Zhong v Ong

[2017] NZHC 2476

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2014-404-002996 [2017] NZHC 2476

BETWEEN

TING LONG ZHONG

Plaintiff

AND

MICHAEL ONG First Defendant

STANLEY SHING LOO Second Defendant

Appearances:

R Kaur and N Lostitmonton for Plaintiff

D K Wilson for First Defendant

Judgment:

10 October 2017

JUDGMENT OF COURTNEY J

This judgment was delivered by Justice Courtney on 10 October 2017 at 3.00 pm

pursuant to R 11.5 of the High Court Rules

Registrar / Deputy Registrar

Date……………………….

ZHONG v ONG & OR [2017] NZHC 2476 [10 October 2017]

Introduction

[1]      This costs judgment follows my dismissal of Mr Zhong’s claim for damages against  Mr  Ong.1      Further  steps  are  required  to  determine  the  division  of  sale proceeds still held in a solicitor’s trust account.  This may take several months and, in the meantime, parties are agreed that I should determine the issue of costs up to and including the trial and Mr Ong’s application for a stay of execution in respect of any costs order made.

Costs

[2]      Mr Ong seeks 2B costs which total $39,471.  In addition, he seeks an uplift of

30 per cent in respect of preparation for and appearance at the trial of $3,679.50. This is based on a Calderbank letter sent four weeks before the trial.

[3]      Mr Zhong resists the time claimed for inspection of documents.  The daily allocation for 2B costs is 1.5 but Ms Kaur, for Mr Zhong, contends that inspection involved only a few pages of documents and did  not justify the standard daily allocation.  Mr Wilson, for Mr Ong, responds that inspection encompassed not only the personal inspection of original documents at counsel’s chambers but also the review of documents obtained on discovery in electronic form.  The latter exercise required more than 1.5 days.  I accept that the standard allocation is appropriate and there should be no reduction from it.

[4]      Mr Zhong also resists any uplift based on the Calderbank offer.  The offer, made in a letter dated 31 March 2017, proposed settlement by way of a division of the sale proceeds 55/45 per cent in Mr Zhong’s favour.  This would have resulted in Mr Zhong receiving $528,000.   Mr Zhong was in fact seeking to have the sale proceeds divided on a basis that would see him receive $676,100.

[5]      Ms  Kaur  resisted  any  suggestion  of  uplift  on  the  basis  that  Mr  Ong maintained until shortly before trial that $120,000 paid towards the settlement of the property had come from his funds not, as Mr Zhong asserted, from Mr Zhong’s

funds.  Mr Ong’s refusal to accept that put Mr Zhong to considerable time and cost

1      Zhong v Ong [2017] NZHC 1537.

obtaining evidence to confirm the source of the funding.  Although it might be more appropriately couched as a reason to reduce the costs to which Mr Ong would otherwise be entitled, the outcome is much the same.  I accept that, whilst ordinarily Mr Ong could expect a small uplift to reflect his Calderbank offer, any increase would be inappropriate given the position in relation to the issue over the $120,000. I consider that costs on a 2B basis is appropriate without any uplift.

[6]      The result is costs on a 2B basis of $39,471 and disbursements of $220.

Stay application

[7]      Mr Zhong has appealed the judgment against him and has applied for a stay of execution of the costs judgment.   Initially the stay application was advanced in relation to both the substantive judgment and (in anticipation of) the costs order. Since my judgment of 5 July 2017 did not actually result in any direction regarding the division of the sale proceeds a stay application was plainly misconceived insofar as it related to the substantive judgment.   By consent, however, I treat the stay application as live for the purposes of the costs order.

[8]      A court considering a stay application is balancing the successful litigant’s right to enforce the judgment against the need to preserve the unsuccessful litigant’s position pending appeal.2     The principles are well settled, with the relevant considerations being:3

(a)       Whether  the  appeal  will  be  rendered  nugatory  if  the  stay  is  not granted;

(b)      The bona fides of the unsuccessful party’s appeal;

(c)       Whether the successful party will be injuriously affected by the stay; (d)      The effect on third parties;

2      Duncan v Osborne Buildings Ltd (1992) 6 PRNZ 85 (CA) at 87; Keung v GBR Trustees Ltd & Ors [2010] NZCA 396.

3      Dymocks Franchise Systems (NSW) Pty Ltd v Todd (No 2) [2005] 1 NZLR 145 (PC).

(e)       The novelty and importance of questions involved; (f) The public interest in the proceeding;

(g)      The overall balance of convenience; and

(h)      The strength of the appeal.

[9]      In this case I am satisfied that there is no basis on which to stay the costs order.   There is now approximately $1m being held in a solicitor’s trust account being the proceeds of sale. Even on Mr Zhong’s own case, Mr Ong would be entitled to a proportion of those funds so there is no risk that, in the event of a successful appeal, the amount paid under a costs order could not be recouped from Mr Ong’s share of the proceeds if that were necessary.  Requiring Mr Zhong to pay the costs award at this point will not affect his appeal.  Although Mr Ong has not indicated any injurious effect in the event of a stay, nor is there any reason that he ought to be deprived of the costs order I have made.

Result

[10]     Mr Ong is entitled to costs on a 2B basis.

[11]     The application for a stay of the costs order is refused.

[12]     It was agreed at the hearing of the stay application that costs on the stay application itself would be reserved pending the final outcome of the substantive

issues.

P Courtney J