Zhou v Chi - [2018] NZHC 1298

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2017-404-1761

[2018] NZHC 1298

BETWEEN
XIN ZHOU

Applicant

AND

XIAO RAN CHI

First Respondent

JIAN PING YUE
Second Respondent

WEI HUANG YUE

Third Respondent

Hearing: 25 May 2018

Appearances:

A Manuson and E H Callister-Baker for the Applicant D Zhang for the Respondent

Judgment:

5 June 2018

JUDGMENT OF MUIR J

This judgment was delivered by me on Tuesday 5 June 2018 at 3.00 pm Pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date:…………………………

Solicitors:
A Manuson, Presitge Lawyers Limited, Auckland
E H Callister-Baker, Prestige Lawyers Limited, Auckland D Zhang, Amicus Law, Auckland

ZHOU v CHI [2018] NZHC 1298 [5 June 2018]

Introduction

[1] The third respondent Mr Wei Huang Yue and his parents, the first and second respondents, apply for orders discharging a freezing order made by Courtney J on 1 August 2017 (as subsequently varied by Venning and Palmer JJ).

[2] The charging order was in respect of the net proceeds of sale (comprising a little more than $600,000) of an apartment at 10/C-125A Hobson Street, Auckland Central. This apartment had, for a period of approximately four years been the family home of the Mr Yue and his wife, Ms Zhou, in whose favour the freezing order was obtained. Subsequently, however, they had moved to an address in Blockhouse Bay Road. Subsequently again their marriage broke down and Mr Yue returned to China.

[3] Ms Zhou’s application for a charging order proceeded on the basis that the Hobson Street apartment was relationship property and that the transfer of the proceeds of sale to Mr Yue’s parents was a disposition which could be set aside under s 44 of the Property (Relationships) Act 1976 (the Act).

[4] Mr Yue’s position is that although he was the registered proprietor of the apartment, he had at all times held it on trust for his parents. In addition he says that, even if that were not the case, the property had been acquired many years prior to entry into his relationship with Ms Zhou and at the point it was no longer the family home its status reverted as a matter of law to that of separate property. For these reasons he says Ms Zhou never had a good arguable case to a claim against the proceeds of sale and accordingly there was no proper basis for the issue of a freezing order.

[5] He also says that even if Ms Zhou had a claim against the proceeds, her assumed half share (approximately $300,000) could be satisfied from Mr Yue’s interest in other relationship property in West Auckland. He says, therefore, that a freezing order was not necessary to protect any claim which (contrary to his position) Ms Zhou was able to sustain.

[6] Additionally (and significantly within the context of my decision) he argues that there was material nondisclosure in relation to the without notice application determined by Courtney J.

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 Zhou v Chi

Details

AGLC: Zhou v Chi [2018] NZHC 1298
Case: [2018] NZHC 1298
Decision Date: 5 June 2018

CaseChat Overview and Summary

Xin Zhou sought a freezing order over the proceeds of sale of an apartment at 10/C-125A Hobson Street, Auckland Central. The apartment had been the family home of Ms Zhou and Mr Wei Huang Yue and their child. After the marriage broke down, Mr Yue returned to China and the apartment was sold. Ms Zhou sought the freezing order on the basis that the apartment was relationship property and the transfer of the proceeds to Mr Yue's parents was a disposition which could be set aside under s 44 of the Property (Relationships) Act 1976. Mr Yue argued that the apartment had been acquired prior to the relationship and had reverted to the status of separate property when the parties moved to another property. He also argued that Ms Zhou's claims could be satisfied from his interest in another property. The court discharged the freezing order because Ms Zhou's affidavit did not make full and frank disclosure of all material facts. She did not disclose that the property at 236C Blockhouse Bay Road was registered in the name of Ms Zhou and Mr Yue, that Mr Yue had made substantial financial contributions to its redevelopment, or that there was an agreement recognising Mr Yue's parents' interest in the Hobson Street apartment. The court held that the nondisclosures were sufficiently material and impacted on the original exercise of judicial discretion, and that the freezing order should be discharged. The court awarded costs to Mr Yue, but did not award indemnity costs. The court considered that the nondisclosure was more likely to have been an oversight on the part of counsel rather than a deliberate withholding of information by Ms Zhou. The court also considered that an award of indemnity costs would be implicitly to reward actions outside the Rules. The court awarded costs of 25 per cent above scale costs, recognising the critical importance of full and fair disclosure of all material facts on a without notice application.

Orders