Xiao v Sun - [2018] NZHC 1334

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-2872

[2018] NZHC 1334

UNDER the Credit Contracts and Consumer Finance Act 2003

UNDER

Part 2, subpart 5 of the Contract and Commercial Law Act 2017

BETWEEN

HANYUE XIAO

Plaintiff

AND

XIUFANG SUN

Defendant

Hearing: On the papers

Judgment:

7 June 2018

JUDGMENT OF GORDON J

[As to costs]

This judgment was delivered by me on 7 June 2018 at 3.30 pm, pursuant to
r 11.5 of the High Court Rules

Registrar/Deputy Registrar Date:

Solicitors: Loo & Koo, Newmarket Auckland Counsel: AJB Holmes, Auckland

XIAO v SUN [2018] NZHC 1334 [7 June 2018]

Introduction

[1]This is an application for costs by the plaintiff, Ms Xiao.

[2] The substantive proceeding was an application by Ms Xiao for relief on the basis that loan agreements between her and the defendant, Ms Sun, were illegal contracts under the Contract and Commercial Law Act 2017 (CCLA) and consumer credit contracts under the Credit Contracts and Consumer Finance Act 2003 (CCCFA) which were both oppressive and entered into by oppressive means.

[3] Ms Xiao and Ms Sun met at the SkyCity Casino where they both gambled. Ms Sun loaned money to Ms Xiao over an 11-month period by way of a series of oral and written loan agreements. A key issue in the proceeding was whether Ms Sun charged Ms Xiao interest.

[4] In my judgment dated 26 March 2018,1 I found that Ms Sun charged interest on the money loaned to Ms Xiao and of the $800,000 recorded in the loan agreements, an approximate amount of $133,000 was loaned, with the balance of the $800,000 being capitalised interest.

[5] I also held in favour of Ms Xiao that the loan agreements were illegal contracts for the purposes of the CCLA, as they were contrary to the Gambling Act 2003. Ms Xiao had repaid $100,000 of the approximately $133,000 borrowed. That latter figure was based on SkyCity gambling records. In granting relief, I exercised my discretion under s 76 of the CCLA and did not order Ms Xiao to repay any outstanding money borrowed from Ms Sun.

[6] As part of the relief, I also made an order restraining Ms Sun from exercising any powers of enforcement under the loan agreements, including as against an apartment and a house owned by Ms Xiao and her husband.

1 Xiao v Sun [2018] NZHC 536.

[7] Given that the contracts were illegal contracts, I did not go on and make determinations under the CCCFA.2 However, I made factual findings relevant to those claims, which were favourable to Ms Xiao.

[8] It followed from my decision in favour of Ms Xiao that I refused Ms Sun’s counterclaim for $700,000, being the balance of the $800,000 Ms Sun says was loaned (with $100,000 having been repaid by Ms Xiao).

[9]Ms Xiao now seeks costs.

[10] In a memorandum filed on her behalf, Mr Holmes states that Ms Xiao’s solicitors wrote…

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 Xiao v Sun

Details

AGLC: Xiao v Sun [2018] NZHC 1334
Case: [2018] NZHC 1334
Decision Date: 7 June 2018

CaseChat Overview and Summary

The plaintiff, Ms Xiao, sought an award of costs following her successful application to have loan agreements between her and the defendant, Ms Sun, declared illegal and oppressive. Ms Xiao and Ms Sun met at SkyCity Casino, where they both gambled. Ms Sun loaned money to Ms Xiao over an 11-month period by way of a series of oral and written loan agreements. The substantive proceeding was an application by Ms Xiao for relief on the basis that the loan agreements were illegal contracts under the Contract and Commercial Law Act 2017 and consumer credit contracts under the Credit Contracts and Consumer Finance Act 2003 which were both oppressive and entered into by oppressive means. Gordon J held in favour of Ms Xiao that the loan agreements were illegal contracts for the purposes of the Contract and Commercial Law Act, as they were contrary to the Gambling Act 2003. Given that the contracts were illegal contracts, Gordon J did not go on and make determinations under the Credit Contracts and Consumer Finance Act. Ms Xiao now seeks an award of costs. Ms Xiao seeks scale costs totalling $123,653.50 calculated on a category 2B basis. An uplift of 50 per cent of scale is sought in respect of all steps, bringing the total award to $185,480.25. Disbursements of $201,834.28 are also sought. Gordon J found that Ms Xiao was entitled to costs of $171,319.75 and disbursements of $175,514.82, totalling $346,834.57. Gordon J made an order accordingly.

Orders