IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE	
CIV-2023-409-367
[2023] NZHC 2010	

BETWEEN	XIAOXUAN QI and LIN ZHANG
Plaintiffs	
AND	FANG LIANG (also known as Ria Leung) Defendant	

Hearing:	(On the papers)	
Counsel:	A J Summerlee and S R Patient for Plaintiffs	
Judgment:	28 July 2023	

JUDGMENT OF ASSOCIATE JUDGE LESTER

XIAOXUAN QI and LIN ZHANG v FANG LIANG (also known as Ria Leung) [2023] NZHC 2010 [28 July 2023]

[1]	The plaintiffs apply without notice for leave to issue a charging order before judgment under r 17.41 of the High Court Rules 2016 (the Rules).

[2]	The plaintiffs in this proceeding seek judgment against the defendant by way of summary judgment for an unpaid loan they made to the defendant. The plaintiffs say the defendant has, in WeChat messages, accepted she is liable to pay the amount claimed in the proceeding and those messages have been produced in the affidavit in support of the application for summary judgment and of the application for pre-judgment charging orders.

[3]	Rule 17.41 provides:

Leave to issue charging order

Leave to issue a charging order before judgment may be granted only on proof that the liable party, with intent to defeat either his or her creditors or the entitled party or both,—

(a)	is removing, concealing, or disposing of the liable party’s property; or

(b)	is absent from or about to leave New Zealand.

[4]	In McKay v 314 Maunganui Road Ltd, (under the previous r 567 which was materially similar), Keane J held:1

To obtain the benefit of the rule a claimant need not show a serious question to be tried or that he or she is favoured by the balance of convenience and justice overall, but must satisfy a test that is equally stringent.

[5]	In this case, the plaintiffs rely on r 17.41(a) asserting that the defendant is disposing of her property with the intent to defeat their claim.

[6]	McGechan on Procedure provides that a high standard of proof is required.2 Concrete evidence establishing one of the grounds is required. Conjecture, even reasonable conjecture will not suffice.

[7]	The plaintiffs rely on the following factors to meet that high standard.

1	In Mckay v 314 Maunganui Road Ltd, I note that case was an application for review from Associate Judge Robinson’s decision to decline to grant leave for a pre-judgment charging order.
2	Robert Osborne (ed) McGechan on Procedure (online ed, Thomson Reuters at [HR 17.41.03].

[8]	There is evidence that the defendant misled the plaintiffs as to her ability to repay the loan from the sale of another asset she held. The evidence is that in the WeChat exchange the defendant represented that the asset had been sold for $45,000. The plaintiffs have obtained a copy of the agreement for sale and purchase showing the asset had been sold for $90,000 which would clear their debt.

[9]	The plaintiffs have produced evidence that the defendant’s home is on the market. The first-named plaintiff’s evidence is that the defendant told them that she was moving to Australia.   At that stage Mr Qi says he was not concerned about     the defendant moving to Australia because he understood he would be paid from the proceeds of the asset sale referred to above.

[10]	Mr Qi also recounts that the defendant told him that she was impecunious. This coupled with the defendant saying the asset had sold for only half of what it had sold for coupled with the defendant going to Australia without making any provision to pay, is said to show the necessary intent to defeat the plaintiffs’ claim.

[11]	Mr Summerlee, counsel for the plaintiffs, in his memorandum of support sums up the situation by saying the evidence shows the defendant is in the process of disposing of her property, is leaving New Zealand and has not made any provision to pay the plaintiffs either from the sale of the asset referred to above or from the sale of her home. Mr Summerlee relies on Justice Gordon’s decision in AHS Construction Ltd (formerly trading as Advanced Housing Systems NZ Ltd) v Andrews,3 where the Court accepted that the necessary intent to defeat a creditor’s claim could be inferred from the liable party arranging to sell their New Zealand assets without making provision to pay the debtor.

[12]	I am satisfied the defendant is well aware of the outstanding debt. The defendant acknowledged the debt in the WeChat exchange I have referred to. In that exchange she appears to misrepresent the sale price of the asset sale. While the outstanding debt is the subject of the WeChat exchange, the defendant makes no offer

3	AHS Construction Ltd (formerly trading as Advanced Housing Systems NZ Ltd) v Andrews [2019] NZHC 1779.

to make the repayment from the proceeds of the sale of her home. All the factors point to the defendant seeking to defeat the plaintiffs’ claim.

[13]	I am satisfied this is an appropriate case for an interim charging order. There is leave to issue a charging order before judgment over the defendant’s interest at 125 Grahams Road, Burnside, Christchurch, more particularly described as Record of Title CB34A/742.

[14]	The evidence satisfies me that the defendant, Ria Leung, is the same person as Fang Liang who is the registered proprietor of the above property.

[15]	Costs are reserved.

Associate Judge Lester

Solicitors:
Parry Field Lawyers, Christchurch (for Plaintiffs)