardship for any of the defendants and this is not a situation where the obligations imposed on Mr Wang or Ms Lu are impossible, unfair, unconscionable, unlawful or unenforceable.

(b)The obligations imposed on LXY are unenforceable  due  solely  to Ms Lu’s actions in removing it from the Companies’ Register.

(c)The substantial justice in this case favours the Court granting Maraposa’s application for summary judgment for specific performance against the defendants.

Ms Lu’s submissions

[27]Ms Lu is the only defendant who has opposed this application.

[28]   Mr Ryan, for Ms Lu, submits that while Ms Lu admits to having provided a guarantee, she does not accept that Maraposa is entitled to seek an order for specific performance pursuant to the Guarantee asserting:

(a)she did not guarantee to perform and observe the conditions and obligations of LXY as set out in the Agreement; and

(b)she did not agree to be treated as LXY for all purposes.

[29]   Mr Ryan submits that in the alternative, if Maraposa is entitled to seek an order for specific performance, then Ms Lu opposes an order on the basis that she does not

have the financial ability to complete settlement, and therefore any order for specific performance will cause hardship and/or will be impossible to complete.

[30]   Mr Ryan refers to the operative clause of the Guarantee which provided that Ms Lu:

(a)guarantees, jointly and severally, to the Vendor the performance by the Nominee of the Nominee's obligations with respect to the Agreement; and

(b)indemnifies and agrees to keep indemnified the Vendor against all losses, payments, claims which the Vendor may suffer or incur as a result of the Nominee's breach of the Nominee's obligations with respect to the Agreement.

[31]   Based on this, Mr Ryan submits that Ms Lu has guaranteed the performance by LXY of its obligations with respect to the Agreement, but she has not guaranteed to perform the obligations of LXY as set out in the Agreement, or to be treated as LXY for all purposes under the Agreement. He submits:

(a)The form of the guarantee provided by Ms Lu is different from the form of the guarantee signed by Mr Wang which is set out in Schedule 7 of the Agreement. Mr Wang, as director of GWT, signed the Agreement and covenanted with Maraposa on the terms of Schedule 7 of the Agreement.

(b)The form of the guarantee in Schedule 7 of the Agreement is similar to the operative clause of the Guarantee, but crucially contains the following additional clause:

[the Guarantor(s)] may, as between the Vendor and the Guarantor(s), for all purposes be treated as the Purchaser and the Vendor is under no obligation to take proceedings against the Purchaser before taking proceedings against the Guarantor.

(c)This clause is the equivalent of a “principal debtor” clause and renders the guarantor under Schedule 7 liable as purchaser to perform the obligations under the Agreement. Maraposa relies upon this clause when seeking specific performance against Mr Wang. Maraposa has also referred to an earlier decision of this Court which granted an order for specific performance in favour of the plaintiff against another guarantor under an identical version of the agreement.8 However, that decision noted that the terms of the guarantee entitled the plaintiff to treat the guarantor as the purchaser.

(d)The form of the Guarantee provided by Ms Lu does not include the clause at (b) above. The Agreement was not signed by Ms Lu, and she has not covenanted with Maraposa as set out in Schedule 7. Therefore, Ms Lu is not to be treated as the purchaser for all purposes and is not liable as purchaser to perform the obligations of LXY under the Agreement. Accordingly, Maraposa is not entitled to an order for specific performance against Ms Lu.

[32]   In relation to clause 26.20 of the Agreement, Mr Ryan submits that this was not a guarantee by Ms Lu to personally perform LXY’s obligations under the Agreement, but is an obligation on the purchaser (whether as nominee or otherwise) to procure a personal guarantee in the form to be provided by Maraposa “to the effect that the nominated directors personally guarantee to perform and observe the conditions and obligations of the Purchaser as set out in” Schedule 7 of the Agreement. Therefore, he submits:

(a)The Guarantee is the form of the guarantee provided by Maraposa to LXY, to be signed by Ms Lu, and the operative clause of that document determines the scope of liability of Ms Lu as guarantor, not clause 26.20 of the Agreement.

(b)Pursuant to the Guarantee, Ms Lu has guaranteed to Maraposa the performance by LXY of its obligations with respect to the Agreement.

8      Broughton v Wyatt Family Trust Holdings Ltd (2010) 12 NZCPR 368.

ln the absence of the additional clause referred to above in the Guarantee, if LXY fails to perform its obligations with respect to the Agreement, the extent of Ms Lu’s liability is as guarantor for any loss or damage that is suffered by Maraposa as a consequence of that non- performance.

[33]   Mr Ryan submits that Maraposa is not entitled to specific performance, given that the ordinary remedy for breach of contract is damages. He submits:

(a)Specific performance is an equitable remedy which, where appropriate, can be exercised to enforce performance of a contract in accordance with its original terms.

(b)For this relief to be available to Maraposa, it must be established that the requirement for Ms Lu to perform the obligations of LXY is within the scope of the Guarantee provided by Ms Lu to Maraposa.

(c)Terms of the Guarantee do not require Ms Lu to pay the purchase price and settle the purchase of the Property as the purchaser under the Agreement if LXY fails to do so. Such an obligation would need to be clearly expressed as spelled out in the decision of Evagelakos v UPG 318 Pty Ltd.9 The explicit words of the Guarantee state that Ms Lu has guaranteed performance by LXY for its obligations with respect to the Agreement and the Guarantee does not state Ms Lu has guaranteed to perform the obligations of LXY as set out in the Agreement herself. In the absence of those express words, that the Guarantee does not require Ms Lu to perform the obligations of LXY in the event LXY fails to do so.

[34]   With regards to the Court’s discretion. Mr Ryan submits that ordering specific performance will cause hardship to Ms Lu or will be impossible for her to complete the settlement of the Agreement. He submits that Ms Lu has deposed that she does

9      Evagelakos v UPG 318 Pty Ltd [2024] NSWSC 1179 at 28, 29 and 56.

not have the financial ability to complete settlement and this evidence has not been contradicted by Maraposa.

Quantum of damages

[35]   Mr Ryan submits that in the event the Court does not grant an order for specific performance against her, then Ms Lu challenges the quantum of damages claimed by Maraposa. He submits that Maraposa has failed to provide evidence of the losses suffered as a result of LXY’s failure to complete the settlement and Maraposa has failed to take reasonable steps to mitigate such loss, including, but not limited to, re- selling the Property.

Result

[36]   As to the liability of Mr Wang, he has not opposed Maraposa’s application, and the guarantee given by him in Schedule 7 contains the additional wording effectively making him a principal debtor. Accordingly, specific performance could be ordered against him. Specific performance is an appropriate remedy for default under an agreement for sale and purchase of land.10

[37]   As to liability of LXY, it has been removed from the Companies Office Register and orders cannot be ordered against it until it is restored to the Companies Office Register. An order for specific performance against LXY would be granted if it was restored to the Companies Office Register.

[38]   As to liability of Ms Lu, I am of the view that Maraposa’s application for summary judgment for an order for specific performance against her should be dismissed. The reasons for my view are:

(a)It is reasonably arguable that the terms of the Guarantee signed by   Ms Lu are restricted to guaranteeing the performance of LXY under the Agreement, and not performing those obligations herself in the event LXY fails to do so. Similar to the analysis in Evagelakos,11 it is

10     McLean Tower Ltd v Ash Road Investments Ltd [2007] NZCA 307 at [27].

11     Evagelakos v UPG 318 Pty Ltd, above n 9.

arguable the terms of the Guarantee do not require Ms Lue to perform the obligations of LXY under the Agreement, and therefore do not support an order for specific performance against Ms Lu under the Guarantee.

(b)While the terms of cl 26.20 of the Agreement require Ms Lu to “personally guarantee to perform and observe the conditions and obligations of the purchaser” under the Agreement and, as set out in Schedule 78, it is the terms of the Guarantee itself which govern     Ms Lu’s obligations under the Agreement herself.

[39]   Given I am of the view that Maraposa is not entitled to an order for specific performance against Ms Lu, for the reasons set out at [38] it is not necessary for me to consider the exercise of the Court’s discretion not to order specific performance on the grounds of hardship to Ms Lu or impossibility of performance of the Agreement. However, I would comment that in my view, Ms Lu has not established financial hardship or impossibility of performance of the Agreement, and this ground would not justify refusing Maraposa an order for specific performance.

[40]   I am not satisfied that Ms Lu has no defence to Maraposa’s claim and accordingly summary judgment for specific performance is refused.

Orders

[41]I make the following orders:

(a)Maraposa’s application for summary judgment for an order for specific performance against Mr Wang is granted.

(b)Maraposa’s application for summary judgment for an order for specific performance against LXY is dismissed.

(c)Maraposa’s application for summary judgment for an order for specific performance against Ms Lu is dismissed.

(d)Maraposa is entitled to costs on a 2B basis plus disbursements against Mr Wang in respect of its successful summary judgment application against him;

(e)As is the usual position in respect of a summary judgment application which is dismissed, costs in respect of Maraposa’s unsuccessful application against LXY and Ms Lu are reserved to be dealt with as part of the substantive proceeding.

…………………………….. Associate Judge Taylor