King David Investments Limited (in liquidation) v Zhang [2017] NZCA 37 (2 March 2017)

Last Updated: 13 March 2017

IN THE COURT OF APPEAL OF NEW ZEALAND
CA646/2016 [2017] NZCA 37
BETWEEN	KING DAVID INVESTMENTS LIMITED (IN LIQUIDATION) First Appellant
AND	JINYUE YOUNG Second Appellant
AND	HSIANG-FEN YING Third Appellant
AND	ZIE ZHANG Respondent

Hearing:	27 February 2017
Court:	Kós P, Wild and Brown JJ
Counsel:	No appearance for the First Appellant Second and Third Appellants in person P C Finau for the Respondent
Judgment:	2 March 2017 at 3.00pm

JUDGMENT OF THE COURT

1. The first appellant is struck out.
2. A new and rule-compliant notice of appeal is to be filed by the remaining appellants within ten working days, absent which the appeal will be struck out.

100. No order for costs.

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REASONS OF THE COURT

(Given by Kós P)

[1] This appeal has been set down for review at the direction of a Judge. Formally there are no applications before us today, but some quasi-applications can be inferred from a memorandum of counsel for the respondent dated 25 January 2017. They are:

• (a) that the first appellant, King David Investments Ltd (in liquidation), be struck out as the appeal appears to have been filed by the other appellants without the consent of its liquidator;
• (b) that the second appellant, Mr Young, be struck out for lack of standing to appeal;
• (c) that Mr Young be debarred from acting for Ms Ying, who is his wife; and
• (d) that the notice of appeal be struck out as prolix, irrelevant and abusive, or else confined.

Background

[2] This appeal is one against a judgment of Palmer J delivered 13 December 2016.^[1] In that judgment Palmer J held Ms Ying to be in contempt of court and fined her $10,000.^[2] The circumstances are set out comprehensively in Palmer J’s judgment. It is unnecessary to rehearse them again here. Shorn of inessentials, King David failed to settle the sale of a property to the respondent, Ms Zhang. She commenced proceedings. The appellants compromised that by High Court consent orders to settle. King David again failed to settle and instead resold the property at a profit to a bona fide purchaser. King David’s director Ms Ying, who had been a signatory to the compromise but not a party in the litigation, then had that company placed in liquidation

High Court judgment

[3] Palmer J concluded that Ms Ying had deliberately acted in breach of the consent orders made by the Court, and was thereby in contempt.^[3] He ordered her to pay a fine of $10,000. He ordered that a sum of $506,000 be paid to Ms Zhang. A fund of $550,000 having been paid into Court would meet the judgment sum, interest and indemnity costs. If inadequate to meet the full amount of costs, what was still owing was to be paid by Mr Young.

Should the first appellant be struck out?

[4] Mr Young and Ms Ying have also brought the appeal in the name of King David also. It is a company in liquidation. The effect of s 248(1)(b) of the Companies Act 1993 is that Ms Ying, its director, had no power to bring the present appeal for the company. There is no evidence (or suggestion) that the liquidator, a Mr Kamal, has authorised the filing of the appeal. Indeed, Mr Young and Ms Ying accept that “King David (in liquidation)” should be struck out as an appellant. But they say that the “old King David” should remain a party. That is not a competent proposition. There is only one King David. It is in liquidation. Absent authority from the liquidator, it cannot appeal.
[5] The first appellant is struck out.

Should Mr Young be struck out as an appellant?

[6] Ms Zhang submits that Mr Young did not suffer any adverse consequence in Palmer J’s judgment. He was not held to be in contempt. Relying ostensibly on Gao v Body Corporate 183930 she says Mr Young should be struck out too.^[4]
[7] We do not accept that proposition. Mr Young is liable under Palmer J’s judgment to pay costs in the event the fund held by the Court is inadequate. He has a sufficient interest to be entitled to appeal.^[5] This is not therefore a case in which the principle in Gao applies. That case simply stands for the proposition that where no order, declaration or relief is granted, there is no judgment against which a right to appeal is conferred by s 66 of the Judicature Act 1908.^[6]

Should Mr Young be debarred from acting for Ms Ying?

[8] Mr Young is a solicitor. It is evident that his area of practice is conveyancing. He is ill-equipped by experience, and on the material before us, to act in litigation. Be that as it may, he and Ms Ying have co-signed their filings in this Court. They are effectively self-represented. Mr Young is not acting for Ms Ying.
[9] There is no basis on this material for Mr Young to be debarred from acting for Ms Ying, because he quite simply is not doing so.
[10] Ms Ying is however to participate and be named as an appellant henceforth, not as a mere “interested party” as she hitherto has been described. That is because it is she who really advances the appeal against the contempt finding and the penalty visited on her. She cannot avert the prospect of adverse costs orders by hiding in status shadows.

Should the notice of appeal be struck out or confined?

[11] In a memorandum dated 13 February 2017 the appellants said:

The main issue of the appeal is whether there were serious mistakes in the consent order on 5/7/16, and whether these mistakes should be corrected in the interests of justice. Mr Young can prove that there were serious mistakes and so he is the most appropriate person to explain the details. Mr Young should be present in order to save the time of the Judges and the respondent.

Ms Zhang asks for an order that the appellants now be confined to this issue in the substantive appeal.

[12] We decline the request to confine the appeal in this way. We are not satisfied that it is just or necessary to do so. The issue above was the “main issue” only. There are others. In particular, the finding of contempt and the penalty.
[13] We turn now to the notice of appeal. The original notice of appeal filed is some seven pages. It is a prolix mixture of fact, law, submission and accusation. On 25 January 2017 the appellants sought to file a second amended notice of appeal. If possible, that document is worse. It runs to some 20 pages.
[14] We are satisfied that neither notice conforms to r 30 and Form 2 in sch 1 of the Court of Appeal (Civil) Rules 2005. These require specific grounds of appeal to be identified. That is, to set out, extremely briefly, summary grounds where the Judge is said to have erred. A notice of appeal is not the place for argument, accusation or ad hominem excursion.
[15] We will give the appellants time to regularise their position. A new rule-compliant notice of appeal may be filed within ten working days. It is to conform strictly to r 30 and Form 2. It is to identify specific grounds of appeal briefly and without engaging in argument or irrelevancy. As the issues identified so far are limited to three or perhaps four, it is not to exceed two pages. Unless all that is done, the appeal will be struck out.
[16] In the absence of formal applications, no order for costs is made.

Solicitors:
Amicus Law, Auckland for Respondent

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^[1] Zhang v King David Investments Ltd (in liq) [2016] NZHC 3018.

^[2] She was not a party to the original proceedings. She continues to be described as an “interested party” by the notice of appeal but her position must be regularised as an appellant: see [10] below.

^[3] Zhang v King David Investments Ltd (in liq), above n 1, at [43].

^[4] Gao v Body Corporate 183930 [2016] NZCA 458, [2016] NZAR 1313.

^[5] A v S [1982] NZCA 121; [1982] 1 NZLR 726 (CA) at 732.

^[6] Gao v Body Corporate 183930, above n 4, at [22].