Kai Yuan v Jian Hua Zhou

Legislation Cited: Civil Procedure Law of the People's Republic of China

Cases Cited: Bao v Qu; Tian (No 2) (2020) 102 NSWLR 435; [2020] NSWSC 588
Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583
Shanghai Chenggong Industrial Co Ltd v Zhihua Chen [2025] NSWSC 1112

Category: Principal judgment

Parties: Kai Yuan (Plaintiff)
Jian Hua Zhou (Defendant)

Representation: Counsel:
J Hewitt SC and T Goldberg (Plaintiff)
Solicitors:
Sunfield Chambers Solicitors and Associates (Plaintiff)

File Number(s): 2025/00434331

Publication restriction: Nil

Judgment

1. By way of Summons filed on 10 November 2025, the plaintiff, Mr Kai Yuan, seeks against the defendant, Mr Jian Hua Zhou, an order recognising and enforcing a judgment entered in the People’s Court of Zhangjiagang City, Jiangsu Province, China (“Chinese Court”).

2. The plaintiff relies on the following evidence:

(a) the affidavit of Dickson Luo affirmed on 9 November 2025 and Exhibit DL-1 to that affidavit (“First Luo Affidavit”); (b) the affidavit of Dickson Luo affirmed on 17 November 2025 and Exhibit DL-2 and Exhibit DL-3 to that affidavit (“Second Luo Affidavit”); (c) the affidavit of Joseph Khoury sworn 11 November 2025; and (d) the affidavit of Kai Yuan affirmed 18 November 2025 and Exhibit KY-1 to that affidavit.

3. On 10 November 2025, the Court made ex parte freezing orders against Mr Zhou and Henlong Property Group Pty Ltd (“HPG”) (a non-party to these proceedings). In accordance with those orders, the materials relied upon by the plaintiff (including the Summons, Notice of Motion, evidence and written submissions) were served on:

(a) Mr Zhou by email on 11 November 2025 and by personal service on 12 November 2025: Second Luo Affidavit at [9]-[12] and Yuan Affidavit at [8]; and (b) HPG by delivery to its registered address on 11 November 2025: Second Luo Affidavit at [13]; Khoury Affidavit.

4. The matter comes before me as the Duty Judge. There was no appearance of the defendant when the matter was mentioned at 10:30am. The application was stood in the list until 2:00pm. Once again, there was no appearance of or on behalf of the defendant.

5. I am satisfied that the defendant has been personally served. In that regard, I rely upon the evidence of Dickson Luo as contained in the Second Luo Affidavit at [11]-[12]. I’ve also had regard to the evidence of the plaintiff in his affidavit affirmed on 18 November 2025 at [8], together with the video Exhibit DL-3.

Background

6. The background to these proceedings is extracted from the helpful submissions of counsel for the plaintiff.

7. On 9 April 2024, Mr Yuan commenced a civil proceeding against Mr Zhou in the Chinese Court by filing a civil complaint with the Chinese Court seeking recovery of a debt (“Chinese proceeding”).

8. The Chinese proceeding was a contested proceeding and both parties had legal representation.

9. On 30 April 2025, Mr Yuan obtained judgment against Mr Zhou in the Chinese Court in the proceedings identified as (2024) S 0582 M C No 6795 (“Chinese Judgment”). That judgment was for RMB 14,878,243.24 of loan principal plus specified costs and interest: First Luo Affidavit at [8(f)]; Exhibit DL-1 at page 34. As at 4 December 2025, Mr Zhou owes Mr Yuan approximately RMB 24,256,223.86 (or AUD $5,217,963.23, converted at the rate of exchange on 3 December 2025).

10. On 19 May 2025, Mr Zhou, as the appellant, filed a notice of appeal against the Chinese Judgment with the Intermediate People's Court of Suzhou City, Jiangsu Province, China.

11. On 20 July 2025, the Chinese Court issued a notice confirming Mr Zhou had withdrawn his appeal. The Chinese Judgment remains unsatisfied by Mr Zhou.

12. On 19 November 2025, this Court made orders extending the freezing orders until further order of the Court.

13. On 27 November 2025, HPG filed a notice of appearance. Mr Zhou has not engaged in the proceedings.

Enforcing the Chinese Judgment

14. There are four requirements that must be satisfied for the plaintiff to recognise and enforce the Chinese Judgment under Australian common law. Bao v Qu*; Tian (No 2)* (2020) 102 NSWLR 435; [2020] NSWSC 588 (“Bao”) citing Benefit Strategies Group Inc v Prider (2005) 91 SASR 544; [2005] SASC 194 at [18] (Bleby J); Schnabel v Lui [2002] NSWSC 15 at [75] (Bergin J).

15. Those four requirements are:

(a) jurisdiction, which is satisfied where either: (i) the defendant is personally served with an originating process within the jurisdiction of the foreign court; or (ii) the defendant submits to the jurisdiction of the court by arguing the merits of the case: Bao at [27]; Bhushan Steel Ltd v Severstal Export GmbH [2012] NSWSC 583 at [148]. (b) finality, which is satisfied if the foreign court’s judgment puts the proceedings to an end: Bao at [28] citing Nouvion v Freeman (1889) 15 App Cas 1 at 9. The fact that a judgment may be subject to appeal does not affect the finality of the judgment: Bao at [28] citing Colt Industries Inc v Sarlie (No 2) [1966] 1 WLR 1287; Lewis v Eliades [2003] EWCA Civ 1758. (c) identity, which is satisfied if the defendant in these proceedings is the same as the person who is subject to the Chinese Judgment. (d) the Chinese Judgment must be for a fixed, liquidated sum.

16. A translation of the Chinese Judgment has been provided (together with the notarial certificate).

17. I am satisfied that the four requirements for the Chinese Judgment to be recognised are satisfied for the following reasons.

18. First, the Chinese Judgment establishes that Mr Zhou submitted to the jurisdiction of the Chinese Court, as he contested the merits of the Chinese proceeding. The Chinese Judgment names the parties and confirms that they appeared in court to participate in the litigation.

19. Second, the Chinese Judgment decided the controversy between Mr Yuan and Mr Zhou in relation to two loan agreements in a final and conclusive way by determining what was owed by Mr Zhou to Mr Yuan. Although Mr Zhou issued a notice of appeal, that notice has been withdrawn.

20. Third, Mr Zhou in the Chinese Judgment is the defendant in these proceedings.

21. Fourth, the Chinese Judgment is for a fixed liquidated sum of AUD $5,217,963.23 (as at 4 December 2025), being the sum of RMB 24,256,223.86 exchanged into AUD at 3 December 2025. The sum of RMB 24,256,223.86 comprises:

(a) RMB 14,878,243.24 of loan principal; (b) RMB 6,021,513.31 as at 31 March 2024 for interest; (c) RMB 2,748,602.58 as at 4 December 2025 for interest from 1 April 2024 until 4 December 2025 (inclusive) at the rate of 11% per annum; (d) RMB 544,384.73 as at 4 December 2025 for interest pertaining to Art 264 of the Civil Procedure Law of the People's Republic of China from 10 May 2025 to 4 December 2025: First Luo Affidavit at [8(f)]; see Shanghai Chenggong Industrial Co Ltd v Zhihua Chen [2025] NSWSC 1112 at [28]-[32]; and (e) RMB 63,480 for costs associated with the Chinese proceeding.

22. A discrete issue relates to whether it is appropriate to make an order for pre-judgment interest. I note that in Bao, Rothman J raised the question of whether the imposition of Art 253 (as Art 264 was formerly numbered) interest may be considered penal in nature, and therefore unenforceable, because of the exclusionary principle that Australian courts will not enforce a penal law either directly at the suit of a foreign government or indirectly in a suit between private citizens: at [59].

23. However, I have had regard to the decision in Shanghai Chenggong Industrial Co Ltd v Zhihua Chen [2025] NSWSC 1112, where Peden J concluded that the purpose of the interest ordered was to compensate, not to punish. I have arrived at the same conclusion in the present matter.

24. Accordingly, I make the following orders:

25. Judgment be entered for the plaintiff in the sum of AUD $5,217,963.23 being the equivalent of RMB 24,256,223.86 and interest in respect of the judgment dated 30 April 2025 of the People's Court of Zhangjiagang City, Jiangsu Province, China in the proceedings identified as (2024) S. 0582 M. C. No. 6795 (as at 4 December 2025), converted at the rate of exchange on 3 December 2025.

26. Grant leave to the parties under UCPR 7.3 to issue subpoenas generally.

27. Grant leave to the plaintiff under UCPR 7.3 nunc pro tunc to issue the subpoenas to ANZ, Westpac, CBA and Qinghong Liu filed on 14 November 2025 (the Subpoenas).

28. Grant general access to all parties in respect of all documents produced or to be produced pursuant to the Subpoenas, including, without limitation, document packets S-1 and S-2.

29. Costs for the Supreme Court proceedings.

30. Liberty to apply on two days’ notice.

31. I make the following direction:

32. The plaintiff's solicitor is to serve a copy of the judgment on the defendant via the email address they have on file.

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