Zheng v Jun Yue Investment Limited

[2023] NZHC 3244

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2022-404-001743

[2023] NZHC 3244

BETWEEN

YINJI ZHENG

First Plaintiff

FUJUN LIU
Second Plaintiff

AND

JUN YUE INVESTMENT LIMITED

First Defendant

PING FAN
Second Defendant

YUE YANG

Third Defendant

HONGTAO ZHANG

Fourth Defendant

Hearing:	On the papers
Judgment:	17 November 2023

JUDGMENT OF DOWNS J

(Costs)

This judgment was delivered by me on Friday, 17 November 2023 at 10 am pursuant to r 11.5 of the High Court Rules.

Registrar/Deputy Registrar

Solicitors/Counsel:

Tompkins Wake, Auckland. Righteous Law, Auckland. JWA Johnson, Auckland.

SRG Judd, Auckland.

ZHENG v JUN YUE INVESTMENT LTD [2023] NZHC 3244 [17 November 2023]

[1]    This brief judgment addresses outstanding costs determinations against the second defendant, Ping Fan. I explain later why costs are not sought against other defendants.

[2]Ms Fan is now self-represented.

Injunction judgment

[3]    On 22 December 2022, the plaintiffs obtained interim orders against the first and second defendants by a judgment of Powell J.1 The Judge observed the plaintiffs were entitled to costs. He invited agreement. That was not forthcoming. The plaintiffs seek scale costs and disbursements totalling $16,035.

[4]    As with all of the other costs sought, Ms Fan says the figure should be reduced by 80 percent to reflect the public interest in the case, financial hardship, and “a lack of truthfulness and reliability” on the part of the plaintiffs in this litigation.

[5]    I do not accept this submission. No public interest issue arises—the case is wholly commercial in nature. Alleged financial hardship is not a basis for reducing costs. The contention the plaintiffs have been inaccurate and dishonest is a matter for trial; they were successful in obtaining interim orders and costs typically follow the event. There is no reason they should not.

[6]    However, I award $9,104, not $16,035. I do not accept items 22 and 24 of the plaintiffs’ costs schedule fall within band C, and therefore justify more time. Rather, I apply band B to both.

Abandoned application for leave to appeal

[7]    The plaintiffs seek costs and disbursement of $1,544, on a 2B  scale basis.  Ms Fan contends the correct classification is 2A, so a lesser amount should be awarded. I disagree. I award 2B, as sought.

1      Zheng v Jun Yue Investment Ltd [2022] NZHC 3605.

Legal costs judgment

[8]    Ms Fan appears to acknowledge the plaintiffs were ultimately successful but says the amount should be reduced by 80 percent for the reasons identified earlier. I have already rejected that argument.

[9]I award 2B costs of $2,509.50.

Costs on receivership judgment

[10]   On 13 July 2023, I appointed receivers to Jun Yue Investment Ltd,2 the first defendant, following an application by the plaintiffs to appoint liquidators.3 I said I was inclined to award 2B costs on a single interlocutory application. The plaintiffs seek such costs, which amount to $8,962.50, and disbursements of $40,209.80. Much of the latter concerns costs of reports by forensic accountancy experts.

[11]   Ms Fan contends the cost of these reports should be excluded as they were “completely unnecessary” to the appointment of a receiver. Again, I disagree. The reports helped demonstrate the “opaque”4 nature of Jun Yue Investment’s affairs, and illustrated the withdrawal of money by Ms Fan, which she then acknowledged, despite earlier testimony to the contrary. In short, the reports were relevant to the application and the disbursements are reasonable. I, therefore, award $49,172.30.

Costs apportionment

[12]   The plaintiffs seek costs against Ms Fan only. The third and fourth defendants have not played any role in the case. The remaining defendant is Jun Yue Investment. The plaintiffs contend costs should not be awarded against it as they hold shares in the company, and a costs award would, therefore, not be in their favour.

[13]   I accept this submission. It is consistent with the approach identified by the Court of Appeal in Totara Properties Whangarei Ltd v Cochrane.5

2      Jun Yue Investment.

3      Zheng v Jun Yue Investment Ltd [2023] NZHC 1824.

4 At [11].

5      Totara Properties Whangarei Ltd v Cochrane [2013] NZCA 283 at [36]–[38].

A final matter

[14]Ms Fan also contends the costs determinations should be made after trial.

[15]   To approach matters this way would be inconsistent with costs principles, which emphasise predictability, expedition, and costs following the event.

Result

[16]Ms Fan must pay the plaintiffs $62,329.80 in costs and disbursements.

……………………………..

Downs J