Wang v Future Urban Limited - [2024] NZHC 1615

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV CIV-2023-404-2772

[2024] NZHC 1615

BETWEEN
YUE WANG

Plaintiff

AND

FUTURE URBAN LIMITED

Defendant

Hearing: 10 June 2024

Counsel:

D Hickson for the Plaintiff B Han for the Defendant

Judgment:

19 June 2024

JUDGMENT OF ASSOCIATE JUDGE BRITTAIN

This judgment was delivered by me on 19 June 2024 at 12 midday Pursuant to r 11.5 of the High Court Rules.

…………………..
Registrar/Deputy Registrar

Solicitors/Counsel:
Essence Law Ltd, Auckland PCW Law Ltd, Auckland

WANG v FUTURE URBAN LTD [2024] NZHC 1615 [19 June 2024]

Introduction

[1] On 20 September 2023, the plaintiff, Yue Wang (Mr Wang), obtained judgment by formal proof against the defendant, Future Urban Limited (FUL), for $29,686.30 plus interest and costs (the judgment).1

[2] On 18 October 2023, Mr Wang served a statutory demand on FUL for the amount due under the judgment of $63,762.01, including interest and costs. FUL did not satisfy the statutory demand. Mr Wang then commenced this proceeding seeking the liquidation of FUL.

[3] This proceeding was served on FUL on 19 December 2023. The last day for FUL to file a statement of defence as of right was on 9 January 2024.2 FUL did not file a statement of defence within time and now applies for orders extending time under r 31.20 of the High Court Rules 2016 (HCR) and staying the liquidation proceeding. Mr Wang opposes the application.

[4] FUL’s director, Lai Wai (Mr Wai), says that he did not receive a copy of the statement of claim and supporting documents filed in this proceeding until 15 February 2024.

[5] On 15 February 2024, FUL applied to set the judgment aside, on the grounds that FUL has a defence to the quantum of the judgment and FUL has a reasonable explanation for its failure to take steps in the proceeding that resulted in the judgment.

[6] FUL’s application for an order extending time to file a defence in this proceeding raises two issues:

(a)Is there an arguable basis for FUL to set aside the judgment?

(b)Does FUL have a reasonable explanation for its delay in filing a defence in this proceeding?

1 Wang v Future Urban Ltd [2023] NZHC 2609.
2 High Court Rules 2016, r 31.17. The rule provides: A statement of defence must be filed within 10 working days after the date on which the statement of claim is served on the person filing the statement of defence.

Legal principles

[7] The principles to be applied on an application for an extension of time to file a defence in a liquidation proceeding are well settled. The Court is exercising a discretion, and the Court should consider the following factors:3

(a)Is there an arguable basis that the defendant is not liable?

(b)Is the defendant solvent?

(c)Has the defendant advanced a reasonable explanation for the failure to file a statement of defence?

[8] If factors (a) and (b) justify a grant of leave,…

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 Wang v Future Urban Limited

Details

AGLC: Wang v Future Urban Limited [2024] NZHC 1615
Case: [2024] NZHC 1615
Decision Date: 19 June 2024

CaseChat Overview and Summary

Yue Wang, the plaintiff, obtained a judgment against Future Urban Limited (FUL), the defendant, for $63,762.01, which included interest and costs. Mr Wang subsequently served a statutory demand on FUL, which FUL did not satisfy. He then commenced a proceeding seeking the liquidation of FUL. FUL, represented by its director Lai Wai, did not file a statement of defence within the prescribed time and now applies for an extension of time under r 31.20 of the High Court Rules 2016 and to stay the liquidation proceeding. Mr Wang opposes the application. The court needed to decide whether FUL had an arguable basis to set aside the judgment and whether FUL had a reasonable explanation for its delay in filing a defence.

The court found that FUL did not have an arguable basis to set aside the judgment. The court held that there was insufficient evidence to establish that FUL had a substantial defence to the quantum of the judgment. FUL could only meet the threshold for setting aside the judgment on the basis of the amount of damages awarded, but it could not establish that it had a substantial defence to its liability. Therefore, the court concluded that FUL did not have an arguable basis to set aside the judgment.

Regarding the explanation for the delay in filing a defence, the court held that FUL had not provided a reasonable explanation for its delay. The court found that FUL had been aware of the proceeding and had elected to take no steps to defend it, even after FUL was aware that Mr Wai's defence to the claims against him personally were struck out. The court accepted that Mr Wai was in China when the statutory demand was served, but it noted that FUL was aware that a statutory demand had been served and that a liquidation proceeding would follow if the demand was not satisfied. The court found that there was no satisfactory explanation as to why FUL did not take steps to ensure that FUL filed a defence on time.

The court concluded that this was not an appropriate case for an extension of time for FUL to file a defence. There was no reasonable prospect of FUL setting aside the judgment in full, and FUL had not satisfactorily explained its delay in filing a defence in this proceeding. The court also found that there was no basis to stay the liquidation proceeding.

The court declined the defendant's application for an order extending time to file a statement of defence. The proceeding was adjourned to allow FUL a final opportunity to settle the debt. The defendant was ordered to pay the plaintiff's costs on this application on a 2B basis plus disbursements as fixed by the Registrar.

Orders