Zhang v King David Investments Ltd (in liquidation)

[2018] NZHC 2028

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV 2014-404-0680

[2018] NZHC 2028

BETWEEN

JIE ZHANG

Plaintiff

AND

KING DAVID INVESTMENTS LTD (IN LIQUIDATION)

First Defendant

JIN YUE YOUNG
Second Defendant

HSIANG-FEN YING

Interested Party

Hearing:

9 August 2010

Appearances:

No appearance for Plaintiff Ms Ying in person

Mr Young in person

Judgment:

9 August 2018

JUDGMENT OF JAGOSE J

This judgment is delivered by me on 9 August 2018 at 4.00pm pursuant to r 11.5 of the High Court Rules.

.....................................................

Registrar / Deputy Registrar

Solicitors:

Justicia Chambers, Auckland

Copy to:

Second Defendant Interested Party

ZHANG v KING DAVID INVESTMENTS LTD (IN LIQ) [2018] NZHC 2028 [9 August 2018]

[1]Ms Ying and Mr Young brought without notice an application for orders:

(a)discharging the freezing order on  their  family  trust’s  property  at  31 Haseler Crescent in Auckland’s Howick;

(b)freezing the plaintiff’s property at 18 Limond Street in Auckland’s Manurewa; and

(c)recalculating Palmer J’s 13 December 2016 award of $506,000, plus interest and costs, to the plaintiff.

What remains to be addressed in this proceeding

[2]    On 12 July 2018, Moore J directed the plaintiff, Ms Zheng, be given notice of the application. On 26 July 2018, in setting the now-served application down for hearing today, Wylie J recorded at [4]:

I have explained to Mr Young that the Court will require proof that the various obligations the charging order was put in place to secure, have been met. I have indicated to Mr Young that he and his wife should file an affidavit or affidavits confirming that the obligations have been met, that the various payments required have been made, and annexing proof of the same.

[3]Those obligations were set out in Palmer J’s:

(a)13 December 2016 judgment at [54], relevantly being Ms Ying’s payment of a $10,000 fine for her contempt of court, and Mr Young’s payment of such indemnity costs awarded to Ms Zhang as exceeded the balance of the $550,000 fund paid into Court; and

(b)26 May 2017 judgment at [15(c)], quantifying that excess sum of costs at $3,394.32, and correcting its payment to be by Ms Ying (not Mr Young).

Among Ms Ying’s and Mr Young’s compendious affidavit evidence filed in support of the orders sought is a receipt for $10,000 paid into Court in this case on 20 December 2016. There is no evidence of payment of the excess sum of costs to Ms Zhang.

[4]Wylie J continued at [5]:

I have also advised Mr Young and Ms Ying that I have significant reservations as to whether or not a freezing order is available. Having perused the file, it seems to me that Mr Young and Ms Ying are simply seeking to revisit orders already made against them by this Court and confirmed in the Court of Appeal. I noted that Mr Young and Ms Ying were declined leave to appeal to the Supreme Court. Mr Young asserts that there is fresh evidence. Even if that is the case (which I doubt), it would not normally be found to justify the imposition of a freezing order, or of itself to permit the correction of the awards made in Ms Zhang’s favour. These issues, however, will have to be decided when the matter proceeds to hearing. I have simply advised Mr Young and Ms Ying to carefully consider their position.

[5]    Undeterred, Ms Ying expressly contends she and Mr Young were directed by the Court of Appeal to “sort out 3 issues not examined by” that Court, being those raised on the present application. She adds they wish to reopen another two issues, being the finding of contempt, and a consent order, made in the proceeding, respectively on the basis of “new evidence”, and a contended mathematical error by the Court of Appeal. An ‘expert witness’ – J P Liu, who was present in Court – was intended to be called by Ms Ying and Mr Young at the hearing.

[6]    The Court of Appeal’s direction does not support such a cavalier approach to this Court’s earlier judgments and orders. In response to memoranda filed by Ms Ying and Mr Young, on 23 February 2018, the President of the Court of Appeal directed:

There being an application for leave to the Supreme Court, any residual matters must be dealt with by that court or by application to the High Court to now vary the Haseler Cres freezing order.

In other words, the only matter available for this Court’s attention in the present proceeding was the latter variation. I am not able to ‘correct’ the Court of Appeal (although, with respect, I see no error in its calculation).

Payment of costs to Ms Zhang

[7]    I refused to hear from Ms Ying or Mr Young, despite their repeated attempts, on anything other than that ‘variation’ aspect of their current application. Payment of the fine having been evidenced, the only outstanding issue was payment of the balance of costs to Ms Zhang, thus enabling the freezing order over the Haseler Crescent property to be discharged.

[8]    Both Ms Ying and Mr Young explained they understood Ms Zhang’s costs would be paid out of the fund paid into Court. Mr Young said he did not know how much money was left in the Court fund, and Ms Zhang had not made any claim against them for payment of any excess. The inference was there is nothing further to be paid.

[9]    However, that is not a sustainable position in light of Palmer J’s 26 May 2017 judgment, in which at [15] he directs the balance of the fund paid into Court fully to be paid out to Ms Zhang, expressly leaving $3,394.32 to be paid to her by Ms Ying. Without evidence of that payment, the defendants’ present application must fail.

[10]   When I put that to Ms Ying, she responded she was unable to pay Ms Zhang, because she did not know how she could do that, because of difficulties she had with Ms Zhang. Mr Young enquired whether she could instead pay the outstanding amount into Court. That seemed a sensible accommodation, if Ms Zhang could not be located, as I understood to be Ms Ying’s ‘difficulty’. I said I would provide for that alternative in this judgment.

[11]   I adjourned briefly to permit Ms Ying and Mr Young to discuss the course of this morning’s hearing. On my return, when Mr Young said they understood the position, I directed Ms Ying to file an affidavit proving her payment of the costs to Ms Zhang, or into Court, on receipt of which I would discharge the freezing order over the Haseler Crescent property. Otherwise their application would be dismissed.

Postscript

[12]   On retiring, as I was leaving the court room, a woman, who had been sitting in the back of the room throughout the hearing, asked what she was to do with her complaints. I asked Mr Young who she was. He identified her as Ms Zhang. I confirmed that with the woman. She had further complaints about Ms Ying and Mr Young. I explained I could not address them in this proceeding, all of which remained was for Ms Ying and Mr Young to pay her the outstanding costs.

[13]   I have since seen, filed in Court today, Mr Young’s most recent affidavit of service, in which he identifies Ms Zhang’s business address, at which he served her documents, by leaving them at the business’ door at her instruction (and refusal to

permit him into the premises). Plainly Ms Ying easily could pay the outstanding costs to Ms Zhang in the same manner, if Ms Zhang directed accordingly on Ms Ying’s attendance at the business. Ms Ying will need to prove the payment has been received by Ms Zhang.

[14]   Ms Zhang’s presence in the courtroom throughout, and Ms Ying’s and Mr Young’s plain knowledge of her, caused me to question whether I should still extend the Court’s facilities for payment of Ms Zhang’s costs. The Court is not to be lumbered with litigants’ responsibilities for meeting Court orders. If Ms Ying nonetheless seeks to make use of the facility I agreed to provide, she must also establish in her affidavit what attempts she has made to make payment directly to Ms Zhang.

Orders

[15]I order:

(a)Ms Ying to file an affidavit, proving her payment of costs to Ms Zhang, or into Court;

(b)on such proof, the freezing order over the Haseler Crescent property is discharged; and

(c)otherwise, the application is dismissed.

—Jagose J