YINGQIU ZHANG v WESTPAC NEW ZEALAND LIMITED [2022] NZSC 34

YINGQIU ZHANG v WESTPAC NEW ZEALAND LIMITED [2022] NZSC 34 [31 March 2022]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUISC 4/2022[2022] NZSC 34BETWEEN YINGQIU ZHANGApplicantAND WESTPAC NEW ZEALAND LIMITEDRespondentCourt: William Young, O'Regan and Ellen France JJCounsel: Applicant in personB J Upton and L B Harrison for RespondentJudgment: 31 March 2022JUDGMENT OF THE COURTA The application for leave to appeal is dismissed.B The applicant must pay the respondent costs of $2,500.____________________________________________________________________REASONSIntroduction[1] The applicant, Yingqiu Zhang, obtained loans from the respondent,Westpac New Zealand Ltd, on the security of registered mortgages over twoproperties. After the applicant defaulted under the mortgages Westpac sold theproperties as mortgagee. There was a shortfall after the sale for which Westpacobtained summary judgment. Westpac also issued bankruptcy proceedings. Theapplicant applied to the High Court to set aside the summary judgment and opposedthe bankruptcy proceedings. The High Court declined to set aside the summaryjudgment and made an order adjudicating the applicant bankrupt.1[2] The applicant appealed unsuccessfully to the Court of Appeal against thedecision of the High Court.2 The Court of Appeal also declined the applicant'sapplication to admit new evidence. She now seeks leave to appeal to this Court.The proposed appeal[3] The applicant seeks to challenge the Court of Appeal decision on a number ofgrounds emphasising the public interest in these matters and the prospect of amiscarriage of justice. The principal points which emerge from her submissions areas follows:(a) The Court of Appeal was wrong to reject the claim Westpac breacheds 176(1) of the Property Law Act 2007. That section provides that amortgagee exercising the power of sale has a duty of reasonable care topersons, including the current mortgagor, "to obtain the best pricereasonably obtainable as at the time of sale".(b) The Court of Appeal erred in not considering the source of the fundslent to her by Westpac was "not clean". This is a reference to thepossibility the loan funds were obtained either through overcharging ofcredit card fees or anti-money laundering law breaches.(c) The Court of Appeal erred in rejecting her argument that the High Courthearing was unfair because extensions of time were not granted.(d) It was an error for the Court not to accept arguments going to thediscretion to make an order adjudicating the applicant bankrupt. Thisaspect of the proposed appeal refers to claims against Auckland Counciland against a Mr Wu in China.1 Yingqiu Zhang v Westpac New Zealand Ltd [2019] NZHC 2422 (Associate Judge Paulsen). TheCourt also declined the applicant's application for discovery against Westpac and non-parties.2 Yingqiu Zhang v Westpac New Zealand Ltd [2021] NZCA 672 (Courtney, Duffy andDunningham JJ) [CA judgment].Our assessment[4] The proposed appeal would turn on an assessment of the various factualmatters on which the applicant relies. There is no challenge, in particular, to theprinciples applied in determining whether there was a breach of s 176(1). Noquestions of general or public importance or of commercial significance accordinglyarise.3 Nor is there any appearance of a miscarriage of justice in the civil sense.4[5] In terms of the alleged breach of s 176(1), the Court of Appeal reviewed thevarious matters advanced by the applicant in support of this claim and the way inwhich the Associate Judge had addressed them. The Court concluded there was"a proper basis" for the Associate Judge's views on the available valuations.5 TheCourt also considered that the reasoning for the view Westpac had taken all reasonablesteps to secure the best possible price for the two properties was "unimpeachable".6Nothing raised by the applicant calls into question these assessments.[6] Westpac says the point about the source of the loan funds was not an issueraised in the High Court nor in the affidavit the applicant sought to have admitted asnew evidence in the Court of Appeal. Westpac's submission is that although notspecifically referred to in the judgment it was addressed nonetheless by theCourt of Appeal. This submission is a reference to the discussion by the Court ofmatters raised which were outside the notice of appeal. The Court, not surprisingly,said these matters were "irrelevant to the essential issues raised by" the appeal.7 Weadd that, in any event, Westpac challenges the allegations underpinning the claimrelating to the source of the loan funds.83 Senior Courts Act 2016, s 74(2)(a).4 Section 74(2)(b); and see Junior Farms Ltd v Hampton Securities Ltd (in liq) [2006] NZSC 60,(2006) 18 PRNZ 369 at [4]–[5].5 CA judgment, above n 2, at [21].6 At [22].7 At [33].8 The respondent submits the allegations relating to money laundering were premised on amisunderstanding of media reporting and that the issue in terms of overcharging of fees has beenresolved but was, in any event, irrelevant to the bankruptcy adjudication.[7] The proposed argument relating to extensions of time would also reprisearguments made in the Court of Appeal. Again, we see no error in the Court ofAppeal's assessment of the conduct of the hearing.9[8] Nor does anything raised by the applicant about the approach to the discretionto make an order adjudicating bankruptcy give rise to any point of merit.Result[9] The application for leave to appeal is dismissed.[10] The applicant must pay the respondent costs of $2,500.Solicitors:Simpson Grierson, Auckland for Respondent9 The Court said the Associate Judge's initial decision to decline an extension of time was"understandable" in part because of the applicant's prior delay: at [32]. There was, ultimately, athree-day adjournment after the hearing commenced to enable childcare difficulties to be resolved.In terms of overall fairness of the approach to the discretion, the Court made the point that theAssociate Judge had stood back at the end and considered whether there was anything else in theapplicant's favour.