Hu v Chen
[2020] NZHC 485
•11 March 2020
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2019-404-001602
[2020] NZHC 485
BETWEEN WEI HU
Plaintiff
AND
ZHEN ZHEN CHEN
First Defendant/First Applicant
JASON SHI
Second Defendant/Second ApplicantKEVIN TIEW
Third Defendant/Third Applicant
Hearing: 3 March 2020 Appearances:
Plaintiff in Person
M Cavanaugh for Defendants
Judgment:
11 March 2020
JUDGMENT OF ASSOCIATE JUDGE P J ANDREW
HU v CHEN & ORS [2020] NZHC 485 [11 March 2020]
Introduction
[1] Dr Wei Hu, the plaintiff, invested money in China with a Ms Yu. The money was to be used to secure entrepreneur work visas in New Zealand when Dr Hu and his family immigrated here in 2015.
[2] In a formal proof judgment of this Court in 2018,1 Dr Hu and his wife obtained judgment against Ms Yu, based on the tort of deceit, in the sum of $721,952.75. That judgment was subsequently recalled after Ms Yu, who says she had no knowledge of the proceedings, filed a protest to jurisdiction.2 The protest was upheld and the proceeding was dismissed.
[3] Dr Hu then attempted to recall the judgment dismissing the proceedings and upholding the protest, but that application was unsuccessful.3
[4] Dr Hu now sues the lawyers who acted for Ms Yu on the recall and protest to jurisdiction proceeding. The defendants are respectively the director of Righteous Law Ltd, an incorporated law firm (Righteous Law) and a senior associate and legal executive employed by Righteous Law.
[5] The cause of action in Dr Hu’s statement of claim is described as perjury and miscarriage of justice. He alleges that the defendants “submitted forged authority to act, forged statement of defence and Ms Yu’s personal information illegally obtained to mislead the Court”.4
[6] The defendants seek to strike out the statement of claim on the grounds that it is an abuse of process. The defendants say that the current proceedings seek to contest
1 Zhang & Hu v Yu [2018] NZHC 2215.
2 Zhang & Hu v Yu [2019] NZHC 29.
3 Zhang & Hu v Yu [2019] NZHC 206.
4 In relation to the first two judgments (namely 27 August 2018 and 29 January 2019) Dr Hu was legally represented. He was self-represented in relation to the recall judgment of 19 February 2019 and has remained self-represented since. He appeared before me with the assistance of a Mandarin interpreter, Mr J Young, whose email address appears as the address for service in the statement of claim. Mr Young confirmed that he was a barrister and solicitor of this Court but was suspended by the New Zealand Law Society. The suspension has expired but Mr Young has not applied for a new practicing certificate. The memorandum from Dr Hu dated 5 March 2020 (“Memorandum of precedent”) suggests that Mr Young has had previous dealings with the first defendant.
findings and determinations already made by this Court in the earlier proceedings (i.e. they are a collateral attack on the previous judgments). They also contend that the statement of claim discloses no reasonable cause of action in that the pleading does not meet the required standard for a cause of action in either fraud or deceit. In the alternative, the defendants seek an order for security for costs.
Factual background
[7] The background to the proceeding is set out in the earlier judgments of Van Bohemen J of 29 January 2019 and 19 February 2019.
[8] In the earlier formal proof proceedings Dr Hu and Ms Zhang claimed that Ms Yu had made false representations to them in New Zealand, inducing them to invest NZ$500,000, which was subsequently lost.
[9] The Court made an order for substituted service against Ms Yu, permitting service on Ms Yu by an email address and subsequent orders setting the claim down for a formal proof hearing.5 Issues with the order for substituted service arose later in the proceedings, given what the defendants say was Ms Yu’s incarceration in China and Dr Hu’s knowledge of this. However, at the time, the Court was persuaded on the submitted material that the order for substituted service was appropriate and it was made accordingly.
[10] The Court, following the formal proof hearing, was persuaded on Dr Hu and Ms Zhang’s evidence that Ms Yu had made the alleged false representations which induced Dr Hu to make the investment. The Court entered judgment accordingly.
[11] The defendants say Ms Yu only became aware of the proceedings after the formal proof judgment. She, via her lawyers in China, instructed Righteous Law to apply for recall of the formal proof judgment, and seek the dismissal of the proceedings on the grounds of want of jurisdiction. Dr Hu opposed the application. The evidence filed by the respective parties included:
5 Zhang & Hu v Yu, above n 2, at [6](c).
(a)Affidavit evidence on behalf of Ms Yu, regarding Dr Hu’s relationship with Ms Yu, Dr Hu’s knowledge of Ms Yu’s incarceration and Ms Yu’s absence from New Zealand at the time of the alleged representation. This included provision of material obtained from Immigration New Zealand (NZIS) confirming Ms Yu’s arrivals and departures from New Zealand.
(b)Affidavit evidence from Ms Yu’s solicitor in China (Mr Gu’s affidavit), accompanied by Mr Gu’s questions to Ms Yu and transcribed answers given by Ms Yu during what Mr Gu says was a visit to Ms Yu in prison in China. Mr Gu’s evidence also included an authority for Righteous Law to act signed by Ms Yu.
(c)Affidavit evidence from Dr Hu questioning whether Righteous Law was authorised to act for Ms Yu and questioning Mr Gu’s affidavit and the veracity of the accompanying material.
(d)Affidavit evidence from a handwriting expert, Mr Maran, as to the differences between the transcribed answers in Mr Gu’s affidavit and the signature in the authority to act.
[12] Van Bohemen J in his judgment of 29 January 2019 recalled the formal proof judgment and upheld the protest to jurisdiction, dismissing the proceedings. In so doing, he held:
(a)Ms Yu authorised Righteous Law to act for her, as settled by Mr Gu’s affidavit and a signed authority for Righteous Law to act.6
(b)Dr Hu’s assertions of and evidence supporting assertions that Ms Yu’s signature and the authority to act was fabricated were not persuasive, and ultimately not relevant to the determination of the 29 January 2019 judgment.7
6 Zhang & Hu v Yu, above n 2, at [12].
7 At [11].
(c)Ms Zhang and Dr Hu did not meet qMs Yu in New Zealand prior to making the investment with Ms Yu’s company, as the NZIS evidence established conclusively that Ms Yu was not in New Zealand at the relevant time.8 In addition, the parties, including Dr Hu, agreed that Ms Yu was not in New Zealand at the relevant time.9
(d)Ms Zhang and Dr Hu knew facts and circumstances relevant to the Court’s prior orders, particularly those orders for substituted service, and failed to disclose those to the Court at the time.10 Those known facts and circumstances included the extent of Dr Hu and Ms Zhang’s relationship with Ms Yu and that Dr Hu and Ms Zhang knew of Ms Yu’s incarceration. The omission of those facts and circumstances conveyed “a very different state of affairs” to the Court and cast “a very different light on the claims made by Ms Zhang and Dr Hu”.11
[13] Dr Hu then applied to recall the 29 January 2019 judgment. In support of that application, Dr Hu filed an affidavit from Mr Young, a translator assisting Dr Hu, and a further affidavit from Dr Hu. Dr Hu continued to contest the validity of Dr Gu’s affidavit and the veracity of the signed authority to act.
[14] On 19 February 2019, Van Bohemen J delivered judgment dismissing that application.12 His Honour held:
(a)Mr Gu’s affidavit was validly made in terms of s 10 of the Oaths and Declarations Act 1957;13
(b)there was no alternative explanation for the authenticity of the signed authority to act and desire to contest the formal proof judgment;14 and
8 Zhang & Hu v Yu, above n 2, at [25].
9 At [25].
10 His Honour was clear that no finding was being made that Dr Hu and Ms Zhang deliberately misled the Court: at [41]. His Honour did not, however, accept that Dr Hu and Ms Zhang had been completely open with the Court: at [40].
11 At [40].
12 Zhang & Hu v Yu, above n 3.13 At [10].
14 At [11].
(c)in any event, the allegations that Ms Yu’s signature was forged in that authority to act were irrelevant to the determination of his Honour’s 29 January 2019 judgment.15
[15] In the 19 February 2019 judgment, Van Bohemen J also noted his direction to the Registrar not to accept further documents for filing in the proceedings.
[16] Dr Hu has appealed both the 29 January 2019 and the 19 February 2019 judgments to the Court of Appeal. The Court of Appeal recently dismissed Dr Hu’s application to dispense with security for costs.16
Parallel complaint
[17] Prior to issuing this proceeding and prior to the 19 February 2019 judgment, Dr Hu filed a complaint with the New Zealand Law Society against the first and second defendants (the disciplinary complaint). In that complaint, Dr Hu:
(a)Repeated the allegations that Ms Yu’s signature was forged;
(b)alleged that Van Bohemen J erred in the 29 January 2019 judgment, in that his Honour did not consider, or did not adequately consider the allegations of forgery when determining the issues between Dr Hu and Ms Yu; and
(c)alleged that Righteous Law knowingly filed false evidence on behalf of Ms Yu, which resulted in the 29 January 2019 judgment.
[18] On 13 June 2019, the Standards Committee determined to take no further action on the disciplinary complaint, including on the basis that the allegations as to Ms Yu’s signature relate only to the claim against Ms Yu and do not support the serious allegations against Righteous Law. The Standards Committee noted that Dr Hu’s appropriate remedy was an application for stay or appeal of the 29 January 2019 judgment.
15 Zhang & Hu v Yu, above n 3, at [11].
16 Zhang v Yu [2019] NZCA 677.
[19] On 25 June 2019, Dr Hu applied for review of the Standards Committee determination by the Legal Complaints Review Officer (LCRO application). The LCRO application largely repeated the disciplinary complaint.
[20] On 5 November 2019, the Legal Complaints Review Officer dismissed the LCRO application, upholding the Standards Committee determination. The LCRO decision included reservations about Dr Hu’s assertions of fraud, the lack of evidence to support those assertions and the absence of any basis for adverse findings against Righteous Law.17
The statement of claim
[21] A statement of claim, filed on 12 August 2019, sets out Dr Hu’s complaints with the two judgments of Van Bohemen J of 29 January and 19 February 2019. It is alleged that the decision of 19 February 2019 was made without considering the “said evidence”.
[22] The pleaded allegations against Righteous Law, read together with the Notice of Opposition filed by Dr Hu, can be summarised as follows:
(a)Ms Yu did not and could not authorise Righteous Law to act in the new proceeding, or to obtain the Immigration New Zealand evidence because, Ms Yu was incarcerated in China, the signed authority to act was forged, and Mr Gu’s affidavit exhibiting that signed authority was invalid and/or questionable;
(b)Righteous Law knew or ought to have known that the signed authority to act was forged, and that Mr Gu’s affidavit was invalid and/or questionable;
(c)Righteous Law misled the Court, in the course of the new proceeding, in failing to alert the Court that the signed authority to act was forged, and that Mr Gu’s affidavit was invalid and/or questionable; and
17 Hu v Chen Shi & Andrews LCRO85/2019 (5 November 2019) at [66]-[69].
(d)His Honour, in the 29 January and 19 February 2019 judgments, failed to take into account evidence of that forgery.
Relevant legal principles
[23] Rule 15.1 of the High Court Rules 2016 provides that the Court may strike-out all or part of the pleading if the pleading:
(a)Discloses no reasonably arguable cause of action;
(b)is likely to cause prejudice or delay;
(c)is frivolous or vexatious; or
(d)is otherwise an abuse of process of the Court.
[24] The general principles applicable to the exercise of the Court’s powers are summarised in the Court of Appeal’s decision in Attorney-General v Prince,18 as endorsed by the Supreme Court in Couch v Attorney-General.19 These include:
(a)Pleaded facts, whether or not admitted, are assumed to be true. This does not extend to pleaded allegations which are entirely speculative and without foundation.
(b)The cause of action or defence must be clearly untenable.
(c)The jurisdiction is to be exercised sparingly and only in clear cases.
(d)The jurisdiction is not excluded by the need to decide difficult questions of law, requiring extensive argument.
(e)If a defect in the pleading can be cured by amendment, the claim should not be struck out.
18 Attorney-General v Prince [1998] 1 NZLR 262 (CA) at 267.
19 Couch v Attorney-General [2008] NZSC 45, [2008] 3 NZLR 725 at [33].
[25] Importantly, the Supreme Court noted that the courts should be slow to strike out claims in any developing area of law, such as where a duty of care is alleged in a new situation.20 A claim which raises a novel category of duty requiring assessment of public policy considerations may require expert evidence only available at trial.21
Analysis and decision
(a)Abuse of process
[26] The critical issue for determination is whether the current proceedings seek to re-litigate the findings and determinations of Van Bohemen J in his two recall judgments of 29 January and 19 February 2019. That is, are the current proceedings a collateral attack on the earlier findings and determinations of Van Bohemen J, and thus an abuse of process under r 15.1(d) of the High Court Rules?
[27] The jurisprudence is clear that it is an abuse of process to attempt to re-litigate issues previously determined by the Court.22 In Sutcliffe v Tarr, the Court of Appeal held that the circumstances in which proceedings may amount to an abuse of process are varied:23
One of these is an attempt to re-litigate a claim previously determined by the Court. As per Lord Diplock in Hunter v Chief Constable of the West Midlands Police:
The abuse of process which the instant case exemplifies is in the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the position in the court by which it was made.
Essentially, it will be an abuse of process to bring the same proceeding in a different garb. If this is the case, it is no bar that the later proceeding is brought against a different party. Claims may be struck out as an abuse of process even though the defendant was not party to the previous litigation.
(footnotes omitted).
20 Couch v Attorney-General, above n 19, per Elias CJ and Anderson J at [33].
21 Attorney-General v Prince, above n 18, at 267-268.
22 Sutcliffe v Tarr [2018] NZCA 135 at [27]; [2018] NZAR 696 at [27] and [28].
23 At [27].
[28] In Sutcliffe v Tarr, Mr and Mrs Tarr had a relationship property dispute, which included the issue of the beneficial ownership of shares in a company incorporated for the purpose of purchasing property. The Family Court and the High Court on appeal determined that Mr Tarr had no beneficial interest in those shares, making various factual findings when doing so. Subsequently, Mr Tarr issued separate proceedings against Mr Sutcliffe, a solicitor who had acted on the company’s purchase of the property. Mr Tarr claimed that Mr Sutcliffe exerted undue influence on Mr Tarr and breached fiduciary duties owed to him, allegedly depriving Mr Tarr of the beneficial ownership of shares in that company.
[29] The Court of Appeal held that to allow Mr Tarr’s claim against Mr Sutcliffe to proceed would require a court to reach different factual findings to those of the Family Court and High Court and therefore, that the proceedings amounted to an abuse of process. The Court of Appeal struck out Mr Tarr’s claim against Mr Sutcliffe.24
[30] It is apparent from Dr Hu’s notice of opposition and his submissions (both written and oral) that he remains deeply aggrieved that he and his wife invested a substantial sum with Ms Yu and her company and that investment was lost.25 Dr Hu seems intent on seeking a remedy to have his formal proof judgment against Ms Yu restored. Thus far he has had at least two opportunities in this Court to argue his case and have the formal proof judgment restored. I find that the matters at issue in the current proceedings are in substance the same as the matters complained of in the earlier proceedings, including the conduct of the solicitors and legal executive at Righteous Law.
[31] In my view, this case is essentially the same as Sutcliffe v Tarr. Dr Hu’s claim against Righteous Law will require the Court to reach different factual findings to those of Van Bohemen J in the earlier proceedings. In particular, Dr Hu’s claim of fraud will require the Court to find that:
24 Sutcliffe v Tarr, above n 21, at [29]–[35].
25 See the comments of Van Bohemen J in Zhang & Hu v Yu, above n 3, at [16].
(a)Righteous Law acted without Ms Yu’s authority, in either filing the application for recall and to protest to jurisdiction or obtaining the NZIS evidence (as to Ms Yu’s arrival and departure dates);
(b)Mr Gu’s affidavit was invalid; and
(c)the signed authority (by Ms Yu) to act was forged.
[32] In his application to set aside Ms Yu’s protest to jurisdiction and his accompanying affidavit, Dr Hu specifically put at issue the question of whether Righteous Law had authority to act for Ms Yu. Dr Hu repeated those allegations in his application for the recall of Van Bohemen J’s judgment of 29 January 2019. As Van Bohemen J recorded at [3] of that judgment, Dr Hu sought to recall the judgment of 29 January 2019 on the following grounds:
(a)The signatures of Ms Yu to answers she provided to questions in annexure B, to an affidavit sworn by Zhan Yang Gu on 16 November 2018 were forged;
(b)the authority to act from Ms Yu was invalid; and
(c)Ms Yu was effectively served with the plaintiff’s proceeding.
[33] In responding to Dr Hu’s claims, Van Bohemen J in his 29 January 2019 judgment, expressly found that Righteous Law was authorised to act for Ms Yu, in both filing the application for recall and protest to jurisdiction and in obtaining the NZIS evidence. At [12] of that judgment his Honour held:
I have also considered it unnecessary to examine further the contentions made by Ms Zhang and Dr Hu that Ms Andrews and Mr Shi, Ms Andrew’s instructing solicitor, have no authority to act for Ms Yu. That matter was settled with the filing of Mr Gu’s affidavit to which a copy of Mr Gu’s authority was annexed.
[34] In the same judgment (29 January 2019) Van Bohemen J also found Dr Hu’s assertions and evidence filed in support of a forged signature to the authority to act were unpersuasive. At [11] his Honour held:
It is appropriate to note at this stage that I do not find Dr Hu’s assertions that Ms Yu’s signature has been fabricated or the evidence of Mr Maran in support of those assertions to be persuasive. I have not taken that evidence into account in my decision which is based principally on facts not in dispute.
[35] In his subsequent judgment of 19 February 2019, Van Bohemen J expressly found that Mr Gu’s affidavit was validly made and that Dr Hu’s continued assertions as to the authenticity of the authority to act remained unpersuasive. At [10] his Honour held:
Dr Hu says the authority to act is invalid because Mr Gu’s affidavit was not signed and because he says Ms Yu’s signature was forged. As to the first point, while Ms Yu’s solicitors did initially file an unsigned affidavit from Mr Gu, they later filed an affidavit signed by Mr Gu and witnessed by a Consular Officer at the New Zealand Consulate-General in Shanghai. That means the affidavit was validly made in terms of s 10 of the Oaths and Declarations Act 1957 and the definition of “Commonwealth representative” in s 2 of that Act.
[36]At [11] his Honour held:
As to the allegation that Ms Yu’s signature on the authority to act was forged, Dr Hu has offered no explanation of why anyone other than Ms Yu would want to contest my decision of 27 August 2018 [the formal proof judgment]. Moreover, even if there was a question about the authenticity of Ms Yu’s signature, that does not provide any basis for recalling my decision of 29 January 2019. It does not change the fact that there had been no meeting in New Zealand in July 2014 involving Ms Yu, Ms Zhang and Dr Hu.
[37] The documents filed by Dr Hu in the present proceedings (which include evidence that appears to have been before the LCRO) and the submissions of Dr Hu reinforce my conclusion that his focus is on re-litigating matters already determined by Van Bohemen J. I have also taken into account Dr Hu’s further submissions dated 5 March 2020, entitled “Memorandum to precedent”. They include the following:
(a)In his written submission Dr Hu states “A judge is human and may make a mistake too. For instance, Ms Yu must sign her affidavit personally in front of a consulate and she is not entitled to ask her Chinese lawyer to sign on behalf of her. Thus the judgment on 19/2/2019 under Oath and Declaration Act by Van Bohemen J is a clear mistake”.
(b)In his notice of opposition Dr Hu asserts:
“The defendants never show what evidence they submitted to INZ [Immigration New Zealand] to apply for Ms Yu’s information. The 29 January 2019 was based on INZ information illegally obtained”.
(c)In his oral submissions Dr Hu placed some emphasis on what he says was a representation made by Ms Yu to him in Auckland in March 2015. The critical point is, according to Dr Hu, that Ms Yu was in New Zealand at that time.
[38] The claim of a representation in March 2015 is a clear challenge to the finding of Van Bohemen J that the protest to jurisdiction should be upheld because the claimed deceit underpinning the cause of action did not take place in New Zealand. However, Van Bohemen J has already dealt with the claim of a representation in New Zealand in March 2015. At [53] and [54] of his judgment of 29 January 2019, his Honour held:
[53] … Dr Hu seeks to persuade me that the representations were in fact made to him while he was in New Zealand in March 2015. However, Dr Hu’s evidence is not consistent with the evidence he and Ms Zhang gave in their affidavits of 3 April 2018 …
[54] In these circumstances, I am far from persuaded that any relevant representations were made by Ms Yu to Dr Hu while he visited New Zealand in March 2015. If such representations were made, I consider it more likely that they were made in China rather than in New Zealand ….
[39] A number of the other submissions made by Dr Hu were either misguided or not of any real relevance. So, for example, Dr Hu’s criticism of Righteous Law that they could only represent Ms Yu if one of their solicitors had met her in person, is simply incorrect. There is no such obligation. Likewise, the reliance that Dr Hu says the Court should place on the evidence of the forensic specialist, Mr Maran, is misguided.
[40] Mr Maran (whose findings are very much dependent upon the expertise of another person, namely a registered Chinese language teacher at an Auckland secondary school) confirms that his instructions were to examine three questioned signatures of Ms Yu on three questionnaire documents. However, as Mr Cavanaugh pointed out, the signatures on those documents are not claimed to be those of Ms Yu. The evidence from Mr Gu, the Chinese solicitor, is that both the questions and answers were recorded by him when he visited Ms Yu in prison. There is no signature attributable to Ms Yu that could form the basis of a valid comparison. The instructions given to Mr Maran were flawed.
[41] For all these reasons I conclude that the current proceedings are an abuse of process because they are essentially a collateral attack on the findings in the earlier
judgments of Van Bohemen J. The same claims have been brought by Dr Hu but in a different garb – and it matters not that the defendant parties are different.
[42] For completeness, I note that the Court may allow the re-litigation of issues where there has been a material fraud discovered after the earlier proceeding.26 However, the necessary threshold has clearly not been made out here.
(b)No reasonably arguable cause of action
[43] I also find that the statement of claim does not disclose a reasonably arguable cause of action, essentially for the reasons submitted by Mr Cavanaugh.
[44] As the Court of Appeal made clear in Schmidt v Pepper NZ (Custodians) Ltd, allegations of fraud or dishonesty are very serious.27 They must be pleaded with care and particularity. Fraud cannot be left to be inferred from the facts – fraudulent conduct must be distinctly alleged and as distinctly proved. General allegations, however strong the words may appear to be, are insufficient to amount to a proper allegation of fraud.
[45] This means that there must be sufficient particulars of fraud and reasonably credible material on which to establish a prima facie case. It is also clear that the principles apply with “equal rigour” to those who represent themselves.28
[46] Dr Hu’s statement of claim contains very little particulars as to fraud, Righteous Law’s perpetration of any fraud and, importantly, the alleged knowledge that the lawyers involved had about the forgery and/or lack of authority to act.
[47] Furthermore, the available material falls short of establishing a prima facie case of fraud. As I have already noted, Dr Hu places significant weight on the evidence of the expert, Mr Maran, as to the differences between signatures on the authority to act
26 Shannon v Shannon (2005) 17 PRNZ 587 at [132].
27 Schmidt v Pepper NZ (Custodians) Ltd [2012] NZCA 565 at [15].
28 Schmidt v Pepper NZ (Custodians) Ltd, above n 27, at [16], where the Court also noted “those who seek to portray themselves as well acquainted with the law and its processes cannot shelter behind the barrier of unfamiliarity when it suits. They must satisfy the same exacting standard when preparing their own pleadings”.
and the questions and answers exhibited to Mr Gu’s affidavit. However, Mr Maran’s conclusion that the authors are different people does not demonstrate fraud. That is because the author of the two documents are in fact different and no-one is claiming otherwise.
[48] As I understand it, Dr Hu also contends that Mr Maran’s evidence demonstrates that the signature of Ms Yu on the authority to act is not the same as those on the INZS arrival and departure cards (although it is not clear on the face of the evidence exactly what materials Mr Maran bases his comparison on). However, even if that were the case (and I note that Van Bohemen J has already expressed concerns about the limited probative value of Mr Maran’s evidence) it does not in any way establish that Righteous Law knew that the authority to act was forged or that they were somehow obliged not to accept the authority to act which had been obtained by the Chinese solicitor and confirmed in an affidavit sworn before the New Zealand Consulate.
[49] There is also very little additional evidence to establish that Righteous Law somehow perpetrated the fraud or had any knowledge of the alleged forgery. Righteous Law understood it was authorised to act for Ms Yu, based on its dealings with Ms Yu’s Chinese lawyers and upon receipt of the signed authority to act annexed to Mr Gu’s affidavit. As found by Van Bohemen J, Mr Gu’s affidavit was validly made, being signed by Mr Gu, a Chinese solicitor, and witnessed by a Consulate officer in Shanghai. The affidavit states that Mr Gu’s law firm is representing Ms Yu in relation to the criminal proceedings and on that basis it would make sense that members of the firm had access to her in prison by way of visiting rights. 29 There is no evidence to suggest that Righteous Law could or should have questioned Mr Gu’s affidavit, especially one affirmed by another solicitor in the jurisdiction where Ms Yu was incarcerated and where it was witnessed by a consulate officer.
29 Whether visiting rights are normally restricted to the 29th day of each month and whether it was impossible for Mr Gu to visit on 8 November 2018, as Dr Hu contended, is of little relevance. Even if Dr Hu’s evidence on these points is true (and in my view it has limited probative value) it does not establish that Righteous Law committed fraud or had any knowledge of the alleged forgery.
[50] For all these reasons, I therefore conclude that the proceedings should be struck out.
[51] My decision to strike out the proceedings will not prevent Dr Hu or Ms Zhang from pursuing their claims against Ms Yu in the appropriate jurisdiction, namely China. Furthermore, Dr Hu can continue with his appeal against the 29 January and 19 February 2019 judgments in the Court of Appeal. I also note that even if there was a reasonably arguable case of fraud, Dr Hu would face formidable causation hurdles given that Van Bohemen J accepted on the uncontested evidence that the cause of action and deceit only arose in China and therefore no losses are recoverable in New Zealand.
Result
[52] The defendant’s application to strike out the statement of claim is granted. The statement of claim is struck out.
[53] The plaintiff, Dr Hu, is to pay costs to the defendant on a 2B basis plus disbursements.
Associate Judge P J Andrew
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