Zheng v Deng
[2019] NZHC 2811
•31 October 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV 2017-404-002730
[2019] NZHC 2811
BETWEEN LU ZHENG
First Plaintiff
AND
ORIENT CONSTRUCTION LIMITED
Second Plaintiff
AND
DONGLIN DENG
First Defendant
AND
BIN JIANG
Second Defendant
AND
ORIENT HOMES LIMITED
Third Defendant
AND
EVERSOLID CONSTRUCTION LIMITED
Fourth Defendant
AND
HONGLAN LIU
Fifth Defendant
continued overleaf
Tele Conference: 30 October 2019 Appearances:
D Zhang for the Plaintiffs
J Turner for the First and Third Defendants
K L Chiu for Second, Fifth and Sixth DefendantsJudgment:
31 October 2019
JUDGMENT OF GWYN J
This judgment was delivered by me on 31 October 2019 at 3.00pm Pursuant to Rule 11.5 of the High Court Rules
…………………………
Registrar/Deputy Registrar
ZHENG v DENG [2019] NZHC 2811 [31 October 2019]
continued from previous page
AND D & R HOMES LIMITED
Sixth Defendant
AND
YAN JIN
Seventh Defendant
AND
TONG ZHU
Eighth Defendant
AND
YAOKUN CHEN
Ninth Defendant
[1] When this matter came before Edwards J on 3 October 2019 she made timetabling orders which are set out in her minute of that date.
[2] Since then, Associate Judge Sargisson heard the plaintiffs’ application for leave to file an amended statement of claim, on 23 October 2019. Her Honour’s judgment, granting leave, was released on 29 October 2019.
[3] At this morning’s hearing I had before me pre-trial memoranda from the plaintiffs and from the first and third defendants. The first and third defendants have also filed a Comparative Plaintiff and Defendant Chronology.
Further interlocutory applications
[4] Judge Sargisson was not able to hear the applications by the second, fifth and sixth defendants requiring the plaintiffs to file a more explicit statement of claim and to file a cross claim against the first defendant on 23 October 2019. Both applications are opposed.
Application for further and better particulars
[5] I direct that the first of these applications, for further and better particulars of the plaintiffs’ statement of claim, be set down for an hour and a half hearing before an Associate Judge on a possible date of 6 November 2019. Mr Turner for the first and third defendants is excused from attendance at that hearing.
[6] Counsel indicated tentative agreement on a timetable, if the application for further particulars were to be granted, with provision of the particulars within five working days and a statement of defence in response three working days later.
[7] Although I have directed the matter be set down for hearing before an Associate Judge, I observe that on the face of it the issues raised by the second defendant are principally matters of evidence rather than pleadings per se. The second, fifth and sixth defendants appear to be asserting that the evidence filed by the plaintiffs does not support the plaintiffs’ pleaded claim of a partnership relationship or in the
alternative a Chirnside v Fay joint venture. It is not clear that any further particulars of the statement of claim will remedy that alleged deficiency.
Application for leave to file cross-claim
[8] I heard argument from Ms Chiu and Mr Turner on the second outstanding application, the application by the second, fifth and sixth defendants for leave to file a cross claim against the first defendant. The application is opposed by the first defendant (Notice of Opposition dated 11 October 2019)1.
[9] Rule 4.18 of the High Court Rules 2016 requires that cross-claims between defendants may be filed as of right at any time before the close of pleadings. Rule 7.7 provides that no interlocutory application may be made or step taken after the close of pleadings date without the leave of a Judge.
[10] As the commentary to r 7.7 notes, the close of pleadings date has a clear purpose, that is, to ensure that the pleadings have been completed and all interlocutory matters have been completed, so that the parties can concentrate on preparing for the hearing.2 That preparation is demanding work that requires clear time and attention.
It should not be subject to disruption from interlocutory matters.3
[11] In order to obtain leave to take steps after the close of pleadings date, the applicant must show that doing so would be in the interests of justice, will not significantly prejudice other parties, or cause significant delay.4
[12] The application has been filed very late in the proceedings, in the context of a ten day hearing date set down for 18 November 2019, which all counsel assured me they were very anxious to preserve. Even as recently as the call of this matter before Edwards J on 3 October 2019 there was no indication from the second, fifth and sixth plaintiffs of an intention to seek leave to file a cross claim.
1 Notice of Opposition dated 11 October 2019
2 McGechan on Procedure (online looseleaf ed, Thompson Reuters) at [HR 7.7.01].
3 RHH Ltd v Anderson (No 3) [2018] NZHC 2045 at [9].
4 Elders Pastoral v Marr [1987] 2 PRNZ 383 (CA) at 385, applied in Smallbone v London [2018] NZHC 3300 at [43].
[13] Mr Turner notes that the application could have been brought at any time from November 2017, particularly having regard to the cooperation between the defendants in the proceeding. He says that the proposed cross claim is based on a cooperation agreement between the two defendant parties, that was entered into in 2016, and well after the separation of business interests of the defendants from the plaintiffs on 31 May 2015. He submits that it did not involve the plaintiffs at all and is simply unrelated to the claim brought by the plaintiffs against the defendants.
[14] Ms Chiu submits that the agreement is referred to in her clients’ amended statement of defence but as Mr Turner notes that was not in the context of a possible cross claim. It cannot be taken as notice to the first defendant of the possibility of such a claim. On the material currently before me the basis for the proposed cross claim appears tenuous.
[15] Mr Turner submits, and I think it is self-evident, that at this late stage the time required to deal with responding to a cross claim by way of a statement of defence, as well as preparing any consequential evidence, would be seriously detrimental to his clients’ preparation for trial. There is also the question of additional costs.
[16] Any claim the second defendant may have against the first defendant is of course contingent on the second defendant being found liable to the plaintiffs. As Mr Turner notes, there will be nothing to preclude the second defendant from bringing such a claim, possibly in the District Court, if and when that liability eventuates.
[17] Having regard to all of these matters I am satisfied that the second, fifth and sixth defendants’ application does not satisfy the test under Elders Pastoral v Marr. The application for leave to file the cross claim is therefore refused.
Timetable directions
[18] By memorandum dated 29 October 2019, counsel for the plaintiffs notes that some steps in the timetable previously directed have not been met. The specific matters not yet completed and the reasons for the delay are set out in that memorandum. Counsel proposes an amended timetable at paragraph 6 of his memorandum.
[19] After hearing from all counsel, I amend the timetable in the terms sought at paragraph 6 of the plaintiffs’ memorandum, save that paragraph 6(d) is amended to provide that “the second defendant is to provide the plaintiff with all English translations of all Chinese documents by the end of 30 October 2019.” In addition, I direct that the plaintiffs are to file and serve a list of enactments and authorities to be relied on at trial by 8 November 2019.
Costs
[20]Costs are reserved.
Gwyn J
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