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Zheng v Deng

Zheng v Deng

Case [2024] NZHC 1773 3 July 2024

Costs

Jurisdiction

Admissibility of Evidence

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IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002730

[2024] NZHC 1773

BETWEEN
LU ZHENG

First Plaintiff

ORIENT CONSTRUCTION LIMITED
Second Plaintiff

AND

DONGLIN DENG

First Defendant

BIN JIANG
Second Defendant

ORIENT HOMES LIMITED
Third Defendant

.../intituling cont over

Hearing: On the papers

Counsel:

D Zhang and E Tie for Plaintiffs JD Turner for First Defendant

Judgment:

3 July 2024

JUDGMENT OF DOWNS J

(Costs)

This judgment was delivered by me on Wednesday, 3 July 2024 at 2 pm pursuant to r 11.5 of the High Court Rules 2016.

Registrar/Deputy Registrar

Solicitors:
Advent Ark Lawyers, Auckland.
McVeagh Fleming Lawyers, Auckland.

ZHENG v DENG [2024] NZHC 1773 [3 July 2024]

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

The issue

[1] Lu Zheng alleged a partnership with Donglin Deng. I held no partnership existed.1 The Court of Appeal2 and Supreme Court3 corrected that. This judgment determines costs in light of those appeals.4

[2] Costs are not contested in relation to the recent taking of an account of the partnership.5

Success of the parties

[3] Mr Deng continues to characterise himself as the real victor in the litigation. Mr Deng succeeded in resisting seven of eight of Mr Zheng’s causes of action and all claims brought by Orient Construction Ltd.6 So, Mr Deng contends he did not fail in terms of r 14.2(1)(a) of the High Court Rules 2016.

[4] I do not accept this characterisation. As I observed earlier in this litigation, the most important cause of action “by some margin” was whether a partnership existed.7 Mr Zheng succeeded on that cause of action, and it occupied the preponderance of trial time. So, Mr Zheng succeeded on an “overall basis”8 and is entitled to costs.9 That said, Mr Deng’s success on the other causes of action—success undisturbed by either the Court of Appeal or Supreme Court—requires recognition. This is because costs may be reduced to recognise partial success of the other party.10

[5] Mr Zheng accepts his costs should be discounted by 25 percent to reflect Mr Deng’s success. This level of reduction is apt. While Mr Zheng was unsuccessful

1      Zheng v Deng [2019] NZHC 3236 [High Court judgment].
2      Zheng v Deng [2020] NZCA 614, [2021] NZCCLR 30 [Court of Appeal judgment].
3      Deng v Zheng [2022] NZSC 76, [2022] 1 NZLR 151 [Supreme Court judgment].
4      I ordered Mr Zheng pay Mr Deng costs and disbursements: Zheng v Deng [2020] NZHC 959 [First costs judgment]. That order was set aside: Court of Appeal judgment, above n 2, at [140].
5      Zheng v Deng [2024] NZHC 586. At [34] I considered each party had some success.
6      Orient Construction.
7      Zheng v Deng [2022] NZHC 2595 at [7].
8      Middeldorp v Avondale Jockey Club Inc [2021] NZSC 117 at [13].
9      However, I am not persuaded…

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 Zheng v Deng

Details

AGLC: Zheng v Deng [2024] NZHC 1773
Case: [2024] NZHC 1773
Decision Date: 3 July 2024

CaseChat Overview and Summary

In Zheng v Deng, the High Court of New Zealand resolved the dispute between Lu Zheng and Donglin Deng, along with several other defendants, regarding a claimed partnership and associated financial matters. The case was initially decided in Zheng's favour on the issue of partnership, but this was overturned by the Court of Appeal and the Supreme Court. The current judgment focuses on determining the costs incurred during the litigation process.

The primary legal issues addressed by the court were the apportionment of costs between the parties, considering the outcome of the litigation and the specific points of contention regarding the costs themselves. This included determining whether Zheng's costs should be reduced to reflect Deng's partial success, the admissibility and usefulness of expert evidence, the reasonableness of time spent on trial preparation and discovery, the costs associated with the preparation of a chronology of events, the eligibility of disbursements paid by a third party, the costs associated with second counsel, and the impact of settlement offers on costs.

The court found that although Deng had succeeded on several counts, Zheng was the overall winner due to his success on the critical issue of the partnership. Consequently, Zheng was entitled to costs, albeit reduced by 25% to account for Deng's partial success. The court ruled on several specific points, including allowing expert fees, applying higher costs for complex trial preparation and discovery, permitting costs for the preparation of a chronology, disallowing disbursements paid by Orient Construction, and refusing costs for second counsel who lacked a practising certificate. Additionally, the court found that Zheng's rejection of Deng's settlement offer was reasonable and did not warrant a reduction in costs.

In conclusion, the court ordered Deng to pay Zheng costs totaling $106,026.40, which included higher costs for certain preparatory steps, a 25% reduction for Deng's partial success, and reimbursement for expert fees incurred by Zheng. This decision balanced the overall success of Zheng with the need to recognize Deng's partial victories.

Orders