Kang v Guangzhou Dongjiang Petroleum Science & Technology Development Company Limited
[2022] NZCA 281
•30 June 2022 at 11.00 am
| IN THE COURT OF APPEAL OF NEW ZEALAND I TE KŌTI PĪRA O AOTEAROA |
| CA729/2020 [2022] NZCA 281 |
| BETWEEN | YONGNAN KANG |
| AND | GUANGZHOU DONGJIANG PETROLEUM SCIENCE & TECHNOLOGY DEVELOPMENT COMPANY LIMITED |
| Hearing: | 3 March 2022 |
Court: | Kós P, Gilbert and Goddard JJ |
Counsel: | A M Glenie and C Huang for Appellant |
Judgment: | 30 June 2022 at 11.00 am |
JUDGMENT OF THE COURT
AThe application for leave to adduce further evidence on appeal is declined.
BThe appeal is dismissed.
CThe appellant must pay costs to the respondent for a standard appeal on a band A basis with usual disbursements.
____________________________________________________________________
REASONS OF THE COURT
(Given by Goddard J)
Introduction
The respondent, Guangzhou Dongjiang Petroleum Science & Technology Development Company Ltd (GDP) obtained judgment against the appellant, Mr Kang, in the People’s Court of Tianhe District, Guangzhou City, Guangdong Province in the People’s Republic of China for RMB 7,657,156.16 (about NZD 1,700,000). Mr Kang lives in New Zealand. GDP brought proceedings in the High Court to enforce the Chinese judgment against Mr Kang. It applied for, and was granted, summary judgment.[1]
[1]Guangzhou Dongjiang Petroleum Science & Technology Development Company Ltd v Kang [2020] NZHC 3068 [High Court judgment].
In the High Court it was common ground that the judgment had been given by a Court with jurisdiction over Mr Kang, because he had voluntarily appeared before it; the judgment was final and conclusive; and it was for a fixed money sum. Mr Kang opposed summary judgment on the basis that he had arguable defences that the judgment was obtained in breach of natural justice; that the judgment was obtained by fraud; and that enforcement of the judgment would be contrary to New Zealand public policy. Associate Judge Bell held that there was no breach of natural justice.[2] Nor was there an arguable defence based on fraud or public policy.[3]
[2]At [21].
[3]At [43] and [54].
Mr Kang appeals to this Court. On appeal, the only defence on which he relies is that enforcement of the judgment in New Zealand would be contrary to public policy. He says it is arguable that the commercial agreement on which the Chinese judgment is founded involved an attempt to bribe a former public official in China.
The public policy defence to a claim for recognition and enforcement of a foreign judgment is a narrow one.[4] Mr Kang has not shown that he has a tenable argument that the defence is engaged in this case. The appeal must therefore fail.
Background
The parties
[4]Reeves v OneWorld Challenge LLC [2006] 2 NZLR 184 (CA) at [64].
Mr Kang is a director and shareholder of One Pure International Group Ltd (One Pure), a New Zealand company which exports drinking water to China.
GDP is a Chinese company with business interests that include operating petrol stations. In March 2017 Mr Kang met Mr Pun, the controller of GDP. Mr Kang says that Mr Pun was introduced to him by a mutual acquaintance, Mr Xu. Mr Xu is a former Deputy Governor of the Guangdong Province in China. He was also closely involved with the Canton Golf Team, and was its current or former Chair. Mr Xu’s status as a former public official, and his interest in the Canton Golf Team, are at the heart of the public policy argument as we explain below.
The investment agreement
Mr Pun was interested in investing in One Pure through GDP. A written agreement dated 28 March 2017 was entered into between GDP, One Pure and Mr Kang under which:
(a)GDP would advance RMB 30 million to Mr Kang in two tranches;
(b)the first tranche would be RMB 15 million, which would be advanced for a term of 12 months at an interest rate of 0.8 per cent per month;
(c)Mr Kang would give security over his shares in One Pure to secure repayment of the advance;
(d)GDP would have three months to carry out due diligence on One Pure, after which it could decide whether to lend a further RMB 15 million and whether to buy a 20 per cent stake in One Pure from Mr Kang;
(e)if GDP did not decide to do either of those things, the initial tranche of the loan would be repayable after 12 months;
(f)of the funds advanced in the initial tranche, RMB 3 million would be used by One Pure to sponsor the Canton Golf Team; and
(g)if there was no further loan and GDP did not acquire any shares in One Pure, GDP and Mr Kang would each meet one half of the cost of sponsorship of the Canton Golf Team.
The contract was governed by the laws of the People’s Republic of China.
On 4 April 2017 the parties entered into a variation of the investment agreement. The first tranche of the loan was reduced from RMB 15 million to RMB 8 million. The parties agreed that if GDP did not go ahead with the purchase of shares in One Pure, GDP would meet RMB 2 million of the cost of sponsorship of the Canton Golf Team (that is, two thirds of the expected cost of RMB 3 million, rather than half).
Performance of the investment agreement
It is common ground that GDP advanced the initial tranche of RMB 8 million to Mr Kang.
One Pure acquired the sponsorship rights for the Canton Golf Team for RMB 2.25 million, a reduced figure that it negotiated. In addition, One Pure supplied its bottled water products at no cost to the team during the period of sponsorship, which ran from March 2017 to December 2019.
Mr Kang says that GDP took no steps to carry out due diligence. By 2018 it was apparent that GDP did not intend to go ahead with any investment in One Pure. Mr Kang asked Mr Pun to confirm that the amount to be repaid was RMB 6 million plus interest, being the principal of RMB 8 million less GDP’s agreed share of the sponsorship of RMB 2 million. Mr Pun responded to say that GDP would not bear any of the sponsorship costs, and demanded repayment of RMB 8 million plus interest.
Proceedings before the Chinese Court
GDP and Mr Pun brought proceedings before the Chinese Court against Mr Kang. The proceedings were not served on Mr Kang in New Zealand, but he received a text from the Court advising him of the proceedings, and of the hearing date. Mr Kang instructed a lawyer, who attended at the Court and sought an adjournment. The hearing was adjourned. On 9 April 2019 counsel for the claimants and for Mr Kang appeared before the Court to argue the case. On 23 May 2019 the Court delivered its judgment.
The Court held that the contract was governed by the mainland laws of the People’s Republic of China, notwithstanding that Mr Pun lived in Hong Kong. As Mr Pun was not a party to the agreement, he was not entitled to any rights under it. The Court upheld the contract and the variation. They were lawfully concluded and valid under the law. The parties were required to perform their respective rights and obligations. The Court rejected Mr Kang’s defence that GDP had failed to do due diligence. It held that GDP had a discretion whether to acquire the equity in One Pure and was not in breach because it had decided not to buy the shares. It rejected GDP’s claim that Mr Kang had failed to sponsor the Canton Golf Team, and accepted Mr Kang’s evidence that he had sponsored the Golf Team as required under the agreement. The Court held that Mr Kang was liable to repay GDP RMB 6.5 million plus interest.[5] Mr Kang was also liable for GDP’s costs on the proceeding.
[5]This figure appears to have been calculated by deducting from the RMB 8 million advanced the sum of RMB 1.5 million, representing two thirds of the sponsorship cost of RMB 2.25 million. The Court pro-rated the agreed contribution of RMB 2 million to reflect the reduced cost of the sponsorship.
The Court made the following orders:
(a)Mr Kang was to repay RMB 6.5 million, accrued interest of RMB 384,000 and ongoing overdue interest at the monthly rate of 0.8 per cent per annum from 1 April 2018 to the date of actual repayment of the RMB 6.5 million. This was to be paid within 10 days of the judgment taking effect.
(b)Mr Kang was also to pay legal costs of RMB 50,000 within 10 days of the judgment taking effect.
(c)Mr Pun’s claim was dismissed.
(d)GDP’s other claims were also dismissed.
(e)Mr Kang was to pay the Court’s own costs of RMB 60,338. GDP was to pay RMB 12,740.
The judgment finished by advising the parties of their appeal rights. Mr Kang was entitled to appeal within 15 days of service of the judgment. He did not appeal.
Mr Kang’s bribery argument
A central plank of Mr Kang’s opposition to the entry of summary judgment before the High Court, and before this Court, is his allegation that the agreement he entered into with GDP involved bribery. Mr Kang’s evidence on that issue is that at the time the variation agreement was entered into in April 2017, Mr Pun told him that the reason for entering into the agreement was that Mr Pun wanted to please Mr Xu, the former Deputy Governor of Guangdong Province, by providing funding for sponsorship of the Canton Golf Team. Mr Pun wanted Mr Xu to assist GDP in obtaining a licence to reopen a petrol station located in a busy street near a large school. Mr Kang says Mr Pun told him that if GDP obtained the licence with the benefit of Mr Xu’s assistance, GDP would waive repayment of the RMB 8 million loan even if the investment by GDP in One Pure did not go ahead.
Mr Kang’s understanding is that GDP did not obtain the petrol station licence.
High Court judgment
The Associate Judge set out the well-established principles governing a plaintiff’s application for summary judgment, as restated by this Court in Krukziener v Hanover Finance Ltd:[6]
The principles are well settled. The question on a summary judgment application is whether the defendant has no defence to the claim; that is, that there is no real question to be tried … The court must be left without any real doubt or uncertainty. The onus is on the plaintiff, but where its evidence is sufficient to show there is no defence, the defendant will have to respond if the application is to be defeated … The court will not normally resolve material conflicts of evidence or assess the credibility of deponents. But it need not accept uncritically evidence that is inherently lacking in credibility, as, for example, where the evidence is inconsistent with undisputed contemporary documents or other statements by the same deponent, or is inherently improbable … In the end the court’s assessment of the evidence is a matter of judgment. The court may take a robust and realistic approach where the facts warrant it …
[6]High Court judgment, above n 1, at [3], citing Krukziener v Hanover Finance Ltd [2008] NZCA 187, [2010] NZAR 307 at [26] (citations omitted).
The evidence established that GDP had obtained a final money judgment in the Chinese Court. That Court had jurisdiction over Mr Kang because he voluntarily submitted to the Court’s jurisdiction by appearing before it, through his lawyer. The judgment was for a definite sum. So, the Associate Judge said, subject to Mr Kang’s affirmative defences GDP had made out its case for summary judgment.[7]
[7]High Court judgment, above n 1, at [18].
The Associate Judge did not accept Mr Kang’s submission that it was arguable that the judgment was obtained in breach of New Zealand’s standards of natural justice.[8] Mr Kang does not challenge that finding on appeal.
[8]At [19]–[21].
Mr Kang also argued before the High Court that there was an arguable defence that the judgment was obtained by fraud. He submitted that GDP had been fraudulent in obtaining judgment because it claimed the agreement was lawful, and failed to disclose to the Chinese Court that the agreement involved bribery on the basis outlined at [17] above. Mr Kang argued that because GDP had deceived the Chinese Court, the judgment should not be enforced in New Zealand.
Mr Kang’s explanation for why he had not raised this issue before the Chinese Court was as follows:
The reason that I did not instruct my lawyer to disclose Mr Xu’s involvement in this matter to the [Chinese] Court was because I was afraid that doing so would have amounted to accusing Mr Xu of being involved in bribery. This is an extremely dangerous accusation to make in the Chinese courts against a former senior government official.
The Associate Judge reviewed the authorities on the standard of proof for raising a defence of fraud in opposition to an application for summary judgment based on a foreign judgment. He concluded that in these circumstances a defendant raising a fraud defence must establish a prima facie case that the judgment creditor misled the foreign court with sufficient cogency to warrant the matter going to trial. If the defendant’s case is anything less, the plaintiff will have made out its case for summary judgment.[9]
[9]At [30].
The Associate Judge then considered the fraud argument on the merits. The allegation in this case was that the agreement involved bribery of a public official. The law against bribery in the public sphere is directed against diverting public officers from faithfully performing their public duties. The bribery offences in pt 6 of New Zealand’s Crimes Act 1961 are concerned with such conduct.[10]
[10]At [32] and [35].
The Associate Judge did not accept that the evidence about pleasing Mr Xu provided an arguable foundation for a defence of fraud:
[36] Mr Xu is described as a former deputy governor of the Guangdong province, but there is no evidence that he held any public office at the time of the loan agreement. There is nothing showing that he had any formal role in allocating petrol station licences. The evidence does not show that he received a bribe because he held some public office.
[37] The other possibility is that Mr Xu was to use his influence on other officials to help [GDP] get its petrol station licence. But that has to be a corrupt influence. According to Mr Kang, Mr Pun wanted Mr Xu to assist him. But “assist” is equivocal. It may be legitimate or not. Equivocal assertions are not enough to establish fraud. Mr Xu’s assistance could have been lawful lobbying and that is not bribery.
Mr Kang attempted to surmount the difficulty that his evidence did not suggest that any current holder of a public office was bribed by submitting that in China it is against the law to bribe former officials. For that proposition he relied on a publication by the United Kingdom Foreign and Commonwealth Office titled Overseas Business Risk — China (updated 29 June 2020) (the UKFCO document). The UKFCO document contains a section on bribery and corruption. It refers to a judicial interpretation by the Supreme People’s Court to the effect that it is illegal in China to provide money or property to former public officials for illegitimate benefit.
The Associate Judge did not consider that the UKFCO document provided satisfactory evidence of Chinese law.[11]
[11]At [39].
Nor, the Associate Judge observed, was there any evidence about how petrol station licences are allocated in Guangdong Province, or how Mr Xu as a former Deputy Governor could influence that process. Mr Kang also had not provided any evidence about the effect of the alleged bribe on the enforcement of the loan agreement in China. Mr Kang’s evidence was insufficient to establish a proper fraud defence. GDP had shown that Mr Kang did not have an arguable defence that it obtained judgment against him by fraud.[12]
[12]At [40]–[41] and [43].
The Associate Judge went on to consider whether Mr Kang was precluded from raising the bribery issue before the New Zealand courts because he had not raised it in the Chinese Court. His failure to raise the issue had been deliberate and his explanation for that was unconvincing. That also counted against his fraud defence. But in any event, Mr Kang was not prejudiced by his failure to run the defence in China, because that defence had been considered and found wanting in the High Court.[13]
[13]At [44] and [49].
Finally, the Associate Judge addressed Mr Kang’s argument that enforcing the Chinese judgment would be contrary to public policy because it would involve enforcing in New Zealand an agreement involving corruption. He emphasised that this defence is narrow. A foreign judgment will not be enforced if to do so would shock the conscience of the reasonable New Zealander, would be contrary to our view of basic morality, or would offend some moral, social or economic principle so sacrosanct as to require its maintenance without exception. The defence is not to be used to put right perceived injustices that do not offend our sense of basic morality.[14]
[14]At [51], referring to Reeves v OneWorld Challenge LLC, above n 2, at [46]–[67].
The Associate Judge accepted that it was arguable that a judgment of a foreign court enforcing payment of a bribe to a foreign public official should not be enforceable in New Zealand because it offends basic New Zealand values. But the difficulty Mr Kang faced was that his evidence was not strong enough to raise an arguable defence that the agreement with GDP involved bribery.[15]
[15]At [53]–[54].
The Associate Judge also identified another issue that Mr Kang would have to overcome in order to make out an arguable defence on this ground. On Mr Kang’s case, the bribery element in the transaction was the sponsorship of the Canton Golf Team. The Chinese judgment allowed Mr Kang credit for RMB 1.5 million in respect of that sponsorship. His argument before the High Court was that he should be able to keep the rest of the funds advanced by GDP. That raised the question of whether restitution ought to be made where a contract was alleged to be illegal. In New Zealand the court has power to grant relief in such circumstances. It is not clear that performance of the part of the loan agreement that was extraneous to the sponsorship would be unenforceable as contrary to public policy. But the Associate Judge did not need to decide the issue: he only noted it in the event the case went further.[16]
[16]At [55].
The Associate Judge was satisfied that Mr Kang did not have an arguable defence to the claim on the Chinese judgment. He entered judgment for GDP against Mr Kang.[17]
Mr Kang’s submissions on appeal
[17]At [56].
As already mentioned, on appeal Mr Kang pursues only one of the defences that he advanced before the High Court. He says he has a tenable defence that enforcement of the Chinese judgment would be contrary to New Zealand public policy, because the underlying agreement involved an attempt to bribe a former public official in China. Mr Kang says that the High Court erred in:
(a)requiring him to establish a prima facie case that the investment agreement was tainted by bribery for there to be a tenable public policy defence;
(b)declining to accept the UKFCO document as a reliable source of information about Chinese bribery law; and
(c)concluding that GDP had discharged its onus and was entitled to summary judgment.
Mr Kang applied to adduce further evidence in this Court on the questions of Chinese law addressed in the UKFCO document, in the form of an affidavit from a Chinese lawyer confirming the accuracy of the UKFCO document’s explanation of Chinese law on bribery.
Evidence of Chinese law on bribery
Mr Glenie, who appeared before us for Mr Kang, submitted that the UKFCO document was a reliable source of information for the purposes of s 144 of the Evidence Act 2006. It should have been accepted as evidence that under Chinese law it is a criminal offence to bribe a former public official in China.
At the hearing we explored with Mr Glenie the relevance of Chinese law to the issue before this Court, which is concerned with New Zealand public policy. Mr Glenie said that some authorities require that there be symmetry between the law of New Zealand and the law of the foreign country in order to raise a public policy defence. However he accepted that if the Court considered that such symmetry was not needed, then evidence of Chinese law was not relevant to the only issue now before this Court.
If however this Court were to consider that Chinese law was relevant, Mr Glenie submitted that this Court should either accept the UKFCO document as evidence of Chinese law, or grant leave to adduce the affidavit from the Chinese lawyer confirming the accuracy of that publication.
Threshold for establishing a tenable public policy defence
Mr Glenie submitted that this Court held in Reeves v OneWorld Challenge LLC that a defendant raising a public policy defence need only clear the usual summary judgment bar of establishing a tenable defence. That does not require the defendant to establish a prima facie case.
Mr Glenie addressed in some detail the authorities on the threshold for raising a fraud defence in the summary judgment context. But we need not set out his submissions in detail, as we accept his primary submission that that issue need not be determined in these proceedings. Mr Kang no longer relies on his fraud defence. He relies solely on his public policy defence.
Existence of a tenable defence
Mr Glenie submitted that a foreign judgment upholding an agreement which involved the payment of a bribe to a former public official in China should not be enforceable in New Zealand. No New Zealand court would uphold a domestic agreement which involved payment of a bribe as such an agreement would be illegal and contrary to New Zealand public policy. Similarly, no New Zealand court would uphold an agreement which involved the doing of acts that were contrary to public policy in both New Zealand and the country where the agreement was to be performed. The English courts have declined to enforce contracts involving influence or bribery in other countries.[18] The evidence before the Court establishes that an agreement involving bribery of a former public official is against the public policy of China. Performing such an agreement in China would expose both the payer and the recipient of the bribe to liability under Chinese criminal law.
[18]Lemenda Trading Co Ltd v African Middle East Petroleum Co Ltd [1988] QB 448 (QB) at 458 and 461. See also Westacre Investments Inc v Jugoimport-SPDR Holding Co Ltd [2000] QB 288 (CA) at 315–316 per Waller LJ.
In this case, Mr Glenie said, the Court should be uneasy about enforcing the Chinese judgment. There was something peculiar about this transaction. GDP had failed to adduce any evidence responding to the bribery allegation: if there was an innocent explanation, Mr Pun could have sworn an affidavit setting it out. But he had chosen not to do so. There should be a proper investigation of the dealings with Mr Xu at trial, following discovery, to ensure that the New Zealand courts are not inadvertently lending their assistance to corrupt transactions.
Discussion
Judgment enforceable unless a tenable defence is made out
It was common ground before us that the Chinese judgment satisfied the criteria for recognition and enforcement in New Zealand unless Mr Kang could make out an arguable defence. In order to resist summary judgment, Mr Kang would need to demonstrate a tenable defence. In order for Mr Kang’s defence to be tenable:
(a)that defence needs to be arguable as a matter of law; and
(b)there must be evidence before the Court that is sufficient to show that the defence is arguable, and should be determined at trial.[19]
[19]See Reeves v OneWorld Challenge LLC, above n 2, at [76].
In the present case, Mr Kang can avoid entry of summary judgment if, and only if, this Court is satisfied that there is a tenable argument that the investment agreement involved bribery of a kind that engages New Zealand public policy, and that as a result enforcement of the judgment would be inconsistent with New Zealand public policy.
Mr Kang no longer relies on the fraud defence that he advanced in the High Court. So we need not consider the various tests enunciated in that context in relation to the onus on a defendant seeking to resist summary judgment. We will apply the ordinary summary judgment standard, without any gloss.
Public policy defence
A New Zealand court will not enforce a foreign judgment if it would be contrary to New Zealand’s public policy to do so. But, as this Court explained in Reeves v OneWorld Challenge, the public policy exception is a narrow one.[20] It is not sufficient that the outcome reached in the overseas court, applying foreign law, differs from the result that would be reached in a New Zealand court applying New Zealand law. Enforcement of a foreign judgment is contrary to public policy only if enforcing that judgment would shock the conscience of a reasonable New Zealander, or would be contrary to New Zealand’s view of basic morality or a violation of essential principles of justice or moral interests in New Zealand.[21]
Evidence of Chinese law is not relevant in this case
[20]At [50]–[51], [56]–[57], [60] and [64], relevantly citing Beals v Saldanha 2003 SCC 72, [2003] 3 SCR 416 at [75]; and Society of Lloyd’s v Meinzer (2001) 210 DLR (4th) 519 (ONCA).
[21]At [67].
The public policy defence is concerned with New Zealand public policy. The question is whether a New Zealand court should decline to enforce an otherwise regular and enforceable foreign judgment because to do so would be fundamentally objectionable by reference to the values that underpin New Zealand’s legal system. As noted above, the question is whether enforcing the foreign judgment would shock the conscience of a reasonable New Zealander, or be contrary to New Zealand’s view of basic morality or a violation of essential principles of justice or moral interests in New Zealand.
Plainly none of those questions turns on, or is informed by, Chinese law. In particular, the fact that a transaction or dealing of some kind might be unlawful in a foreign country does not establish that such a transaction or dealing is contrary to New Zealand public policy. Still less does it establish that enforcement of a judgment from a court of that country that arises out of that transaction or dealing would offend New Zealand public policy. Conversely, if enforcement of a judgment from a court of another country would be inconsistent with New Zealand public policy it is irrelevant that the judgment is valid and unexceptional under the laws of the other country.
It follows that Chinese law on bribery of former officials is not relevant to any issue that we need to consider.
We are inclined to think that the Associate Judge was right to find that the UKFCO document was not admissible as evidence of Chinese law. Certainly it was not enough, without more, to establish how that law would apply to a particular transaction. In order to establish how the law of another country applies to a particular dealing a party will normally need to provide evidence of the relevant primary legal materials: legislation and any authoritative rulings or interpretations, with reliable translations if they are not in English. The party will also need to provide reliable evidence about the way in which those materials apply to such dealings. It is difficult to envisage circumstances in which a New Zealand court could make findings about the content of foreign law, and how it applies to a particular dealing, by reference to a general guide for businesspeople. Such a guide could not be relied on as an authoritative source on a point of New Zealand law. We struggle to see why the position should be different on a point of foreign law. But as Chinese law is not relevant to the issue before us, we need not finally decide whether the UKFCO document would have been admissible as evidence of Chinese law on bribery if that issue was relevant in the present case.
It also follows that the affidavit from a Chinese lawyer addressing Chinese law on bribery of former officials is not relevant to any issue we need to decide. We decline the application for leave to adduce that evidence on appeal.
Is there a tenable public policy argument?
It is in our view very clear that Mr Kang does not have an arguable defence based on public policy.
We accept Mr Glenie’s submission that it would be contrary to New Zealand public policy to enforce a judgment for payment of a bribe to a foreign official. The Crimes Act creates a number of offences relating to bribing or corruptly influencing a foreign public official in respect of any act or omission by that official in his or her official capacity.[22] These provisions give effect to the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (the OECD Anti-Bribery Convention), to which New Zealand is a party.[23] The offence of bribery of foreign public officials is provided for in art 1 of the OECD Anti-Bribery Convention:
[22]Crimes Act 1961, ss 105C, 105D, 105E and 105F.
[23]Convention on Combating Bribery of Foreign Public Officials in International Business Transactions 2802 UNTS 225 (signed 17 December 1997, entered into force 15 February 1999).
Article 1
The Offence of Bribery of Foreign Public Officials
1. Each Party shall take such measures as may be necessary to establish that it is a criminal offence under its law for any person intentionally to offer, promise or give any undue pecuniary or other advantage, whether directly or through intermediaries, to a foreign public official, for that official or for a third party, in order that the official act or refrain from acting in relation to the performance of official duties, in order to obtain or retain business or other improper advantage in the conduct of international business.
2. Each Party shall take any measures necessary to establish that complicity in, including incitement, aiding and abetting, or authorisation of an act of bribery of a foreign public official shall be a criminal offence. Attempt and conspiracy to bribe a foreign public official shall be criminal offences to the same extent as attempt and conspiracy to bribe a public official of that Party.
3. The offences set out in paragraphs 1 and 2 above are hereinafter referred to as “bribery of a foreign public official”.
4. For the purpose of this Convention:
a) “foreign public official” means any person holding a legislative, administrative or judicial office of a foreign country, whether appointed or elected; any person exercising a public function for a foreign country, including for a public agency or public enterprise; and any official or agent of a public international organisation;
b) “foreign country” includes all levels and subdivisions of government, from national to local;
c) “act or refrain from acting in relation to the performance of official duties” includes any use of the public official’s position, whether or not within the official’s authorised competence.
However neither the OECD Anti-Bribery Convention nor the New Zealand Crimes Act provisions extend to former officials. That is because their focus is on attempts to influence the performance by a serving official of their official duties. We accept unhesitatingly that it would be contrary to New Zealand public policy to enforce a judgment for the payment of a bribe for that purpose. We also consider that it is strongly arguable that enforcement of a judgment would be contrary to New Zealand public policy where that judgment gave effect to a contract procured by bribery of the kind to which the OECD Anti-Bribery Convention is addressed, at least where the judgment was obtained by a person complicit in the bribery.
But the insuperable difficulty that Mr Kang faces is that he has not provided any evidence of bribery of this kind. Mr Xu was not at the relevant time a public official. There is no suggestion that GDP sought to influence him in the exercise of any official duties, whether in connection with the issue of licences for petrol stations or otherwise. Taken at its highest, Mr Kang’s evidence suggests that Mr Pun and GDP were anxious to secure Mr Xu’s goodwill. But Mr Xu was not an official engaged in performing official duties. Nor was there any evidence that Mr Xu’s goodwill would in turn result in inappropriate influence over some other serving official, or in receipt of some illegitimate benefit for GDP. All of that is simply speculation. The evidence before the New Zealand courts is, as the Associate Judge pointed out, equally consistent with Mr Xu providing legitimate assistance such as lawful lobbying.
Thus the attempt to “please” Mr Xu by sponsoring the Canton Golf Team does not engage the policy goals of the OECD Anti-Bribery Convention. It is not within the scope of the anti-bribery provisions of the Crimes Act. There is no tenable argument that it is contrary to New Zealand public policy.
That is sufficient to dispose of the appeal. But we agree with the Associate Judge that there is another potential obstacle in the way of Mr Kang’s public policy argument. Even if it were the case that the Canton Golf Team sponsorship involved an element of bribery or corruption, it would not follow that the loan agreement as a whole would be contrary to New Zealand public policy. Nor would it follow that recovery by way of restitution of the amount that GDP advanced to Mr Kang was contrary to New Zealand public policy. Mr Kang would need to show that there was a tenable argument that enforcement of a judgment that resulted in restitution to GDP of the sum that it advanced to him would be contrary to New Zealand public policy. It is by no means self-evident that this is the case, at least so far as the amount advanced was not used to pay any “bribe”. But that issue was not the subject of full argument before us, and we prefer not to express a concluded view on it.
Finally, we do not accept Mr Glenie’s submission that GDP should have responded to the allegations made by Mr Kang on the merits, and that an adverse inference can be drawn from its failure to do so. We echo what the majority of this Court said about a similar argument advanced in Reeves v OneWorld Challenge:[24]
[79] We do not agree with the observation … that it is surprising that OneWorld has not provided sworn evidence in the New Zealand proceeding denying Mr Reeves’ allegations. OneWorld has an American judgment in its favour which prima facie establishes OneWorld’s claim. OneWorld should not be required to put forward evidence of factual matters relating to its claim to support a judgment it has already obtained through a litigation process in the United States Courts. This is not the typical summary judgment scenario of one person’s word against another’s: it is a case of a final foreign judgment (appeal rights having been foregone) versus one person’s unsupported affidavit evidence.
[24]Reeves v OneWorld Challenge, above n 4.
The Associate Judge was right to find that Mr Kang had not established any arguable defence based on public policy. The appeal must therefore be dismissed.
Result
The application for leave to adduce further evidence on appeal is declined.
The appeal is dismissed.
The appellant must pay costs to the respondent for a standard appeal on a band A basis, with usual disbursements.
Solicitors:
Great Wall Lawyers, Auckland for Appellant
JC Legal, Auckland for Respondent
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