Zheng v Deng - [2020] NZHC 2387

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-002730

[2020] NZHC 2387

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

Judgment:

14 September 2020

JUDGMENT OF DOWNS J

This judgment was delivered by me on Monday, 14 September 2020 at 3 pm pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:
D Zhang, Auckland.
McVeagh Fleming, Auckland.

ZHENG v DENG [2020] NZHC 2387 [14 September 2020]

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 issues and arguments

[1] Mr Zheng sued Mr Deng and eight other defendants. I found against Mr Zheng.1 I later ordered he pay Mr Deng costs of $258,137.41; which includes disbursements of
$122,385.41.2 Mr Zheng has appealed both decisions to the Court of Appeal. The
appeals are to be heard 3 November 2020. Mr Zheng seeks a stay of the costs decision until the Court of Appeal has decided both appeals.

[2] Mr Zheng contends if he pays Mr Deng costs his appeals may be compromised, because even if successful, he would unlikely recover any money from Mr Deng. Mr Zheng says Mr Deng has no significant assets and Mr Deng “keeps a low asset profile in order to avoid creditors’ claims”.3 Mr Zheng also says the appeals are “genuinely arguable” and involve an important question of law under s 4(2) of the Partnership Act 1908.4 Mr Deng says Mr Zheng’s concerns about payment are speculative and there is no reason he should not be paid costs, as ordered, after Mr Zheng’s claim was roundly rejected.

Principle

[3]Rule 20.10 of the High Court Rules governs the application. It reads:

20.10 Stay of proceedings

(1) An appeal does not operate as a stay—

(a)of the proceedings appealed against; or

(b)of enforcement of any judgment or order appealed against.

(2) Despite subclause (1), the decision-maker or the court may, on application, do any 1 or more of the following pending determination of an appeal:

(a)order a stay of proceedings in relation to the decision appealed against:

(b)order a stay of enforcement of any judgment or order appealed against:

(c)grant any interim relief.

(3) An order made or relief granted under subclause (2) may—

1      Zheng v Deng [2019] NZHC 3236.
2      Zheng v Deng [2020] NZHC 959.
3      Mr Zheng’s written submission of 31 August 2020 at para 22.
4      At para 30.

(a)relate to enforcement of the whole of a judgment or order or to a particular form of enforcement:

(b)be subject to any conditions for the giving of security the decision- maker or the court thinks just.

[4] A party seeking a stay pending appeal must persuade the Court their appeal would be fruitless in the absence…

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 [2020] NZHC 2387
Case: [2020] NZHC 2387
Decision Date: 14 September 2020

CaseChat Overview and Summary

In the case of Zheng v Deng, Mr Zheng appealed against the High Court’s decision to reject his claim against Mr Deng and order him to pay costs. Mr Zheng sought a stay of the costs order pending the outcome of his appeal. The Court considered whether the appeal was genuinely arguable and whether the balance of convenience favoured a stay. The Court found that Mr Zheng had not established his appeal would be compromised without a stay. While the merits of the appeal were for the Court of Appeal, Mr Zheng’s primary claim that he and Mr Deng had a fiduciary relationship in the form of a partnership was not well supported. The Court also noted that Mr Deng was successful, and the claim would have been expensive to defend. The overall balance of convenience favoured Mr Deng, not Mr Zheng. The Court dismissed the application for a stay but ordered that $100,906.52 of the costs be held in the trust account of Mr Deng’s instructing solicitors until further order of the Court or Court of Appeal.
The Court held that Rule 20.10 of the High Court Rules governed the application. A party seeking a stay pending appeal must persuade the Court that their appeal would be fruitless in the absence of a stay. In this context, the Court kept a broad eye on the interests of justice, typically with reference to a host of considerations including the apparent strength of the appeal, and the overall balance of convenience. The Court considered the arguments of both parties and found that Mr Zheng had not established his appeal would be compromised without a stay. The Court also noted that Mr Deng was successful, and the claim would have been expensive to defend. The overall balance of convenience favoured Mr Deng, not Mr Zheng. The Court dismissed the application for a stay but ordered that $100,906.52 of the costs be held in the trust account of Mr Deng’s instructing solicitors until further order of the Court or Court of Appeal. The Court found that reasonable minds could disagree about the reasonableness of the disbursement and Mr Deng acknowledged this amount could be held on trust, albeit as an alternative submission.

Orders