Bank of China Limited v Chen

Supreme Court of NSW|2022-02-18

Judgment

HER HONOUR: By summons filed 24 December 2020 ("Summons"), the plaintiff seeks the enforcement at common law in Australia of two foreign judgments obtained from the People's Court of District Jimo, Qingdao Shi, Shandong Province China, against the defendant on 23 October 2019.
The judgments sought to be enforced in Australia are two of three Civil Mediation Judgments handed down by the People's Court against seven defendants following judicial mediation on 23 October 2019 in proceedings (2019) Lu 0282 Civil Trial 4209 and proceedings (2019) Lu 0282 Civil Trial 4210 ("Proceedings 4209 and 4210"). The defendant was not a party to the third proceedings.

The Summons

The Summons relevantly seeks: "[1] Judgment for the Plaintiff in the sum of RMB ¥ 17,990,172.26, or the equivalent in Australian dollars, being the recognition and enforcement of a judgment of the People's Court of District Jimo, Qingdao Shi, Shandong Province, China in proceedings (2019) Lu 0282 Civil Trial 4209. [2] Judgment for the Plaintiff in the sum of RMB ¥ 22,372,474.11, or the equivalent in Australian dollars, being the recognition and enforcement of a judgment of the People's Court of District Jimo, Qingdao Shi, Shandong Province, China in proceedings (2019) Lu 0282 Civil Trial 4210. [3] …"

The defendant's notice of motion

On 21 April 2021, the defendant filed a notice of motion seeking to set aside the plaintiff's summons ("Defendant's Motion"). The defendant's motion relevantly seeks: 1. The originating process be set aside pursuant to rr 11.6 and 12.11 of the Uniform Civil Procedure Rules 2005. 2. Service of the originating process on the defendant be set aside pursuant to r 12.11 of the Uniform Civil Procedure Rules 2005. 3. A declaration that the originating process has not be duly served on the defendant pursuant to r 12.11 of the Uniform Civil Procedure Rules 2005.
The defendant further sought a variation of the previous cost order of Registrar K Jones ("Registrar") dated 21 October 2021 to the effect that each party bear their own costs for their earlier expert reports.

Legal principles

The principles for enforcement of a Chinese judgment in Australia are settled. In Bao v Qu; Tian (No 2) [2020] NSWSC 588 ("Bao"), Rothman J summarised those principles at [23]-[29]: "[23] Foreign judgments may be enforced in Australia either at common law or pursuant to the statutory regime under the Foreign Judgments Act 1991 (Cth). [24] The statutory regime applies where a country has been designated as a jurisdiction of substantial reciprocity under the Regulations. The People's Republic of China has not been so designated: see the Foreign Judgments Regulations 1992 (Cth), sch 1. [25] Thus, the judgments of Chinese courts are not enforceable in Australia through statutory means. However, decisions of Chinese courts may be enforceable in Australia under the common law procedure for the enforcement of foreign judgments. [26] At common law, a foreign judgment is prima facie capable of recognition and enforcement if the following requirements have been met: (1) the foreign court must have exercised jurisdiction of the requisite type over the defendant (also known as jurisdiction "in the international sense"); (2) the judgment must be final and conclusive; (3) there must be identity of parties between the judgment debtors and the defendants in any enforcement action; and (4) the judgment must be for a fixed, liquidated sum. See Benefit Strategies Group v Prider (2005) 91 SASR 544; [2005] SASC 194 per Bleby J at [18]; Schnabel v Yung Lui [2002] NSWSC 15 per Bergin J at [75]; RDCW Diamonds Pty Ltd v Da Gloria [2006] NSWSC 450 per Rothman J at [28]-[32]; M Davies et al, Nygh's Conflict of Laws in Australia (LexisNexis, 10th ed, 2020) at [40.2]. … [29] The onus rests on the party seeking to enforce the foreign judgment to establish these four requirements: Carl Zeiss Stiftung v Rayner & Keele Ltd [1967] 1 AC 853, Schnabel at [74]-[76]. Once they are established, however, the judgment is prima facie enforceable as a valid obligation: Stern v National Australia Bank; National Australia Bank Ltd v Pollack [1999] FCA 1421 at [133] (Tamberlin J); Suzhou Haishun Investment Management Co. Ltd v Yue'e Zhao & Ors [2019] VSC 110 at [92]."

Relevant Legislation

The plaintiff submits that it served the Summons and the requisite accompanying notice on the defendant pursuant to r 11.4 and Sch 6(m) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") and therefore did not require leave of the Court.
UCPR r 11.4 relevantly reads: "11.4 Cases for service of originating process (1) Originating process may be served outside of Australia without leave in the circumstances referred to in Schedule 6. (2) …"
UCPR Sch 6 relevantly reads: "An originating process may be served outside of Australia without leave in the following cases - … (m) when it is sought to recognise or enforce any judgment, …"
The defendant relies on UCPR rr 11.6 and 12.11 in her Motion seeking to set aside the Summons. Those rules relevantly read: "11.6 Court's discretion whether to assume jurisdiction (1) On application by a person on whom an originating process has been served outside of Australia, the court may dismiss or stay the proceeding or set aside service of the originating process. (2) Without limiting subrule (1), the court may make an order under this rule if satisfied - (a) that service of the originating process is not authorised by these rules, or (b) that the court is an inappropriate forum for the trial of the proceeding, or (c) that the claim has insufficient prospects of success to warrant putting the person served outside Australia to the time, expense and trouble of defending the claim. 12.11 Setting aside originating process etc (1) In any proceedings, the court may make any of the following orders on the application of a defendant - (a) an order setting aside the originating process, (b) an order setting aside the service of the originating process on the defendant, (c) an order declaring that the originating process has not been duly served on the defendant, (d) … (2) …"
The plaintiff makes reference to ss 11 and 12 of the Interpretations Act 1987 (NSW) ("Interpretations Act"). Those sections relevantly read: "11 Words etc in instruments under an Act have same meanings as in the Act Words and expressions that occur in an instrument have the same meanings as they have in the Act, or in the relevant provisions of the Act, under which the instrument is made. 12 References to New South Wales to be implied (1) In any Act or instrument - (a) a reference to an officer, office or statutory body is a reference to such an officer, office or statutory body in and for New South Wales, and (b) a reference to a locality, jurisdiction or other matter or thing is a reference to such a locality, jurisdiction or other matter or thing in and of New South Wales. (2) In any Act or instrument, a reference to a body constituted by or under an Act or instrument need not include the words "New South Wales" or "of New South Wales" merely because those words form part of the body's name or title."

Service

The plaintiff submitted that a summons seeking to enforce a foreign judgment may be served outside of Australia without leave. It must be accompanied by a notice in the approved form. It is the plaintiff's contention that the following evidence establishes that the plaintiff's summons (including the attached Notice to Defendant Served Outside Australia) filed 24 December 2020 (Ex 1, 1) and the Affidavit of Junxian Huang, affirmed on 11 December 2020 ("Huang Aff 11.12.20") (Ex 1, 12) were personally served on the defendant in Shandong Province, China on 7 January 2021: 1. The affidavit of Tong Qiu, a paralegal at a Beijing law firm, affirmed 8 June 2021 ("Qui Aff 8.6.21") (Ex 1, 54). Mr Qiu attests that he handed the documents to the defendant after confirming her identify at [5], and that she signed for the documents at [7]. He annexes the proof of service signed by the defendant: Annexure "A". 2. The affidavit of Yang Zhang, a lawyer at a Beijing Law firm, affirmed 22 January 2021 ("Zhang Aff 8.6.21") (Ex 1, 60). Mr Zhang attests that he accompanied Mr Qiu and observed the documents being served on the defendant at [5]. At the time Mr Zhang obtained the defendant's consent to check her ID card and photograph it at [6]. He annexes his photograph of the ID card: Zhang Aff 8.6.21 Annexure "A".

Chinese Judgments

The plaintiff's lay evidence is given in Huang Aff 11.12.20. Mr Huang was present in Court on the day of the judgments and gives direct evidence of the events that took place. The plaintiff also relies on the judgments themselves and the certified English translations of the transcripts of the three proceedings. The accuracy of the events set out in the Chinese versions of the transcripts is verified by Mr Huang.
The evidence is that the judgments were entered in the following circumstances: 1. on 23 October 2019, the three proceedings (being financial loan dispute cases) were listed for hearing before Judge Kai Huang in the Chinese court; (Huang Aff 11.12.20 at [2]-[3]) 2. all seven defendants (including the defendant) appeared in court represented by their authorised legal representative whose identity was checked by the court. None of the defendants were in court personally; (Huang Aff 11.12.20 at [5]-[7]) 3. The Judge made a brief introduction of the three cases. The lawyers did not object. The Judge then said: "I propose that the parties do mediation. A Mediation Judgment and Judgment have the same legal effect but the Mediation Judgment has a faster and easier approval process" 1. all of the parties agreed to do mediation; (Huang Aff 11.12.20 at [7]-[8]) 2. the Judge then dealt with the cases one by one. He asked the plaintiff's lawyer what its opinion was on the resolution of the proceedings. The plaintiff's lawyer stated that the defendants should pay certain amounts to the plaintiff. The defendants' lawyer agreed with the plaintiff and this was recorded in the transcripts; (Huang Aff 11.12.20 at [11]) 3. the lawyers checked and signed the transcript and the hearing finished. The Civil Mediation Judgments were then issued by the Court. (Huang Aff 11.12.20 at [12]-[13])

International jurisdiction

The plaintiff submitted that to establish jurisdiction in the international sense, the basic principle is that the foreign court must have had jurisdiction over the defendant at the time when the jurisdiction of the foreign court was invoked. This can arise by the voluntary submission by the defendant to that jurisdiction. A party can submit to the jurisdiction of a foreign court either by appearing as a party in the proceedings, whether as plaintiff or defendant, or by agreeing in advance to accept the jurisdiction of that court.
The plaintiff further submitted that the evidence establishes that the defendant appeared before the Chinese Court by her authorised legal representative. The authorised legal representative made no objection to the mediation documents. Jurisdiction in the international sense is therefore established.

Judgment must be final and conclusive

In Bao Rothman J stated at [28]: "[28] On the second requirement, the foreign court's judgment must be final, in that it must put to an end the proceedings concerned and quell the controversy between the parties to the dispute: Nouvion v Freeman (1889) 15 App Cas 1 at 9; Doe v Howard [2015] VSC 75 at [67] per J Forrest J; Schnabel at [77] and [133]. A foreign judgment is final where it is treated as res judicata by the courts of the country in which it is made, in respect of the issues determined: Schnabel at [77], [133]; Bank Polska Kasa Opieki Spolka Akcyjna v Opara (2010) 238 FLR 309; [2010] QSC 93. It that regard, the fact that a judgment may be subject to appeal does not, in principle, affect the finality of the judgment: Colt Industries Inc v Sarlie (No2 [1966] 1 WLR 1287; Lewis v Eliades [2003] EWCA Civ 1758."
The plaintiff relied on the expert report of Mr Yanghui Cao, expert Chinese litigation lawyer, dated 19 February 2021 ("Cao Report 19.2.21"). In Cao Report 19.2.21 Mr Cao concluded that, as a matter of Chinese law, and by reference to and after consideration of the relevant provisions of Chinese law, the judgments are binding, enforceable, final, conclusive, unappealable and can be enforced without further order.
The plaintiff also relied on the affidavit of Duo Xue, certified translator, affirmed 26 February 2021 ("Xue Aff 26.2.21"), confirming the accuracy of the translations of Chinese law in Mr Cao's expert report: Ex 1, 67.

Identity of parties between judgment debtor and defendant

The plaintiff submitted that the defendant's name, Ying Chen, appears on the Chinese judgments as a defendant. Her date of birth and Chinese citizen ID card number also appear on the judgments. These match with the same particulars on the ID card presented by Ying Chen when she was served with these proceedings: Zhang Aff 8.6.21 Annexure "A". Thus, the Court can be satisfied that the Ying Chen is the same Ying Chen in each proceeding.
As noted in M Davies et al, Nygh's Conflict of Laws in Australia (LexisNexis, 10th ed, 2020) ("Nygh") at [40.37]: "If the foreign judgment is expressed to be against several defendants acting as separate legal entities, enforcement proceedings may be brought in Australia against any or all of them."

The judgment is for a fixed liquidated sum

Each judgment gives a fixed amount for principal and interest on the respective loans, being: 1. (2019) Lu 0282 Civil Trial No 4209 RMB ¥ 17,990,172.26 2. (2019) Lu 0282 Civil Trial No 4210 RMB ¥ 22,372,474.11
It is the plaintiff's submission that having established the four requirements set out above, the foreign judgments are prima facie enforceable as a valid obligation and should be entered in this Court accordingly.

On the Defendant's Motion

With regards to the defendant' notice of motion, the plaintiff submitted that the defendant moves the Court to set aside the service of the Summons, solely on the basis of her contention that the documents do not embody "judgments" within the meaning of UCPR Sch 6(m). That of course is a question which will require adjudication at the final hearing of the Summons, but the defendant effectively seeks to have it determined at an interlocutory level. It therefore takes on the "General Steel onus" of clearly establishing that the matter is beyond argument at final hearing: see General Steel Industries Inc Commissioner for Railways (1964) 112 CLR 125; [1964] HCA 69.
It is the plaintiff's argument that the defendant's motion is based on a fundamental and fatally flawed premise. It has served evidence from a translator and a Chinese law expert, to the effect that the two Chinese judgments sought to be enforced do not fall within a strict definition of ''judgment" according to Chinese law. The flaw is that the defendant seeks summary dismissal on the basis of what "judgment" means according to Chinese law, when that is not the question for this Court. The question for this Court will be whether the two Chinese judgments fall within the meaning of "judgment" in the UCPR, that is, accordingly to New South Wales law, not Chinese law.
On that question, the plaintiff submitted that there is no controversy. The UCPR contains no definition. The elements of a "judgment" are well settled according to Australian law and the evidence of the Chinese law experts for both parties, confirms that the Documents do have those essential elements required by Australian law. The plaintiff contends that the defendant's expert has been asked the wrong question, namely what does "judgment" mean in Chinese law. The reports of translators are irrelevant because this is a question as to the substantive legal content of Australian law (and what "judgment" means in Australian law); not a question of translation of that word into Chinese and what Chinese law considers a "judgment" to be.
Finally, on this point the plaintiff submitted that even if at final hearing the Court were to determine that the two Chinese judgments were not within the scope of UCPR 11.4, that would only require that leave of the Court be obtained, which the Court might give nunc pro tunc, given that at that stage it would then be fully versed in the matter.

Procedural history and evidence

The plaintiff submitted that the present proceedings were originated by the plaintiff's summons filed on 24 December 2020 and served on the defendant in China on 7 January 2021: Zhang Aff 8.6.21 at [4]-[5]; Qui Aff 8.6.21 at [4]-[5].
The plaintiff argued that the defendant's motion seeks orders to set aside the Summons, to set aside the service of the Summons, and a declaration that the Summons was not duly served on the defendant. The sole basis for the defendant's motion is that the two judgments in respect of Proceedings 4209 and 4210 are not ''judgments" but 民事调解书 (Minshi Tiaojie Shu) ("MTS'"). In the evidence, an MTS is variously translated into English as: 1. "civil mediation judgment": Huang Aff 11.12.20 Annexures D, E and F; 2. "civil mediation statement": Affidavit of Stephen Chan affirmed on 30 July 2021 ("Chan Aff 30.7.21") at p 9 Part VII(f); 3. "civil mediation": Chan Aff 30.7.21 at p 5 Part VII(a) and p 9 Part VII(f); 4. "mediation certificate": Affidavit of Snezana Vojvodic affirmed 29 April 2021 at [4]; 5. "mediation agreement": Chan Aff 30.7.21 at p 7 Part VII(d) (row 5) and p 8 Part VII(e) (row 5); 6. "written mediation agreement": Report of Professor Lin ("Prof. Lin") dated 21 January 2021 ("Lin Report 21.1.21") at p 4 at [9] and p 9 at [28]; 7. "written mediation statement": Lin Report 21.1.21 at p 8 at [21]-[22]; 8. "conciliation statement": Lin Report 21.1.21 at pp 8-9 at [23]-[24]; and 9. "consent judgment": Lin Report 21.1.21 at p 9 [25]-[26] and p 10 at [34].
In other case law, an MTS is variously translated as: 1. "civil mediation statement": Wei v Mei [2018] BCJ No 163 (Supreme Court of British Columbia) ("Wei"); 2. "mediation agreement": Ng Yuk Keung v Tan Xiaojie [2018] 6 HKC 338; [2018] HKDC (District Court of Hong Kong) ("Ng Yuk Keung"); and 3. "paper of civil mediation": Feng v Ye [2014] NZHC 2377 (High Court of New Zealand) ("Feng").
The affidavit in support of the defendant's motion contains the assertion that an MTS is not a "judgment" for the purposes of UCPR Sch 6(m), and thus a summons for recognition and enforcement of an MTS may not be served outside Australia without leave under UCPR r 11.4.
The plaintiff submitted that leave is not required if the foreign judgment falls within the meaning of judgment in UCPR Sch 6(m). Accordingly, the primary question before the Court on the hearing of the Defendant's Motion is whether or not the two MTS' in question fall within the meaning of "judgment" under UCPR Sch 6(m), such that their service outside Australia did not require leave.

What is a "judgment" under UCPR Sch 6(m)?

The provisions of the UCPR are to be interpreted according to the law of New South Wales as to any "matter or thing" referred to in the UCPR: s12(1)(b) of the Interpretations Act. Where relevant, a word or expression used in the UCPR is to be interpreted according to any definition of that word or expression contained in the Act under which the UCPR was made (Interpretations Act s 11), being the Civil Procedure Act 2005 (NSW) ("CPA").
"Judgment" for the purposes of UCPR Sch 6(m) is not defined in the UCPR, nor is the definition in the CPA material to the present proceedings as it is non-exhaustive: See s 3(1) of the CPA. Consequently, what constitutes a "judgment" under UCPR Sch 6(m) falls to be determined according to the common law of New South Wales.
Under the common law, a "judgment" is an order of Court which: 1. gives rise to res judicata, that is, the rights which make up the cause of action merge in the judgment, and cease to exist for as long the judgment stands, rendering it impossible, during the currency of the judgment, to bring later proceedings on the same cause of action: Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 at 510-511; [1988] HCA 21 at [21] ("Chamberlin"); and 2. takes effect through the authority of the Court, producing legal consequences through the very fact that that it is made by the Court: Beck v Weinstock; Beck v L W Furniture (Consolidated) Pty Ltd [2012] NSWCA 289 at [61] ("Beck"); approved in Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 259 CLR 1 at 41; [2016] HCA 16 at [115] ("Atwells").
The evidence of Associate Professor Jie (Jeanne) Huang ("Assoc. Prof. Huang"), in her expert report dated 1 October 2021 ("Huang Report 1.10.21") and her expert report in reply dated 4 February 2022 ("Huang Report 4.2.22"), establishes that an MTS, such as those at issue in Proceedings 4209 and Proceedings 4210, possesses the factors which constitute a ''judgment" under Australian law, namely by establishing res judicata (Huang Report 1.10.21 at [23]-[27]) and having mandatory enforceability and coercive authority (Huang Report 1.10.21 at [28]).
Assoc. Prof. Huang explains that an MTS is a form of mediation conducted before a judge (or before panel on which a judge sits, as in the instant case, accompanied by People's Jurors): Huang Report 1.10.21 at [24]. An MTS is a type of consent judgment resulting from that mediation which becomes effective once all parties have acknowledged receipt by affixing their signature to the Certificate of Service, either directly or through their representatives: Huang Report 1.10.21 at [25]; Huang Report 4.2.22 at [8]. The Certificates of Service in respect of the MTS' for proceedings 4209 and 4210 were signed by the legal representatives of the plaintiff (Mr Youxiang Wei) (Huang Aff 11.12.20 at [14]) and defendant (Mr Guotao Luan) (Huang Report 4.2.22 pp 14-15) on the day that the MTS' were made, and in the very courtroom in which the MTS' were delivered.
Assoc. Prof. Huang confirms that an MTS is distinct from a private mediation conducted before a mediator other than a judge. In Huang Report 1.10.21 at [26]-[28], Assoc. Prof. Huang opines an MTS: "is not a contract between the parties: it creates finality, precludes parties from litigating on the same cause of action and can be enforced like a judgment issues by a people 's court. … Turning a judicial mediation agreement into an MTS, a people's court gives judicial sanction and coercive authority to what the parties have settled on in the mediation and in that way converts a mere agreement into a judicial decision on which a plea of res judicata may be founded."
Assoc. Prof. Huang observes that an MTS is distinct from a specific form of order otherwise translated as a "civil judgment" (a 民事判决书 'Minshi Panjue Shu' ("MPS")), as they exist under different articles of the Chinese Civil Procedure Law (an MTS under art 97, an MPS under art 152).
Nevertheless, Assoc. Prof. Huang observes that once an MTS is made, it "has the same binding force as a legally effective judgment (i.e. MPS)": Huang Report 1.10.21 at [25(4)]. Further, an MTS "can be enforced exactly like a Chinese judgment (i.e. MPS)" as the enforcement mechanisms of Chinese Civil Procedure Law Art 234 apply likewise to an MTS and an MPS: Huang Report 1.10.21 at [25(4)]. The MTS' in respect of Proceedings 4209 and Proceedings 4210 are "enforceable against Ms Chen according to their terms in China through the execution process of the People's Courts in the same way as a judgment that is obtained after trial (i.e. an MPS). They are capable of being used for enforcement immediately and without the need for further or other order or judgment of the People's Courts": Huang Report 1.10.21 at [41].
The defendant's expert report does not address the question of what constitutes a "judgment" under Australian law. Rather, the Lin Report 21.1.21 addresses whether an MTS is a "judgment" [i.e. MPS] under Chinese law, and how the procedure for making an MTS differs from that for making an MPS. However, crucially, Prof. Lin concedes that, once made, an MTS has the same legal effect as an MPS. It must follow that it creates res judicata and takes effect through the authority of the Court, in which case the elements required of a 'judgment" in the UCPR are satisfied.
As the issue to be determined on the present motion does not turn on what constitutes a "judgment" under Chinese law, but rather what constitutes a "judgment" under Australian law, the opinions Prof. Lin expresses as to what constitutes a "judgment" under Chinese law and whether an MTS is a "judgment" under Chinese law are irrelevant to the present proceedings. Prof. Lin was of course only addressing the questions he was asked by the defendant to address - but they are the wrong questions.
Further, to the extent that Prof. Lin's opinion relates to the process by which an MTS is made (such as the principle of voluntariness (Lin Report 21.1.21 at [42]-[49]), and the role of parties' signatures Lin Report 21.1.21 at [57])), as distinct from the legal effect of an MTS once made, Prof. Lin's evidence is irrelevant to the question to be determined in the present proceedings.
Indeed, Prof. Lin concedes that "the court exercises certain judicial power in making the [MTS']" (Lin Report 21.1.21 at [100]) and confirms that, once an MTS is made, it is legally effective in the sense that it "will have the same effect as an effective judgment [i.e. MPS]": Lin Report 21.1.21 at [51].

Expert evidence from translators Mr Duo Xue and Mr Stephen Chan

Expert evidence from translators has been filed by the both the plaintiff and the defendant: See Xue Aff 26.2.21 and Chan Aff 30.07.21. As described above, various different translations are proposed for "MTS" in the translators' evidence, with each expressing a preference for a particular translation. Mr Xue prefers "civil mediation judgment" (Xue Aff 26.2.21 at [7]); Mr Chan prefers "civil mediation" (Chan Aff 30.07.21 at p 5 Part VIII(a)).
The plaintiff submits that the issue on the defendant's motion of whether or not an MTS is a ''judgment" under Australian law does not fall to be determined by reference to a question of fact, being the question of which translation of the term MTS, from amongst the more than half a dozen translations proffered by the translators (and indeed Assoc. Prof. Huang and Prof. Lin, in their course of their reports). Rather, the issue falls to be determined as a question of law, being the question of what constitutes a judgment" under Australian law and whether, on the evidence of Assoc. Prof. Huang and Prof. Lin, an MTS bears the necessary characteristics to so qualify.

Recognition of MTS' as judgments in other common law jurisdictions

Huang's Report provides evidence that the Courts of British Columbia (Huang Report 1.10.21 at [30]; Wei) Hong Kong (Huang Report 1.10.21 at [31]; Ng Yuk Keung) and New Zealand (Huang Report 1.10.21 at [32]; Feng) have all recognised MTS' as "judgments" for the purpose of recognition and enforcement of a foreign judgment within their respective jurisdictions.
The cases cited in Huang Report 1.10.21 evince that the factors which characterise a "judgment" under Australian law are the same as those which characterise a "judgment" under the law of British Columbia, Hong Kong and New Zealand: Huang Report 1.10.21 at [33]. Prof. Lin does not engage with this issue.
The plaintiff submits that the recognition of MTS' as judgments in the common law jurisdictions of British Columbia, Hong Kong and New Zealand lends support to the same recognition being afforded under the law of New South Wales, which employs the same common law concepts.

MTS' are "judgments" under UCPR Sch 6(m)

The plaintiff submitted that as the evidence establishes that an MTS, such as those at issue in Proceedings 4209 and Proceedings 4210, possesses all the necessary characteristics of a "judgment" under Australian law, the service outside Australia of the Summons in respect of the recognition and enforcement of Proceedings 4209 and Proceedings 4210 did not require leave under UCPR Sch 6(m). As such, the plaintiff submitted that the defendant's motion should be dismissed with costs.

Whether the documents are "foreign judgments" According to the law of the People's Republic of China?

The defendant submitted that on an application to set aside service, or to have the Court decline to exercise jurisdiction, the defendant may direct attention to any of a number of features of the proceeding, the claims made in it, or the parties to it, in aid of the proposition that the Court should not exercise jurisdiction. That includes challenging the plaintiff's claim that the matter is one where service outside the jurisdiction is permitted under the rules: Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [55].
The defendant noted that the plaintiff purports to rely on UCPR Sch 6(m) in order to have served the documents without leave of the Court. Under Sch 6(m), a plaintiff may serve an originating process outside Australia "when it is sought to recognise or enforce a judgement." It was submitted by the defendant that the first hurdle therefore that the plaintiff faces is whether the Documents are "judgments" within the meaning of Sch 6(m).
UCPR Sch 6(m) permits the service of judgments of any court from within the country and without. This reading is consistent with the former UCPR Sch 6(u) which provided for service outside the jurisdiction "if the proceedings are commenced to enforce in New South Wales a judgment wherever given."
There is no definition of "judgment" within the UCPR. Under s 3 of the CPA, "judgment" is defined as "includes any order for the payment of money, including any order for the payment of costs". The UCPR leaves unanswered the question of the meaning of "judgment" according to whose law.
The defendant submitted that in the present case the Documents are said to be foreign judgments. It is submitted that as service outside the jurisdiction without leave is only permitted in this case if the Documents are foreign judgments, then the plaintiff must first prove, as a fact, that they are such things.
If the Documents are foreign judgments, given that judgments of Chinese courts are not enforceable in Australia through statutory means (ie the Foreign Judgments Act 1991 (Cth)), they may be enforceable under the common law: See Bao at [25].
The four tests identified in Bao all pre-suppose the existence of a foreign judgment. In other words, it is assumed that there is as a matter of fact, proved by admissible evidence, a foreign judgment.
The theoretical basis for the enforcement of an order or judgment of a foreign court at common law is that they are enforced on the basis of a principle that where a court of competent jurisdiction has adjudicated a certain sum to be due from one person to another, a legal obligation arises to pay that sum, on which an action of debt to enforce the judgment may be maintained: Rubin & Anor v Eurofinance SA & Ors [2012] UKSC 46 at [9] citing Williams v Jones (1845) 13 M & W 628 at 633 per Parke B; Godard v Gray (1870) LR 6 QB 139 at 147; Adams v Cape Industries plc [1990] Ch 433 at 513; Owens Bank Ltd v Bracco [1992] 2 AC 443 at 484.
The Documents purport to be judgments of a District Court of the People's Republic of China. In the defendant's submission, it follows that the question must be asked whether, as a matter of Chinese law, the Documents are judgments. In other words whether the Documents were the result of an adjudication process by the foreign court. As this question concerns the application of foreign law, it is a question of fact for this Court to determine: Neilson v Overseas Projects Corporation of Victoria Ltd (2005) 223 CLR 331 at [115]; Tahiri v Minister for Immigration and Citizenship (2012) 293 ALR 526. This is distinct from the task of asking whether as a matter of domestic law the foreign judgments ought to be recognised at common law.
In examining whether the Documents are "foreign judgments" as a matter of fact it is not a question of asking whether they are "judgments" within the meaning of our domestic law. Posing the question in that way assumes that the criteria of judgments within the foreign law is the same as the domestic law. That cannot be the position where a foreign judgment will not necessarily have all the attributes such as res judicata, which attach to a domestic judgment at common law: Carl Zeiss Stiftung v Rayner and Keeler (No 2) [1967] 1 AC 853 at 917 and 925; Nygh at [40.45].
The defendant contends that to ask that question will result in documents which are not judgments of a foreign court being recognised as "judgments" and enforced under the domestic law. Conversely, it will result in actual foreign judgments not being recognised as "judgments" and enforced here.
The second scenario would be, in the defendant's submission, unfortunate in the modern world of trade and commerce but has been long accepted as a consequence of sovereign states jealously guarding judicial power. The first scenario would result in the creation of binding orders of the domestic court in circumstances where the substratum for recognition and enforcement does not exist and there would be good reasons not to allow it: see Benefit Strategies Group Inc v Prider 211 FLR 113; [2007] SASC 250 at [17] in which the court was considering whether to recognise and enforce a foreign judgment which had since been overturned and set aside in the foreign court.
The defendant submitted that the plaintiff's first task is to prove, on the balance of probabilities, that the foreign judgment is in fact a judgment according to that foreign law. The defendant submits that the plaintiff fails at this first hurdle.

Whether the documents are "foreign judgments" according to the law of the domestic forum where the "judgment" is sought to be recognised and enforced

On this point, the defendant submitted that another way of viewing the matter is to ask whether the Documents are "judgments" under Australian law. The Encyclopaedic Australian Legal Dictionary, LexisNexis, defines judgment as the determination of a court in legal proceedings. Put another way, a judgment or order of a court results from the exercise of a court's jurisdiction. The primary meaning of the term jurisdiction is authority to decide: M Leeming, Authority to Decide - The Law of Jurisdiction in Australia (2nd ed, 2020, The Federation Press) at [1.1].
The defendant contends that a "judgment" may also be seen as an end product in the exercise of a judicial power (and fundamentally a sovereign power). Judicial power is an aspect of sovereign power and includes the power to decide controversies between litigants. It does not require the consent of the litigants and is made against the will of at least one side. This is to be contrasted to the position of arbitrations which require the consent of the parties in order to exercise its power to make an award: See TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia & Anor (2013) 251 CLR 533; [2013] HCA 5 at [27]-[31].
The defendant relies on the expert evidence of Prof. Lin contained within the Lin Report 21.1.21 (Ex 1, 583). Prof. Lin states that the lack of consent is a critical feature in determining whether the Documents are a judgment under Chinese law. As Prof. Lin states the Documents are the result of agreement and consent of the parties: Lin Report 21.1.21 at [11] and [42] (Ex 1, 600 and 605). A registration process under a foreign law that falls short of a foreign court exercising its authority to make a determination in proceedings or to exercise its authority to decide the matter lacks the characteristics of a judgment in the ordinary meaning of that term.
Schedule 6 of the UCPR should be interpreted in a way that the Court will assume jurisdiction by the service of process without leave for a claim that does not have a connection with Australia of the kinds specified only in the limited cases for the recognition or enforcement of a judgment as conventionally understood. Where the obligations sought to be enforced have some connection with a foreign court but have not been determined by that court in the exercise of their authority, the purpose of the UCPR would be promoted by requiring the plaintiff to obtain leave before serving the originating process out of Australia.

(a) Expert opinion as to the law of the People's Republic of China

The defendant submitted that Prof. Lin arrives at the conclusion that the Documents are not "judgments" under the law of the People's Republic of China: Lin Report 21.1.21 at [52] and [89] (Ex 1, 600 and 605).
Prof. Lin approached the issue from several different aspects: Lin Report 21.1.21 at [31] (Ex 1, 596). Prof. Lin examines Art 97 of the Civil Procedure Law of the People's Republic of China pursuant to which the Documents were created: Lin Report 21.1.21 at [9] and [23] (Ex 1, 591 and 595). Prof. Lin examines the text of the law (Lin Report 21.1.21 at [21]-[30] (Ex 1, 595)) and the context in which the law and characters 民事调解书 appear: Lin Report 21.1.21 at [32]-[51] (Ex 1, 596). Under this Article, the Documents are not binding unless and until they are signed by both parties or their representatives: Lin Report 21.1.21 at [10], [37] and [39] (Ex 1, 592 and 597). Prof. Lin concludes that this differs significantly from a judgment which does not require the consent of the parties: Lin Report 21.1.21 at [42] and [44] (Ex 1, 598).
In Processor Lin's opinion the Documents are mediation agreements created under the Civil Procedure Law of the People's Republic of China: See Lin Report 21.1.21 at [8]-[13] (Ex 1, 590)). In effect while the Documents have the benefit of the enforcement mechanisms under the law of China they are only documents recording a contract between the parties.
The plaintiff's reasoning process is that a document is a foreign judgment if it puts an end to proceedings and could be enforced by the procedure of that foreign court: see Huang Report 1.10.21 at [23]-[28] (Ex 1, 86). Prof. Lin in turn draws attention to the fact that under the law of China arbitral awards are similarly enforceable but that, indisputably and unremarkably, an award is not a judgment: Lin Report 21.1.21 at [81]-[82] (Ex 1, 604).
The defendant submitted that the plaintiff relies on no evidence to counter Prof. Lin's opinion. This is despite Assoc. Prof. Huang being an expert in Chinese law: Huang Report 1.10.21 at [1] and [3] (Ex 1, 78). Dr Huang being an expert available to the plaintiff and could have given evidence on this issue. It would also be reasonably expected that she would give such evidence on the issue having the opportunity of a reply report. However, Assoc. Prof. Huang has declined, or has not been instructed to, proffer any opinion to the contrary to Prof. Lin's: see generally the second report of Assoc. Prof. Huang Report dated 4 February 2022 ("Huang Report 4.2.22") (Ex 1, 435). In fact, she clarifies herself by saying that the Documents have the " ... same legal effect as a Mainland judgment ... ": Huang Report 4.2.22 at [6] and [9]. Assoc. Prof. Huang effectively concedes that the Documents are not judgments but rather something akin to judgments. In those circumstances either Assoc. Prof. Huang's statement at [9] is read as an admission that the Documents are not judgments under the law of the People's Republic of China or a Jones v Dunkel (1968) 101 CLR 298 inference should be drawn to the effect that Assoc. Prof. Huang's opinion on the issue, had she given it, would not assist the plaintiff.
The defendant submitted that given that the burden of proof rests on the plaintiff to prove that the documents are judgments, and the absence of any evidence to the contrary, the plaintiff should be found not to have proved on the balance of probabilities that the Documents are "judgments" of a court of the People's Republic of China.

(b) Whether the Documents are legally effective at all

The defendant submitted that both Prof Lin and Assoc. Prof. Huang agree that a "mediation agreement" or "MTS" is not effective unless the Chinese court has signed and sealed the document, served it on the parties, and the parties have returned a signed receipt: Huang Report 1.10.21 at [25] (Ex 1, 87); Lin Report 21.1.21 at [33] (Ex 1, 597); Art 97 of the Civil Procedure Law of the People's Republic of China.
The Documents are located in Huang Aff 11.12.20. The originals and the translations do not show the Documents having been signed by any party, and certainly not signed by the defendant. It follows that on the admissible evidence, under the jointly agreed law of China, the Documents are of no legal effect. For that reason, the Documents are not "judgments" within the meaning of Sch 6 of the UCPR on any view.

The defendant submitted that the above expert evidence as to Chinese law is further supported by the expert evidence of Mr Stephen Chan exhibited to his affidavit dated 30 July 2021 ("Chan Aff 30.7.21") as SC-1 (Ex 1, 526).
Mr Chan states that the characters 民事调解书 are properly translated as "mediation agreement": Chan Aff 30.7.21 SC-1 Part VII (a) (Ex 1, 535). This accords with Prof. Lin's independent translation as "written mediation agreement": Lin Report 21.1.21 at [9] and [28] (Ex 1, 591 and 596).
The lack of the characters 判决 which mean "judgment" in the Documents also weighs against a finding that they are, or purport to be, judgments at all. Thus, on a proper interpretation, the Documents themselves do not purport to be judgments: Chan Aff 30.7.21 SC-1 Part VII(a)(4) (Ex 1, 535).
They purport to be "mediation agreements" or documents evidencing mediation agreements. On that view the evidence does not support the plaintiff's case that they fall within Sch 6(m) of the UCPR.
It was submitted that the expert translation evidence should only be used as a guide or corroborative evidence. The translation evidence should not be determinative, and the true nature of the Documents should be found from their nature under the law of China.

Resolution

The plaintiff seeks enforcement of two Civil Mediation Judgments handed down by the People's Court following judicial mediation in Proceedings 4209 and 4210 and embodied in the Documents. Both parties agree that the Documents are not enforceable in Australia through statutory means but may be enforceable under the Common Law: see Bao at [25].
The defendant's primary contention is that the Documents do not embody judgments at all and therefore a) they cannot be enforced in accordance with the principles in Bao and b) the plaintiff required leave in order to serve the Summons on the defendant and having not sought leave this Court ought to exercise its discretion under UCPR 11.6 and issue a declaration under UCPR 12.11.
Before turning to the heart of the dispute, whether the Documents are judgements in the relevant sense, it is necessary to briefly address the Bao criteria which allow for enforcement of a foreign judgment under Australian Common Law.

Jurisdiction in the international Sense

The basic principle in relation to this criterion is that the foreign court must have jurisdiction over the defendant. The defendant's authorised legal representative appeared before the People's Court on her behalf: Huang Aff 11.12.20 at [5]-[7]. The parties agreed to mediation: Huang Aff 11.12.20 at [7]-[8]. The representatives of the plaintiff and the defendant agreed that the defendant should pay the plaintiff RMB ¥ 17,990,172.26 in relation to Proceedings 4209, and RMB ¥ 22,372,474.11 in relation to Proceedings 4210, and this agreement was recorded in the transcript: Huang Aff 11.12.20 at [11]. The parties' representatives then signed the transcript and the Documents were issued by the People's Court: Huang Aff 11.12.20 at [12]-[13]. I am satisfied jurisdiction in the international sense is established.

Final and conclusive

In order for the second criterion to be made out, the foreign court's judgment must be final in the sense that it puts an end to the proceedings and is treated as res judicata by the courts of the country in which it is made: Bao at [28]. The Mr Cao confirms this in Cao Report 19.2.21 at [1] and [3.5]-[3.8] and Mr Cao's translation is confirmed in Xue Aff 26.2.21. Assoc. Prof. Huang reports an MTS establishes res judicata: Huang Report 1.10.21 at [23]-[28]. Prof. Lin reports that an MTS is binding once signed by both parties or their representatives: Lin Report 21.1.21 at [10], [37] and [39]. I am satisfied the MTS' are final and conclusive.

Identity of Parties

The defendant's name, date of birth and Chinese citizen ID card number appear on the Documents. These are the same as those in Annexure "A" of Zhang Aff 8.6.21. I am satisfied the defendant is relevantly identified.

Judgment for a fixed liquidated sum

The Documents give a fixed amount for principal and interest being RMB ¥ 17,990,172.26 in Proceedings 4209 and RMB ¥ 22,372,474.11 in Proceedings 4210. I am satisfied the judgments are for a fixed liquidated sum.
The Bao principles have, in my opinion, been met on the evidence presented.

Do the Documents embody Judgments?

As previously stated, the primary point of dispute between the parties is whether the Documents embody a judgment. In relation to this dispute there was much discussion of the translation of the Chinese characters for MTS which appears on the Documents. As noted earlier in this judgment at [31]-[32] 'MTS' has been translated in the evidence as: civil mediation judgment, civil mediation statement, civil mediation, mediation certificate, mediation agreement, written mediation agreement, written mediation statement, conciliation statement and consent judgment. Further it has been translated in other case law as civil mediation statement, mediation agreement and paper of civil mediation.
While it is helpful to know both that there are various translations of MTS and what those translations are, this matter should not fall to be decided on the arbitrary basis of which of many possible translations is preferred. In fact, the defendant acknowledges this, having submitted that the translation evidence should not be determinative but should be viewed as a guide or corroborative evidence. Accordingly, the defendant's submission that the absence of the characters which it submits mean judgment is, in my opinion, of little consequence.
The evidence of enforcement of MTS' as judgments in the common law jurisdictions of British Columbia, Hong Kong and New Zealand is helpful although also not determinative. The plaintiff relied on the cases of Wei, Ng Yuk Keung, and Feng. The defendant did not engage with this evidence other than to orally submit (at T39.42-50): "Either this is a question of fact to which your Honour will not be assisted by the foreign courts, as they find and characterise how China judgments are or whether these things are China judgments, because that is a question of foreign law, question of fact. You Honour is not bound. Those are cases of no assistance. Or is it a question of law in which your Honour has to be firstly satisfied that we are talking about the same legislative procedure, and that the meaning of judgment, if it appears in that foreign legislation, bears the same meaning and understanding as we are talking about here."
If there are judgments in other common law jurisdictions in which other courts have refused to enforce MTS' on the basis that they are not judgments, none were submitted.
Instead, the defendant first submitted that the question of whether an MTS such as the Documents is a judgment, should be decided by reference to Chinese law. She submitted "that to not ask the question of whether an MTS is a judgment under Chinese law may result in things which are not judgments being recognised and enforced in this jurisdiction as a judgment". This is an interesting submission. It was supported by the defendant by reference to what she submitted was the theoretical basis for enforcement of a judgment of a foreign court being: "… that [judgments] are enforced on the basis of a principle that where a court of competent jurisdiction has adjudicated a certain sum to be due from one person to another, a legal obligation arises to pay that sum, on which an action of debt to enforce the judgment may be maintained."
I do not accept that my task is to examine whether the Documents embody judgments pursuant to Chinese law. Rather it is to have regard to the Documents and determine by reference to my understanding of the law of this jurisdiction, whether they are judgments as a question of law.
Under the common law, a "judgment" is an order of Court which gives rise to res judicata (see Chamberlin at [21]) and which takes effect through the authority of the Court (see Beck at [61] approved in Attwells at [115]).
The translation of the transcript of Proceedings 4209 reads (Ex 1, 25): "? This court holds, both of the parties reached the agreements as below: 1. Qingdao Hoston Garmets Co., Ltd will pay back the principal and interests of the loan in the amount of RMB ¥ 17,990,172.26 to Jimo Branch of the Bank of China on or before 31 January 2020 … 2. Qingdao Hoston West Suit Co., Ltd, Yanwei Mao, Yong' Ai Zou and Ying Chen are jointly responsible to the to the liability of the above payment figures. … ? Do the parties agree with the above agreement Plaintiff: Agree. Defendant: Agree. ? The above agreement takes effect upon both of the parties put their signatures or fingerprints on the agreement, the period to apply for enforcement is two years started from the next day of the Mediation Judgment. All: Understood. ? Check the transcript, sign it or put a fingerprint on it"
The transcript bears the plaintiff's and defendant's representatives' signatures (Mr Youxiang Wei and Mr Guotao Luan respectively): Ex 1, 25.
The translation of the transcript of Proceedings 4210 reads (Ex 1, 31): "? This court holds, both of the parties reached the agreements as below: 1. Qingdao Hoston Garmets Co., Ltd will pay back the principal and interests of the loan in the amount of RMB ¥ 22,372,474.11 to Jimo Branch of the Bank of China on or before 31 January 2020 … 2. Qingdao Hoston West Suit Co., Ltd, Yanwei Mao, Yong' Ai Zou, Ying Chen, Jichun Liu and Lichen Miao are jointly responsible to the to the liability of the above payment figures. … ? Do the parties agree with the above agreement Plaintiff: Agree. Defendant: Agree. ? The above agreement takes effect upon both of the parties put their signatures or fingerprints on the agreement, the period to apply for enforcement is two years started from the next day of the Mediation Judgment. All: Understood. ? Check the transcript, sign it or put a fingerprint on it"
The transcript bears the plaintiff's and defendant's representatives' signatures (Mr Youxiang Wei and Mr Guotao Luan respectively): Ex 1, 31.
Each of the Documents is affixed with the seal of the People's Court of Jimo District, Qingdao City: Ex 1, 42 and 48.
The Documents are enforceable against the defendant immediately according to their terms in China and without the need for further or other order or judgment of the People's Court: Huang Report 1.10.21 at [41]; Cao Report 19.2.21 at [3.1], [3.6]-[3.8]. The parties cannot vary or cancel the Documents without the permission of the Jimo District Court: Huang Report 1.10.21 at [42]. The People's Court exercises certain judicial power in making an MTS: Lin Report 21.1.21 at [100]. While disagreeing as to whether an MTS is a judgment, Prof. Lin nevertheless concedes that an MTS has the same legal effect as an MPS: Lin Report 21.1.21 at [51]. This is supported by Mr Cao: Cao Report 19.2.21 at [3.1]. It is also supported by the fact that the enforcement mechanisms of Chinese Civil Procedure Law Art 234 apply likewise to an MTS and an MPS: Huang Report 1.10.21 at [25(4)]. It is not necessary for the parties to sign the Documents for them to be effective, the court's stamp being affixed and their service upon the parties is sufficient: Cao Report 19.2.21 at [3.9].
The defendant submitted that as an MTS requires the consent of the parties, only taking effect after they or their representatives sign while a judgment of the Peoples Court does not, that the Documents cannot embody judgments. The defendant submitted that a registration process which falls short of a foreign court exercising its authority to make a determination lacks the characteristics of a judgment. In this jurisdiction we have consent judgments the terms of which are created by the parties' consent but nevertheless are judgments being mandatorily enforceable and having coercive authority. I do not consider this factor to be determinative.
Given the above, it is my opinion that the MTS' establish res judicata (Chamberlain at [21]; Huang Report 1.10.21 at [23]-[27]; Cao Report 19.2.21 at [3.8]), are mandatorily enforceable and have coercive authority (Beck at [61] approved in Attwells at [115]; Huang Report 1.10.21 at [28]; Cao Report 19.2.21 at [3.6]-[3.7]) and are therefore judgments for the purpose of the law of this jurisdiction.
Having determined that the Documents embody judgments, the defendant's submission that they have not been properly served falls away as they are therefore be within the scope of UCPR Sch 6(m) and do not require leave to be validly served.

Result

The judgments in Proceedings 4209 and 4210 embodied in the Documents are enforceable. The plaintiff is to file and serve an affidavit by 20 June 2022 as to the correct amount of the judgment debt.
The Defendant's Motion is dismissed.

Costs

The defendant sought a variation of the previous costs order of the Registrar dated 19 October 2021 to the effect that each party bear their own costs for their earlier expert reports.
On 19 October 2021, the Registrar made an order that "There be no order as to costs in relation to the defendant's costs of, and incidental to, responding to plaintiff's redundant report of Professor Cao". As the Defendants Motion is dismissed there is no reason to vary the registrar's order.
Costs are discretionary. Costs generally follow the event. The defendant is to pay the plaintiff's costs on an ordinary basis.
The defendant's application for variation of the previous cost order of Registrar K Jones dated 19 October 2021 is refused.

The Court Orders: 1. The defendants notice of motion filed 21 April 2021 be dismissed. 2. The defendant's application for variation of the previous cost order of Registrar K Jones dated 19 October 2021 is refused. 3. The plaintiff is to file and serve an affidavit deposing the current amount of the judgment debt by 20 June 2022. 4. The defendant is to pay the plaintiff's costs.

Amendments 07 June 2022 - Orders amended. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 June 2022

Interpretations Act 1987(NSW)

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (32 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (25)

Cited By (3)