Tsao v Chen - [2023] NZHC 679

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-000561

[2023] NZHC 679

BETWEEN
WENG-YUAN TSAO

First Plaintiff

SHAN-HUA CHEN
Second Plaintiff

AND

YEN WEI CHEN
First Defendant

KUEI HUAN CHEN

Second Defendant

Hearing: 27 March 2023

Appearances:

Plaintiffs and Defendants are self-represented

Judgment:

30 March 2023

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 30 March 2023 at 2 pm, pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

WENG-YUAN TSAO v YEN WEI CHEN [2023] NZHC 679 [30 March 2023]

Background

[1] The plaintiffs and the defendants were once in business together, including the operation of a company, Alligators Fast Food Ltd (AFF). The relationship between the parties ended badly. The plaintiffs invested money in the business and lost it. They believe that they have legal remedies against the defendants. The parties have been involved in litigation in various jurisdictions since 2010.

[2] Prior litigation included a claim by the plaintiffs against the defendants in the District Court. The litigation history and outcome of that proceeding was summarised by the Court of Appeal as follows:1
[2] There is a substantial history of litigation between the applicants and the respondents consequent upon an unsuccessful business venture. The applicants were successful in a proceeding against the respondents in the District Court but the respondents’ appeal was allowed and a direction made for a rehearing in the District Court. That proceeding was eventually struck out on 25 July 2016 on account of the applicants’ non-compliance with directions. An appeal against the strike-out order was dismissed on 21 February 2017.

(footnotes omitted)

[3] A subsequent High Court proceeding, CIV-2017-404-1276, ultimately concluded when the Court of Appeal refused to grant leave to the plaintiffs to appeal out of time against a costs decision of Associate Judge Bell in his judgment dated 29 March 2018, following his decision on an application by the defendants to strike out the plaintiffs’ claim. The Court of Appeal described the High Court litigation as follows:2
[3] The applicants then commenced a fresh proceeding in the High Court on 14 June 2017. The respondents applied to strike-out that proceeding. Their application was dismissed in a judgment of Associate Judge Bell delivered on 29 March 2018. The judgment concluded in this way:

This decision has gone in favour of Mrs Chen and Mr Tsao. If they had legal representation, I would order costs in their favour. If the defendants may later seek costs against them, Mrs Chen and Mr Tsao may be able to raise their victory on this occasion as counting in reduction of any order for costs they might otherwise be ordered to pay.

1 Chen v Chen [2019] NZCA 136.
2 Chen v Chen, above n 1.

[4] The proceeding was called again before Muir J on 1 November 2018. His Honour’s minute of 1 November 2018 records that, after an adjournment during which the parties conferred, a comprehensive…

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 Tsao v Chen

Details

AGLC: Tsao v Chen [2023] NZHC 679
Case: [2023] NZHC 679
Decision Date: 30 March 2023

CaseChat Overview and Summary

The case of Tsao v Chen involves a dispute between former business partners who have been engaged in prolonged litigation since 2010. The plaintiffs, Weng-Yuan Tsao and Shan-Hua Chen, allege that they suffered losses due to the defendants' actions in their shared business venture, Alligators Fast Food Ltd (AFF). The defendants, Yen Wei Chen and Kuei Huan Chen, dispute these claims and have challenged the jurisdiction of the court in the latest proceeding. The court's task was to determine whether the settlement agreement from a previous litigation, which included a promise by the plaintiffs to cease all litigation related to the business and AFF, precludes the current claims.

The legal issues before the court were primarily whether the defendants' objection to jurisdiction based on the settlement agreement was valid and, if not, whether the plaintiffs could proceed with their claims after amending their statement of claim. The court considered the terms of the settlement agreement and determined that it was intended to bar any future litigation between the parties regarding the business and AFF. However, the court held that the defendants' objection to jurisdiction was misdirected, as the enforceability of the settlement agreement is not a matter of jurisdiction but rather a defence that should be raised in a statement of defence. The court also noted that while the settlement agreement bars claims related to the business and AFF, the plaintiffs could still pursue a claim to overturn the settlement agreement itself, provided they could establish a valid cause of action.

The court set aside the defendants' protest to jurisdiction and directed the plaintiffs to file an amended statement of claim by a specified date. The defendants were then required to file a statement of defence and any relevant applications, such as for summary judgment, by a subsequent date. The court also scheduled a case management conference to oversee the proceeding. No order was made regarding costs. This outcome allows the plaintiffs an opportunity to clarify their claims while cautioning them about the challenges they face in proving their case, particularly regarding the statute of limitations on past claims.

Orders