Hebei Huaneng Industrial Development Co Limited v Shi
[2022] NZHC 1484
•23 June 2022
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2020-404-733
[2022] NZHC 1484
BETWEEN HEBEI HUANENG INDUSTRIAL DEVELOPMENT CO LIMITED
Plaintiff
AND
DEMING SHI
Defendant
Hearing: 16 March 2022 Counsel:
K Morrison and A Manuson for the Plaintiff B O’Callahan and J Nolen for the Defendant
Judgment:
23 June 2022
JUDGMENT OF ASSOCIATE JUDGE SUSSOCK
This judgment was delivered by me on 23 June 2022 at 4pm pursuant to r 11.5 of the High Court Rules
Registrar/Deputy Registrar
Solicitors/Counsel:
Meredith Connell, Auckland K3 Legal Limited, Auckland
B O’Callahan, Barrister, Auckland
HEBEI HUANENG INDUSTRIAL DEVELOPMENT CO LTD v SHI [2022] NZHC 1484 [23 June 2022]
Introduction
[1] The plaintiff has applied for leave to appeal my judgment dated 8 October 2021 dismissing the plaintiff’s application for summary judgment (Judgment).1
[2] The plaintiff had sought summary judgment of its proceedings to enforce a judgment of the Higher People’s Court of the Hebei Province in the People’s Republic of China (PRC). As noted in the Judgment, any enforcement must be according to common law principles as there is no treaty between New Zealand and China for the enforcement of judgments.2
[3] The plaintiff submits that it is in the interests of justice for leave to appeal to be granted as the Judgment raises important questions of law and fact that warrant consideration by the Court of Appeal. The plaintiff says these questions have sufficient public and private importance to outweigh the cost and delay of a further appeal and that an appeal might enable the parties to avoid the unnecessary costs and delay of proceeding to trial.
[4] In response to the summary judgment application, the defendant had submitted that it was arguable that the Hebei Higher People’s Court was not a “court” as that term is understood for the purposes of recognition at common law and, further, that it was arguable that the judgment was not final and conclusive. The plaintiff submits that I erred in upholding these two arguments and, additionally, in finding that it was arguable that the foreign judgment ought not to be recognised for natural justice reasons when the defendant did not rely on this defence. The plaintiff submits these three errors ought to be the subject of an appeal.
[5] The defendant submits in response that leave ought not to be granted because the plaintiff misstates the propositions of law in the Judgment as their premise for setting up an arguable point of law that is said to have general or public importance. Importantly the defendant emphasises that the plaintiff would have to succeed on all
1 Hebei Huaneng Industrial Development Co Ltd v Shi [2021] NZHC 2687.
2 At [7].
grounds for the appeal to be dispositive of the summary judgment application with many of the issues factual ones, including various points of Chinese law.
[6] Furthermore, the defendant submits that the plaintiff is not precluded from raising its proposed appeal points in an appeal following a full hearing, relying on s 56(6) of the Senior Courts Act 2016. The defendant says the prejudice to the plaintiff of requiring a trial first is not substantial whereas there is real and continuing prejudice to the defendant in the delay an appeal would cause. The overall interests of justice do not, therefore, support leave being granted.
Issues
[7]The issues I need to consider are:
(a)Is there an arguable error of law or fact?
(b)Is there general or public importance in the appeal or is it sufficiently important to the applicant to outweigh the lack of general or public importance?
(c)Do the circumstances warrant incurring further delay?
(d)Are the interests of justice served by granting leave?
(e)Is the high threshold for leave to appeal met?
Legal principles applying to leave to appeal
[8] Section 56(3) of the Senior Court Act 2016 requires a party to apply for leave to appeal any order or decision of the High Court made on an interlocutory application in respect of any civil proceeding except a successful summary judgment or strike out.3
3 Senior Courts Act 2016, ss 56(3). Contrast s 56(4).
[9] In Greendrake v District Court of New Zealand, the Court of Appeal approved the following statement of principles:4
[6]In Finewood Upholstery Ltd v Vaughan, to which Dunningham J referred to in the leave decision, Fitzgerald J appropriately observed that the requirement for leave to appeal should serve as a filtering mechanism to ensure that unmeritorious appeals of interlocutory orders, or appeals of interlocutory orders of no great significance to either the parties or more generally, do not unnecessarily delay the proceedings in which the orders were made. The following considerations were recognised as relevant on an application for leave to appeal:
(a)a high threshold exists;
(b)the applicant must identify an arguable error of law or fact;
(c)the alleged error should be of general or public importance warranting determination or otherwise of sufficient importance to the applicant to outweigh the lack of general or precedential value;
(d)the circumstances must warrant incurring further delay; and
(e)the ultimate question is whether the interests of justice are served by granting leave.
[7]This Court in Ngai Te Hapu Inc v Bay of Plenty Regional Council indicated that considerations similar to the principles applicable to applications under the former s 24G of the Judicature Act 1908, as explained in Meates v Taylor [Leave], apply to applications under s 56(5), stating:
We agree that leave to appeal should only be granted where the significance or implications of an arguable error of fact or law, either for the particular case or for the applicant or as a matter of precedent, warrants the further delay which the appeal process would involve.
[10]These principles have recently been confirmed by the Court of Appeal in
Tomar v Tomar.5
[11] The defendant in addition relies on Yu v Bradley which was an application for leave to appeal in the context of a summary judgment application which had been declined.6 The defendant submits it is useful for its focus on the particular relevant factors. In Yu v Bradley, Moore J relied on Palmer J’s summary of principles in Li v
4 Greendrake v District Court of New Zealand [2020] NZCA 122 at [6] – [7]; citing Finewood Upholstery Ltd v Vaughan [2017] NZHC 1679 at [13]; Ngai Te Hapu Inc v Bay of Plenty Regional Council [2018] NZCA 291 at [17]; and Meates v Taylor [Leave] (1992) 5 PRNZ 524 (CA) at 526.
5 Tomar v Tomar [2021] NZCA 419 at [6] and [7]; and further confirmed in Smith v Plowman [2022] NZCA 170 at [3].
6 Yu v Bradley [2018] NZHC 2312.
Chief Executive of the Ministry of Business, Innovation and Employment.7 Palmer J held leave to appeal an interlocutory decision under s 56(3) is likely to be granted if:8
(a)the appeal is not likely to be overtaken by the substantive hearing or cannot otherwise be considered as effectively in the context of an appeal of the substantive decision; or
(b)the appellant is likely to be prejudiced by a postponement [until] the substantive appeal; or
(c)the appeal may be dispositive of the case in law or as a practical matter; and
(d)the arguments in the appeal are capable of bona fide and serious argument; and
(e)the issue on appeal concerns a decision of sufficient significance to the parties or a question of law or general principle of sufficient importance as to outweigh the cost and delay of the appeal.
[12] Prior to the passage referred to above, Palmer J recorded that “the wider purpose behind s 56(3) is to lessen tactical delays and enhance the efficiency of the administration of justice”.9 Palmer J concluded that an application for leave is likely to be granted where “more pithily”:10
(a)there is good reason to consider it before, or separately to, the substantive appeal; and
(b)it is sufficiently meritorious in substance and relates to a sufficiently important issue as to outweigh the cost and delay of appeal.
[13] I consider the application in terms of the Finewood summary, bearing the factors relied on in Li v Chief Executive of MBIE and Yu v Bradley in mind.
Is there an arguable error of law or fact?
[14] As set out above, the plaintiff submits that I erred in three respects warranting consideration by the Court of Appeal.
7 At [9] – [11]; citing Li v Chief Executive, Ministry of Business, Innovation and Employment [2018] NZHC 1171.
8 Li v Chief Executive, Ministry of Business, Innovation and Employment, above n 8, at [21].
9 At [20].
10 At [22].
First alleged error: Is it arguable that the Higher People’s Court of Hebei Province is not a court for the purposes of recognition?
[15] The plaintiff submits that I erred in considering whether the Higher People’s Court is a court for the purposes of recognition. The plaintiff described the error as follows:
3.4It is not in dispute the People’s Republic of China (PRC) is an independent sovereign country with its own government and established arms of government for its people. It has a population of over 1.4 billion. To assist the resolution of disputes among its population, the PRC has a legal and judicial system. The judicial system involves a hierarchy of courts, much like most other nations. The Higher People's Court is one of the courts in the PRC's judicial system.
3.5The defendant does not contend it is unclear whether the Higher People's Court is a court of the PRC. As discussed below, this distinguishes the present case from Kuwait Finance House (Bahrain) BSC v Teece.11 Rather, the defendant contends that, although the Higher People's Court is a court in the PRC and he fully participated in the legal process in the PRC and has no specific complaint about the legal process he participated in, New Zealand should not recognise it as a court until it is satisfied that the manner in which the PRC courts operate effectively meet the threshold of a western democracy. This is unprecedented.
[16] The plaintiff’s submission misunderstands the basis on which I held it was arguable that the judgment the plaintiff was seeking to enforce was not issued by a court as that term is understood for recognition purposes.
[17] I started by confirming that the underlying rationale for the enforcement of foreign judgments, as confirmed by the Court of Appeal in Eilenberg v Gutierrez,12 is the doctrine of obligations rather than comity as had been submitted by the plaintiff.
[18] I began by listing the three prerequisites that the plaintiff must satisfy for the Court to order recognition of a foreign judgment at common law, that the judgment must:
(a)be issued by a foreign court of competent jurisdiction;
11 Kuwait Finance House (Bahrain) BSC v Teece [2017] NZHC 1308, [2018] 2 NZLR 257.
12 Eilenberg v Gutierrez [2017] NZCA 270 at [32].
(b)be for a definite sum of money; and
(c)be final and conclusive.13
[19] The defendant did not deny that he submitted to the Higher People’s Court and that the judgment was for a definite sum. However, Mr Shi raised the following defences:
(a)that the Higher People’s Court was not a “foreign court of competent jurisdiction” as understood for recognition; and
(b)the judgment is not final and conclusive because its enforceability depended on factual issues including of Chinese law in relation to property security provided by a third party.
[20] I discussed the requirements for a foreign court of competent jurisdiction, including that it act judicially, and concluded that this arguably required independence and impartiality.14
[21] I then held that there was cogent evidence that there may have been a lack of independence or impartiality. Summary judgment could not therefore be granted as the defendant had established an arguable defence on this basis.
[22] One of the reasons for finding that it was arguable that the exercise of judicial power for recognition purposes required impartiality and independence was because otherwise recognition of foreign judgments becomes synonymous with the “act of state” doctrine.
[23] The “act of state” doctrine gives legal recognition to the exercise of the sovereign power of a foreign state. In the Judgment I referred to Altimo Holdings and Investment Ltd v Kyrgyz Mobile Tel Ltd where the Privy Council held that there is no rule that a court will not examine whether the foreign court or the foreign court system is lacking in independence. The rule is instead that considerations of international
13 Hebei Huaneng Industrial Development Co Ltd v Shi, above n 1, at [27]; citing Eilenberg v Gutierrez, above n 13, at [30].
14 At [27].
comity militate against a finding that the judgment was not the exercise of judicial power in the absence of cogent evidence. As the Privy Council held in Altimo Holdings, otherwise the paradoxical result would follow that the worse the system of justice in the foreign country the less it would be permissible to make adverse findings on it.15
[24] The plaintiff submits that the defendant does not contend that it is unclear whether the Higher People’s Court is a court of the PRC and that this distinguishes the case from Kuwait Finance House (Bahrain) BSC v Teece.16
[25] The reason for discussing Kuwait at some length in the Judgment was because the plaintiff appeared to rely on Kuwait to submit essentially that the Higher People’s Court must be a court for the purposes of recognition because it was a court in PRC. I worked through the decision in Kuwait (in hindsight, in too much detail) to show that the use of the word “judicial” by Mander J imported characteristics of impartiality and independence. In Kuwait there was no evidence that the Bahrain courts were not impartial or independent so if the BCDR was a court in Bahrain, it would be a court for the purposes of recognition.
[26] In this case cogent expert evidence was filed on behalf of the defendant raising issues with both impartiality and independence. The defendant, therefore, established that he had a reasonably arguable defence that the Higher People’s Court was not a court of judicature for the purposes of recognition at common law.
[27] I do not consider that I erred by finding that there was sufficient evidence on which to raise a defence of a lack of impartiality or independence in the exercise of judicial power by the Higher People’s Court. Nor do the plaintiffs appear to submit that I did err in this regard. Their submission is instead:
What can be raised as a defence to enforcement of a foreign judgment is well- established. The New Zealand Court is not required (and there is no scope) to embark on an assessment about whether the foreign court meets a threshold as to how such courts should be formed or operated. It would defeat the underlying principles of private international law for such an exercise to be undertaken with respect to each foreign country, especially where no fault can
15 Ibid.
16 Kuwait Finance House (Bahrain) BSC v Teece, above n 12.
be identified with the foreign judgments sought to be enforced. In the event of specific concerns about the foreign judgment, the well-established defences to recognition may be called upon.
[28] In the Judgment I held the evidence put forward on behalf of the defendant did raise possible fault with the foreign judgment sought to be enforced. It did not do so on the face of the particular judgment but, as the defendant submits, it would be contrary to principle that a court system designed in a way that does not deliver impartiality and judicial independence (and thereby fails the requirements for natural justice) cannot be scrutinised just because there is no failure apparent on the face of the record in the particular case.
[29] The plaintiff further submits that I reached a different conclusion to Associate Judge Bell on the question and that this supports granting leave to appeal. However Associate Judge Bell and I were asking different questions. Associate Judge Bell was considering a protest to jurisdiction where he had to decide whether the plaintiff had an arguable case.17 In the decision on the summary judgment application I was considering whether the defendant had an arguable defence.
[30] In addition, following Associate Judge Bell’s decision, the Supreme Court held in Minister of Justice v Kim18 that it cannot be presumed from the fact that a judgment does not record that a judicial committee was involved that the collegial panel named in the decision decided the case and not a judicial committee. Associate Judge Bell had proceeded on the basis that a judicial committee was not involved (presumably because the PRC judgment did not record that it was). The Supreme Court’s view in Minister of Justice v Kim was reached on the basis of expert evidence, including from the expert for the defendant in this case, Mr Ansley. As I said in the Judgment, if a judicial committee was involved the judgment may not be a judgment of a tribunal employing “a process which includes the application of the law to the facts with opportunity to parties to participate,” referred to as fundamental by Mander J in Kuwait.19
17 Hebei Huaneng Industrial Development Co Ltd v Shi [2020] NZHC 2992.
18 Minister of Justice v Kim [2021] NZSC 57.
19 Hebei Huaneng Industrial Development Co Ltd v Shi, above n 1, at [88].
[31] Since the hearing of the plaintiff’s application for leave, the Supreme Court has issued its final judgment in Minister of Justice v Kim, reinstating the Minister’s decision to surrender Mr Kim to stand trial in China.20
[32] Although the Supreme Court has reinstated the Minister’s decision to surrender Mr Kim, it is on the basis of assurances given by PRC to the Minister of Justice, including in relation to the concerns identified by the Court in relation to judicial committees.
[33] The concerns raised by the Supreme Court necessitating the assurances were that, on the evidence before the Minister at the time of the second surrender decision, she could not have concluded that Mr Kim would be tried by an independent and impartial tribunal, as it was not possible for the Minister to have come to the conclusion that Mr Kim’s case would be decided by the judges who had heard the evidence rather than by a judicial committee. Furthermore, the Supreme Court held that it was not possible for the Minister to consider that the judicial committee would decide the case on the basis of the evidence and free from outside influence, in particular from party representatives. The Supreme Court said even if that influence was not political, it was nonetheless influence from external bodies in the judicial decision making process.21
[34] The majority in the Supreme Court held that they could not “come to any definitive conclusion, on the basis of the material before [them], as to whether referral to a judicial committee would breach Mr Kim’s fair trial rights” and that it would be for the Minister to make further inquiry and “to consider after that inquiry (and any further assurances) whether the judicial committee system as it may operate in Mr Kim’s case would meet minimum international standards for independence and impartiality.”22 They therefore adjourned the appeal to allow the Minister to make further inquiries and obtain further assurances.
20 Minister of Justice v Kim [2022] NZSC 44 and as referred to in the memorandum filed by the plaintiff dated 9 June 2022.
21 Minister of Justice v Kim, above n 20, at [345].
22 At [355].
[35] Mr Kim’s case can be distinguished from the present case as Mr Kim was seeking judicial review of the Minister of Justice’s decision to extradite him to PRC to face a criminal charge of intentional homicide. The Court was therefore considering whether Mr Kim would be likely to receive a fair trial. In this case a judgment has already been issued and it is a civil rather than a criminal matter. However, the Supreme Court’s reference to the difficulty in establishing the rate of referral to judicial committees echoed the evidence of Dr Ding and Mr Ansley in this case.
[36] The recent judgment of the Supreme Court, where the majority accepted that sufficient assurances had been given by the PRC to address their concerns, does not reduce the Supreme Court’s concerns as to the general lack of independence or impartiality of judicial committees.
[37] In any event, if I did err in respect of this question, it still may not be appropriate to grant leave as there were several reasons for not granting summary judgment. These were that it was arguable on the evidence that the judgment was not final and conclusive and that there was arguably a natural justice defence available.
[38] I, therefore, consider the two further questions in relation to which the plaintiff submits that I made errors before considering the remaining Finewood and Li factors.
Second alleged error: Is the defence of natural justice available when the defendant did not rely on it?
[39] The plaintiff submits that I erred in relying on this defence arguably being available when the defendant did not plead this defence and the plaintiff submits no evidence was adduced in support. The plaintiff says that, despite this, the plaintiff will now be put to the cost of having to address this issue at the trial.
[40] As the defendant submits, this was an application for summary judgment. A statement of defence has not yet been filed. Even if there had been one it would be capable of amendment. My comments in relation to natural justice were made on the basis of the evidence filed. The plaintiff had an opportunity to respond to the defendants’ evidence and did so. In my view it did not therefore suffer any real prejudice through my reference to this defence being available. To be clear, I use the
word “reference” rather than “reliance” because I held two further defences were also arguable. I did not rely on this defence to conclude that summary judgment was not available.
[41] The evidence relating to the involvement and operation of judicial committees both in these proceedings and in Minister of Justice v Kim provided an arguable basis for submitting the judgment may not have been reached by a “tribunal applying the law to the facts with the opportunity to parties to participate”: the basic requirements for natural justice. It would be artificial for the defence of natural justice not to be available in such circumstances.
Third alleged error: Did I err by finding it was reasonably arguable that the judgment of the Higher People’s Court was not final and conclusive?
[42] As the plaintiff submits, it is a pre-requisite to recognition that the foreign judgment is final and conclusive. The plaintiff submits however that I erred in conflating the defendants’ submissions about the steps taken by the plaintiff to enforce the judgment (which are disputed) with the issue of whether the Higher People’s Court judgment is final and conclusive.
[43] I relied on the classic statement of the meaning of “final and conclusive” from Nouvion v Freeman23 to hold that the defendant has an arguable case that the judgment is not final and conclusive because under PRC law the plaintiff may be required to first pursue or preserve its rights against a third party (Detai) thereby reducing or extinguishing the liability of Mr Shi under the guarantee. Because of the evidential disputes between the parties both on the law and the facts, I was unable to reach a view on a summary basis as to the applicable law or the facts.
[44] As Lord Herschell in Nouvion v Freeman explains, where “it may thereafter be declared by the tribunal which pronounced it that there is no obligation and no debt, it appears to me that the very foundation upon which the Courts of this country would proceed in enforcing a foreign judgment fails”.24
23 Nouvion v Freeman (1889) 15 App Cas 1 (HL).
24 At 9 – 10.
[45] This is consistent with the recognition of foreign judgments being concerned with obligation and not comity as discussed above.25 The court is asked to enter judgment on a debt for which the foreign judgment “conclusively, finally and forever established the existence of the debt of which it is thought to be made conclusive evidence in this country, so as to make it res judicata between the parties.” If there is conflicting evidence on whether that is the case then it is not appropriate to enforce the judgment on a summary judgment application. I found that there was such evidence.26
[46] The plaintiff submits that the defendant’s case is that the judgment of the Higher People’s Court was wrong, not that his obligation to pay the plaintiff was final and conclusive, relying on the evidence of the defendant’s expert, Dr Ding, that in her opinion the Higher People’s Court “should also rule on the realization sequence of the two security interests to satisfy Huaneng’s credit right as follows …”. Dr Ding then said that, if the Higher People’s Court had done that, the plaintiff could not enforce the judgment against Mr Shi before the property security provided by Detai Limited was exhausted. This may have been Dr Ding’s evidence, but it is not the basis of my decision that the judgment was not final and conclusive. Instead, my decision rested on the plaintiff’s expert evidence that the defendant was able to raise the order of enforcement during the enforcement steps in the PRC.27
[47] The plaintiff submits that in reaching this finding I failed to fully record or consider the plaintiff’s expert evidence that any such objection raised by the defendant during the enforcement steps in the PRC would have failed because:
(a)the defendant had no legal basis to object, because enforcement would not be a violation of any law;
(b)any objection needed to be raised before the termination of the enforcement process (which the plaintiff says the defendant does not dispute has come to an end).
25 Eilenberg v Gutierrez, above n 13; and see my discussion in Hebei Huaneng Industrial Development Co Ltd v Shi, above n 1, at [29].
26 Hebei Huaneng Industrial Development Co Ltd v Shi, above n 1, at [100]–[112].
27 At [119].
[48] In relation to the first reason, I held there were differing views between the experts on whether the defendant had a legal basis to object. 28 It was not therefore a matter I could determine in summary judgment proceedings.
[49] Furthermore, whether any objection did need to be raised before the termination of the enforcement process or whether it could be raised in New Zealand in response to the proceedings for recognition was again a question that needed to be considered with full evidence. As Mr Shi did not appear in the enforcement proceedings enforcement was effectively obtained by default. Whether Mr Shi would be estopped from raising the plaintiff’s failure to exhaust its remedies against the assets of Detai before it could enforce any judgment against him was not a question that I was prepared to determine on a summary basis in the face of conflicting evidence on PRC law and on the steps that had been taken by the plaintiff.
[50] The plaintiff further submits that I acknowledged that no ruling had been made by the PRC Court requiring the plaintiff to first proceed against Detai but that I went on to suggest that the Higher People’s Court should make its declaration in the negative – that the plaintiff did not need to first proceed against Detai.29
[51] Counsel for the plaintiff says that even if New Zealand judgments find the defendants jointly and severally liable without going further to say words to that effect, this means the plaintiff is not required to enforce the judgment against one party or the other first.
[52] The point I was making in the judgment however was simply that the PRC judgment was neutral on the question: it did not require the plaintiff to enforce against Detai first but nor did it require the plaintiff to enforce against the defendant. I did not intend to suggest that the Higher People’s Court should have made such a declaration.
28 At [103].
29 At [118].
[53] The plaintiffs further submit that although I noted that the PRC judgment had been enforced and that the defendant did not appeal or oppose the enforcement steps taken, I dismissed that fact by speculating that the defendant may have decided to do so given he had no assets in the jurisdiction.30
[54] I made these comments in the course of considering the question of whether the defendant was prevented from raising enforcement issues. I was considering the Henderson v Henderson principle which precludes a party from raising in subsequent proceedings matters which were not, but should and could have been, raised in earlier proceedings.31
[55] In Henderson v Henderson the House of Lords held that there may be special circumstances where this estoppel does not operate. An example of such special circumstances included where the earlier proceedings have resulted in a default judgment. I therefore held I could not conclude in a summary context that the defence would be estopped from raising the issue in New Zealand. I do not consider I erred in relation to this aspect of the judgment.
[56] The plaintiff submits that my decision now creates scope to argue that a foreign judgment is not final or conclusive, depending on how the judgment is enforced or whether all arguments have been raised before the foreign court and dismissed. The plaintiffs say this approach is inconsistent with the well-established legal test of what constitutes final and conclusive.
[57] Associate Judge Bell in his decision notes the difference between the expert’s evidence at the post-judgment stage.32 Associate Judge Bell goes on to say that, in his view, the facts point to the expert for the plaintiff (Dr Zhu) having the stronger position.33 He therefore found that Hebei had a good arguable case that its judgment against Mr Shi is an accrued liability.
30 At [117].
31 Henderson v Henderson [1843] 67 ER 313 (Ch).
32 Hebei Huaneng Industrial Development Co Ltd v Shi, above n 19, at [73].
33 At [76].
[58] As I have said above, Associate Judge Bell was determining whether the plaintiff had a reasonably arguable case for the purposes of the protest to jurisdiction. My decision determined the question of whether the defendant had a reasonably arguable defence for the purposes of resisting a summary judgment application. Associate Judge Bell accepted that the experts differed on whether the judgment was conditional. His judgment is therefore consistent with mine on this point. Associate Judge Bell indicated that he considers Dr Zhu’s position was stronger but he did not decide the point as it was in the context of a protest to jurisdiction. In my view it is not a point that can be determined in the context of a summary judgment application.
Conclusion on Error of Law or Fact
[59] I do not consider that I erred in relation to the three aspects relied on by the plaintiffs. I go on to consider the remaining Finewood and Li factors however in case that is not correct.
Is there general or public importance in the appeal or is it sufficiently important to the applicant to outweigh the lack of general or public importance?
[60] I accept that the appeal is likely to have general and public importance. If the plaintiff does not succeed, the plaintiff submits the Court of Appeal’s decision will still provide it with guidance as to the appropriate test for the substantive trial in the High Court. In my view, even if the Court of Appeal does not uphold the appeal, the Court is still likely to provide significant guidance in the absence of full evidence on the facts including the position under PRC law.
[61] From a private perspective, the decision is very important to the plaintiff as the PRC judgment is for a significant sum and a summary judgment would reduce the costs of proceeding to a full trial. The plaintiff says that trial costs will be significant because of the need to obtain expert evidence on PRC law (and the difficulties associated with that).
[62] I accept the importance of the questions raised by this appeal both generally and to the parties but note that this is a factor to be balanced alongside the other factors considered.
Do the circumstances warrant incurring further delay?
[63] Even if I did err, the circumstances do not in my view warrant incurring the delay of an appeal. This is because for the summary judgment application to succeed, my judgment would need to be overturned on all three bases for not granting summary judgment. Although Associate Judge Bell and I came to different views on the question of whether the Higher People’s Court may meet the requirements for recognition, the decisions of the Supreme Court in Minister of Justice v Kim both followed Associate Judge Bell’s decision and reinforced the defendant’s position as far as the operation of the judicial committees.34 Furthermore, Associate Judge Bell and I both agreed that the experts differed as to the position under PRC law on enforcement.
[64] The delay of an appeal is likely to add a delay of at least a year to these proceedings. The defendant submits that whatever view is taken of the merits of the appeal and the likelihood that the appeal could be dispositive of the case, there is no substantial prejudice in requiring the plaintiff to go to trial without an appeal against the refusal of summary judgment. The defendant submits the prejudice to the plaintiff is limited only to saving the costs of a substantive hearing.
[65] In the defendant’s submission this needs to be compared to the alternative that the appeal will instead add significant costs to all parties.
[66] The assets of the defendant are currently subject to a freezing order and the defendant has no certainty as to the future of those assets while this claim remains extant. A substantial portion of the defendant’s assets are involved in a property development which the defendant submits requires ongoing effort, skill and acceptance of risk by the defendant. Counsel submits that these are difficult contributions to make when under the threat of a claim like this. The defendant needs instead to have matters resolved as soon as possible.
[67] An appeal will delay the trial substantially and extend the time during which the defendant will be subject to the freezing orders.
34 Minister of Justice v Kim [2021] NZSC 57; and Minister of Justice v Kim [2022] NZSC 44.
Are the interests of justice served by granting leave?
[68] The interests of justice are not in my view served by granting leave. The proceeding raises important questions that need to be resolved with the benefit of full argument and comprehensive evidence. My decision on the summary judgment application is not binding on the judge who will hear the substantive matter and there is therefore no need for any errors I made to be corrected at this stage.
Has the high threshold for leave to appeal been met?
[69] As will be clear from the above, the high threshold for granting leave to appeal has not been met in this case.
Result
[70]The plaintiff’s application for leave to appeal is dismissed.
Costs
[71] I did not hear from the parties on costs. I expect that costs may be able to be agreed. If not, memoranda may be filed, on behalf of the defendant within 20 working days of this judgment and on behalf of the plaintiff within a further 10 working days.
Associate Judge Sussock
0
10
1