Shiu v Luo

[2024] NZCA 277

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

 CA58/2022
 [2024] NZCA 277

BETWEEN	XIAOLING (ANNIE) SHIU First Appellant
AND	CSR POKENO LIMITED Second Appellant
AND	ZHENLIN (ROBERT) LUO First Respondent
AND	K C BROTHERS LIMITED Second Respondent
AND	ANG YIP Third Respondent
AND	MANFEI COMPANY LIMITED Fourth Respondent

Court:	French, Gilbert and Mallon JJ
Counsel:	D R Bigio KC and Y Y Mortimer-Wang for Appellants J E Hodder KC for Respondents
Judgment: (On the papers)	1 July 2024 at 11.30 am

JUDGMENT OF THE COURT
(Application for Stay)

AThe application for a stay of part of this Court’s judgment delivered on 7 March 2024 is granted to the extent and subject to the conditions specified in [11].

BThe security arrangements ordered in the High Court by Tahana J on 12 September 2022 are to remain in place until the date on which the respondents’ application for leave to appeal to the Supreme Court is determined.

CWe make no award of costs in relation to the application for a stay.

____________________________________________________________________

REASONS OF THE COURT

(Given by French J)

1. On 7 March 2024, we issued a judgment allowing an appeal brought by Ms Shiu and CSR Pokeno Ltd (Pokeno) against a decision of Whata J in the High Court.[1]  The Judge had awarded damages and interest totalling just over $1 million in favour of the first respondent, and damages and interest totalling approximately $1.6 million in favour of the fourth respondent.[2]  We held that the appellants were not liable to pay any of these sums and also dismissed a cross‑appeal brought by the respondents.

   [1]Shiu v Luo [2024] NZCA 48 [Court of Appeal judgment]; and Luo v Shiu [2021] NZHC 3564, (2021) 22 NZCPR 911 [High Court judgment].

   [2]High Court judgment, above n 1, at [133].

2. The formal orders made by us were as follows:

   A        The appeal is allowed and the cross-appeal is dismissed.

   B        The decision of the High Court is quashed.

   CThe respondents must pay the appellants’ costs in the High Court calculated on a 2B basis, together with usual disbursements.  Any disagreement as to amount may be determined by that Court. 

   DThe respondents are ordered to pay the appellants one set of costs for a standard appeal on a band A basis, with usual disbursements.  We certify for two counsel.

   ELeave is reserved for the parties to come back to this Court for further orders in the event there are any difficulties regarding repayment of security for costs in both this Court and the High Court.

3. On 8 April 2024, the respondents filed an application for leave to appeal our decision to the Supreme Court.  The application for leave has not yet been determined.  Subsequently, on 6 May 2024, the respondents filed an application in this Court seeking an order staying execution of our judgment until the Supreme Court decides their application for leave and any appeal pursuant to leave.[3] 

   [3]In reliance on r 30 of the Supreme Court Rules 2004.

4. The stay application is not brought in respect of that part of our judgment dismissing the cross-appeal, but encompasses our order quashing the High Court decision and also our costs awards.  In addition, the respondents seek an order that the security arrangements made in the High Court by Tahana J on 12 September 2022 (the High Court securities) are to remain in place.

5. The High Court securities were provided by Ms Shiu and Pokeno as a condition of being granted a stay of Whata J’s decision pending the outcome of their appeal to this Court.  The arrangements involved the provision of a first registered mortgage over a Papakura property in favour of the respondents with a priority sum of $1 million and the retention of $1,707,191.64 in a solicitors’ trust account until further order of the Court.

6. The application for a stay is opposed by the appellants.

7. In support of the application, the respondents submit that the proposed appeal to the Supreme Court is genuine, raises issues of public importance and has a reasonable chance of success.  They further submit that the appeal to the Supreme Court may be rendered nugatory without a stay because it appears the appellants no longer have substantial assets other than those subject to the High Court securities.

8. Uncontested affidavit evidence suggests there is a real risk of dissipation of assets such that the proposed appeal to the Supreme Court could be rendered nugatory if a stay were not ordered.  In our view, it is not a complete answer to say, as the appellants do, that this was the very same risk the respondents faced without security when they first issued proceedings in the High Court.  The difference between then and now is that the High Court was satisfied the respondents’ claim had merit.

9. Applying the well-established principles governing stay applications,[4] we are persuaded that it is in the interests of justice to grant the application for a stay of part of our judgment but on certain terms and conditions detailed below, and only until the Supreme Court has determined the application for leave to appeal.  If leave to appeal is granted, any further extension of the stay is for the Supreme Court to decide.

   [4]See r 30 of the Supreme Court Rules; and Kiwi Internet Marketing Ltd v Trent [2017] NZCA 174 at [7], recently applied in Sustainable Otakiri Inc v Whakatāne District Council [2023] NZCA 32 at [9].

10. As regards costs on this stay, we consider it is appropriate for there to be no award given the imposition of the conditions. 

Outcome

1. The application for a stay of part of this Court’s judgment delivered on 7 March 2024 is granted to the extent and subject to:

   (a)Execution of the orders allowing the appeal and quashing the High Court judgment is stayed until the date on which the respondents’ application for leave to the Supreme Court is determined.  This is conditional on:

   (i) The respondents repaying the appellants, within five working days, the sum of $180,471.27 representing costs and disbursements in the High Court paid by the appellants to the respondents in March 2022.

   (ii) The respondents paying into the trust account of the appellants’ solicitors, within five working days, the High Court costs and disbursements payable under this Court’s judgment of 7 March 2024 to the appellants ($140,258.85) together with the appellants’ costs and disbursements in this Court ($21,358.95).  The money to be held in the trust account until determination of the application for leave to appeal in the Supreme Court.

2. The security arrangements ordered in the High Court by Tahana J on 12 September 2022 are to remain in place until the date on which the respondents’ application for leave to appeal to the Supreme Court is determined.

3. We make no award of costs in relation to the application for a stay.

Solicitors:
Heritage Law, Auckland for First Appellant
Tompkins Wake, Auckland for Second Appellant
Righteous Law, Auckland for Respondents