Zheng v Lyndon

[2021] NZHC 471

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2020-404-2182

[2021] NZHC 471

BETWEEN

LU ZHENG AND HIBISCUS INDEPENDENT TRUSTEES 2008 LTD
First Applicant

ZHENG LU HOLDINGS LTD
Second Applicant

AND

DAVID JULIAN RICHARD LYNDON, JENNIFER ROBYN LYNDON and LISA MICHELLE ARCHER

Respondents

Hearing:	26 February 2021
Counsel:	P J Dale QC for Applicants S J Tee for Respondents
Judgment:	11 March 2021

JUDGMENT OF BREWER J

This judgment was delivered by me on 11 March 2021 at 3:30 pm pursuant to Rule 11.5 High Court Rules.

Registrar/Deputy Registrar

Solicitors:

Skinners Law (Auckland) for Applicants Morton Tee Ltd (Auckland) for Respondents

ZHENG & HIBISCUS INDEPENDENT TRUSTEES 2008 LTD v LYNDON & ORS [2021] NZHC 471 [11

March 2021]

Introduction

[1]                  The applicants apply to transfer a proceeding from the District Court to this Court.1 The application is based upon s 89 of the District Court Act 2016 (“the Act”).

[2]                  In short, the applicants commenced proceedings in the District Court in 2016 claiming damages to their market garden business resulting from the presence of poplar trees on a boundary.

[3]                  On 20 February 2018, an order was made in the District Court giving the applicants until 9 March 2018 to:

(a)elect whether to file any application to transfer the proceedings to the High Court; and

(b)to file an amended statement of claim.

[4]                  On 7 November 2018, a further amended statement of claim was filed alleging total losses of $1,477,825. However, the quantum sought was $350,000 (being the limit of the District Court’s jurisdiction).

[5]                  On 11 December 2018, the case was put on the ready list in the District Court. No trial date has yet been allocated.

[6]                  There has been a change of counsel. Mr Dale QC now represents the applicants. Upon his advice, the applicants now wish to pursue the total quantum of their damages. It is expected the quantum will increase from that set out in the further amended statement of claim and a further pleading will be required.

[7]                  Mr Dale, on behalf of the applicants, filed an application in the District Court on 17 September 2020 to transfer the proceeding to this Court. An affidavit was filed in support. The respondents opposed, and also filed an affidavit.

1      Zheng v Lyndon DC North Shore CIV-2016-044-1425.

[8]                  On 30 October 2020, Judge Harrison declined the application to transfer the proceeding. The only reason he gave was that delay will occur if the proceeding were transferred to the High Court.

Discussion

[9]Section 89 of the Act provides:

High Court Judge may order removal of proceeding into High Court

(1)A High Court Judge may, on application by a party to a proceeding, order the removal of the proceeding into the High Court if the Judge is satisfied that it is desirable to do so.

(2)In deciding whether to make an order under subsection (1), the Judge must have regard to the following factors:

(a)the nature of the case:

(b)the complexity of the case:

(c)the general or public importance of the case:

(d)the amount in issue:

(e)the likely length of the hearing:

(f)the financial resources of the parties:

(g)whether it is otherwise in the interests of justice to make the order.

(3)The order may be made on such conditions, including conditions as to costs or giving security for costs, as the Judge thinks fit.

(4)This section overrides sections 86 to 88.

[10]              Mr Dale submits that there is a change in circumstances which justifies the applicants resiling from their decision to cap their claim at the limit of the District Court’s jurisdiction. Mr Zheng in his affidavit talks about damage by encroaching roots being greater than previously thought.

[11]              Mr Dale considers the case to be complex and containing issues of general or public importance relating to the rights of owners of land shaded by trees or encroached upon by tree roots. He points also to the amount in issue as being so much greater than the jurisdiction of the District Court as to make it essential that the case be tried in this Court.

[12]              I have considered the factors set out in s 89(2). There are significant matters going to the interests of justice which are against the granting of the application:

(a)The applicants accepted the jurisdiction of the District Court and capped their claim. Since 2016 the respondents have not felt in jeopardy for a greater sum.

(b)There is no real change in circumstances. Mr Zheng’s apprehensions about greater damage caused by roots than had been anticipated does not change the fact that until Mr Dale took responsibility for the case the applicants had waived the right to claim for more than $350,000. They had decided they would not pursue their claim to additional damages of more than $1.2 million.

(c)Judge Harrison declined to transfer the proceeding. His decision has not been appealed. Instead, the applicants seek to bypass the Judge’s decision by invoking the s 89 jurisdiction.

(d)This is not a matter of lifting a District Court proceeding to the High Court. The applicants’ case will need to be repleaded in this Court.

[13]Notwithstanding these factors, I have decided to grant the application:

(a)I agree with Mr Dale that the case has complexities of evidence and law.

(b)The amount in issue is so far above the District Court’s jurisdiction that holding the applicants to that jurisdiction (there is no estoppel claimed) would be against the interests of justice.

(c)Of real significance is that if I do not grant the application then the applicants can simply discontinue the proceeding in the District Court and then bring a fresh proceeding in this Court.

(d)Given the existence of Judge Harrison’s order refusing transfer, I would normally require the applicants to discontinue and start again. But:

(i)Judge Harrison did not give the parties a chance to be heard and gave no reasons which addressed the arguments for transfer. I can look at the issues afresh.

(ii)If there is a discontinuance, some of the claims will be time- barred. The evidence relating to the claims might still be relevant but the applicants would be barred from pursuing claims amounting to, perhaps, $300,000 or more which are already pleaded.

[14]              If there were a discontinuance the respondents would be entitled to their scale costs. I will make it a condition of granting the application that the applicants pay the respondents their scale costs.

Result

[15]The application is granted. I order the proceeding be removed into this Court.

[16]              I make it a condition of my order that the applicants pay the respondents scale costs to the amount that would have been payable if the applicants had discontinued the proceeding. If there is disagreement as to quantum, the parties must file their memoranda no later than 16 April 2021.

Brewer J