Young v Zhang
[2022] NZCA 560
•17 November 2022 at 10.15 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA646/2016 [2022] NZCA 560 |
| BETWEEN | JINYUE YOUNG |
| AND | ZIE ZHANG |
| Court: | Cooper P, Courtney and Katz JJ |
Counsel: | Applicants in Person |
Judgment: | 17 November 2022 at 10.15 am |
JUDGMENT OF THE COURT
AThe application to adduce further evidence is declined.
BThe application for recall is declined.
CThere is no order as to costs.
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REASONS OF THE COURT
(Given by Courtney J)
Mr Young and Ms Ying have applied for the recall of this Court’s decision in Young v Zhang.[1] This decision represented the culmination of litigation arising from a sale and purchase agreement. The agreement was between King David Investments Ltd (KDIL) (a company controlled by the second applicant, Ms Ying), as vendor and the respondent, Ms Zhang, as purchaser. The first applicant, Mr Young, is Ms Ying’s husband. He was a practising solicitor at the relevant time and, although not a director of KDIL, signed the sale and purchase agreement on its behalf. When KDIL failed to settle the sale, Ms Zhang brought proceedings for specific performance.[2]
[1]Young v Zhang [2017] NZCA 622, [2018] NZAR 207 [Court of Appeal judgment].
[2]The proceedings also sought damages against Mr Young for interfering in the contract between Ms Zhang and KDIL. Ms Ying herself was not a party to the proceedings.
The parties agreed to settle the proceedings and negotiated on 5 July 2016 that KDIL would transfer the property to Ms Zhang by 13 September 2016, pay her $220,000 by way of a set-off from the sale price on settlement, and that the proceedings against Mr Young would be discontinued and costs would lie where they fell. Duffy J made a consent order to this effect in a minute also dated 5 July 2016.
KDIL did not comply with the consent order. Instead, it sold the property to a third party bona fide purchaser for value without notice. The settlement date was 12 September 2016. Ms Ying subsequently placed KDIL in liquidation. These events led to further proceedings. Mr Young and Ms Ying applied to set aside the consent order. Ms Zhang applied for an order that Mr Young and Ms Ying be held in contempt until the proceeds of the sale were disgorged.
Palmer J declined Mr Young’s and Ms Ying’s application to set aside the consent order and held that Ms Ying was guilty of contempt by procuring KDIL to sell the property, knowing that it was bound by the terms of the consent order to transfer it to Ms Zhang.[3]
[3]Zhang v King David Investments Ltd (in liq) [2016] NZHC 3018 [High Court judgment].
This Court upheld the Judge’s findings on both issues.[4] Mr Young and Ms Ying now seek to have the decision recalled on the grounds that there is fresh evidence proving it was Ms Zhang who breached the consent order and that it was she who was guilty of contempt.
Jurisdiction
[4]Court of Appeal judgment, above n 1. Although the appeal against both findings was dismissed, the fine imposed by Palmer J for contempt was reduced.
Although the proceeding was a civil proceeding, the appeal from Palmer J’s finding of contempt was treated as having been brought under s 232(2)(b) and 232(2)(c) of the Criminal Procedure Act 2011 because the finding of contempt against Ms Ying was necessarily one of criminal contempt. Although Palmer J had found that she was guilty of contempt in the civil sense, Ms Ying had aided and abetted the breach of a court order, rendering her guilty of a criminal contempt.[5] The question on appeal was therefore treated as whether the finding of contempt had resulted from a miscarriage of justice.[6]
[5]At [42]–[43].
[6]At [44]–[45].
The well-established test for when recall is available, set out in Horowhenua County v Nash (No 2), applies to the both the civil finding regarding the validity of the consent order and the finding of criminal contempt:[7]
Generally speaking, a judgment once delivered must stand for better or worse subject, of course, to appeal. Were it otherwise there would be great inconvenience and uncertainty. There are … three categories of cases in which a judgment not perfected may be recalled — first, where since the hearing there has been an amendment to a relevant statute or regulation or a new judicial decision of relevance and high authority; secondly, where counsel have failed to direct the Court’s attention to a legislative provision or authoritative decision of plain relevance; and thirdly, where for some other very special reason justice requires that the judgment be recalled.
[7]Horowhenua County v Nash (No 2) [1968] NZLR 632 (SC) at 633; and Saxmere Co Ltd v Wool Board Disestablishment Co Ltd (No 2) [2009] NZSC 122, [2010] 1 NZLR 76 at [2].
Mr Young’s and Ms Ying’s application relies on the third ground.
The application to adduce further evidence
Because the appeal against the contempt finding was treated as though it were an appeal against conviction, the relevant procedural rules are the Court of Appeal (Criminal) Rules 2001 (Criminal Rules). Mr Young and Ms Ying have applied under r 12B of the Criminal Rules for leave to file further evidence. Rule 12B provides that if a ground of appeal is that there was a miscarriage of justice because further evidence has become available since the trial, affidavit evidence is required setting out that further evidence and explaining why it was not available at the trial and why it could not, with reasonable diligence, have been called. For further evidence to be admissible it must be credible, fresh and cogent.[8]
[8]Lundy v R [2013] UKPC 28, [2014] 2 NZLR 273 at [120].
The further evidence comprises an affidavit by Mr Young sworn on 27 May 2022, an affidavit by Mustaq Sheikh sworn on 30 October 2017 and an affidavit by Karen Cheng sworn on 30 May 2022. However, only the original of Mr Young’s affidavit has been provided. Mr Sheikh’s and Ms Cheng’s affidavits take the form of photocopies (without intituling) annexed to Mr Young’s affidavit as exhibits.
Mr Young’s affidavit comprises a mix of evidence and submission. For the most part the evidence relates to the original sale and purchase agreement and settlement of the consequent proceedings for specific performance that led to the consent order. None of this evidence is fresh. It either was, or could have been, produced at both the High Court trial and the appeal hearing and does not indicate any basis on which the decision on appeal might be recalled.
To the extent that Mr Young offers fresh evidence it is not relevant. For example, Mr Young refers to Ms Ying’s medical condition which post-dated the High Court trial. That has no relevance to the circumstances surrounding the consent order or the facts that led to the finding of contempt.
Finally, Mr Young filed an “[a]mended submission” dated 27 July 2022 which effectively replicates all of the matters canvassed in his affidavit. Insofar as the content comprises submissions, we address the matters as they are dealt with in the amended submission. We decline to admit Mr Young’s affidavit.
Mr Sheikh’s affidavit is said to have been “misplaced” in the Court of Appeal. The only evidence of this is Mr Young’s affidavit in which he says:
I prepared the Case on Appeal and included the evidence of [Ms Ying’s] 7 requests to settle. I also emailed and sent by courier the new adduced evidence (Exhibits 3, 3A) on 30/10/17 for the hearing on 6/12/17. The adduced evidence was an affidavit of Harcourt agent [sic] to prove that “should there be a court order before the property is settled, the property will be withdrawn from the sale” ... But the Addendum … did not mention the Affidavit.
In fact, exhibits 3 and 3A are simply emails between Mr Young and the Court about memoranda and the list of issues. There is no mention of an affidavit.
Ms Cheng’s affidavit is advanced on the basis that it is fresh because Ms Cheng could not be located earlier. Mr Young explains that he had been unable to locate Ms Cheng, though gives no details of specific enquiries made. Ms Cheng herself confirms that she was overseas “for a while”, without any particulars.
We find the explanation as to freshness of both Mr Sheikh’s and Ms Cheng’s affidavits unconvincing. However, even if we were to accept them as fresh, for the reasons we come to shortly, they do not offer any evidence of relevance to the issues that arise in this case.
The application for recall
The application for recall is advanced on the basis of fresh evidence. Because we have declined to admit Mr Young’s affidavit, we consider the application only by reference to the affidavits of Mr Sheikh and Ms Cheng. Their affidavits are directed to the same point — showing that Ms Ying listed the property in August 2016 on the basis that there could be a court order (Mr Sheikh) or a sealed court order (Ms Cheng) before settlement of any sale, in which case the property would have to be withdrawn before settlement.
The purpose of this evidence is, it appears, to invite the inference that Ms Ying was aware of KDIL’s obligations under the consent order and took steps to comply with it. That inference would then provide the basis for the following argument, set out in Mr Young’s amended submission:
(a)Ms Zhang’s lawyer had dishonestly altered the consent order to reduce the purchase price by $220,000, but it was expected that Duffy J would correct this alteration, so that if Ms Zhang wanted the property she would have to provide the correct price.
(b)Ms Zhang was obliged to take the first steps to implement settlement of the transaction.
(c)KDIL predicted that she would not do so because she could not afford the correct purchase price.
(d)KDIL was entitled to anticipate that she would not do so and proceed with the sale to the third party.
(e)Therefore, when Ms Zhang allowed the caveat to lapse and failed to take steps such as sending a dealing number for a Landonline transaction, KDIL was not in breach of the consent order because the caveat lapsing caused it to anticipate that she did not intend to settle the transaction.
There is no merit in this argument. The allegations over the deduction of $220,000 in the consent order were canvassed in the High Court and in this Court and rejected. Further, although the most practical means of effecting the transfer was probably for Ms Zhang to initiate the Landonline transaction, she was not merely a purchaser — KDIL’s obligation to transfer the property by 13 September 2016 arose under the consent order, not an agreement. KDIL was not entitled to assume an “anticipatory breach”.
Further, not only does this argument appear not to have been raised in the High Court or in this Court, it is also inconsistent with Ms Ying’s evidence in the High Court that:[9]
I sold the property before I received the sealed Consent Order …
Had I sold the property after receiving the sealed Consent Order, it would be interpreted as contempt of court but I sold it before receiving the sealed Order …
[9]This evidence was set out in the Court of Appeal judgment, above n 1, at [57].
In the High Court and on appeal Mr Young and Ms Ying suggested that there was a distinction between the consent order in its sealed and unsealed state. But that argument is misconceived and was rejected. The consent order was binding from the time it was made.
Mr Young also submitted that Ms Ying’s actions did not amount to a contempt because the requisite mens rea was not established. This submission relied mainly on the evidence of Mr Sheikh and Ms Cheng (which does not assist for the reasons just explained) and the attempt at relitigating the allegations that the consent order had been altered (which is not tenable). In addition, Mr Young relies on two further matters.
First, that Mr Young (in his capacity as Ms Ying’s solicitor) advised Ms Ying to follow the final decision of the High Court. Mr Young exhibits an email from him to Ms Ying to this effect. But, although this email shows that Ms Ying received correct advice, she clearly did not follow it because she proceeded to procure the sale in the face of the consent order that required the transfer of the property to Ms Zhang.
Secondly, that the liquidation of KDIL was made on the basis of erroneous advice from a liquidator that doing so would terminate the proceedings. There is no evidence of this and in any event, it could not possibly affect Ms Ying’s liability for contempt arising from procuring the sale of the property in breach of the consent order.
The issue of mens rea was discussed in the appeal judgment, with the following conclusion:[10]
[58] These facts, Ms Ying’s statement and the chronology make for the inescapable conclusion that Ms Ying deliberately sold the property … to prevent KDIL from complying with the consent order. Whether her intention was to flout the consent order or simply protect KDIL’s assets does not matter. The mens rea element of criminal contempt is satisfied by proof that the defendant knowingly carried out the act or was responsible for the conduct in question. …
[10]Court of Appeal judgment, above n 1 (footnote omitted).
We decline to consider Mr Young’s other submissions in relation to the validity of the sale and purchase agreement and the consent order. Arguments on these issues included that there was deceit in the negotiations for the original sale and purchase agreement, and illness and exhaustion on Mr Young’s and Ms Ying’s part during the settlement negotiations. These arguments were fully considered by the High Court and by this Court and rejected. The evidence sought to be adduced now about these issues is either not fresh or, where it post-dates the events, not cogent.
There is no basis on which to recall the judgment on these grounds.
Result
The application to adduce further evidence is declined.
The application for recall is declined.
We make no order as to costs.
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