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Chen v Lin

Chen v Lin

Case [2016] NZCA 113 11 April 2016

Civil Litigation & Procedure

Conflict of Laws

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IN THE COURT OF APPEAL OF NEW ZEALAND

CA334/2015
[2016] NZCA 113

BETWEEN	YANG CHEN Appellant
AND	JINZHU LIN Respondent

Hearing:	15 and 18 February 2016
Court:	Harrison, Fogarty and Toogood JJ
Counsel:	R M Hesketh (on February 15) and R Reed (on February 18) for Appellant ASR Kashyap for Respondent
Judgment:	11 April 2016 at 11.30 am

JUDGMENT OF THE COURT

AThe appeal is allowed.
BThe Chinese judgment is to be enforced to its full value of RMB 28,567,202.23.
CThe appellant is awarded interest on the sum of RMB 20 million under s 87 of the Judicature Act, from the date of the High Court judgment (23 July 2014).
DThe respondent must pay the appellant costs for a standard appeal on a band A basis together with the usual disbursements.

____________________________________________________________________

REASONS OF THE COURT

(Given by Fogarty J)

Introduction — the application

The respondent, Jinzhu Lin, is indebted to the appellant, Yang Chen. Mr Chen has the benefit of a judgment in China for RMB 28,567,202.23. This sum splits between the principal of RMB 20 million and the balance being interest. The interest component of RMB 8,567,202.23 in turn splits between cumulative interest of RMB 6,590,155.56 and an extra 30 per cent of that sum, being RMB 1,977,046.67.
In common with many other jurisdictions across the world, the New Zealand courts will recognise and enforce foreign judgments subject to limited public policy exceptions. On 23 July 2014 the High Court (Associate Judge Doogue) entered judgment for Mr Chen as to the capital amount of the debt, the sum of RMB 20 million.[1] The Associate Judge had omitted, by mistake, to consider and include the interest component of the debt. He declined twice to recall the judgment as it had been sealed.[2] He acknowledged, however, in his reasoning that his failure to award interest was, in his opinion, a mistake or error. This appeal seeks to recover the total award of interest.
[1]Chen v Lin [2014] NZHC 1727.
[2]Chen v Lin [2014] NZHC 3210 and Chen v Lin [2015] NZHC 998.
The judgment sought from the Court of Appeal is:
(a)An order enforcing the Chinese judgment in New Zealand in its entirety. That is including both the principal sum of RMB 20 million and interest of RMB 8,567,202.23 (from 14 May 2009 to 19 June 2014).
(b)An order for interest on the judgment debt, at a rate of interest appropriate under s 87 of the Judicature Act 1908 from the date of the High Court’s judgment to the date of repayment.
(c)An order for costs regarding this application and costs on appeal.

The Chinese judgments

On 11 March 2014, Mr Chen initiated proceedings in the High Court, seeking summary judgment against Ms Lin. The proceedings were to enforce a judgment from the Fuzhou Intermediate People’s Court, in China, that awarded Mr Chen RMB 28,567,202.23. That Chinese judgment was subsequently upheld on appeal by the Fujian Higher People’s Court and then the Supreme Court of China.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Chen v Lin

Details

AGLC: Chen v Lin [2016] NZCA 113
Case: [2016] NZCA 113
Decision Date: 11 April 2016 at 11.30 am

CaseChat Overview and Summary

In Chen v Lin, the Court of Appeal of New Zealand heard an appeal from a decision made by the High Court in relation to a judgment debt owed by Jinzhu Lin to Yang Chen. The dispute centered on the enforcement of a Chinese judgment, which awarded Yang Chen a sum of RMB 28,567,202.23, split between a principal amount of RMB 20 million and interest of RMB 8,567,202.23. The High Court had previously only enforced the principal amount, omitting the interest component, a decision which Yang Chen sought to appeal. The legal issues before the Court of Appeal included whether the interest component of the Chinese judgment was enforceable, whether the judgment itself was enforceable in New Zealand due to public policy considerations, and whether interest should be awarded on the principal sum under the provisions of the Judicature Act.

The Court of Appeal began its analysis by addressing whether the interest component was enforceable, considering the contention that the interest calculation in the Chinese judgment contained errors. The Court found that the interest rates used in the Chinese judgment were correctly applied based on the People's Bank of China's published rates for overdue loans, and that the enforcement jurisdiction does not critique the application of substantive law by the foreign court. The Court also rejected the argument that the 30 per cent addition to the interest rate constituted a penalty, which would render the judgment unenforceable on public policy grounds. The Court noted that while the policy of increasing interest rates for overdue debts was different from New Zealand's, it did not shock the conscience of a reasonable New Zealander or violate basic morality.

Regarding the interest on the judgment debt under the Judicature Act, the Court found that once judgment had been entered in New Zealand, New Zealand law on interest applied to it. Consequently, Yang Chen was awarded interest on the principal sum of RMB 20 million from the date of the High Court's judgment, at the prescribed rate of 7.5 per cent.

In conclusion, the Court of Appeal allowed the appeal, ordering that the Chinese judgment be enforced in its entirety, including the interest component, and that Yang Chen be awarded interest on the principal sum from the date of the High Court's judgment. Jinzhu Lin was also ordered to pay the costs of the appeal.

Orders