Xu v Liu - [2020] NZHC 921

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2015-404-2384

[2020] NZHC 921

BETWEEN
JIANGANG XU

First Plaintiff

YOUZHI ZHU
Second Plaintiff

AND

JIN LIU

First Defendant

PING WANG

Second Defendant

Hearing (via AVL): 4 May 2020

Appearances:

C Huang for the Plaintiffs

G P Blanchard QC for the Defendants

Judgment:

6 May 2020

JUDGMENT OF GAULT J

This judgment was delivered by me on 6 May 2020 at 2:00 pm pursuant to r 11.5 of the High Court Rules 2016.
Registrar/Deputy Registrar

……………………………………

Solicitors / Counsel:
Mr C Huang, Queen City Law, Auckland Mr G P Blanchard QC, Barrister, Auckland Mr C Jiang, Glaister Ennor, Auckland

XU v LIU [2020] NZHC 921 [6 May 2020]

[1] Following the plaintiffs’ failure to pay security for costs of $60,000 by 24 December 2019, as required by a consent order dated 10 September 2019, the defendants filed an application dated 12 February 2020 to dismiss the proceeding and discharge a freezing order in place.

[2] On 17 February 2020 Downs J made a (varied) unless order that the plaintiffs must pay security for costs in full by 5.00 pm 27 February 2020. It provided that if they did not, the claim would be stayed. The freezing order would also be discharged.

[3] The plaintiffs did not pay the security, but their solicitor filed a memorandum on 27 February 2020 indicating that after some difficulty the plaintiffs had transferred the money from China and expected it to clear within a week. On 28 February 2020 van Bohemen J recalled the 17 February order insofar as it related to the discharge of the freezing order and substituted it with an order that unless the plaintiffs paid security for costs in full by 5.00 pm 5 March 2020, the freezing order would be discharged. The plaintiffs did not pay by that date, and the freezing order was therefore discharged.

[4] On 28 April 2020 Lang J issued a minute recording that security for costs had not yet been paid and the proceeding remains stayed. He listed the defendants’ application to dismiss the proceeding for mention in the Duty Judge list on Monday 4 May 2020, warning that if the security remains unpaid, he anticipated the presiding judge would grant the application and dismiss the proceeding.

[5] At the mention on Monday, Mr Blanchard QC, for the defendants, sought an order dismissing the proceeding. Security for costs remained unpaid.

[6] Mr Huang, for the plaintiffs, requested that the Court allow the proceeding to continue to be stayed for six months to allow time for the plaintiffs to source funds to comply with the security for costs order. He referred to his memorandum of 9 April 2020 to similar effect, which I had not seen. I observed that requesting a further extension in this way appeared not to appreciate that the proceeding is already stayed as a result of the breach of an unless order, and in those…

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 Xu v Liu

Details

AGLC: Xu v Liu [2020] NZHC 921
Case: [2020] NZHC 921
Decision Date: 6 May 2020

CaseChat Overview and Summary

In Xu v Liu, the plaintiffs, Jiangang Xu and Youzhi Zhu, sued the defendants, Jin Liu and Ping Wang. The plaintiffs' failure to pay security for costs of $60,000 led to an application by the defendants to dismiss the proceeding and discharge a freezing order. The Court was required to determine whether the plaintiffs' non-compliance with the security for costs order warranted dismissal of the proceeding.

The Court considered whether the interests of justice required dismissal, taking into account the duration and impact of the default, the absence of an adequate explanation or excuse, and the substantial prejudice to the defendants. The plaintiffs had been in default since December 2019, and the proceeding had been stayed since February 2020. The defendants argued that they were unable to defend the case due to the plaintiffs' non-compliance, resulting in significant uncertainty, financial pressures, and stress. The Court noted that the plaintiffs' financial difficulties might have been exacerbated by the COVID-19 situation, but this did not justify their continued non-compliance.

The Court concluded that there was little point in issuing another unless order before dismissal. However, considering the plaintiffs' potential lack of understanding of the seriousness of the situation and the possibility of their difficulties being exacerbated by the COVID-19 situation, the Court decided to give the plaintiffs one final opportunity to pay the security and seek to lift the stay before the proceeding was dismissed. The Court ordered that unless the plaintiffs paid the security for costs and applied to discharge the stay by 5:00 pm on Friday, 29 May 2020, the proceeding would be dismissed.

The Court also ordered that the defendants were entitled to costs. If the parties could not agree on the costs, the defendants had to file and serve a memorandum within 15 working days, and the plaintiffs had to file and serve a memorandum within 10 working days thereafter. The Court would then determine the costs on the papers.

Orders