YINGQIU ZHANG v WESTPAC NEW ZEALAND LIMITED [2020] NZSC 26

YINGQIU ZHANG v WESTPAC NEW ZEALAND LIMITED [2020] NZSC 26 [31 March 2020]IN THE SUPREME COURT OF NEW ZEALANDI TE KŌTI MANA NUISC 9/2020[2020] NZSC 26BETWEEN YINGQIU ZHANGApplicantAND WESTPAC NEW ZEALAND LIMITEDRespondentCourt: Glazebrook and Ellen France JJCounsel: Applicant in personB J Upton and L B Harrison for RespondentJudgment: 31 March 2020JUDGMENT OF THE COURTA An extension of time to apply for leave to appeal is granted.B The application for leave to appeal is dismissed.C The applicant must pay costs of $2,500 to the respondent.____________________________________________________________________REASONSBackground[1] Ms Zhang seeks leave to appeal against a decision of the Court of Appealdeclining her application for a stay of the order adjudicating her bankrupt.1[2] Ms Zhang's debts arose because she defaulted on the repayment of loans owedto Westpac New Zealand Ltd (Westpac NZ). The properties securing the loans weresold by Westpac NZ as mortgagee. Westpac NZ obtained summary judgment for the1 Zhang v Westpac New Zealand Ltd [2019] NZCA 682 (Kós P, Brown and Goddard JJ)[CA judgment].shortfall and then commenced bankruptcy proceedings. Associate Judge Paulsengranted Westpac NZ's application to adjudicate Ms Zhang bankrupt on 25 September2019.2Court of Appeal decision[3] The Court of Appeal dismissed Ms Zhang's application for a stay. The Courtsaid that Ms Zhang's arguments in favour of her application largely duplicated thosemade to Associate Judge Paulsen in an application to suspend adjudication under s 416of the Insolvency Act 2006. Those arguments were intensely factual and raised noissues of either legal novelty or wider public interest.3[4] The Court held that a stay is not necessary for Ms Zhang to pursue her appealagainst the bankruptcy order.4 Nor is her appeal rendered nugatory by the adjudicationorder remaining in place.5[5] The Court accepted that there had been a separate proceeding against a Mr Wu(in China), Westpac NZ and others filed by Ms Zhang but the rights under thatproceeding have been disclaimed by the Official Assignee.6 In any event, the Courtconsidered "there is insufficient cogent evidence before us to suggest that proceedinghas real merit or that Ms Zhang has the capacity to pursue it or the prospect ofrecovering material sums under it".7[6] The Court pointed out that Westpac NZ is not the only creditor concerned inMs Zhang's estate.8 There is no evidence of her financial circumstances and nosecurity has been offered. It held that the bankruptcy should proceed in the ordinaryway, absent a compelling case of prejudice demonstrated by Ms Zhang.92 Zhang v Westpac New Zealand Ltd [2019] NZHC 2422 [First HC judgment].3 CA judgment, above n 1, at [13], referring to Zhang v Westpac New Zealand Ltd [2019] NZHC2797 [Second HC judgment].4 At [10].5 At [9].6 This is the same proceeding referred to below at [10] below: CIV-2019-404-1327. See furtherSecond HC judgment, above n 3, at [12].7 At [9].8 At [12].9 At [11].Grounds of application[7] In support of her application for leave to appeal to this Court Ms Zhangadvances the following grounds:(a) "Credibility" issues with Westpac NZ related to proceedings broughtby AUSTRAC10 against Westpac in Australia in November 2019relating to money laundering allegations.(b) That, absent a stay, she cannot pursue her claim against third parties.(c) A substantial miscarriage of justice may have occurred whenAssociate Judge Paulsen dismissed her application for discovery in arelated proceeding.(d) Westpac NZ should have challenged Auckland Council's rezoning ofone of Ms Zhang's properties but did not do so.Respondent's submission[8] Westpac NZ submits that the interests of justice do not require this Court tohear the proposed appeal in this case. This is a procedural matter, relating to atemporary stay of adjudication pending the outcome of an appeal.[9] As to the specific grounds raised by Ms Zhang, any alleged failure inmonitoring and reporting was by Westpac Banking Corporation in Australia, a separateAustralian company, and not Westpac NZ. In any event, these matters are not relevantto Ms Zhang's adjudication or whether her bankruptcy should be stayed pending herappeal.[10] Further, there is no general or public interest in Ms Zhang's ability to bring aclaim against a third party in China (Mr Wu) pending her appeal. This is a matter ofprivate concern. In any event, the Courts below considered this claim had little10 Australian Transaction Reports and Analysis Centre (AUSTRAC) is an Australian Governmentagency that monitors financial transactions to detect criminal activity.prospect of success. As to the change to the zoning of one of Ms Zheng's propertiesby the Auckland Council in 2017, this is irrelevant to the issue of a stay or suspensionof her bankruptcy. Ms Zhang can pursue this argument at the substantive hearing ofthe appeal against the adjudication order.Extension of time[11] Westpac NZ also says that Ms Zhang's application was out of time as it shouldhave been filed and served on or before 11 February 2020. The notice of applicationfor leave to bring civil appeal is dated 13 February 2020. Ms Zhang's submissions,which were filed prior to her application for leave, were only received by the Court on12 February 2020.[12] The application was only two days out of time. Westpac NZ has not pointedto any prejudice suffered as a result. We therefore grant an extension of time.Our assessment of the leave application[13] There is no issue of principle involved in this proposed appeal. The applicationrelates to the particular facts of this case. Further, nothing raised by Ms Zhangsuggests the Court of Appeal's reasoning was in error.[14] Ms Zhang attempts to raise new grounds in the proposed appeal. We acceptWestpac NZ's submission that none of those grounds warrant a stay being granted.The leave criteria are not met.11Result[15] An extension of time to apply for leave to appeal is granted.[16] The application for leave to appeal is dismissed.11 Senior Courts Act 2016, s 74(4).[18] The applicant must pay costs of $2,500 to the respondent.Solicitors:Simpson Grierson, Auckland for Respondent