Yao Wei He v Zhixiong Chen - [2016] NZSC 151

IN THE SUPREME COURT OF NEW ZEALAND

SC 88/2016
[2016] NZSC 151

BETWEEN	YAO WEI HE Applicant
AND	ZHIXIONG CHEN Respondent

Court:	Glazebrook, Arnold and OʼRegan JJ
Counsel:	Applicant in person N R Campbell QC for Respondent
Judgment:	21 November 2016

JUDGMENT OF THE COURT

AThe application for leave to appeal and the application to adduce further evidence are dismissed.

B Costs of $7,500 are payable to the respondent.

____________________________________________________________________

REASONS

Background

Mr Chen says that he lent Mr He $300,000. He sued for repayment of that sum plus interest. In those proceedings (the debt proceedings) Mr Chen relied on a document that was handwritten by Mr He and signed by him to the following effect (in English translation):
Acknowledgement of Debt
I, HE Yao Wei, hereby borrow three hundred thousand New Zealand dollars in total from CHEN Zhixiong. The annual interest rate is 6 percent, which only applies to the sum of two hundred thousand New Zealand dollars of the whole amount of the loan. The remaining amount of one hundred thousand dollars is free of interest. The whole amount of the loan must be paid off within half a year.
The borrower: HE Yao Wei
16 August 2010
Mr He defended the claim. He acknowledged receiving $300,000 and accepted the acknowledgment of debt was authentic. He said, however, that the money was advanced to him on trust for the implementation of a joint venture arrangement with Mr Chen through a joint venture company NZ Products International Ltd (NZPIL). He said that the arrangement was that, assuming Mr Chen was satisfied with the performance of NZPIL after six months, then the $300,000 was to be treated as an advance to NZPIL.[1] It was Mr He’s case that this had occurred and therefore that he was not personally liable to make any payment to Mr Chen.
[1]In fact Mr Chen was not a shareholder of NZPIL. His son was, however, a shareholder and director.
Mr Chen succeeded in both the High Court[2] and the Court of Appeal.[3] Mr He seeks leave to appeal against the Court of Appeal judgment and also applies to adduce further evidence.

Grounds

[2]Chen v He [2015] NZHC 1593 (Moore J).

[3]He v Chen [2016] NZCA 340 (Kós, Clifford and Brewer JJ).

Mr He says that his defence to Mr Chen’s debt proceedings had two limbs. The first was that the loan was not personal to him but had become a loan to NZPIL. The second was that NZPIL had repaid more money to Mr Chen than Mr Chen had advanced to NZPIL[4] and that $300,000 owed had therefore been repaid.
[4]It is not in dispute that Mr Chen had made other advances to NZPIL, although the quantum is not agreed.
The new evidence Mr He seeks to file primarily relates to what he asserts was the second limb of his defence. Mr He submits that the Court of Appeal was wrong to dismiss his application to adduce evidence relating to the second limb…

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.

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Details

Case: [2016] NZSC 151
Decision Date: 21 November 2016

CaseChat Overview and Summary

The case of Yao Wei He v Zhixiong Chen concerns a dispute over a personal loan of $300,000 that Zhixiong Chen claims Yao Wei He owes him. The case was heard by the Supreme Court of New Zealand, with Glazebrook, Arnold, and O’Regan JJ presiding over the appeal brought by He against the Court of Appeal's decision. The key legal issues in this case involved whether He's defence, which included claims that the loan had been transferred to a joint venture company and that any excess repayments had been made, was properly presented in court and whether there were grounds for He to appeal the decision.

The Court of Appeal had previously ruled that He's defence did not sufficiently address the nature of the personal debt, particularly since any repayments made by the joint venture company were deemed irrelevant to He's personal liability. The Court of Appeal also dismissed He's application to adduce further evidence, which was intended to support his claim that the joint venture company had overpaid Chen. The Supreme Court found that He's appeal did not raise issues of general or public importance and that the evidence presented was largely factual, with no apparent miscarriage of justice. Consequently, the Supreme Court dismissed He's application for leave to appeal and his request to adduce further evidence.

The Supreme Court also addressed the issue of costs, noting that Chen's legal expenses had been significantly increased due to the volume of material filed by He and the nature of the applications. While acknowledging some of the procedural shortcomings, the Court awarded Chen $7,500 in costs, with $5,000 attributed to the application for leave to adduce further evidence and the remainder concerning the application for leave to appeal. This decision underscores the importance of adhering to procedural rules and ensuring that the presented defences are relevant to the specific claims being made.

Orders