Wang v Wang
[2020] NZHC 2454
•21 September 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-001447
[2020] NZHC 2454
BETWEEN LI WANG
Plaintiff
AND
CHAO WANG
Defendant
Hearing: 31 August 2020 Appearances:
A Malone for the Plaintiff
No appearance by or for the Defendant
Judgment:
21 September 2020
JUDGMENT OF ASSOCIATE JUDGE GARDINER
This judgment was delivered by me on 21 September 2020 at 10.30 a.m. pursuant to Rule 11.5 of the High Court Rules.
Registrar/Deputy Registrar Date.......................................
Solicitors:
Snedden & Associates, Auckland Wilson McKay, Auckland
WANG v WANG [2020] NZHC 2454 [21 September 2020]
Introduction
[1] The plaintiff applies for summary judgment against the defendant pursuant to r 12.2 of the High Court Rules 2016. The plaintiff and defendant were formerly married. The plaintiff’s claim relates to a loan of $500,000 she made to the defendant in April 2014, two years prior to their marriage. The plaintiff seeks an order directing the defendant to repay her the $500,000 plus interest pursuant to a formal deed of acknowledgement allegedly signed by both parties.
[2] The defendant previously protested the New Zealand jurisdiction to hear and determine the plaintiff’s claim, and sought an order dismissing the proceeding. That application was heard by Associate Judge Smith on 19 February 2020 and was dismissed in a judgment delivered on 27 February 2020.1
[3] The defendant filed a notice of opposition to the plaintiff’s application but has not filed an affidavit in support, seeking instead to rely on an earlier affidavit filed in support of his application protesting the jurisdiction of the Court and for dismissal of the proceedings. Prior to the hearing of this application, the defendant’s solicitor and counsel, Mr Clark of Wilson McKay, sought and was granted leave to withdraw as the solicitor/counsel for the defendant. In an affidavit, Ms Caro of Wilson McKay advised that the defendant has been absent from New Zealand since January 2017, has no intention to return or to defend the summary judgment proceedings and has withdrawn instructions from that firm.
[4] The plaintiff has filed an affidavit in support of the application for summary judgment dated 3 July 2019. She also relies on an earlier affidavit sworn in relation to the jurisdiction proceedings dated 24 October 2019.
Factual background
[5] The parties were briefly married to one another from 26 March 2016 to November 2016.
1 Wang v Wang [2020] NZHC 309.
[6]The plaintiff says that two years prior to their marriage, she lent the defendant
$500,000 to assist him to open a nightclub in New Zealand. She says that at that time, she and the defendant expected that the loan would be repaid within two months. She says that the terms of the loan were recorded in a formal “Deed of Acknowledgement of Debt” (the Deed) signed by both the parties on 23 March 2014. The Deed included provisions concerning interest payable by the defendant on the amount of debt owing from time to time, and for repayment of the debt on demand by the plaintiff. The relevant clauses of the Deed are:
2. DEBT
2.1 Acknowledgement of Debt: In consideration of the transfer of the Contribution Amount (or Debt) to him, the Borrower acknowledges that they owe the Debt to the Lender …
3. DEBT REPAYMENT
3.1 Debt Repayment: The Borrow (sic) must repay the Lender for a minimum repayment of NZ$5,000.00 per month including interest.
3.2 Repayment Upon Demand: The Borrower must also repay the debt to the Lender immediately upon demand by the Lender …
4. INTEREST
4.1 Payment of Interest: Subject to clause 4.3, the Borrower must pay interest to the Lender at the Interest Rate on the amount of the Debt owing from time to time.
4.2 Calculation of Interest: Interest under this clause will be calculated annually in arrears on each anniversary of the date of this deed.
4.3 Interest Payable Only If Demanded: The Borrower must pay interest under clause 4.1 only if the Lender demand payment of interest. The Lender must make this demand in writing within three months of each anniversary of the date of this deed, for interest due for the year up to that anniversary …
[7] “Debt” or “Contribution Amount” is defined in clause 1.1(c) of the Deed Agreement as meaning “…the total amount of NZ$500,000, representing the borrower’s contribution required to set up the Business. The Contribution Amount was advanced to the Borrower’s nominated accounts in several payments”. “Interest rate” is defined as meaning 25% per annum.
[8] The plaintiff says that she advanced $500,000 to the defendant by transfer of funds from her ASB Bank account to the defendant’s bank account between 12 and 19 April 2014, by eight instalments of $60,000 and one instalment of $20,000. The defendant does not dispute that these advances were made.
[9] Over 11 and 12 April 2014, the plaintiff and defendant emailed one another regarding the transfer of funds:
After transferring to me, I will then transfer it to the company account, otherwise IRD would ask me about the inflow / income issues if it is from other people’s name. Because the company has not yet started its operation, apart from myself, all other income / inflow would be counted as company income, which needs to pay tax.
From next month (May), I will transfer the money back to your account within two months by splitting into a few instalments, the monthly interest is NZD5000. I will let you know in advance if there is any taxation issues involved. Because I will transfer from the company to myself, and then transfer to you. I will try to avoid PAYE and taxes.
If you have any urgency on your side, please let me know in advance, I will immediately sort out the idea and transfer back to you agreement for sale and purchase.
Really thank you for your help this time, in such a tight timeframe.
[10] On 17 January 2017, following the parties’ separation in November 2016, the plaintiff demanded repayment of the loan, plus interest, from the defendant.
[11] In July 2019, after the parties’ marriage was dissolved, the plaintiff filed her proceedings for breach of contract and application for an order for summary judgment against the defendant. As at the hearing date, no repayments have been made by the defendant.
Summary judgment principles
[12] The principles governing applications for summary judgment are well-known and were summarised by the Court of Appeal in Krukziener v Hanover Finance Ltd:2
[26] The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that
2 Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307.
there is no real question to be tried: Pemberton v Chappell [1987] 1 NZLR 1 at 3 (CA). The Court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated: MacLean v Stewart (1997) 11 PRNZ 66 (CA). The Court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as for example where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable: Eng Mee Yong v Letchumanan [1980] AC 331 at 341 (PC). In the end the Court’s assessment of the evidence is a matter of judgment. The Court may take a robust and realistic approach where the facts warrant it: Bilbie Dymock Corp Ltd v Patel (1987) 1 PRNZ 84 (CA).
[13] In assessing a defence, the Court will look for appropriate particulars and a reasonable level of detailed substantiation — the defendant is under an obligation to lay a proper foundation for the defence in the affidavits filed in support of the notice of opposition.3
Discussion
[14] The defendant does not dispute that the funds were advanced to him, and that the advance was a loan which he agreed to repay. However, he denies ever seeing or signing the Deed. He alleges that the signature on the Deed produced by the plaintiff is a fraud. He says that the loan was recorded in an informal one-page letter/agreement, which did not have a defined repayment term or any interest component. The defendant says that he has not retained a copy of this one-page letter/agreement. The plaintiff denies that it exists.
[15] Further, the defendant says that the debt must be off-set against $60,000, which he says was paid to the plaintiff between May 2014 and January 2015, and further sums advanced to the plaintiff and her family during their relationship. This ground was advanced in his notice of opposition, but the defendant has not adduced any evidence to substantiate it. In his affidavit filed in support of the protest to jurisdiction application, he appended a letter from his solicitor maintaining that he had advanced significant sums of money to the plaintiff and her family by way of travel, lifestyle expenses, property renovation, and expensive jewellery and clothing. As a result, the
3 Middleditch v NZ Hotel Investments Ltd (1992) 5 PRNZ 392 (CA) as cited in Gardner v Gardner
[2015] NZHC 2018 at [20].
terms of the loan advance were altered to reflect an offsetting of these amounts and the amount due (if any) to the plaintiff is significantly less than the $500,000 claimed. The defendant has not produced any evidence quantifying or substantiating these claims. These claims are denied by the plaintiff, who says that any funds advanced by the defendant on behalf of her family members were repaid, and that they discussed and agreed that their personal relationship would not impact his obligation to repay the loan (which was funded from her family in China).
[16]I also note Associate Judge Smith’s observation:4
… Ms Wang and Mr Wang appear to have only lived together for a few short months – on the evidence so far produced, it seems improbable that anything Mr Wang spent on maintaining Ms Wang’s lifestyle would have been sufficient to extinguish the $500,000 loan (assuming, without deciding, that he is entitled to set off any such expenditure against the loan).
Decision
[17] The defendant does not dispute that the plaintiff loaned him $500,000. The two points of dispute between the parties are:
(a)Whether the Deed is authentic and was signed by the defendant. This matters because it determines the interest payable by the defendant.
(b)Whether alleged advances from the defendant to the plaintiff and expenses paid by him for her and her family should be off-set against the debt.
[18] On the first issue, in summary judgment applications, the onus is on the plaintiff; however, where the plaintiff has adduced sufficient evidence to show there is no defence, the defendant will have to respond for the application to be defeated. The plaintiff has adduced the Deed signed by herself and allegedly the defendant, which he denies. The signature on the Deed that is said to be the defendant’s matches the defendant’s signature in his affidavit. That, of course, is not conclusive; the defendant alleges the signature on the Deed is a fraud. However, he has not adduced
4 Wang v Wang, above n 1, at [92].
any evidence in support of this very serious allegation. Nor has he adduced the one- page agreement that he says actually recorded the loan. The Court, in a summary judgment application, will not normally resolve material conflicts of evidence, but it need not accept evidence uncritically; a robust and realistic approach is required. For the above reasons, I find that the Deed is authentic and was signed by the defendant.
[19] For completeness, I note the plaintiff’s submission that, regardless of whether the Deed is authentic or not, $500,000 was advanced to the defendant and has not been repaid; the defendant does not dispute this. Therefore, the plaintiff says, summary judgment should be entered in any event. Had I not reached the conclusion that the Deed is authentic, I would have found that the plaintiff and defendant entered into a verbal agreement whereby the plaintiff agreed to loan the defendant, and the defendant agreed to repay, $500,000. The question of repayment terms and interest would have needed to be determined, but I note that the best available contemporaneous evidence (besides the Deed) is an email from the defendant in which he expresses an intent to repay the loan within two months.
[20] On the second issue, again, the defendant has fallen some way short of establishing an evidential foundation. He has not particularised or corroborated the alleged advances made or the expenses paid. In fact, he has not even directly attested that he repaid the plaintiff $60,000 or paid for her and her family’s expenses. He has simply appended a letter from his solicitors in which they make these assertions. The defendant has not adduced sufficient evidence to persuade me that he has a credible defence based in the claimed set-off.
Result
[21]I order by way of summary judgment in favour of the plaintiff as follows:
(a)Judgment in the sum of $607,545, being the $500,000 principal debt plus $107,545 in interest under the Deed of Acknowledgement of Debt dated 23 March 2014, as demanded by the plaintiff on 17 January 2017.
(b)Costs on a Category 2, Band B basis.
[22] I will accept memoranda for the plaintiff on costs within 14 days, and from the defendant within seven days after that.
Associate Judge Gardiner
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