Xie v Wang - [2016] NZHC 2756

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2016-404-001214 [2016] NZHC 2756

BETWEEN
JIQING XIE

Plaintiff

AND

WANG HUI (HELEN WANG) Defendant

Hearing: 17 November 2016

Counsel:

K M Austin for Plaintiff
No appearance for Defendant

Judgment:

17 November 2016

ORAL JUDGMENT OF DOWNS J

Solicitors/Counsel:
Prestige Lawyers Ltd, Auckland.

JIQING XIE v WANG HUI (HELEN WANG) [2016] NZHC 2756 [17 November 2016]

The issue

[1] Mr Xie lent money to Mr Wang. Mr Wang did not repay Mr Xie – and has since gone bankrupt. Mr Xie seeks to enforce against Mrs Wang an alleged guarantee in relation to her husband’s debt. The application is by way of formal proof because Mrs Wang has not filed a statement of defence or for that matter, taken any other step in connection with this proceeding.

The facts

[2] The facts are simple.

[3] In 2002 and 2003 Mr Xie lent Mr Wang a total of $150,000: $20,000 in early

2002; $100,000 in January 2003; and $50,000 in April 2003. Mr Wang signed three related acknowledgements of debt. Interest was payable and paid – until October
2009, when Mr Wang stopped paying any. Mr Xie says Mr Wang told him his car business had foundered. But Mr Xie also says he learnt Mr Wang was spending money “recklessly”. In this context the true position matters not. In June 2010
Mr Xie agreed to waive outstanding interest provided Mr Wang repaid the $150,000. Mr Wang agreed. So, on 20 June 2010 the parties entered into the agreement set out below, which Mrs Wang signed as “guarantor”:

Repayment Agreement

Party A: Wang Yang …
Party B: Xie Jiqing …

The two parties, upon amicable consultation, conclude and enter into this Agreement regarding Party A’s owing Party B NZD ONE HUNDRED AND FIFTY THOUSAND ONLY (NZD 150,000).

Party A agrees to repay Party B NZD FOUR THOUSAND ONLY (NZD
4,000) every month before the fifth day of that month in cash from October
1, 2010; to repay Party B NZD SIX THOUSAND FIVE HUNDRED AND SEVENTY TWO ONLY (NZD 6,572) every month before the fifth day of that month in cash from January 1, 2011. Party A will repay the entire amount if owes Party B before October 21, 2012. Considering Party A’s poor operation state, Party B voluntarily gives up the interest incurred from the balance payable by Party B during the repayment period. In case that Party A fails to repay the debt in accordance with the date agreed upon in this Agreement, Party A shall pay Party B monthly liquidated damages at two percent of total amount of debt. In case that the payment is overdue for more than three consecutive months, Party A agrees that Party B will settle

the repayment matter by judicial procedure. The guarantor shall undertake joint and several liabilities therefor.

This Agreement shall come into force upon the acceptance and signature of both parties. This Agreement is made in duplicate, each bearing the same legal effect.

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 Xie v Wang

Details

AGLC: Xie v Wang [2016] NZHC 2756
Case: [2016] NZHC 2756
Decision Date: 17 November 2016

CaseChat Overview and Summary

In the case of Xie v Wang, the plaintiff, Jiqing Xie, sought to enforce a guarantee against the defendant, Wang Hui (Helen Wang), in relation to a debt owed by her husband, Wang Yang. The court was tasked with determining whether the guarantee was valid and enforceable, given that Wang Yang had gone bankrupt and was unable to repay the debt. The primary legal issue was whether the guarantee had been correctly executed and whether it gave rise to the obligation claimed.

The court found that the guarantee was valid and enforceable. Although the agreement was not drafted by a lawyer and could have been more clearly expressed, it was evident that the intention was for Wang Hui to assume joint and several liability for her husband's indebtedness. The use of the term "guarantor" and the context of the agreement supported this conclusion. Additionally, the court accepted that Wang Hui had signed the agreement as guarantor, as there was no contrary evidence. Therefore, the court held that Wang Hui was liable for the repayment of the principal amount of $150,000 and outstanding interest of $220,500.

The court awarded costs to the plaintiff on a 2A basis, meaning that the costs would follow the event. This decision was made because there was no reason to deviate from the usual practice of awarding costs to the successful party.

Orders