Zhang v Westpac New Zealand Limited

[2019] NZHC 2319

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-001042

[2019] NZHC 2319

UNDER

Part 12 of the High Court Rules

IN THE MATTER

of an application for summary judgment

BETWEEN

YINGQUI ZHANG

Applicant

AND

WESTPAC NEW ZEALAND LIMITED

Respondent

CIV-2018-404-002589

IN THE MATTER

of the Insolvency Act 2006

AND

IN THE MATTER

of the bankruptcy of YINGQIU ZHANG

BETWEEN

WESTPAC NEW ZEALAND LIMITED
Judgment Creditor

AND

YINGQIU ZHANG

Judgment Debtor

Hearing:

13 September 2019

Appearances:

J S Learner and L B Harrison for Respondent/Judgment Creditor Applicant/Judgment Debtor self-represented

A R Govind for Auckland Council
Yangbing Li (Interpreter for Applicant/Judgment Debtor)

Judgment:

16 September 2019

JUDGMENT OF ASSOCIATE JUDGE PAULSEN

WESTPAC NEW ZEALAND LIMITED v ZHANG [2019] NZHC 2319 [16 September 2019]

This judgment was delivered by me at 4.00pm on 16 September 2019 pursuant to Rule 11.5 of the High Court Rules

Registrar/Deputy Registrar Date: 16 September 2019

[1]There is before the Court for hearing:

(1)an application by Ms Zhang to set aside a bankruptcy notice issued by Westpac New Zealand Ltd (“Westpac”) in relation to a summary judgment obtained by Westpac on 28 August 2018;1

(2)an application by Ms Zhang to set aside Westpac’s summary judgment;

(3)an application by Ms Zhang for discovery against Westpac and non-parties; and

(4)Westpac’s creditor’s application to adjudicate Ms Zhang bankrupt.

[2]        These matters first came before me  for  hearing  on  10  September  2019. Ms Zhang sought an adjournment because her translator was not available. When a translator was provided by the court, she sought an adjournment on other grounds. The grounds included that she wanted to obtain the services of a lawyer. I refused her application for an adjournment but, in the event, I later adjourned the hearing to     13 September 2019 because Ms Zhang’s son (who was with her in court) was disruptive to an extent that I felt the hearing could not continue. This was all set out in a minute of 12 September 2019.

[3]        On 12 September 2019, Ms Zhang filed a memorandum seeking an adjournment for eight weeks. At the hearing on 13 September 2019 Ms Zhang was assisted by an interpreter appointed by the court. She spoke to the reasons she sought an adjournment, which were that:

1      There is some doubt as to whether Ms Zhang intended to file an application to oppose Westpac’s creditor’s application to adjudicate her bankrupt, but in the present context that is of no consequence.

(1)she disputes Westpac’s claim (which is to recover the shortfall after mortgagee sale of two of Ms Zhang’s properties) because, she says, the sales may not have been genuine and were at a substantial undervalue;

(2)she was not personally served with the summary judgment proceedings and she did not understand them because she has a limited command of English;2

(3)she has tried to instruct a lawyer to act for her without success but now Paul Dale QC has said that he may act. Mr Dale is unavailable to act for eight weeks; and

(4)there is no prejudice to Westpac in allowing the adjournment.

[4]        The application for an adjournment was opposed by Westpac. It was also opposed by the Auckland Council, a creditor of Ms Zhang, appearing in support of Westpac’s application to adjudicate her bankrupt.

[5]        After hearing from Ms Zhang and counsel, I advised Ms Zhang that her application for an adjournment was refused. I explained why, but said I would provide full reasons in writing. These are my reasons.

[6]        The court has a wide discretion in determining whether to grant an adjournment. Ms Zhang’s application focuses on her challenge to set aside Westpac’s summary judgment. Under r 7.42 High Court Rules, the hearing of such an application may from time to time be adjourned on any terms that the Judge thinks just. The court must balance competing interests.3 It must have regard to not only the interests of the immediate parties but also the interests of other parties in cases waiting in the queue for a hearing and the public interest in achieving the most efficient use of court resources.4

2      There is no suggestion that Ms Zhang was not validly served by substituted service. She did in fact receive the proceedings.

3      O’Malley v Southern Lakes Helicopters Limited, HC Christchurch, CP 513/89, 4 December 1990.

4      Cygnet Farms Ltd v ANZ Bank New Zealand Limited [2016] NZHC 1945 at [18].

[7]        There is a great deal of information before me. This includes email correspondence between Ms Zhang and the lawyers for Westpac. Notwithstanding the language difficulties that Ms Zhang has, before Westpac obtained summary judgment the nature of the proceeding was explained to her and she was advised to engage a lawyer. She clearly understood that advice. She decided not to instruct a lawyer nor appear at the hearing in which judgment was obtained.5 Following the entry of summary judgment, Ms Zhang negotiated with Westpac. She did not dispute her liability to Westpac until she filed her application to set aside Westpac’s bankruptcy notice on 3 July 2019, more than 10 months after Westpac’s summary judgment was obtained.

[8]        Ms Zhang now wishes to instruct a lawyer. She says that she has approached many lawyers but the only lawyer who has agreed to act for her is Mr Dale. It appears, on what is before me, that Mr Dale has not yet agreed to act. Ms Zhang’s memorandum of 12 September 2019 (which was approved by Mr Dale) is noticeably couched in terms that Mr Dale has not presently agreed to act for Ms Zhang but may do so if she is granted legal aid.6 There is nothing before me concerning Ms Zhang’s eligibility for legal aid. She has not yet applied for legal aid. There is no indication of a timeframe within which an application for legal aid (if made), is likely to be processed.

[9]        Not only is Mr Dale not engaged  to  act,  it  appears  that  he  has  advised Ms Zhang that she will require the services of an expert-valuer. A valuer has not been engaged and it must follow that even if Ms Zhang were to obtain legal aid and Mr Dale was to agree to act (all of which is likely to take longer than eight weeks) the court will be faced with yet further applications for adjournments.

[10]      Ms Zhang decided not to instruct a lawyer or oppose Westpac’s application for summary judgment and took no steps to immediately challenge the judgment after it was obtained. It is not appropriate that she now be granted an adjournment on nothing more than a possibility that she may, all going well, at some uncertain future-time be able to secure the services of Mr Dale.

5      Affidavit of Angelene Rona Smylie of 28 August 2019 at [10] and exhibit D.

6      Paragraph [9] of Ms Zhang’s memorandum of 12 September 2019.

[11]      Ms Zhang speaks limited English and faces challenges in representing herself. However, this must be considered in context. She has had the benefit of some legal advice from Mr Dale and from the Auckland Community Law Centre. She has filed papers that set out clearly the basis of her challenge to Westpac’s claim. She is, in effect, arguing that Westpac breached its obligation of reasonable care under s 176 Property Law Act to obtain the best prices reasonably obtainable for her properties at the times of sale. The law is well settled and is not complex.7 The facts of this case are not complex either.

[12]      I am satisfied that Mrs Zhang has had sufficient time to consider the comprehensive information that has been provided by Westpac relating to the steps that it took to market and sell her properties. I am satisfied that the court has all the information that it needs to justly determine whether Ms Zhang has an arguable defence to Westpac’s claim. Having heard from Ms Zhang, I am satisfied that she is able, with the assistance of a translator, to effectively present her case.

[13]      I do not believe that the court would obtain significant assistance from an expert-valuer’s report. Ms Zhang has put before the court two valuation reports and I have two valuation reports that Westpac obtained before the sales. I have the tenders received for the properties and the marketing reports of the real estate agents. Furthermore, the focus under s 176 is not whether the best price reasonably obtainable was in fact obtained, but whether the mortgagee exercising its power of sale has taken reasonable care to obtain the best price reasonably available. As Wylie J noted in Westpac v Lamb:8

..ultimately a property is only worth what somebody is prepared to pay for it, and valuations lose much of their force when the mortgagee has taken reasonable care and there has been a properly conducted auction.

[14]      Ms Zhang argues that Westpac will suffer no prejudice if the adjournment is granted. I do not agree that is necessarily the case. Ms Zhang has not put before the court any information concerning her financial position to substantiate this submission. Westpac is entitled to either payment of its judgment or to have

7      Westpac New Zealand Ltd v Lamb [2012] NZHC 319.

8 At [61].

Ms Zhang’s affairs investigated by the Official Assignee. Westpac will be put to significant additional cost of preparing for and attending further hearings if an adjournment is granted, which it would appear there is little (if any) prospect that it will recover.

[15]      There are also relevant public policy considerations. Bankruptcy proceedings should be dealt with expeditiously. They should not be adjourned successively, particularly in a case such as this where there is no information before the court concerning the debtor’s financial circumstances.

[16]      This case was already adjourned on 9 September 2019 because Ms Zhang’s son was disruptive. A day’s hearing time was lost. She now seeks a further adjournment for a reason that would not have arisen had she engaged a lawyer, as she was advised to do, when Westpac first commenced its claim or in the months following entry of its judgment. To grant the adjournment would mean that a second day of court time would be lost. The resources of the court are precious and limited and are not to be squandered in such a manner.

Result

[17]      Weighing matters in the balance, I concluded that it would not be just to grant the adjournment. Ms Zhang’s application for an adjournment was therefore refused.

O G Paulsen

Associate Judge

Solicitors:

Simpson Grierson, Auckland

Y Zhang, Auckland (in person judgment debtor)

Auckland Council – Legal Services, Auckland (Mr Govind)