Xiao v Wan
[2024] NZHC 1624
•19 June 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2023-404-2928
[2024] NZHC 1624
BETWEEN KAN XIAO
Appellant
AND
MEI JUN WAN
Respondent
Hearing: 13 June 2024 (further submissions: 15 and 18 June 2024) Appearances:
MSP Pang for appellant
K J Jenkins for respondent
Date of judgment:
19 June 2024
JUDGMENT OF JAGOSE J
This judgment was delivered by me on 19 June 2024 at 3.00pm.
Pursuant to Rule 11.5 of the High Court Rules.
………………………… Registrar/Deputy Registrar
Solicitors:
Integritas Law, Auckland McVeagh Fleming, Auckland
XIAO v WAN [2024] NZHC 1624 [19 June 2024]
[1] Kan Xiao appeals against Judge I A McHardy’s 17 October 2023 decision,1 requiring Mr Xiao’s compliance with discovery orders and translation directions given in Judge D A Burns’ 20 December 2022 decision,2 both in the Family Court at North Shore. Mr Xiao also seeks an extension of time (styled an application for leave) to appeal Judge Burns’ decision, on which submissions were filed after hearing (submissions filed for hearing predominantly focusing on the merits of the appeals).
Background
[2] The impugned decisions were made in proceedings brought under the Property (Relationships) Act 1976. Mr Xiao and Ms Wan were in a relationship of short duration, commencing either in January (on Ms Wan’s account) or August (on Mr Xiao’s account) 2018 and ending in September 2020. The Family Court is to determine division of their relationship property. To that end, both sought discovery of the other, and Mr Xiao resisted providing translation of his Chinese language affidavit exhibits on grounds Ms Wan read and understood the Chinese language.
Judgments for appeal
[3] Given contest between the parties as to the availability of bank statements from Ms Wan’s closed China Merchant Bank account, Judge Burns directed Ms Wan to give Mr Xiao “full authority” to have access to the account and obtain bank statements.3 He also directed Mr Xiao provide further discovery of specified financial information relating to two companies, Top X Limited and Legend Building Limited, including their shareholder current account ledgers or explanatory statements and documents, and purchase of a property in Auckland’s Albany,4 extending to “English translations of information and evidence provided by [Mr Xiao] in Chinese [language] to assist the Court and counsel to progress matters”.5 And he directed Mr Xiao comply with r 160 of the Family Court Rules 2002, requiring any non-English-language affidavit filed in
1 Wan v Xiao [2023] NZFC 11376.
2 Wan v Xiao [2022] NZFC 13152.
3 At [10].
4 At [13], referring to [11(a)–(g)].
5 At [11(g)].
the proceeding be accompanied by an interpreter’s translation, in respect of “any material annexed to and forming part of an affidavit” from him.6
[4] Mr Xiao failed to provide particular information Judge Burns directed he discover and translate. Noting Mr Xiao had not appealed Judge Burns’ decision,7 Judge McHardy directed Mr Xiao comply with those directions.8 The Judge declined to rule on Mr Xiao’s 11 May 2023 application for further discovery from Ms Wan, given his alternative route to the information.9
[5] On these appeals, for Mr Xiao, Paul Pang argues Judge Burns erred in directing:
(a)discovery of documents predating commencement of a short duration relationship;
(b)a third party accountant explain particular accounting systems and operation; and
(c)Mr Xiao to translate discovered documents
and therefore Judge McHardy erred in enforcing (and not varying) them, as well as in concluding proffered documents did not constitute shareholder current account documents. For Ms Wan, Karen Jenkins responds Judge McHardy was right to uphold Judge Burns’ directions and it is far too late now to permit their reconsideration, particularly as Mr Xiao’s 15 February 2023 response on case review, after time to appeal had expired, was to seek “more time to comply with his side of the disclosure”.
[6] In post-hearing submissions, Mr Pang calculates the delay in appealing Judge Burns’ decision to be of 10 months and 26 days, less the Court’s non-working days. He points to Mr Xiao’s contended errant or inadvertent reasons, rather than any change of mind or indecision, for delay. He argues extension of time would not prejudice Ms Wan, because Mr Xiao’s presumed success on appeal would allow the present
6 At [16].
7 Wan v Xiao, above n 1, at [16].
8 At [16]–[17], [22]–[23] and [41]–[42].
9 At [53].
substantive fixtures in the Family Court to be achieved, whereas they would be imperilled if Mr Xiao had now belatedly to comply with Judge Burns’ decision. And he supports Mr Xiao’s contention for clarification of the law on material discovery obligations. Otherwise he returns to the merits of the proposed appeal.
Approach to appeal(s)
[7] There is difference between coordinate judges if s 39 affords a right of appeal against interlocutory orders made in proceedings brought under the 1976 Act, or any appeal is to be pursued either with leave or under s 124 of the District Court Act 2016.10 There is no utility in me expressing preference for one or other perspective.
[8]Rather I approach the intended appeals on the bases:
(a)any appeal was to be brought within 20 working days of the decision’s issue;11
(b)the ultimate question when considering exercise of any discretion to extend time is what the interests of justice require in the particular circumstances of the case, having regard for factors such as the length of and reasons for the delay, the conduct of the parties and particularly the intending appellant, any prejudice or hardship to others and the significance of the issues to be raised;12
(c)any right of appeal against the Family Court’s decision(s) is as a general appeal conducted by way of rehearing,13 in which Mr Xiao bears the onus of satisfying me I should differ from the decision;
10 See, most recently, Smith v Jones [2023] NZHC 3277 at [10]–[26], referring to Re McIlraith HC Dunedin CIV-2004-412-0037, 1 June 2004; E v E [2005] NZFLR 806 (HC); SMG v EWG [2007] NZFLR 27 (HC); Dunsford v Shanly [2012] NZHC 257; L v L [2017] NZHC 2529; C v H [2022] NZHC 3145; and Simeon v Simeon-Campbell [2022] NZHC 2029; and Ireland v Ireland [2017] NZHC 3115 at [19].
11 District Court Act 2016, s 127; High Court Rules 2016, r 20.18.
12 Almond v Read [2017] NZSC 80, [2017] 1 NZLR 801 at [38]–[40], affirmed in Singh v Auckland District Health Board [2023] NZSC 152 at [7].
13 Property (Relationships) Act 1976, s 39(3); District Court Act, s 127.
(d)I only am justified in interfering with the decision if I consider it is wrong — in other words, the Judge erred;14
(e)I then am to come to my own assessment of the merits of the case afresh, without deference to the Family Court.15 I may rely on the Family Court’s reasons in reaching my own conclusions, but the weight I give those reasons is a matter for me;16 and
(f)after hearing the appeal, I may make any decision I think should have been made, or direct the Family Court to rehear the proceeding or consider and determine any particular matter.17
Discussion
—appeal against Judge McHardy’s decision
[9]First, I see no error at all in Judge McHardy’s decision.
[10] Judge Burns’ directions were clear. Mr Xiao had not sought rehearing of either party’s application on the necessary ground of miscarriage of justice;18 neither had he appealed Judge Burns’ directions. The Family Court’s processes allow no other alternative. Yet Mr Xiao had not complied with Judge Burns’ directions.
[11] There is no room to contend Judge McHardy should have ‘varied’ Judge Burns’ decisions, even if he had jurisdiction to do so (which he did not). Once a court has made an order, there is a significant policy reason for requiring the order to stand as conclusive, unless overturned on such challenge as may be available to affected parties. That reason is the principle of finality in litigation. It is not a principle of absolute finality, because it “accommodates exceptional situations by allowing final determinations to be revisited but within prescribed limits”.19 Substantive errors in a
14 Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141 at [13].
15 At [13].
16 Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [31].
17 Property (Relationships) Act, s 39; District Court Act, s 128; High Court Rules, r 20.19(1).
18 Family Court Rules 2002, r 59.
19 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd [2012] NZSC 94, [2013] 1 NZLR 804 at [28], referring to R v Smith [2003] 3 NZLR 617 (CA) at [46]; Shiels v Blakeley [1986] 2 NZLR 262 (CA) at 266; and Lockyer v Ferryman (1877) 2 AC 519 (HL) at 530; and Chamberlains v Lai [2006] NZSC 70, [2007] 2 NZLR 7 at [58].
court’s finding, application or reasoning may be susceptible to challenge. If not, or until successful challenge, the order stands for compliance.
[12] Recognising Mr Xiao’s non-compliance, Judge Maude directed “[a]ny remaining unprovided discovery is to be addressed at [a] 90[-m]inute [s]ubmissions hearing”,20 ultimately before Judge McHardy, with any applications for further discovery to be filed and served in advance. In doing so, Judge Maude drew clear distinction between “what has been so far ordered and not provided and [what] has later been applied for and not provided”.21
[13] The 1976 Act’s principles include “that questions arising under this Act about relationship property should be resolved as inexpensively, simply, and speedily as is consistent with justice”.22 Presumptions of finality of judicial decisions therefore carry particular weight in this jurisdiction if there is not to be abuse of Court processes.23
[14] Judge McHardy rightly saw his task as being for enforcement of Judge Burns’ directions.24 His decision is unimpeachable. His technical assessment of documents retrospectively created by Mr Xiao and his accountant as shareholder current account ledgers is immaterial, because it is common ground no such documents existed at the time of Judge Burns’ decision and therefore his ‘fallback’ explanatory position applied. I will dismiss Mr Xiao’s appeal against Judge McHardy’s decision.
—extension of time to appeal Judge Burns’ decision
[15] Second, if Mr Xiao should be granted an extension of time to appeal Judge Burns’ decision has little to do with the merits of his intended appeal.25 Especially in the 1976 Act’s desired ‘inexpensive, simple and speedy’ environment, Mr Xiao’s reasons for his delay of nearly eleven months and its consequences in context are the
20 Wan v Xiao FC North Shore FAM-2021-0044-0443, 6 April 2023 (Memorandum of Judge Maude) at 1.
21 At 2.
22 Property (Relationships) Act, s 1N(d).
23 Commissioner of Inland Revenue v Redcliffe Forestry Venture Ltd, above n 19. at [28];
Chamberlains v Lai, above n 19, at [59] and [62]–[63].
24 Wan v Xiao, above n 1, at [17].
25 Almond v Read, above n 12, at [39].
more determinative.26 Given delay’s duration here, a ‘strong’ case for extension is required.
[16] Mr Xiao’s 27 February 2024 affidavit, directed to be filed by Lang J,27 explains he did not appeal Judge Burns’ decision because he believed he had complied with it.
[17] Focusing on the discovery relating to Legend Building Limited, Mr Xiao says he provided the financial documents for the financial years 2019–2021. The Judge’s relevant direction was for “the financial statements for Legend Building Limited that have been signed off and provided to the IRD for the years ending 2018–2021”. The affidavit seeks to construe the Judge’s “years ending 2018–2021” as meaning 1 April 2018 to 31 March 2021, particularly as Mr Xiao contends his relationship with Ms Wan commenced did not commence until August 2018 (although Ms Wan says January 2018).
[18] As for the translations, Mr Xiao would provide English translations of the documents on which he intended to rely and “it did not occur to [him]” to appeal Judge Burns’ decision until Judge McHardy ‘found’ the specificity of its [11(g)] direction.
[19] So far as shareholder current account ledgers are concerned, Mr Xiao suggests that description lacks any technical foundation, leaving him to assert his discovery suffices. He intemperately complains Judge McHardy should not have accepted Ms Wan’s counsel’s criticism of that discovery, and again “it did not cross [his] mind” to appeal Judge Burns’ now-contended indeterminate decision.
[20]The constructions Mr Xiao puts on Judge Burns’ decision are unsound:
(a)his attempted sleight of hand in construing the Judge’s “2018–2021” phrase to refer to non-existent financial reports for calendar and not financial years is meaningless when the Judge’s direction is for statements provided to the IRD for those years — inferentially, for each tax year ending in 2018–2021;
26 At [38].
27 Xiao v Wan HC Auckland CIV-2023-404-2928, 13 February 2024 (Minute of Lang J) at [4].
(b)the specificity of the Judge’s [11(g)] reference wholly was apparent from the time of its making. Mr Pang’s submission its typographic inclusion with the preceding sub-paragraph somehow is to render it ineffective, and Ms Wan’s and Judge McHardy’s reliance on it a “technicality”, begs credulity; and
(c)a ‘shareholder current account ledger’ self-evidently is the record of a company’s net balance of funds introduced or withdrawn by shareholders supplementary to share capital. But Judge McHardy noted
— as, at the time of Judge Burns’ decision, no such documents existed
— the explanatory “fallback” was what was required produced.28 It was not for Mr Xiao retrospectively to create those documents on any reading of Judge Burns’ direction.
Mr Xiao’s dispute of Ms Wan’s counsel’s and Judge McHardy’s expertise is particularly egregious. The Judge recognised the inadequacy of the documents proffered as shareholder current account ledgers on his own “cursory look”.29 The unfounded argumentativeness of Mr Xiao’s affidavit means his delay in seeking to appeal remains unsatisfactorily explained.
[21] Mr Xiao’s reasons for the delay thus are he is entitled to construe Judge Burns’ decision even irrationally in his favour, and should not be constrained from appealing when that construction is found incorrect. Mr Xiao’s reasons for the delay therefore are strategic. Having not succeeded in producing only the discovery and translations he preferred to produce — for example, with reference to the documents’ timespan, as consistent with his view of the relationship’s duration rather than as is at issue in the proceeding — he now belatedly seeks to undermine the foundation for those obligations. It is notable Judge Burns, Judge McHardy and Judge Maude all indicate Mr Xiao’s obdurateness in the Family Court proceeding.30
28 Wan v Xiao, above n 1, at [41]–[42].
29 At [40].
30 Wan v Xiao, above n 2, at [9]–[10] and [14]; Wan v Xiao, above n 1, at [10], [22], [27], [40], [42] and [55]; Wan v Xiao, above n 20.
[22] Resolution then of Ms Wan’s Family Court proceeding remains unacceptably delayed, to her significant prejudice not only in the unresolved aftermath of the parties’ relationship but also in wasted resources on this pointless satellite litigation. I observe the four-volume bundle of documents for these intended appeals — only of discovery orders, at the outset of proceedings — exceeds 1300 pages. These are proceedings commenced now nearly three years ago, in July 2021. The disproportionality of Mr Xiao’s approach alone is prejudicial to Ms Wan. Mr Pang’s advice of further delay if his client does not succeed on his appeal may be thought at odds with Family Court lawyers’ duty to promote conciliation.31 Mr Xiao should not benefit from his delayed compliance; rather, he should be prevailed upon to comply if at all possible within the present timetable. Indeed, that is the Family Court’s determined intention.32
[23] Despite Mr Xiao’s contention there are important legal issues “in terms of discovery process (particularly the issue of relevance and translations), as well as how the Family Court should approach expert evidence”, there is no general significance or public interest in the issues raised at all. At core, Judge Burns’ decision is his assessment of documents to be discovered to assist the Family Court in its determination of the parties’ division of relationship property, in which “[a] robust approach” is taken to relevance, informed by “a need for ‘complete transparency’ in relationship property disputes”.33 None can be said immaterial to the Family Court’s substantive assessment of a just division of the parties’ relationship property with regard for economic advantages or disadvantages arising from their relationship or its ending.34 To that end, the Family Court “may receive any evidence, whether or not admissible under the Evidence Act 2006, that the court considers may assist it to determine the proceeding”.35
[24] Characteristically, Mr Xiao seizes on Judge McHardy’s acknowledgement of some merit as justifying his proposed appeal.36 But the merits, if any, of the proposed
31 Family Court Act 1980, s 9A.
32 Wan v Xiao FC North Shore FAM-2021-044-0443, 19 December 2023 (Memorandum of Judge von Keisenberg).
33 Dixon v Kingsley [2015] NZHC 2044 at [19]–[20]; and J v P [2013] NZHC 557 at [22] (referring to MAC v MAC FC Rotorua FAM-2007-063-652, 20 June 2011) and [33], approved in Biggs v Biggs [2018] NZCA 546 at [33]–[34].
34 Property (Relationships) Act, s 1N(c).
35 Family Court Act, s 12A(4).
36 Wan v Xiao, above n 1, at [16].
appeal wholly are overwhelmed by the factors I already have outlined. Had I to consider the merits at all, I would have considered the Judge’s impugned decisions each and together did not constitute error on the Judge’s part but fell soundly within the Judge’s appropriate assessment of the documents’ prospective support or adverse effect in the parties’ cases.37
[25]As to the procedural, rather than substantive, aspects of the Judge’s decision
— including as to which party should make those documents useful for the Family Court’s English-language assessment and determination — I would have considered they fell as soundly within the purpose of the Family Court Rules 2002,38 to deal with the proceeding:
(a) as fairly, inexpensively, simply, and speedily as is consistent with justice; and
(b) in such a way as to avoid unnecessary formality; and
(c) in harmony with the purpose and spirit of the [Property (Relationships) Act].
[26] And as to the last of those, the 1976 Act’s ss 1M and 1N’s focus on the Family Court’s “just division” is illustrative of the soundness of the Judge’s decision. That stricter considerations of relevance or for production in discovery apply in this Court’s civil jurisdiction, as Mr Pang seeks to contend in reliance on Amaltal Corporation Ltd v Maruha Corporation,39 does not carry material weight on the merits in the Family Court.40 Amaltal also expressly is limited to “normal circumstances” of inspection,41 which need for the Judge’s direction may be thought to exceed.
[27] Mr Xiao lacks any case, let alone the necessary ‘strong’ one, for an extension of time. The interests of justice do not require Mr Xiao have opportunity now to challenge Judge Burns’ decision. I will not extend time for Mr Xiao’s appeal of it.
Result
[28]The appeal is dismissed. The application for an extension of time is declined.
37 District Court Rules 2014, r 8.7.
38 Family Court Rules, r 3.
39 Amaltal Corporation Ltd v Maruha Corporation (2003) 16 PRNZ 968 (HC).
40 See Biggs v Biggs, above n 33, and similarly R v Cao [2024] NZHC 1287 at [30] and following.
41 Amaltal Corporation Ltd v Maruha Corporation, above n 39, at [28].
Costs
[29] In my preliminary view, from what I presently know, Mr Xiao should pay 2B costs and disbursements to Ms Wan. That is because — given Mr Xiao’s right of appeal against Judge McHardy’s decision, and entitlement to seek an extension of time to appeal against Judge Burns’ decision — I cannot identify his unnecessary contribution to the time or expense of the proceeding,42 or his actions otherwise qualify for indemnity costs.43 In other words, the “predictable and expeditious” determination of costs should win out.44
[30] If that is not accepted by the parties and they cannot otherwise agree, costs are reserved for determination on short memoranda each of no more than five pages — annexing a single-page table setting out any contended allowable steps, time allocation and daily recovery rate — to be filed and served by Ms Wan within ten working days of the date of this judgment, with any response or reply to be filed within five working day intervals after service.
—Jagose J
42 High Court Rules, r 14.6(3)(b).
43 Rule 14.6(4).
44 Rule 14.6(3)(d) and (4)(f).
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