Zhang v Zhai - [2013] NZHC 1303

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

CIV-2012-404-6491 [2013] NZHC 1303

BETWEEN SHAOHE ZHANG Plaintiff

AND

XIAOJUN ZHAI and AIDONG ZHONG Defendants

Hearing: 29 May 2013

Appearances:

Mr Henry for applicant
Mr St John and Mr Liu for respondent

Judgment:

5 June 2013

JUDGMENT OF ASSOCIATE JUDGE J P DOOGUE

[on Application for Security for Costs]

This judgment was delivered by me on
5.06.13 at 4 p.m, pursuant to

Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Date……………

ZHANG v ZHAI & Anor [2013] NZHC 1303 [5 June 2013]

[1] The plaintiff has brought proceedings seeking to enforce an agreement for sale and purchase that was entered into between the parties in or about 3 August
2003 pursuant to which the plaintiff agreed to purchase a property from the defendants situated at 23A Margan Avenue, New Lynn, Auckland for $348,000. The plaintiff paid a deposit of $20,000 on the transaction. The agreement was conditional upon issue of a new title but there is no dispute that that occurred and that the agreement in fact became unconditional. That occurred in or about 22 June
2004.

[2] There was a long period of inactivity during which the defendants continued to reside in the property. On 14 May 2012 the plaintiff arranged service of a settlement notice on the defendants but the defendants have refused to settle the transaction. On 1 November 2012 the plaintiff filed the present proceeding.

[3] The defendants have filed a defence in which they first of all agreed about the outlined facts concerning the agreement for sale and purchase including the incorporation into the agreement of the condition relating to the issue of a new title. They alleged that the plaintiff is in breach of a contract because he would not at any time comply with his settlement obligations by which the defendants mean tendering the balance of the purchase price or any of the settlement documents required to be tendered by the plaintiff. By way of affirmative defences they allege, again, the failure to tender settlement documents etc. They further allege that the plaintiff is engaged in prolonged, inordinate and inexcusable delay in bringing the action and that he has acquiesced in the matters complained of. As well, Mr Henry advised me that the defendant will be further alleging that the plaintiff made statements to the defendants which amounted to express acquiescence in the failure to complete the transaction. As well the defendants say that requiring them now to settle the transaction would cause them hardship. They say that the property currently has a capital valuation of $540,000 compared with the purchase price of bargained for in
2003 of $348,000. They also allege that the defence of laches is available to them because by analogy with the limitation period in the Limitation Act the plaintiff should be regarded at equity as being barred from bringing the claim that he does for specific performance. They also plead the action is barred by s 4…

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: [2013] NZHC 1303
Decision Date: 5 June 2013

CaseChat Overview and Summary

The case of Zhang v Zhai and Zhong involves a plaintiff seeking to enforce a sale and purchase agreement for a property located at 23A Margan Avenue, New Lynn, Auckland. The plaintiff, Shaohe Zhang, entered into an agreement with the defendants, Xiaojun Zhai and Aidong Zhong, to purchase the property for $348,000, with a deposit of $20,000 paid. The agreement became unconditional upon the issue of a new title, which occurred in or about 22 June 2004. Despite the agreement becoming unconditional, the defendants refused to settle the transaction, prompting the plaintiff to file proceedings on 1 November 2012. The defendants have raised various defences, including breach of contract, prolonged delay, acquiescence, frustration of contract, and limitations.

The central legal issue in this case is whether the defendants' application for an order for security for costs under Rule 5.45 of the High Court Rules should be granted. The defendants argue that the plaintiff is a resident out of New Zealand, as he spends most of his time in China and has plans to retire in New Zealand. The court must determine if the plaintiff falls under Rule 5.45(1)(a)(i), which pertains to plaintiffs who are residents outside New Zealand, and if so, whether it is just to order the plaintiff to provide security for costs.

The court found that the plaintiff is indeed a resident out of New Zealand as he primarily resides in China. The court considered the equities of the case, including the strength of the plaintiff's case and the potential prejudice to the defendants if they were to succeed but be unable to enforce a costs order. The court found that the plaintiff's case was strong, but the delay in bringing the action and the balance of equities warranted an order for security for costs. The court concluded that it would be just to order the plaintiff to provide security for costs in the sum of $25,000, considering the likely duration of the trial and the plaintiff's ability to meet the security requirement.

The court ordered that the plaintiff provide security for costs in the sum of $25,000, with the possibility of alternative means of providing security, such as a term deposit. The parties were given the opportunity to confer on the matter and file memoranda on costs within ten working days.

Orders