Xu v Meng - [2023] NZHC 1899

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-508

[2023] NZHC 1899

UNDER High Court Rules 2016

BETWEEN

WEI XU and JUNHUI ZHANG

Plaintiffs/Counterclaim Defendants

AND

XING MENG and HUIMIN GUAN

Defendants/Counterclaim Plaintiffs

Hearing: 20 and 21 November 2023

Appearances:

C L Holland for the Plaintiffs

E St John and D Liu for the Defendants

Judgment:

18 December 2023

JUDGMENT OF WOOLFORD J

This judgment was delivered by me on Monday, 18 December 2023 at 2:30 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors: Righteous Law (C L Holland), Auckland
Heritage Law (D Liu), Auckland

Counsel: E St John, Auckland

XU v MENG [2023] NZHC 1899 [18 December 2023]

[1] This proceeding arises out of a failed property deal between two old friends, the first named plaintiff, Wei Xu, and the second named defendant, Huimin Guan, who first met when they attended high school in China together.

[2] Ms Guan and her husband, the first named defendant, Xing Meng, orally agreed to purchase a property at 105 Bayside Drive, Browns Bay, Auckland (the property) from Mr Xu and his wife, the second named plaintiff, Junhui Zhang. The defendants moved into the property on 7 May 2018 as purchasers in possession. They paid a deposit of $200,000 on 15 October 2018. However, the purchase never settled, and the defendants remained in occupation.

[3] On 18 March 2021, the plaintiffs applied to the High Court for an order to recover the property. In a judgment dated 29 July 2021, Associate Judge Andrew found the plaintiffs were entitled to vacant possession and ordered the defendants to vacate the property within 28 days.1 The defendants vacated the property on 21 September 2021.

[4] Associate Judge Andrew did not, however, deal with the defendants’ counterclaim for the return of the $200,000 deposit. That remains to be determined. Since then, the defendants have added another counterclaim to their original counterclaim for the return of the deposit. The defendants now also seek the return of funds paid by them towards the principal component of the plaintiffs’ mortgage while in occupation.

[5] The plaintiffs have subsequently also made counterclaims against the defendants for:

(a)Rental of $162,916.19 for the period from 24 February 2020 to 21 September 2021;

(b)Income from boarders while in occupation; and

1 Xu v Meng [2021] NZHC 1936.

(c)Income from using the property for commercial purposes while in occupation.

[6] This proceeding deals with the five outstanding counterclaims, two from the defendants and three from the plaintiffs.

Application for leave to file amended pleadings

[7] On 15 November 2023, five days before trial, the defendants filed a memorandum seeking leave to file amended pleadings after the close of pleadings date. The first pleading was an amended statement of defence and counterclaim that:

(a)Clarified the basis on which the defendants sought repayment of amounts paid towards the plaintiffs’ mortgage; and

(b)Amended the prayer for relief to identify the correct section…

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 Meng

Details

AGLC: Xu v Meng [2023] NZHC 1899
Case: [2023] NZHC 1899
Decision Date: 18 December 2023

CaseChat Overview and Summary

In Xu v Meng, the High Court of New Zealand was tasked with resolving disputes arising from a failed property transaction between the plaintiffs, Wei Xu and Junhui Zhang, and the defendants, Xing Meng and Huimin Guan. The central issue was whether the defendants were entitled to the return of their $200,000 deposit, along with principal repayments, or if the plaintiffs were owed additional sums for rental, boarders' income, and commercial use of the property. The court found that the defendants were entitled to the return of their deposit, but rejected their claim for the return of principal repayments, ordering them to pay a shortfall in interest payments. The court dismissed all three of the plaintiffs' counterclaims, finding no basis for rental charges, boarders' income, or commercial use income.

The court found that the oral agreement between the parties was that the defendants would purchase the property for $1.78 million, with a deposit of $200,000, and they would be liable for all costs associated with the property until settlement. The defendants moved into the property in May 2018 but failed to settle the purchase, leading the plaintiffs to seek an order for possession in March 2021, which was granted. The court held that the agreement came to an end on 2 December 2020 when the caveat lodged by the defendants lapsed. The court granted the defendants' counterclaim for the return of their deposit, noting that the plaintiffs had never disputed this. However, it dismissed the counterclaim for the return of principal repayments, determining that the plaintiffs were entitled to interest payments that the defendants had failed to make, totaling $16,520.20. The plaintiffs' counterclaims for rental, boarders' income, and commercial use income were dismissed as there was no agreement for rental, and the defendants' use of the property did not constitute unjust enrichment. The court awarded costs to the defendants.

Orders