Xiao v Sun - [2016] NZHC 1449

IN THE HIGH COURT OF NEW ZEALAND

AUCKLAND REGISTRY

CIV-2015-404-2872

[2016] NZHC 1449

UNDER the Credit Contracts and Consumer Finance Act 2003

BETWEEN

HANYUE XIAO

Plaintiff

AND

XIUFANG SUN

Defendant

Hearing: On the papers

Counsel:

A J B Holmes for Plaintiff

B O'Callahan, J A Frampton and Z Chen for Defendant

Judgment:

29 June 2016

COSTS JUDGMENT OF PAUL DAVISON J

This judgment was delivered by me on 29 June 2016 at 2pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors: Loo & Koo (Auckland) for Plaintiff
Kirkland Morrison O’Callahan & Ho (Auckland) for Defendant

XIAO v SUN COSTS JUDGMENT [2016] NZHC 1449 [29 June 2016]

[1] By judgment dated 16 March 2016 I held that the plaintiff was successful in her application for interim relief, and that the defendant was unsuccessful in her applications for summary judgment. I reserved the question of costs and directed the parties to file memoranda regarding costs which I now determine.

[2] The plaintiff submits that I should award costs in her favour, but the defendant says I should further reserve costs pending the outcome of the substantive trial.

Background

[3] For the purposes of determining this costs application, the relevant factual background is as follows. The plaintiff, Ms Xiao, and the defendant, Ms Sun, were gamblers at a casino. Ms Sun leant significant sums of money to Ms Sun for gambling purposes. The exact amount, as well as the nature and terms of the lending agreements, are in dispute.

[4] As part of the agreements entered into for the lending and borrowing of money, Ms Xiao agreed to secure the debt by providing Ms Sun with a mortgage over both her residence and an apartment in Auckland.

[5] In October 2015, Ms Sun’s solicitors served four notices pursuant to s 119 of the Property Law Act 2007 to exercise her powers under the mortgage over the two properties.

[6] In February 2016, Ms Xiao filed proceedings in this Court claiming that Ms Sun had breached her disclosure obligations under the Credit Contracts and Consumer Finance Act 2003 (CCCFA). One of the orders she seeks by way of relief is a declaration that the lending agreements are unenforceable until disclosure has been provided. She also seeks to reopen the credit contract between Ms Sun and herself on the basis that it is oppressive.

[7] Ms Xiao also filed an application for interim relief under r 7.53 of the High Court Rules (the Rules) seeking to restrain Ms Sun from taking any action or

exercising any power under the mortgages registered against her interest in the properties.

[8]Ms Sun, in turn, brought a counterclaim seeking judgment in the sum of

$700,000 against Ms Xiao, being the outstanding sum claimed as due under the lending agreements. She also made an application for summary judgment seeking to dismiss the whole of Ms Xiao’s claim; and judgment in the sum of $700,000 (being the outstanding sum due under the lending agreements).

[9] By my…

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 [2016] NZHC 1449
Case: [2016] NZHC 1449
Decision Date: 29 June 2016

CaseChat Overview and Summary

The High Court of New Zealand was tasked with determining a costs application in the case of Xiao v Sun. The plaintiff, Hanyue Xiao, sought scale 2B costs amounting to $10,927 for her application for interim relief and for opposing the defendant's summary judgment applications. She also sought an uplift of 25 per cent for opposing the summary judgment applications, claiming they were unnecessary and without merit. The defendant, Xiufang Sun, argued that costs should be reserved pending the outcome of the substantive trial and that the plaintiff's submission that the summary judgment applications were unnecessary and without merit was not sufficient grounds for an uplift in costs.

The court held that costs should follow the event on the two unsuccessful summary judgment applications, in line with the general approach that costs in respect of interlocutory applications are dealt with at the time the applications are determined. The court disagreed with the submission that the defendant should be considered the plaintiff in this case, as the plaintiff's application for interim relief and substantive claim were supported by her own causes of action. The court also declined to award increased costs, finding that the defendant's rejection of the plaintiff's letter requesting the withdrawal of the summary judgment applications without opposition was not a sufficient basis for an uplift in costs.

The court accepted the plaintiff's calculation of scale costs and ordered that the defendant pay the plaintiff costs of $10,927 and disbursements of $752.88. This judgment highlights the importance of considering the merits of particular applications and the merits of the substantive proceedings as separate matters, and the appropriate approach to costs in respect of interlocutory applications.

Orders