Tian v Xu - [2023] NZHC 1261

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2023-404-735

[2023] NZHC 1261

BETWEEN
YANG TIAN

Plaintiff

AND

CHEN XU

Defendant

Hearing: On the papers

Counsel:

Y Yang and H Huang

Date of judgment:

26 May 2023

Reissued:

31 May 2023

JUDGMENT OF JAGOSE J

This judgment was delivered by me on 26 May 2023 at 10.00am.
Pursuant to Rule 11.5 of the High Court Rules.

………………………… Registrar/Deputy Registrar

Solicitors:
Great Wall Lawyers, Auckland

TIAN v XU [2023] NZHC 1261 [26 May 2023]

[1] As duty judge, I have Yang Tian’s 25 May 2023 without notice interlocutory application for freezing and ancillary orders in support of this summary judgment proceeding for enforcement of foreign proceedings in New Zealand.

Background

[2] In this proceeding, Mr Tian alleges he and Chen Xu are party to a 30 August 2021 settlement confirmation sealed by the Lubei District People’s Court of Tangshan City in the People’s Republic of China’s Hebei Province (the Lubei Court), requiring Mr Xu pay Mr Tian an outstanding loan principal of approximately RMB 2.887 million by 1 September 2021, plus interest thereafter. The Lubei Court later partly enforced the settlement confirmation by obtaining sale of property belong to Mr Xu, net proceeds of approximately RMB 1.171 million being paid to Mr Tian, leaving a balance owing of some RMB 1.717 million plus interest to Mr Tian. The Lubei Court also is alleged to have determined on 18 May 2022 Mr Xu separately was jointly and severally liable as guarantor of a third party’s loan from Mr Tian to pay Mr Tian RMB 650,000 plus interest from 8 September 2021, which remains unpaid. Together, the principal sums amount to approximately NZD 600,000.

[3] On the present application, Mr Tian seeks to freeze Mr Xu’s assets in New Zealand, being his sole shareholding of Knox X Trustee Limited,1 which owns a property in Auckland’s Hobsonville, presently offered for sale by auction on 28 May 2023 unless sold prior. Mr Xu’s spouse, child and parents-in-law are said to live at the property, but Mr Xu resides in China (as does Mr Tian). Mr Tian evidences another of Mr Xu’s companies in New Zealand, Golden Ocean Investment Limited, is said to have unpaid tax liabilities of some NZD 2.8 million and is in voluntary liquidation.2 Mr Tian observes he maintains cordial relations with Mr Xu in China, but who has sought to avoid contact with Mr Tian until after the auction date. Mr Tian’s counsel, Eddie Yang and Charlie Huang, perceive Mr Xu may be making arrangements to

1 The present application also is entituled as brought against Knox X Trustee Limited. I accept for present purposes the substantive proceeding may be enlarged to include the company as a party. Given freezing orders may be granted without any substantive claim having been filed (Commerce Commission v Viagogo AG [2019] NZCA 472, [2019] 3 NZLR 559 at [26(a)]), the company’s omission from the proceeding…

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 Tian v Xu

Details

AGLC: Tian v Xu [2023] NZHC 1261
Case: [2023] NZHC 1261
Decision Date: 26 May 2023

CaseChat Overview and Summary

The case of Tian v Xu was heard by Jagose J of the High Court of New Zealand, Auckland Registry. The plaintiff, Yang Tian, sought a freezing order against the defendant, Chen Xu, in relation to an outstanding loan from 2021, which had been partially satisfied through the sale of Xu’s property in China. Tian further sought enforcement of a Chinese court's decision that Xu was liable for an additional loan of RMB 650,000, plus interest. Tian applied for the freezing of Xu's assets in New Zealand, specifically his sole shareholding in Knox X Trustee Limited, which owned a property in Auckland, to prevent Xu from disposing of the asset before judgment could be entered in Tian’s favour.

The primary legal issue before the court was whether there was a sufficient basis to grant a freezing order under the High Court Rules, considering the potential for Xu to alienate his assets. The court had to determine if Tian had established a good arguable case based on the Chinese court's determinations, and whether there was a danger that Xu’s assets might be removed or dealt with in a manner that would frustrate the prospective judgment in Tian’s favour. Additionally, the court had to weigh the balance of convenience between Tian and Xu regarding the freezing order.

In ruling on the application, Jagose J found that Tian had presented a sufficiently plausible case, supported by the Chinese court's determinations, which were likely to be enforceable in New Zealand. The court also concluded that the danger of asset alienation was present, particularly given the impending sale of Xu’s Auckland property and his precarious financial situation. The balance of convenience clearly favoured Tian, as the potential loss to him of unsatisfied judgment outweighed any inconvenience to Xu from the freezing order. Consequently, the court granted the freezing order in terms of the draft orders annexed to Tian’s application, with specific conditions regarding the duration and notice requirements for varying or discharging the order.

Orders