Hebei Huaneng v Deming Shi_B. New Zealand High Court on the notion of ‘courts’ in recognising ‘judgments’ internationally.

Thank you Jan Jakob Bornheim for alerting me to Hebei Huaneng v Deming Shi_B [2020] NZHC 2992, which dismissed the defendant’s application for summary judgment and discusses the notion of a ‘court’ , required to recognise its ‘judgments’ internationally. Readers will recognise the discussion ia from the CJEU case-law in judgments such as Pula Parking.

Hebei Huaneng had obtained judgment against Mr Shi at the Higher People’s Court of Hebei Province. The amount remained unsatisfied. Hebei Huaneng then found out that Mr Shi has assets in New Zealand – an inner-city apartment in Auckland and shares in a New Zealand company.  Mr Shi objects to New Zealand hearing this case on the basis that China does not have true courts and that Hebei Huaneng should first enforce its securities in China.

At 78-79 Bell J holds briefly that questions of real and substantial connection with New Zealand and appropriate forum are not much in issue. The two main arguments raised at this stage lie elsewhere.

Given the lack of treaty on the issue between NZ and PRC, he summarises the NZ common law on recognition at 16:  the common law regards a judgment of a foreign court as creating an obligation enforceable under New Zealand law if the judgment is given by a court, the judgment is final and conclusive, the judgment is for a definite sum, the parties are the same or privies, and the court had jurisdiction under New Zealand’s jurisdiction recognition rules. No merits review will be undertaken however refusal of enforcing a ‘money judgment’ is possible if obtained in breach of New Zealand standards of natural justice, enforcing the judgment would be contrary to public policy,
the judgment was obtained by fraud, the judgment was for a revenue debt, or the judgment involves the enforcement of a foreign penal law. Lack of reciprocal recognition by the other State is no objection.

On the issue of the notion of court, he notes at 29 that complaints that a foreign legal system is so defective that its courts cannot be trusted to do substantial justice may arise in two contexts: in forum non cases, where the analysis is prospective seeing as the case may not even be pending abroad; and in recognition cases, where the analysis is retrospective. At 28 Bell J already points out that style of writing etc. particularly also given the civil law background of China must not confuse. At 35 he notes to core issues viz the concept of court: (a) whether the bodies carrying out judicial functions are distinct from those with legislative and administrative function; and (b) whether the bodies carrying out judicial functions are subject to improper interference. Then follows lengthy-ish consideration of expert evidence to conclude at 60 that the good arguable case of the Chinese courts being independent, is satisfied.

The question of the ‘property security first’ principle’ which would mean satisfaction would first have to be sought against the Chinese secured assets, is discussed mostly in the context of Chinese law, against the backdrop of the common law principle of a party’s freedom to chose asset enforcement. The lex causae for that discussion I imagine will be further discussed at the merits stage.

A good case for the comparative conflicts binder.

Geert.

 

Lange v Lange. The Trans-Tasman Proceedings Act 2010’s equivalent of CJEU’s Webb v Webb, Schmidt v Schmidt etc.

Update 15 October 2020 many thanks Jack Wass for providing link to judgment, here.

As I seem to be in a comparative mood today, thank you Jan Jakob Bornheim for flagging [2020] NZHC 2560 Lange v Lange. The case is further discussed by Jack Wass here – at the time of writing I only have Jack’s review to go on for the actual decision appears to be as yet unpublished.

TTPA 2010 follows the model of the more recent Hague Judgments Convention: recognition and enforcement of a judgment may be refused if it infringes jurisdictional rules detailed in the Act. For the case at issue, s 61(2)(c) of the TTPA is engaged. It requires the court to set aside registration of a judgment if it was “given in a proceeding the subject matter of which was immovable property” located outside Australia.

The determining concern is whether the New Zealand property was “in issue” (the words which Jack uses and which presumably Gault J employed; the Act itself uses ‘proceeding subject matter of which is’; compare with Brussels Ia’s ‘proceedings which have as their object’) in the proceedings. Gault J, citing authority, finds that a judgment setting aside a fraudulent disposition is not rendered unenforceable simply because the debt concerned the sale of New Zealand land. (A further appeal to ordre public was refused; for that to be successful, the result of recognition must, Jack notes, “shock the conscience” of the ordinary New Zealander” (Reeves v OneWorld Challenge LLC [2006] 2 NZLR 184 (CA) at [67].

Obvious comparative pointers with EU conflicts law are Webb v Webb, Weber v Weber, Schmidt v Schmidt, Komu v Komu etc.: readers will know that Article 24(1) Brussels Ia typically involves feuding family members.

Geert.

(Handbook of) EU private international law, 2nd ed. 2016, Chapter 2, Heading 2.2.6 . Third edition forthcoming February 2021.

Rincon. Overriding mandatory law or ‘lois de police’ in California.

Update 22 November 2019 for a similar case see Handoush v. Lease Financing Group.

Rincon ((2017) 8 Cal. App 5th 1) is another case suited to comparative conflicts classes. It applies California’s restrictive regime on waiver of jury trial to a contract governed by New York law and with choice of court for New York.

‘Lois de police‘, also known as lois d’application immédiate or lois d’application nécessaire,  are included in the EU’s Rome I Regulation (on applicable law for contracts) in Article 9. (I reported earlier on their application in Unamar).

Jason Grinell has background to the case. Parties had made choice of law and choice of court in favour of New York. The link with New York was real (in EU terms: this was not a ‘purely domestic’ situation), inter alia because of the involvement of New York-based banks, parties being sophisticated commercial undertakings, and the contract having been negotiated in NY. However the real estate development is located at San Francisco, giving CAL a strong link to the case. Under CAL law,  parties generally cannot waive a jury trial before the commencement of a lawsuit unless they use one of two methods approved by the legislature. New York law does not have the same provision and choice of court clauses in favour of New York do not include reference to the only options available under CAL law.

In the case at issue, the boilerplate choice of court clause was set aside by the Court of Appeal. The lower court had denied a substantial enough Californian interest in the case – the CA disagreed. The relevant part of the judgment runs until p.22.

That comparative conflicts binder is filling out nicely.

Geert.