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Xu v Meng

Xu v Meng

Case [2023] NZHC 2915 19 October 2023

Discovery & Disclosure

Breach of Contract

Unjust Enrichment

Mortgages & Security Interests

Civil Litigation & Procedure

Property Law

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2021-404-508

[2023] NZHC 2915

BETWEEN
WEI XU and JUNHUI ZHANG

Plaintiffs

AND

XING MENG and HUIMIN GUAN

Defendants

Hearing: 12 October 2023

Appearances:

C Holland and A Lin for Plaintiffs S Maloney for Defendants

Judgment:

19 October 2023

JUDGMENT OF ANDERSON J

This judgment was delivered by me on 19 October 2023 at 9:00 am pursuant to Rule 11.5 of the High Court Rules 2016.

……………………………… Registrar/Deputy Registrar

Solicitors: Heritage Law, Auckland
Righteous Law Limited, Auckland

XU v MENG [2023] NZHC 2915 [19 October 2023]

[1] The current proceeding arises from a May 2018 informal agreement under which the defendant agreed to buy the plaintiffs’ property at 105 Bayside Drive, Browns Bay, Auckland (the Property) and which included an arrangement for the defendants to occupy it prior to settlement. The agreement was subsequently terminated before the sale was settled.

[2] The plaintiffs had been in possession of the Property for several months when the agreement came to an end and the defendants had paid the $200,000 deposit. During their occupation the defendants paid certain sums to the plaintiffs based on what the defendants say they understood to be the mortgage outgoings on the Property plus other outgoings. The defendants also received Airbnb income from the Property and income from commercial activities they were running from the Property.

[3] The defendants remained in possession after the parties fell out, including after the agreement was terminated, without making further payments. The plaintiffs sought and obtained an order for recovery of possession of the Property.1 This was on the basis that the defendants had been in occupation as purchasers in possession, not as tenants.2

[4] The defendants counterclaimed for recovery of the $200,000 deposit. That counterclaim remains to be determined. By way of counterclaim, the defendants now also seek verification of the mortgage and outgoings the plaintiffs were paying and judgment for such of the amount the defendants paid that are not verified. This is because the defendants believe they were asked to pay amounts towards the mortgage and for outgoings which were in excess of what the plaintiffs were paying which the defendants say was not in accordance with the agreement between them.

[5] The plaintiffs also “counter counterclaim”3 for a figure of $162,916.19 being “rental” they say was not paid by the defendants. Further, the plaintiffs counter counterclaim in “unjust enrichment.” They seek an account of profits of the rental

1      Xu v Meng [2021] NZHC 1936.
2      At [32]-[34].
3      I do not understand there to be such a procedure. The defendants have expressly reserved their position on the status of the document.

income received by the defendants from the Property in their period of occupation and seek judgment for that sum.

[6] A three-day trial is scheduled for 20 November 2023. There was an order for standard discovery.4 The parties have each made applications under Rule 8.19 of the High…

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 2915
Case: [2023] NZHC 2915
Decision Date: 19 October 2023

CaseChat Overview and Summary

The High Court of New Zealand, Auckland Registry, considered applications for further and better discovery in Xu v Meng. The plaintiffs, Wei Xu and Junhui Zhang, and the defendants, Xing Meng and Huimin Guan, had entered into an agreement in May 2018 for the defendants to purchase the plaintiffs' property at 105 Bayside Drive, Browns Bay, Auckland. The agreement was terminated before settlement, leading to the current dispute over the deposit, mortgage outgoings, and other payments made during the defendants' occupation of the property. The defendants counterclaimed for the return of their $200,000 deposit and sought verification of the mortgage and outgoings they had paid. The plaintiffs, in turn, counterclaimed for rental they claimed was not paid and sought an account of the defendants' rental income and profits from the property.

The court addressed the applications for further and better discovery under Rule 8.19 of the High Court Rules. The plaintiffs sought details of income payments received by the defendants, evidence of money paid to the plaintiffs, and a record of stock stored at the property. The defendants sought documents related to the mortgage loan and other outgoings for the property. The court considered the relevance, existence, proportionality, and overall discretion in determining the applications.

The court denied the plaintiffs' requests for details of where income payments went and what they were used for, as the plaintiffs sought no proprietary relief. The request for evidence of payments made by the defendants was allowed. The request for a record of stock was denied as it was not relevant to the pleaded claim of unjust enrichment, which did not specify whether the rental was commercial or residential.

The defendants' requests for mortgage documentation and outgoings were granted. The court found it relevant for the defendants to verify the mortgage payments made by the plaintiffs and the split between principal and interest, directly impacting their counterclaim. The request for outgoings documentation was allowed, with the plaintiffs to assess and provide any existing documents, as the defendants had suspicions of overcharging.

The court modified the discovery categories to ensure proportionality and made orders for the defendants to provide details of income payments received and evidence of payments made to the plaintiffs. The plaintiffs were ordered to provide documents enabling the defendants to ascertain the mortgage payments and outgoings for the specified period. A verified list and inspection set were to be exchanged within 14 days, with costs reserved for the trial.

Orders