Cui v Shuang [2018] NZHC 2810 (31 October 2018)

Last Updated: 14 November 2018

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CIV-2018-404-000914 [2018] NZHC 2810

IN THE MATTER OF	an appeal under s 124 of the District Court Act 2016
BETWEEN	LIYAN CUI Appellant
AND	ZHENG SHUANG First Respondent JIN CHUAN Second Respondent

Hearing:	16 October 2018
Appearances:	J G Donkin for Appellant S Moore for Respondents
Judgment:	31 October 2018

JUDGMENT OF WYLIE J

This judgment was delivered by Justice Wylie On 31 October 2018 at 10.30am

Pursuant to r 11.5 of the High Court Rules Registrar/Deputy Registrar

Date:..............................

Solicitors/counsel:

Forrest Harrison, Auckland

Ong & Partners/S Moore, Auckland

CUI v SHUANG [2018] NZHC 2810 [31 October 2018]

Introduction

[1] The appellant, Ms Cui, appeals a decision given by Judge Harrison in the District Court at North Shore on 10 May 2018.¹

[2] Judge Harrison:

(a) referred Ms Cui’s claim arising from an alleged residential tenancy agreement to the Tenancy Tribunal (the Tribunal) for determination;

(b) discharged a preservation order which Ms Cui had obtained on an ex parte basis;

(c) declined Ms Cui’s application for a freezing order over assets of the respondents, Ms Shuang and Mr Chuan; and

(d) dismissed Ms Cui’s application for particular discovery.

[3] By a notice of appeal dated 15 May 2018, Ms Cui appealed orders (a), (b) and (c). She has since abandoned her appeal in respect of order (b).

[4] Since Judge Harrison’s decision, Ms Cui has applied to the Tribunal under s 83(2) of the Residential Tenancies Act 1986 (the Act) seeking an order transferring the tenancy related claim back to the District Court. This step was taken on a without prejudice basis. The Tribunal has adjourned the hearing of this application until the present appeal is determined.²

Factual background – the substantive proceedings

[5] Ms Cui has deposed that in or around March 2016, she and her husband were introduced to Ms Shuang and Mr Chuan by a mutual associate, and that they discussed possible joint venture business opportunities. Those opportunities ultimately did not progress. While they were ongoing, she allowed Ms Shuang and Mr Chuan to move into a residential property that she owns in Campbells Bay, Auckland. Ms Cui says

¹ Cui v Shuang [2018] NZDC 8656.

² Cui v Shuang [2018] NZTT North Shore 4143102.

that Ms Shuang and Mr Chuan moved into the property on 3 April 2016, and that they agreed, verbally, to pay her rental of $1,100 per week while they lived in the property. She says that Ms Shuang and Mr Chuan lived in the property until 26 January 2017, but that they did not pay any rental. Given the possibility of a joint venture business arrangement, she says that she did not demand rental until around December 2016. She says that Ms Shuang and Mr Chuan agreed to pay a lump sum of $50,000 on 19 January 2017, but that they did not do so. She asserts that after the property was vacated, she incurred $1,000 in removing rubbish from the property, fixing a damaged wall and cleaning.

[6] Ms Cui also says that she lent $120,000 to Ms Shuang, making a first payment into Ms Shuang’s bank account of $50,000 on 16 September 2016 and a second payment of $70,000 on 26 September 2016. She alleges that this loan was, at least partially, documented, that Ms Shuang paid $11,000 on account of interest in January 2017, but that Ms Shuang has failed to make any payments in reduction of the principal sum notwithstanding demands made.

[7] In April 2017, Ms Cui commenced proceedings in the District Court against Ms Shuang and Mr Chuan, seeking $171,000 plus interest. That sum was made up as follows:

(a) $50,000 for unpaid rent;

(b) $1,000, being the cost of repairs to the property; and

(c) $120,000, being the amount Ms Cui says she lent to Ms Shuang.

[8] Ms Cui applied for summary judgment. She also applied for and obtained a preservation order on an ex parte basis for the claimed sum. She did not, however, advise the Court of the $11,000 payment made or of a set off which had been claimed by Ms Shuang and Mr Chuan.

[9] In August 2017, Ms Shuang and Mr Chuan filed a notice of opposition to the summary judgment application, and, in November 2017, they applied to set aside the preservation order. Ms Cui withdrew the summary judgment application, but she
opposed the application to set aside the preservation order. On 16 January 2018, she applied for a freezing order in respect of the respondents’ assets up to the amount claimed.

[10] Ms Shuang and Mr Chuan deny that there was a tenancy agreement. They accept that they lived in the property, but say that Ms Cui said that they could live there rent free. They say that they paid the rates on the property and replaced the carpets. They accept that Ms Shuang borrowed $120,000 from Ms Cui, but say that, in January 2017, the principal sum was reduced by the payment of $11,000. They also say that they made the offer to pay $50,000 in an endeavour to settle all matters in dispute between the parties, and taking into account monies that they say have been lent by them to Ms Cui. They have counterclaimed in respect of these monies, as follows:

(a) not less than $33,717, being expenses they say Ms Cui incurred at Sky City Casino, using Mr Chuan’s Sky City account;

(b) 250,000 Chinese yuan (approximately $56,000), being monies they say were advanced by them to Ms Cui; and

(c) $11,952.26, being reimbursement of the rates they paid on, and the carpet they installed in, Ms Cui’s property.

[11] In reply, and in defence to the counterclaim, Ms Cui says as follows:

(a) the respondents were obliged to pay rental;

(b) the $50,000 offer was on account of rental only and by way of an acknowledgement of debt;

(c) the $11,000 payment was on account of interest on the $120,000 loan;

(d) any expenses incurred on Mr Chuan’s Sky City account were Mr Chuan’s contribution to the proposed joint venture, and did not create a debt required to be repaid;
(e) any payments made between the parties in Chinese yuan have been fully reconciled by her husband; and

(f) that while Ms Shuang and Mr Chuan paid rates on the property for six months and installed new carpets, she is not liable to reimburse these costs.

The District Court decision

[12] Judge Harrison dealt first with Ms Cui’s claim for rental. He noted s 82 of the Act and s 77(5), which precludes the Tribunal from requiring any party to pay any sum in excess of $50,000.³ He recorded Ms Cui’s assertion that tenancy issues between the parties could not be determined by the Tribunal, because the amount claimed exceeds $50,000.⁴ He then referred to the statement of claim, and recorded that he had himself calculated the period of occupancy as 44 weeks which, at the rental claimed of $1,100 per week, would at best result in a rental claim of $48,400.⁵ He noted the further claim of $1,000 for repairs, which takes the total claim to $49,400.⁶ The Judge referred to relevant authorities and noted that the issues which require determination are whether or not a tenancy agreement was entered into orally, and if so, for what period and at what rental.⁷ He noted that if the Tribunal determines that there was a tenancy agreement, it will have to determine the term and rental payable and whether there is any basis for an award of compensation.⁸ He expressed the view that the Tribunal might well reach the position that any amount payable was within its jurisdiction, and noted that, on his own calculation, Ms Cui’s best case indicated the amount claimed fell within the Tribunal’s jurisdiction.⁹ Accordingly, he referred the claim for rental owing and for damages arising out of the alleged tenancy to the Tribunal for determination.¹⁰

³ Cui v Shuang, above n 1, at [2].

⁴ At [5].

⁵ At [6].

⁶ At [6].

⁷ At [8].

⁸ At [9].

⁹ At [9].

¹⁰ At [10].

[13] In regard to Ms Cui’s application for a freezing order, he noted that Ms Shuang and Mr Chuan admit that Ms Shuang borrowed $120,000 from Ms Cui.¹¹ He referred to the appropriate approach when considering applications for freezing orders. He accepted that Ms Cui has a good arguable case in respect of the loan, although observing that the respondents’ counterclaim will also have to be weighed.¹² He stated the only likely assets of the respondents within this jurisdiction are the loan funds, assuming that they remain in the respondents’ bank account.¹³ He was not, however, satisfied that there is any real risk of dissipation.¹⁴ He noted that both Ms Shuang and Mr Chuan have applied for permanent residency in this country, and that the highest Ms Cui can put her case is to express concern that the loan funds could readily be dissipated or removed from this country.¹⁵ The Judge was not satisfied that the likelihood of removal or dissipation had been established to the requisite standard.¹⁶ Accordingly, he declined the application for a freezing order.¹⁷

Submissions

[14] Mr Donkin, for Ms Cui, submitted:

(a) in relation to the claim for unpaid rental and damages, that Judge Harrison erred in determining that the Tribunal has jurisdiction. The Tribunal cannot deal with any aspects of the tenancy dispute, because the amount at issue exceeds the Tribunal’s jurisdictional limit of
$50,000; and

(b) in relation to the freezing order application, that Judge Harrison was wrong to conclude there was no real risk of dissipation. The assets Ms Cui seeks to freeze are funds in a bank account which are, by their nature, liquid, and it would be extremely easy for the respondents to move the funds out of the reach of Ms Cui. Ms Shuang and Mr Chuan are Chinese citizens and they do not have permanent residence in New

¹¹ At [12].

¹² At [33].

¹³ At [34].

¹⁴ At [35].

¹⁵ At [38]-[39].

¹⁶ At [40].

¹⁷ At [40].

Zealand. They have no employment in this country nor any business interests which might tie them to New Zealand. There is a strong incentive for the respondents to remove their funds from the jurisdiction to render themselves “judgment proof”.

[15] Mr Moore, for the respondents, submitted:

(a) in relation to the claim for unpaid rental and damages, that Judge Harrison was correct when he held that the Tribunal has exclusive jurisdiction in respect of this alleged claim. The legislation provides that the Tribunal has no jurisdiction to require any party to pay any sum in excess of $50,000. Even if Ms Cui’s claim does exceed that sum, the Tribunal has exclusive jurisdiction to determine whether or not there is a residential tenancy agreement and its terms; and

(b) in relation to the freezing order application, that Ms Cui does not have a good cause of action in regard to either the tenancy claim or the loan claim. Further, Judge Harrison’s decision that there is no evidence of any real risk of dissipation, was correct. Ms Cui has done no more than state her belief that the respondents could leave the jurisdiction, and there are no “solid grounds” or circumstances from which a risk of dissipation can properly be inferred.

The appeal

[16] Ms Cui’s appeal is brought pursuant to s 124(2) of the District Court Act 2016.
Section 127 provides that it proceeds by way of rehearing.¹⁸

[17] The approach discussed by the Supreme Court in Austin, Nichols & Co Inc v Stichting Lodestar applies.¹⁹ Ms Cui, as the appellant, bears the onus of satisfying this Court on appeal that it should differ from Judge Harrison’s decision. If she can do so, she is entitled to judgment in accordance with the opinion of this Court. The position was summarised by the Chief Justice as follows:

¹⁸ See also High Court Rules, r 20.18.

¹⁹ Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.

[16] Those exercising general rights of appeal are entitled to judgment in accordance with the opinion of the appellate court, even where that opinion is an assessment of fact and degree and entails a value judgment. If the appellate court's opinion is different from the conclusion of the tribunal appealed from, then the decision under appeal is wrong in the only sense that matters, even if it was a conclusion on which minds might reasonably differ. In such circumstances it is an error for the High Court to defer to the lower Court's assessment of the acceptability and weight to be accorded to the evidence, rather than forming its own opinion.

(Citations omitted)

Analysis

[18] I deal with each of the matters raised by Ms Cui in turn.

Transfer to Tenancy Tribunal

[19] Relevantly, the Act provides as follows:

77 Jurisdiction of Tribunal

(1) The Tribunal has ... jurisdiction to determine in accordance with this Act any dispute that—

(a) exists between a landlord and a tenant or between a landlord and the guarantor of a tenant; and

(b) relates to any tenancy to which this Act applies or to which this Act did apply at any material time.

(2) Without limiting the generality of subsection (1), the Tribunal shall have jurisdiction to do the following things:

(a) to determine whether any premises are or are not, or were or were not at any material time, residential premises to which this Act applies:

...

(b) to determine whether there is or is not, or was or was not at any material time, a tenancy agreement to which this Act applies in force in respect of any residential premises, and to determine the terms of and the parties to any such agreement:

...

(e) where any rent is, was, or will be required wholly or partly in a form other than money, to determine in monetary terms the value of the rent so required:

...

(k) to order the tenant under any tenancy agreement to which this Act applies to pay to the landlord any sum found to be owing by the tenant to the landlord, whether by way of rent in arrear or otherwise pursuant to the tenancy agreement, and to order the landlord under any such tenancy agreement to pay to the tenant the whole or any part of any sum found to have been paid by way of rent in excess of the amount lawfully payable, or of any other sum demanded or received by the landlord in contravention of any of the provisions of this Act:

...

(n) to order the landlord or the tenant under any tenancy agreement to which this Act applies to pay to the other party such sum by way of damages or compensation as the Tribunal shall assess in respect of the breach of any express or implied provision of the tenancy agreement or any provision of this Act:

...

(5) Despite subsection (1), the Tribunal does not have jurisdiction to require any party to pay any sum, or to do any work to a value, or otherwise to incur any expenditure, in excess of $50,000.

...

82 Exclusion of other jurisdictions

(1) Notwithstanding any other enactment or rule of law to the contrary, no court or other body shall have originating jurisdiction in respect of any matter that is within the jurisdiction of the Tribunal unless—

(a) proceedings in respect of that matter were commenced before that court or other body before the commencement of this Act; or

(b) an order is made under section 83(2).

...

[20] Here, there was no written tenancy agreement signed by Ms Cui as landlord and by Ms Shuang and Mr Chuan as tenants. This was a breach of s 13(1) of the Act, but it does not preclude such tenancy agreement as was in place being enforced – see
s 13C. On the pleadings, there are a number of tenancy issues in dispute between the parties:

(a) Was there a tenancy agreement, and, if so, what were the terms of any such agreement?

(b) Was any rent being charged in respect of any tenancy?

(c) Were the payments made by Ms Shuang and Mr Chuan in respect of rates and in replacing the carpets on account of rent?

(d) What sum, if any, is owing by Ms Shuang and Mr Chuan on account of rent?

(e) Did Ms Shuang and Mr Chuan breach any term of the tenancy agreement, express or implied, and, if they did breach a term of the tenancy agreement, what sum do Ms Shuang and Mr Chuan owe Ms Cui by way of damages or compensation for any breach?

[21] Mr Donkin in his submissions acknowledged that there are authorities which suggest that discrete tenancy issues such as these should be determined by the Tribunal, even where the amount in dispute exceeds $50,000. He submitted, however, that there are other authorities to the contrary, and that the Court of Appeal has confirmed that the Tribunal only has jurisdiction to determine tenancy issues where the amount in issue falls within its limited monetary jurisdiction.

[22] Mr Moore, in response, argued that such tenancy issues must be dealt with by the Tribunal, even if the amount claimed exceeds the monetary limit. He argued that the authorities, carefully read, make this clear and that s 77(5), in its terms, relates only to the enforcement of monetary claims in excess of $50,000.

[23] I agree with the submissions of Mr Moore. In my judgment, the position is clear from the statute and from the relevant authorities:

• (a) In Auckland City Apartments Ltd v Stars & Stripes 2000 Ltd, the plaintiff sued for unpaid rent for leased premises.²⁰ The amount claimed exceeded the then monetary jurisdiction of the Tribunal ($12,000) and the proceedings were filed in this Court. The defendant sought a stay so that it could apply to the Tribunal to resolve two separate issues, namely whether the lease was a tenancy agreement for residential premises under the Act and whether relief should be granted by the Tribunal under s 66 of the Act. The question before the Court was whether the Tribunal had exclusive jurisdiction to determine these issues. Randerson J set out the relevant provisions, noting s 77(5) of the Act.²¹ He concluded as follows:

[15] Having considered the relevant provisions of the Act, I am of the view that the Tribunal does have jurisdiction to determine the identified issues although it does not have jurisdiction to require a tenant to pay a sum in excess of

$12,000. Mr Gilbert does not seek that relief and accepts that this Court would continue to have jurisdiction in respect of the money claim. I reach this conclusion because the Act does not provide that the Tribunal's jurisdiction is to be excluded altogether where there is a claim in excess of $12,000. It remains open to the Tribunal to determine the discrete issues raised by the defendant while leaving to one side the money claim for which jurisdiction is excluded by virtue of s 77(5). This may be considered to be an untidy state of affairs but in my view it is dictated by the provisions of the Act.

The Judge also said that the Tribunal had exclusive jurisdiction to determine the defined issues.²² He held as follows:

[17] ... I accept that the Tribunal does not have jurisdiction in respect of a money claim in excess of $12,000 but it does not follow in my view that the other discrete issues identified may not be determined in the exclusive jurisdiction of the Tribunal. Section 82(1) makes it clear that the Tribunal alone shall have originating jurisdiction “in respect of my matter that is within the jurisdiction of the Tribunal”. The expression “any matter” is apt to include the discrete issues which the defendant seeks to refer to the Tribunal. That conclusion follows in my view from the way in which s 77 is drawn with specific elements of the Tribunal's jurisdiction being separately identified. I

20. Auckland City Apartments Ltd v Stars & Stripes 2000 Ltd HC Auckland CP429/99, 9 November 1999.

²¹ At [14].

²² At [17].

therefore conclude that the Tribunal does have exclusive jurisdiction to determine the identified issues.

(b) In a separate case, Fetherston v Dorchester Finance Ltd, Randerson J reached a similar conclusion:²³

[23] [Section 77(3) of the Act] makes it abundantly clear that the Tenancy Tribunal's jurisdiction to make an order for recovery of possession of residential premises is available irrespective of the amount of the rent.

(c) In Levett v Village Accommodation Group Ltd, the plaintiffs sought summary judgment in this Court for $93,690.33, being alleged rent arrears owing under a lease.²⁴ In declining the application, Associate Judge Gendall stated:

[9] ... It is clear too that the Tribunal itself has the jurisdiction to determine whether a tenancy is subject to the Residential Tenancies Act 1986 and in the past it has been noted that this would seem to be the case, even where a claim might exceed the monetary limit of $50,000.00 provided for in s 77(5) ...

...

[13] Given this, and in light of the decision in Auckland City Apartments Limited v Stars & Stripes 2000 Limited noted above, there is in my view a reasonable argument open here that the Tenancy Tribunal does have jurisdiction to determine the issues in dispute between the plaintiffs and the defendant, even though when it reaches a final conclusion on those issues it may not have jurisdiction to require the defendant/tenant to pay to the plaintiffs a sum in excess of

$50,000.00.

(d) In Holler v Osaki, landlords were suing their tenant under a residential tenancy for fire damage alleged to have been caused by the tenant’s wife’s negligence.²⁵ They applied for summary judgment for the cost of repairs. In opposition, the tenant invoked ss 268 and 269 of the Property Law Act 2007.

²³ Fetherston v Dorchester Finance Ltd HC Auckland CIV-2007-404-7016, 18 March 2008.

²⁴ Levett v Village Accommodation Group Ltd [2012] NZHC 3356.

²⁵ Holler v Osaki [2012] NZHC 939.

(i) Associate Judge Abbott in this Court stated as follows:

[33] I regard s 77(5) as limiting the relief that can be given by the Tenancy Tribunal, rather than automatically removing its jurisdiction. It follows that where a party seeks an order for a sum in excess of $50,000, the Tribunal will not have exclusive jurisdiction. However, that does not mean that all matters in issue must necessarily be referred to a Court that can award the relief being sought. There may be an issue that can be appropriately dealt with by the Tribunal.

Relying on Auckland City Apartments Ltd, he directed the Tribunal to determine the tenancy related matters in dispute in that case even though the claim was beyond the Tribunal’s monetary jurisdiction. He stayed the summary judgment application, commenting:

[35] ... The Tribunal has been established as a specialist body in this field, with wide powers to consider matters on the basis of their substantive merits and the justice of the case. It was given exclusive originating jurisdiction and it is appropriate that it should determine, at least in the first instance, how the principles underlying ss 268 and 269 should be applied and, if so, whether it should be by a direction that s 142(1) not apply in this case or by applying the sections as “general principles”. The Tribunal has the specialist knowledge and experience to make this determination.

...

[37] It will be apparent from the above that I am not persuaded that the case should be determined in this Court, based on the proposition that the Tribunal does not have jurisdiction ...

(ii) The Tribunal subsequently held that the provisions of the Property Law Act relied on by the tenant did not bar the rental claim. The District Court on appeal found that the provisions did bar the claim.
(iii) On appeal to this Court, Keane J upheld the District Court’s decision.²⁶ Although s 77(5) was not directly in issue, the Judge commented as follows:

[25] Nor is it in issue that the Tenancy Tribunal would have had jurisdiction to order Mr Osaki to pay damages for the loss borne by AMI, but for the fact that the claim exceeds $50,000 ...

[26] The claim is, however, beyond the jurisdiction of the Tribunal because, as s 77(5) says, “the Tribunal does not have jurisdiction to require any party to pay any sum, or to do any work to a value, or otherwise incur any expenditure, in excess of $50,000”. That being so, s 82(1), which confers on the Tribunal exclusive originating jurisdiction for claims within its capacity, cannot apply. As to claims exceeding

$50,000, the District Court and this Court have originating jurisdiction.

...

[36] There are, I consider, four attributes of the [Act],

... and the first is the [Act’s] purpose, as expressed in its long title:

An Act to reform and restate the law relating to residential tenancies, to define the rights and obligations of land lords and tenants of residential properties, to establish a tribunal to determine expeditiously disputes arising between such land lords and tenants ...

One of those purposes is to declare accessibly the central rights and duties of the landlords and tenants. Another, where their dispute concerns less than $50,000, is to give them access to a forum, which is less formal and expensive and more timely than the courts are able to be in their ordinary civil jurisdiction. But, where a claim exceeds the Tribunal's jurisdiction, it can only be brought in the Courts.

(iv) The case then went on appeal to the Court of Appeal.²⁷ In dismissing the appeal from Keane J’s decision, the Court noted Associate Judge Abbott’s decision to stay the summary judgment application. It did not comment adversely on that

²⁶ Holler v Osaki [2014] NZHC 1977, [2014] 3 NZLR 791.

²⁷ Holler v Osaki [2016] NZCA 130, [2016] 2 NZLR 811.

decision.²⁸ Further, the Court commented generally on the Act as follows:²⁹

[21] The [Act] establishes the Tribunal as the body with exclusive jurisdiction to determine disputes within its monetary jurisdiction between landlord and tenant, or which concern a residential tenancy ...

[24] In my view, these authorities support the respondents’ assertion that the Tribunal has exclusive jurisdiction to determine matters which concern a residential tenancy, but that it does not have jurisdiction to require a tenant to pay a sum in excess of $50,000. I reject Mr Donkin’s assertion that the comma in the quote noted immediately above has been misplaced. The passage quoted appears twice in the Court of Appeal’s judgment.³⁰ The comma is in the same place on both occasions. It is inconceivable that a grammatical error was made. In my view, the Tribunal’s jurisdiction in respect of tenancy related issues identified in s 77(1) generally, and particularly in s 77(2), is exclusive, and it is not affected by the monetary limit contained in s 77(5). Section 77(5) only constrains monetary awards that the Tribunal can make.³¹

[25] The only decision that I am aware of suggesting to the contrary is Body Corporate 324525 v Stent.³² In that case, Associate Judge Bell rejected an argument that, in the context of the Unit Titles Act 2010, the Tribunal has originating jurisdiction in respect of a claim of more than $50,000, so long as it does not actually order payment of a sum in excess of that amount.³³ The Judge said of the argument:

[29] ... That is nonsense. It makes no sense at all that the Tenancy Tribunal should be able to receive and hear a proceeding in a unit title dispute where the sums in issue are more than $50,000 and that the limits on its jurisdiction should apply only when it comes to making an order. Clearly, if the tribunal does not have jurisdiction to make an order for payment of more than $50,000, then it should not accept such a proceeding for filing or hear it. The power under s 175 to transfer proceedings to the District Court or the High Court when the Tribunal does not have jurisdiction provides a remedy when a proceeding has started by mistake in the Tribunal. It does not give ground for

²⁸ At [4].

²⁹ See also [22].

³⁰ At [21] and [22].

31. And see David Grinlinton Residential Tenancies: The Law and Practice (4th ed, LexisNexis, Auckland, 2012) at [8.3.1]

³² Body Corporate 324525 v Stent [2016] NZHC 2442.

³³ At [29].

the Tribunal to receive and hear a claim for more than $50,000. That argument does not establish any jurisdiction of the Tenancy Tribunal in this matter.

After summarising both Auckland City Apartments Ltd and Holler v Osaki, the Judge expressed doubt over whether Associate Judge Abbott’s stay decision in the latter case was correct:

[39] With great respect, I doubt that the initial stay decision was correct. As the substantive claim was for more than the Tenancy Tribunal's monetary ceiling of $50,000, the entire proceeding was outside the Tenancy Tribunal's jurisdiction and the Property Law Act defence was not within the Tribunal's exclusive jurisdiction.

(Citations omitted)

Associate Judge Bell then stated as follows:

[41] The defendants' argument is an attempt to split a claim into discrete issues and to have some issues decided in the Tenancy Tribunal and some issues decided in this court, even though all issues are within the jurisdiction of this court. Such a course is obviously inefficient and will prolong the dispute. The argument offends against the general principle that the court should decide all matters in issue when those issues are within its jurisdiction. Further, the defendants' argument runs counter to s 171(9) of the Unit Titles Act ...

[26] I decline to adopt the views expressed by Associate Judge Bell. I note as follows:

(a) The comments were made in the context of the Unit Titles Act 2010, which has a rather different statutory regime. Section 171(1) of that Act states that the Tribunal has jurisdiction to hear and determine all disputes arising between any persons of the kind listed in s 171(2) in relation to a unit title development. It does not state that the Tribunal’s jurisdiction is exclusive. Associate Judge Bell’s comments have no direct application to the situation which confronts me.

(b) The Associate Judge justified his conclusion on the basis of efficiency
– he considered that it is inefficient to have different bodies decide different issues within the same proceeding. That is undoubtedly the case. A similar point was addressed by Randerson J in the Auckland City Apartments Ltd case, where he acknowledged that the position is
untidy, but that it is nevertheless dictated by the provisions of the Act. I agree with Randerson J’s analysis. Associate Judge Bell did not address s 82(1) of the Act which, as noted, states that the Tribunal has exclusive jurisdiction in respect of discrete tenancy issues.

[27] In my judgment, the meaning of s 77(5) is clear. The Tribunal cannot make an order requiring a tenant to pay a sum in excess of $50,000, or to do work valued in excess of that sum. Such order can only be made by the District Court or by this Court. The Tribunal does, however, have exclusive jurisdiction pursuant to s 82(1) to determine, in accordance with the Act, any dispute that exists between a landlord and a tenant, or between a landlord and a guarantor of a tenant, that relates to any tenancy to which the Act applies. That exclusive jurisdiction extends to the matters set out in ss 77(1) and (2) of the Act, and no other Court or body has any originating jurisdiction in respect of those matters unless either of the provisos set out in s 82(1) are met. Neither applies in the present case. It follows that the matters which I have set out in paragraph [20] above are within the exclusive jurisdiction of the Tribunal.

[28] Ms Cui has not persuaded me that Judge Harrison erred when he transferred those issues to the Tribunal. Judge Harrison’s decision in this regard is upheld.

The freezing order application

[29] The District Court may grant a freezing order pursuant to r 7.45 of the District Court Rules 2014, and the relevant legal principles are well established. There are three requirements.³⁴ First, an applicant must establish a good arguable case on a substantive claim. Secondly, there must be assets to which any order can apply, and thirdly, there must be a real risk that the respondent will dissipate or dispose of the assets unless an order is made.

[30] A good arguable case will be established if the allegations in the statement of claim are capable of tenable argument and are supported by sufficient evidence, bearing in mind the early stage at which such applications are likely to be brought.³⁵

³⁴ Shaw v Narain [1992] 2 NZLR 544 (CA) at 548.

³⁵ Dotcom v Twentieth Century Fox Film Corp [2014] NZCA 509 at [18] and [31]; Hannay v Mount

[2011] NZCA 530 at [20]-[22].

[31] Here, Mr Moore, for the respondents, sought to argue that Ms Cui has very little chance of success in regard to her claim for rental and damages arising out of the alleged tenancy. I note, however, that Judge Harrison made no finding in this regard. Rather, he found that Ms Cui has a good arguable case in respect of the alleged loan, because the respondents admit receiving the funds. Nevertheless, the respondents assert that Ms Cui’s first cause of action in respect of tenancy related claims has very little chance of success, and further, that her cause of action in relation to the loan is unlikely to succeed, notwithstanding that it is accepted that Ms Cui lent $120,000 to Ms Shuang. They claim that the various set offs available to them as near as maybe extinguish that loan.

[32] I do not consider that these arguments are available to the respondents. They did not cross-appeal Judge Harrison’s decision in this regard. Further, and in any event, I agree with Judge Harrison that Ms Cui does, prima facie, have a good cause of action in respect of the loan – it is admitted, whereas the counterclaims are very much in dispute.

[33] To my mind, the main issue relates to the risk of dissipation.

[34] The requirement to establish a real risk of dissipation is central to the freezing order jurisdiction. A mere assertion or belief that a respondent might dissipate assets, unsupported by solid grounds justifying that belief, is insufficient.³⁶ However, affirmative proof of likelihood of dissipation or nefarious intent is not necessary.³⁷

[35] I agree with Judge Harrison that Ms Cui failed to discharge the onus that rested on her in this regard. At its highest, Ms Cui’s case is as follows:

(a) Ms Shuang and Mr Chuan have no links to New Zealand;

(b) they have no assets in New Zealand, other than cash in an ANZ account and that cash is “highly liquid”;

³⁶ Mogilin v Jo HC Auckland CIV-2011-404-1584, 26 August 2011 at [34].

³⁷ At [34]. See also Oaks Hotels & Resorts NZ Ltd v Body Corporate 358851 [2013] NZHC 2695 at [17]- [18]; Raukura Moana Fisheries Ltd v The Ship “Irina Zharkikh” [2001] 2 NZLR 801 (HC) at [122]-[124].

(c) they are unwilling to pay the debts allegedly owed;

(d) they have a strong incentive to transfer the money out of New Zealand and deny Ms Cui the satisfaction of the debt owed; and

(e) they have failed to assert in their affidavits that they will not dispose of or dissipate the funds.

[36] With the exception of (e), these assertions are no more than assertions of Ms Cui’s beliefs.

[37] Ms Cui does state in one of her affidavits that, in February 2017, Ms Shuang said to her father-in-law that she owns a property in Sydney, and that if Ms Cui sues her for the money, she will immediately leave for Australia. This is hearsay. It is noteworthy that the father-in-law has filed an affidavit in the proceedings. He makes no reference to this alleged comment.

[38] As against Ms Cui’s assertions, there is evidence from the respondents that they wish to reside in New Zealand, that they have made application for residency in this country, and that they are parties to a tenancy agreement which has been extended to 17 January 2019. They back up these assertions with exhibits.

[39] In my judgment, the bald statements of belief expressed by Ms Cui do not provide solid grounds or circumstances from which a real risk of dissipation can reasonably be inferred.

[40] Again, Ms Cui has not persuaded me that Judge Harrison was wrong in his decision in this regard. The appeal in this regard is dismissed as well.

Conclusion

[41] The appeal is dismissed in both respects. The respondents are entitled to their reasonable costs and disbursements.
[42] It is my preliminary view that costs should be fixed on a 2B basis. If the parties agree with that view, then they should be able to determine costs as between themselves. If there is any disagreement, then I direct as follows:

(a) the respondents are to file a memorandum seeking costs and disbursements within 10 working days of the date of release of this judgment; and

(b) the appellant is to file a memorandum in response within a further 10 working days.

I will then deal with the issue of costs and disbursements on the papers, unless I require the assistance of counsel.







Wylie J