Royal v Zheng - [2025] NZHC 370

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CIV-2025-409-30

[2025] NZHC 370

BETWEEN
JIMMY ROYAL

Plaintiff/Appellant

AND

QI ZHENG

Defendant/Respondent

Hearing:
12 February 2025

further submissions filed 19 February 2025

Appearances:

H C Matthews and K M Anderson for Plaintiff/Applicant

Judgment:

3 March 2025

Reissued:

11 March 2025

JUDGMENT OF EATON J

(application for interim charging order or freezing order and interim injunction)

This judgment was delivered by me on …….. at ……… pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

ROYAL v ZHENG [2025] NZHC 370 [3 March 2025]

[1] Jimmy Royal, a company director based in Christchurch has issued summary judgment proceedings against Qi Zheng, the defendant who is resident in China. In those proceedings he seeks to enforce a judgment obtained by him from the Xinxiang Intermediate People’s Court, Henan, People’s Republic of China dated 31 May 2023. Judgment was entered in favour of Mr Royal against Mr Zheng in the sum of CNY 16,570,000 (approximately NZD 4,000,000) plus interest and an order was made that Mr Zheng bear the joint and several liability for the judgment.

Proceeding without notice

[2] When filing the application for summary judgment, Mr Royal also applied, on a without notice basis, for an interim charging order, or in the alterative, a freezing order. The property the target of both applications is known as 12 Walters Road, Marshlands, Christchurch (described as Lot 10 Deposited Plan 18049, identifier CB4C/19) (the property). He also seeks a substituted service order. His applications are supported by a memorandum from Mr Matthews on his behalf and affidavits filed by Mr Royal.

[3] A hearing was convened on 11 February. Having heard from Mr Matthews, I was satisfied it was appropriate for the applications to proceed without notice. To require Mr Royal to proceed on-notice would, I accept, give rise to the likelihood of dissipation of assets thereby causing prejudice to Mr Royal.

Subsequent process

[4] On 11 February I indicated my tentative view that the evidence did not meet the threshold for an interim charging order to issue but that I was minded to make a freezing order. Mr Matthews expressed concern that unlike a charging order, there is no mechanism by which the freezing order can be registered against the property. He submitted that a freezing order could not prevent Mr Zheng and his wife taking steps to transfer ownership of the property to a third party. Mr Matthews suggested the court might direct that the freezing order be registered against the title to the property. He

sought, and was granted, the opportunity to file further submissions addressing that issue.

[5] On 19 February a further memorandum was filed on behalf of Mr Royal. Mr Matthews no longer seeks a direction that a freezing order be registered on the title to the property. Instead, and with reference to Australian authority, he seeks leave to bring a without notice interlocutory application for an injunction…

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 Royal v Zheng

Details

AGLC: Royal v Zheng [2025] NZHC 370
Case: [2025] NZHC 370
Decision Date: 3 March 2025

CaseChat Overview and Summary

Jimmy Royal, a director of a Christchurch-based company, has brought proceedings against Qi Zheng, a resident of China, seeking to enforce a judgment obtained by him against Mr Zheng from the Xinxiang Intermediate People’s Court, Henan, People’s Republic of China. The judgment, dated 31 May 2023, awarded Mr Royal CNY 16,570,000 (approximately NZD 4,000,000) plus interest, with Mr Zheng bearing joint and several liability for the judgment. Mr Royal has applied for an interim charging order, a freezing order, and an interim injunction, as well as for substituted service, all without notice to Mr Zheng.

The court was required to determine whether an interim charging order should be granted, whether a freezing order should be issued, and whether an interim injunction should be made to prevent the Registrar-General of Land from registering an instrument on the title to the property. The court also had to consider whether substituted service was appropriate.

The court found that Mr Royal had not met the stringent threshold to secure an interim charging order, as there was insufficient evidence to show that Mr Zheng was removing, concealing, or disposing of his property with intent to defeat creditors. However, the court was satisfied that Mr Royal had a good arguable case on his substantive claim, that there were assets of Mr Zheng to which the orders could apply, and that there was a real risk that Mr Zheng might remove, dispose of, deal with, or diminish the value of his assets. Therefore, the court issued a freezing order. The court also declined to grant the interim injunction sought by Mr Royal, but directed that a copy of the freezing order be provided to the Registrar-General of Land. The court made an order for substituted service in the terms sought.

The court made an order pursuant to r 32.2 of the High Court Rules restraining Qi Zheng from removing any assets located in New Zealand and disposing of, dealing with, or diminishing the value of any assets in New Zealand, specifically including the property known as 12 Walters Road, Marshlands, Christchurch. The order is to remain in place for review by the Court on 28 April 2025 at 11.45 am. Leave is reserved to Qi Zheng to apply to the Court to discharge or vary the freezing order on two (2) days’ notice. A copy of the freezing order is to be served on the Registrar-General of Land. The court made an order for substituted service in the terms of paragraph [8] of the application. The first call of the summary judgment application was enlarged to 28 April 2025 at 11.45 am in the duty judge list to ensure that there is at least 25 working days between the date of (substituted) service and the first call.

Orders