Peng v Li - [2016] NZHC 380

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2013-404-4367 [2016] NZHC 380

BETWEEN
ZHONGJIAN (TOM) PENG AND

CATHERINE CHAO Plaintiffs

AND

XIAOXI (RICHARD) LI First Defendant

YUAN CHEN Second Defendant

Hearing: On the papers

Counsel:

M A Karam for Plaintiffs
C R Andrews for Defendants

Judgment:

8 March 2016

JUDGMENT (No 2) OF FOGARTY J

This judgment was delivered by me on 8 March 2016 at 4.30 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date: ………………………….

Solicitors: Aaron Kashyap, Epsom
McVeagh Fleming, Auckland

PENG v LI [2016] NZHC 380 [8 March 2016]

[1] This is my second decision in relation to this matter. Initially there had been seven causes of action. As outlined in my earlier decision in Peng v Li (which I refer to as “Judgment No 1”), these were:1

1Breach of a joint venture contract over two properties having the postal addresses of 1/18 (“Property 1”) and 2/18 Inverary Avenue (“Property 2”), Epsom.

2A cause of action under the Fair Trading Act alleging false and misleading misrepresentations by the first defendant.

3 An action in deceit against the first defendant.

4 An action for unjust enrichment/money had and received.

5 Constructive trust.

6 Resulting trust.

7 Breach of fiduciary duty.

[2] The plaintiffs were successful in obtaining judgment against the first defendant (but not the second defendant) in respect of the first and third causes of action in my first decision. Damages were awarded in the sum of $507,500, together with interest under the Judicature Act and costs.

[3] The plaintiffs have since abandoned their claim under the second cause of action.

[4] In Judgment No 1 I granted leave to the parties to pursue the equitable causes of action by 20 October 2015 because insufficient submissions had been provided on those points.2 The plaintiffs took up this opportunity and filed written argument on
20 October 2015, seeking an entry of judgment on the fourth to seventh causes of

action. Pursuant to these equitable causes of action, the plaintiffs sought a proprietary remedy of 35 per cent of the first defendant’s interest in Property 1. Submissions from the defendant followed on 20 November, together with submissions of counsel for the plaintiff in reply.

[5] In their reply submissions, the plaintiffs substituted their claim for a proprietary remedy in relation to Property 1 with a monetary award instead: a debt judgment in equity to the value of $507,500. I issued a minute dated 18 December noting this development. On that date I also issued a further minute querying what additional advantage the plaintiff might obtain by having a debt judgment in equity
when they already have a judgment debt for the same sum at common law.3

[6] That led to a further round of submissions. Counsel for the plaintiffs explained that because the first judgment was under appeal and there was a possibility that the judgment debts at common law might be overturned, it was considered appropriate to seek judgment in the plaintiffs’…

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 Peng v Li

Details

AGLC: Peng v Li [2016] NZHC 380
Case: [2016] NZHC 380
Decision Date: 8 March 2016

CaseChat Overview and Summary

Peng v Li involved a dispute between Zhongjian (Tom) Peng and Catherine Chao (plaintiffs) and Xiaoxi (Richard) Li and Yuan Chen (defendants) in the High Court of New Zealand. The plaintiffs sought damages and equitable remedies arising from a joint venture agreement over two properties in Epsom, alleging deceit, breach of fiduciary duty, and unjust enrichment. In the first judgment, the court found the first defendant liable for deceit and awarded damages. The plaintiffs subsequently abandoned some claims and sought a debt judgment in equity against the first defendant. The second defendant argued she was not liable for any of the claims.

The court addressed whether the second defendant was liable for any of the equitable claims. The court found that the second defendant was not liable for the fourth cause of action (money had and received) as her conscience was not engaged and there was no proof of dishonesty. The court also dismissed the claims of constructive trust, resulting trust, and breach of fiduciary duty against the second defendant, as her conscience was not engaged and she was unaware of the fraud. The court held that the second defendant was not liable for any of the claims.

The court awarded costs to the plaintiffs against the first defendant, allowing an additional two days for the preparation of briefs in reply to a defence, but denied the plaintiffs’ claim for an uplift of 50 per cent on account of increased costs against the first defendant. The court found that the plaintiffs were unsuccessful in all their causes of action against the second defendant. The court entered judgment against the first defendant for $507,500, plus interest, on the first, third, fourth, fifth, sixth, and seventh causes of action. The court awarded costs to the defendants jointly on a 2B basis, plus two days for the preparation of briefs in reply to the Harbour Fitness defence. The court granted leave to the parties to apply if any difficulties arise in agreeing and settling the formal judgment, including the schedule of the costs.

Orders