Zheng v Deng - [2019] NZHC 2762

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002730

[2019] NZHC 2762

BETWEEN
LU ZHENG

First Plaintiff

ORIENT CONSTRUCTION LIMITED
Second Plaintiff

AND

DONGLIN DEN

First Defendant

BIN JIANG
Second Defendant

ORIENT HOMES LIMITED
Third Defendant

EVERSOLID CONSTRUCTION LIMITED
Fourth Defendant

HONGLAN LIU
Fifth Defendant

D&R HOMES LIMITED
Sixth Defendant

YAN JIN

Seventh Defendant

TONG ZHU
Eighth Defendant

YAOKUN CHEN

Ninth Defendant

Hearing: 23 October 2019

Appearances:

D Zhang and S Zhao for the Plaintiffs

L Huang for the First and Third Defendants
K L Chiu for Second, Fifth and Sixth Defendants

Judgment:

29 October 2019

ZHENG v DEN [2019] NZHC 2762 [29 October 2019]

JUDGMENT OF ASSOCIATE JUDGE SARGISSON

This judgment was delivered by me on 29 October 2019 at 3.30 p.m. pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date.......................................

[1]This judgment deals with an application for leave to amend pleadings.

[2] The plaintiffs, Mr Zheng and Orient Construction Ltd, have brought claims against the nine named defendants in this proceeding. The origin of the dispute is that Mr Zheng was involved in two business ventures, one with Mr Deng (the first defendant) and one with both Mr Deng and Mr Jiang (the second defendant), in which they would acquire, develop and sell land. Those ventures have ceased to function, and the plaintiffs now seek to resolve their situation through these proceedings.

[3] A ten day trial is scheduled to begin on 18 November 2019. The plaintiffs filed their most recent amended statement of claim on 12 July 2019. They now seek to further amend their statement of claim. Because the close of pleadings date has passed they require leave to do so.1 Mr Deng and Orient Homes Ltd (the third defendant) oppose. For convenience, I will refer to the first and third defendants as “the respondents” for the purposes of this application.

[4] In this judgment I grant leave for the plaintiffs to make the sought amendments. Before briefly explaining my reasons I begin with the statement of claim and the proposed changes, and I set out the relevant legal framework.

1 High Court Rules 2016, r 7.7.

A summary of the case

The Orient Partnership

[5] The current statement of claim sets out a narrative wherein Mr Zheng was involved in two business enterprises. The first is an alleged partnership referred to as the Orient Partnership. The partners were Mr Zheng and Mr Deng. The Orient Partnership allegedly involved the partners purchasing land for the purpose of development and sale. Allegedly, they did this through corporate vehicles, including those named as other defendants along with their director/shareholders.

[6] Relating to the Orient Partnership, Mr Zheng alleges that Mr Deng owes him personal debts. He says Mr Deng withdrew money from the various bank accounts used by the Orient partners in April and May 2015. He says Mr Deng then declared the partnership at an end, despite ongoing projects, and took a further $24,000…

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: [2019] NZHC 2762
Decision Date: 29 October 2019

CaseChat Overview and Summary

Zheng v Deng is a case before the High Court of New Zealand, Auckland Registry, involving multiple parties and claims related to business ventures. The plaintiffs, Lu Zheng and Orient Construction Limited, seek to amend their statement of claim against the nine defendants, including Donglin Deng and Bin Jiang, over alleged breaches of partnership agreements and fiduciary duties. The defendants oppose the amendment due to the late stage of the proceedings and the extensive nature of the proposed changes.

The key legal issues in this case are whether the plaintiffs should be granted leave to amend their pleadings after the close of pleadings date and if the proposed amendments serve the interests of justice without causing undue prejudice or delay to the defendants. The plaintiffs argue that the amendments are necessary to update the court on recent events and provide further details to clarify their claims. The defendants, however, contend that the late timing and significant scope of the amendments will prejudice their ability to prepare a defence and potentially disrupt the trial schedule.

The court considered the merits of the proposed amendments, the timing of the application, and the potential for prejudice to the defendants. It found that while the amendments were made late, they did not introduce entirely new facts or parties but rather updated existing claims and clarified the background of the alleged partnerships. The court concluded that the balance of justice favoured granting leave for the amendments, as they would allow the full controversy to be presented at trial without causing significant prejudice or delay. The court set a timetable for filing amended pleadings and briefs of evidence, subject to any further directions from the Duty Judge or Trial Judge.

The final orders of the court granted the plaintiffs leave to amend their statement of claim, set deadlines for filing amended pleadings and briefs of evidence, and reserved costs for later determination. The court also noted a separate application for leave to file a counterclaim, which would be considered at a later stage. The decision allows the case to proceed with the amended claims, ensuring that all relevant issues are presented for determination at trial.

Orders