Zhang v Yu - [2019] NZCA 677

IN THE COURT OF APPEAL OF NEW ZEALAND

I TE KŌTI PĪRA O AOTEAROA

CA75/2019
[2019] NZCA 677

BETWEEN	YIHUA ZHANG First Appellant WEI HU Second Appellant
AND	CHUNLIN YU Respondent

Counsel:	Appellants in person No appearance for Respondent
Judgment: (On the papers)	19 December 2019 at 12.30 pm

JUDGMENT OF BROWN J
(Review of Deputy Registrar’s decision)

The application to review the Deputy Registrar’s decision declining to dispense with security for costs is declined.

____________________________________________________________________

REASONS

Background

This appeal concerns three judgments of van Bohemen J in the High Court at Auckland. On 27 August 2018 judgment was given in favour of the appellants against Ms Yu for proven specific losses in the sum of $721,952.75 together with costs and certain other items.[1] However on 29 January 2019 on the application of Ms Yu the Judge made an order recalling his earlier decision. He upheld Ms Yu’s protest to jurisdiction and dismissed the appellants’ claim.[2] In a judgment dated 19 February 2019 the Judge dismissed a request by Dr Hu for recall of the second judgment.[3]
[1]Zhang v Yu [2018] NZHC 2215.
[2]Zhang v Yu [2019] NZHC 29.
[3]Zhang v Yu [2019] NZHC 206.
On 27 February 2019 the appellants filed a notice of appeal against the second and third decisions and sought an order reinstating the first decision.
Security for costs was set at $6,600. On 19 March 2019 Dr Hu applied under r 35(6)(c) of the Court of Appeal (Civil) Rules 2005 (the Rules) for an order disposing with security. However on 25 March 2019 payment of security in the sum of $6,600 was made.[4]
[4]It was acknowledged in a letter from the Registry dated 11 April 2019.
Nevertheless the appellants pursued their application, providing copies of their bank statements. In a decision dated 28 May 2019 the Deputy Registrar declined the application. The appellants seek a review of that decision.

Relevant principles

The principles applicable to dispensation from security for costs were reviewed by the Supreme Court in Reekie v Attorney-General.[5] The Court stated that the Registrar should dispense with security if of the view that it is right to require the respondent to defend the judgment under challenge without the usual protection as to costs provided by security.[6] The Court explained:
[35] … we consider that the discretion to dispense with security should be exercised so as to:
(a)preserve access to the Court of Appeal by an impecunious appellant in the case of an appeal which a solvent appellant would reasonably wish to prosecute; and
(b)prevent the use of impecuniosity to secure the advantage of being able to prosecute an appeal which would not be sensibly pursued by a solvent litigant.
A reasonable and solvent litigant would not proceed with an appeal which is hopeless. Nor would a reasonable and solvent litigant proceed with an appeal where the benefits (economic or otherwise) to be obtained are outweighed by the costs (economic and otherwise) of the exercise (including the…

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 Zhang v Yu

Details

AGLC: Zhang v Yu [2019] NZCA 677
Case: [2019] NZCA 677
Decision Date: 19 December 2019 at 12.30 pm

CaseChat Overview and Summary

In the Court of Appeal of New Zealand, the appellants, Yihua Zhang and Wei Hu, appealed against the decisions of the High Court to dismiss their claim against Chunlin Yu. The initial judgment was in favour of the appellants, awarding specific losses and costs. However, subsequent judgments recalled the first decision and dismissed the appellants' claim. Security for costs was set at $6,600, which was later paid by the appellants. The appellants then sought to have the security for costs dispensed with but their application was declined by the Deputy Registrar.

The central legal issue in this appeal was whether the security for costs should be dispensed with based on the grounds that costs were unlikely to be ordered against the appellants, or that the appellants were impecunious and would suffer severe hardship if required to pay the security. The Supreme Court had outlined principles for dispensing with security for costs, emphasizing the importance of preserving access to the court for impecunious appellants while preventing the misuse of financial hardship to gain an unfair advantage. The Deputy Registrar had concluded that the appellants were not impecunious and that the prospects of success on the appeal were weak.

The Court of Appeal upheld the Deputy Registrar's decision, finding that the appellants had not demonstrated that they were impecunious, as they had managed to borrow funds to pay the security. The Court further noted that the appellants had not provided any evidence to suggest that Ms Yu would not defend the appeal, despite their assertions to the contrary. The Court of Appeal agreed with the Deputy Registrar that the security for costs should not be dispensed with, as it was not appropriate to deprive Ms Yu of the protection provided by the security for costs regime, given the weak prospects of success on the appeal.

The appeal to dispense with security for costs was declined, and the appellants were not granted any relief from the security for costs requirement. The Court of Appeal's decision emphasized the importance of the security for costs regime in ensuring fair access to the court and protecting respondents from undue financial burdens.

Orders