Wu v Liu

[2025] NZHC 1508

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-447

[2025] NZHC 1508

BETWEEN

HUA WU (also known as DANNY WU) Plaintiff

AND

JINXING LIU

First Defendant

YUHUA LIU
Second Defendant

YONG LIU (also known as JACKIE LIU) Third Defendant

TIMBER KING LIMITED

Fourth Defendant

WENGUI LIU (also known as RINGO LIU) Fifth Defendant

NANNAN GENG

Sixth Defendant

Hearing:

On the papers

Counsel:

A Simkiss and A Lloyd for Plaintiff

A Grant and D Archibald for First and Third Defendants A Choi for Second Defendant

No appearance for fourth to sixth defendants

Judgment:

10 June 2025

JUDGMENT OF LANG J

[costs]

This judgment was delivered by Justice Lang

On 10 June 2025 at 3.00 pm Pursuant to r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:…………………………

WU v LIU [2025] NZHC 1508 [10 June 2025]

[1]    On 7 October 2024, I dismissed a claim by Mr Wu against the first to third defendants.1 In a judgment delivered on 13 December 2024 (the costs judgment), I awarded costs to the first and third defendants, Mr Jinxing Liu (Jinxing) and Mr Yong (Jackie) Liu.2 These were to be calculated on a category 2B basis but decreased by 60 per cent to reflect factors identified in that judgment.3 In total, the judgment required Mr Wu to pay costs in the sum of $44,024.09 to Jinxing and Jackie.

[2]    Mr Wu has appealed to the Court of Appeal against my judgment. The appeal relates only to the fact that judgment was not entered against Jinxing. It does not relate to the dismissal of the claim against Jackie. The appeal is scheduled to be heard on 27 August 2025.

[3]    On 6 March 2025, Jinxing and Jackie served a bankruptcy notice on Mr Wu requiring him to pay them the sum of $44,024.09. He failed to comply with that notice and thereby committed an act of bankruptcy. Jinxing and Jackie therefore now have the ability to apply for an order adjudicating Mr Wu bankrupt.

[4]    To guard against this possibility Mr Wu now seeks an order under r 12(3) of the Court of Appeal (Civil) Rules 2005 staying execution of the judgment for costs. Jinxing and Jackie oppose any such order being made.

[5]    Mr Wu has also paid the sum of $44,024.09 into his solicitors’ trust account to provide Jinxing and Jackie with security for the costs awarded in this Court in the event that his appeal is unsuccessful.

The law

[6]    An application for stay of execution requires the Court to balance the rights of the party who obtained the judgment appealed from against the need to preserve the appellant’s position should the appeal succeed.4 The object is to ensure that, when the appeal is heard, the Court of Appeal is able to do justice between the parties.5

1      Wu v Liu [2024] NZHC 2903.

2      Wu v Liu [2024] NZHC 3822.

3 At [30].

4      Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87.

5      New Zealand Insulators Ltd v ABB Ltd (2006) 18 PRNZ 459 (CA) at [13], citing Minnesota Mining and Manufacturing Co v Johnson & Johnson [1976] RPC 671 (EWCA) at 676.

[7]    Factors commonly taken into account in the balancing exercise will include the prospect that the appeal may be rendered nugatory by the lack of a stay, the bona fides of the applicant as to the prospect of the appeal and whether the party seeking to enforce the judgment will be injuriously affected by the stay.6 Other issues that may be relevant include the prospect that the appeal will raise novel questions or questions of importance and/or whether there is a public interest in the appeal being heard. To the extent that it can, the Court may also take into account the apparent strength of the appeal.

The arguments

Mr Wu

[8]    Mr Wu contends that Jinxing and Jackie will not be prejudiced if a stay is granted because they will have security for the whole of their outstanding costs. Further, the appeal is to be heard in less than three months’ time. This means they will not be required to wait to receive their costs for more than six to 12 further months.

[9]    Mr Wu is also concerned if that, if he pays the outstanding costs and the appeal succeeds, he will face difficulties in being able to recover any money from Jinxing. Jinxing resides in China so it will be difficult to recover the costs from him if the appeal succeeds. Jinxing owns an unencumbered investment property in New Zealand. However, Mr Wu is concerned that there is nothing to stop him from putting any equity in that asset out of reach by selling the property and moving the proceeds of sale out of New Zealand.

[10]   Mr Wu points out that Jackie has made a bald assertion that he is in a sound financial position. However, the only assets that he mentions are held on trust. He  has not provided any assurance that he will be able to repay the costs if the appeal is successful.

[11]   Mr Wu contends that his appeal raises the novel issue of whether a contract induced by blackmail is an illegal contract and therefore void and of no effect under

6      Keung v GBR Investment Ltd [2010] NZCA 396 at [11].

s 73 of the Contract and Commercial Law Act 2017. He says it is a matter of public interest that he be permitted to advance the appeal to a hearing.

Jinxing and Jackie

[12]   Jinxing and Jackie contend that they should be entitled to the fruits of their judgment now.7 They point out that Mr Wu has demonstrated that he has the necessary means to prosecute his appeal because he has engaged the services of a major law firm and has instructed senior counsel. He has also been able to provide security for costs in the Court of Appeal. He has taken these steps without needing to resort to the funds he has paid into his solicitors’ trust account. There is therefore no evidence that he will be unable to prosecute his appeal if he is required to pay costs to Jinxing and Jackie.

[13]   In addition, Jinxing and Jackie have provided evidence suggesting that over the last two years Mr Wu sold three properties for a total sum of approximately $5 million. He also sold a fourth property in March 2023 that had a CV of $3.3 million. They also point out that Mr Wu obviously has the financial resources to meet the outstanding costs given that he has already paid them into his solicitor’s trust account.

[14]   Further, Jinxing disputes the suggestion by Mr Wu that he may attempt to sell or otherwise diminish the worth of the investment property that he owns in New Zealand. He points out that he has owned this property for approximately nine years and has never attempted to dispose of it to date. This is despite the fact that Mr Wu has attempted unsuccessfully on two separate occasions to obtain freezing orders against it.

Decision

[15]   I am satisfied that this is not a case in which a stay of execution should be ordered, and largely for the reasons advanced by Jinxing and Jackie. In particular, I do not accept that Mr Wu’s appeal rights will be rendered nugatory if he is required to

7      Sullivan v Wellsford Properties Ltd [2018] NZHC 708 at [11].

pay the outstanding costs. He has already demonstrated that he has the necessary means to pursue the appeal regardless of whether he is required to pay those costs.

[16]   Further, the only threat that Mr Wu faces at this stage is that of bankruptcy proceedings. At this stage it is not clear whether Jinxing and Jackie intend to pursue these to the stage of an order of adjudication. However, by paying the funds into his solicitor’s trust account Mr Wu has demonstrated that he is not insolvent. It is therefore open to him to defend any bankruptcy proceedings on that basis. He can also argue that it would not be just and equitable for him to be adjudicated bankrupt in circumstances where he has an outstanding appeal. However, the difficulty Mr Wu faces in relation to the latter argument is that he has not filed an appeal against the dismissal of the claim against Jackie.

[17]   There can be no dispute that Jackie is now entitled to the fruits of the costs judgment. The issue of whether he could repay the costs if the appeal is successful does not arise because the appeal does not relate to the claim against Jackie.

[18]   Taking these factors into account I am not satisfied Mr Wu has established to grounds necessary to justify a stay of execution.

Result

[19]The application for stay of execution of the costs judgment is dismissed.

Lang J

Solicitors/counsel:

PCW Law/A Grant, Auckland

Winston Wang & Associates/A Choi, Auckland MinterEllisonRuddWatts, Auckland