Yang v Jia - [2023] NZHC 639

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-1623

[2023] NZHC 639

BETWEEN
YULING YANG

First Plaintiff

SEN GAO
Second Plaintiff

AND

XINHONG (VICTOR) JIA

Defendant

XINHONG (VICTOR) JIA, YANG LIU and ZHANG TRUSTEE COMPANY
2021 LIMITED, as trustees of the JIA AND LIU FAMILY TRUST

Third Party

Hearing: 16 March 2023

Appearances:

S Moore for Plaintiff

B J Norling and W M Alexander for Defendant

Judgment:

28 March 2023

JUDGMENT OF ASSOCIATE JUDGE LESTER

(summary judgment)

This Judgment was delivered by me on 28 March 2023 at 2:30 pm Pursuant to Rule 11.5 High Court Rules

Registrar/Deputy Registrar Date: ……………………….

YANG v JIA [2023] NZHC 639 [28 March 2023]

[1] Yuling Yang (Jenny) and Sen Gao (Jason), the first and second plaintiffs, are a couple. Jason met Xinhong (Victor) Jia (Victor) via a mutual friend, Alan Gao. Jenny, Jason and Victor undertook a six-story apartment building project.

[2] In early 2019, Victor approached Jason seeking a loan to repay a debt owed to another member of the Chinese Community. Jason was prepared to help. The assistance was to take the form of a property being sold to Victor with payment deferred until Victor received a dividend from the apartment building project. The transfer of the property would give Victor an unencumbered asset against which he could borrow to pay the debt he wanted to clear.

[3] The transaction did not proceed as I have outlined. The contract of sale is clear that the purchase price was to be left unpaid. What in fact happened was that Victor raised the $3 million purchase price by borrowing the money which he paid to Jenny on settlement.1 The next day, Jenny advanced $3 million to Victor which Victor used to repay his personal debt and a short-term loan he obtained to put the purchase price together. This left Victor with ownership of the property with a mortgage registered to a bank and his personal debt repaid.

[4] Jenny and Jason say the $3 million advanced to Victor was just that, an advance repayable upon demand. They say it was orally agreed that interest at 10 per cent would be payable. Jenny and Jason say Victor told them he did not need vendor finance for the property purchase as he had raised the purchase price from elsewhere. Victor says that while settlement of the property purchase did not proceed as provided for in the contract, the substance of the transaction remained the same, that is, the
$3 million returned to him was the vendor finance.

[5] Jenny and Jason seek summary judgment in respect of what they say was an advance repayable upon demand. There is no issue they have demanded payment. Victor says that despite the way the transaction actually took place, the substance of his agreement with Jenny and Jason was that he would not have to repay the purchase price of the property, returned…

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 Yang v Jia

Details

AGLC: Yang v Jia [2023] NZHC 639
Case: [2023] NZHC 639
Decision Date: 28 March 2023

CaseChat Overview and Summary

In the High Court of New Zealand, Yuling Yang and Sen Gao sued Xinhong (Victor) Jia for the recovery of a $3 million advance they claim was made to Victor to repay his debts. The plaintiffs sought summary judgment, arguing that the advance was repayable on demand and that there was no real dispute in fact. Victor argued that the advance was vendor finance, which would not be repayable until dividends from an apartment building project were paid. The court was required to determine whether the plaintiffs had demonstrated there was no defence to their claim and that the advance was repayable on demand.

The court found that the plaintiffs' application for summary judgment was inappropriate. The onus was on the plaintiffs to establish that there was no defence to their claim. Victor's evidence was consistent with the contemporaneous documents and pleadings, and it was not implausible. The court found that the evidence and pleadings suggested that a loan was intended but with the terms of the contract remaining active. The court held that the reality was that the plaintiffs' evidence was skeletal and did not explain why the transaction did not proceed in accordance with the contract. The court found that the plaintiffs' proposition was contrary to the entire rationale for the transaction and commercial common sense. The court dismissed the plaintiffs' application for summary judgment.

The court observed that Victor's nomination of his Family Trust to complete the purchase did not relieve him of personal liability. The court held that the burden of a contract can only pass to a third party by novation, and only the purchaser remains a contracting party with the vendor. The court reserved costs and made no further orders.

Orders