As litigation tactics go, it was a pretty brazen. Jinyuan Pan and Ke Zhang demanded upfront security from overseas-based Xiaojin Ren for their legal costs defending her claim to ownership of an Auckland property without first filing a statement of defence on grounds their defence might incriminate them as being in breach of the Overseas Investment Act.
In the High Court, Associate Judge Paulsen dismissed their tactic as simply a ruse to delay the day of reckoning.
Ms Ren lives in China.
Evidence was given that she met Pan and Zhang during a visit to New Zealand. They offered to support her plans to buy property in New Zealand, with them temporarily taking title on her behalf. This, they explained, could get around restrictions stopping overseas individuals buying residential land in New Zealand.
The Overseas Investment Act, in fact, prohibits use of trust arrangements to circumvent the rules.
Ms Ren paid across more than $1.5 million, used by Pan and Zhang to buy a property on Lucas Way in Auckland suburb Albany. There is no written agreement; merely a verbal agreement they would hold title on her behalf, she says.
She later learnt this property had been mortgaged without her knowledge. She told the High Court she suspects this loan was raised by Pan and Zhang to finance their other property purchases.
She demanded Lucas Way be sold and her money returned.
Having been refunded about $198,000 she sued for the balance owed.
The High Court was told Pan and Zhang have filed no statement of defence; only going so far as making a flat denial that any money is owed, while at the same time negotiating with Ms Ren’s lawyer over a possible repayment plan.
Judge Paulsen dismissed their request that Ms Ren provide security upfront for their legal costs should the case go to a full hearing and she lose.
Failure to file a statement of defence entitles Ms Ren to get judgment in her favour by default.
Judge Paulsen was told the only reason this has not yet been done, but for the stalling tactic seeking security for costs, is that Ms Ren is still finalising the exact amount she is owed.
Ren v. Pan & Zhang – High Court (14.02.25)
25.065