Xu v Liu

Case [2017] NZHC 1689 20 July 2017

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2015-404-002384 [2017] NZHC 1689

BETWEEN
JIANGANG XU

First Plaintiff

YOUZHI ZHU Second Plaintiff

AND

JIN LIU (AKA DANIEL HU) First Defendant

PING WANG (AKA SHERRY WANG)

Second Defendant

Hearing: 23 November 2016 and 20 March 2017

Counsel:

G Blanchard QC for applicants (defendants) A Sharp for respondents (plaintiffs)

Judgment:

20 July 2017

JUDGMENT OF KATZ J

This judgment was delivered by me on 20 July 2017 at 4.30 pm
Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar

Solicitors: Jesse & Associates, Auckland
Northern Legal Lawyers, Auckland

Counsel: A Sharp, Chancery Chambers, Auckland
G Blanchard QC, Shortland Chambers, Auckland

JIANGANG XU v JIN LIU (AKA DANIEL HU) [2017] NZHC 1689 [20 July 2017]

Introduction

[1] The plaintiffs are a married couple living in Hangzhou, China. The defendants are also a married couple, who formerly lived in Hangzhou but now reside in New Zealand.

[2] The plaintiffs claim to have loaned the defendants more than RMB 58 million (over $12 million), which has not been repaid. The alleged loans fall into two categories. The first category, comprising loans totalling RMB 24,810,000 (about $5 million), relates to funds that the plaintiffs deposited into the defendants’ bank account for them to use for overnight deposits with commercial banks in China (“the overnight loans”). The second category, comprising loans totalling RMB
34,230,000 (about $7 million), relates to funds that the plaintiffs understood the defendants would loan to third parties to enable them to purchase shares (“the daytime loans”). The plaintiffs rely (in part) on a written loan agreement between the parties, allegedly entered into on 23 April 2014 at Hangzhou (“Loan Agreement”).

[3] The plaintiffs’ case is that, unbeknownst to them, rather than using the loaned funds for their intended purpose, the first defendant used them to purchase stock futures. While the market ran in his favour, all was well. However, when the market turned he suffered heavy losses. As pressure mounted to repay the loans, the defendants fled to New Zealand and assumed new identities.

[4] After the defendants had left Hangzhou, the plaintiffs obtained judgment against them in the Hangzhou People’s Court in respect of the daytime loans, in the sum of RMB 34,230,000 plus interest and costs. In their first cause of action the plaintiffs seek to enforce that judgment in New Zealand. In their second and third causes of action they seek to recover the total sums owed to them pursuant to both the daytime and overnight loans. In relation to the daytime loans, those causes of action are in the alternative to the first cause of action. If the Hangzhou judgment is enforced in New Zealand, it will only be necessary to pursue the second and third causes of action in respect of the overnight loans.

[5] The defendants have filed two applications in response, which are before me for determination:

(a) First, the defendants apply for summary judgment or strike-out of the first cause of action. They say the…

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 [2017] NZHC 1689
Case: [2017] NZHC 1689
Decision Date: 20 July 2017

CaseChat Overview and Summary

Jiangang Xu and Youzhi Zhu, a married couple from Hangzhou, China, commenced proceedings against Jin Liu and Ping Wang, also a married couple, in the High Court of New Zealand. The plaintiffs allege that the defendants owe them over RMB 58 million, arising from two categories of loans: overnight loans totalling RMB 24,810,000 and daytime loans totalling RMB 34,230,000. The defendants have filed two applications in response to the plaintiffs' claims. The first application seeks summary judgment or a strike-out of the first cause of action, which is to enforce a judgment obtained against the defendants in the Hangzhou People's Court in respect of the daytime loans. The second application seeks a stay or dismissal of the second and third causes of action on forum non conveniens grounds. The defendants argue that the Hangzhou judgment cannot be enforced in New Zealand as the Hangzhou Court did not have jurisdiction over them, and the judgment was obtained in breach of natural justice and by fraud. Additionally, the defendants argue that Hangzhou is the more appropriate forum for the resolution of the parties' disputes. The court found that the defendants had not established, on materially undisputed evidence, that the Hangzhou Court did not have jurisdiction over them. The court also found that the issue of whether the defendants received notice of the Hangzhou proceedings and the issue of whether the Loan Agreement was fraudulent were factual issues that could not be determined in a summary judgment context. Therefore, the application for summary judgment or strike-out of the first cause of action was dismissed. The court further found that the defendants had not discharged their onus of establishing that the Hangzhou Court was an available forum for the resolution of the parties' disputes. The court also found that it would be inefficient and contrary to the interests of justice to have parallel proceedings in New Zealand and China. Therefore, the application to stay the second and third causes of action on forum non conveniens grounds was dismissed. The defendants' applications for summary judgment or strike-out of the first cause of action and for a stay or dismissal of the second and third causes of action were dismissed. The parties were urged to endeavour to resolve any issues as to costs directly between counsel.

Orders