Chen v Lin [2015] NZCA 407 (3 September 2015)

Last Updated: 11 September 2015

IN THE COURT OF APPEAL OF NEW ZEALAND
CA334/2015 [2015] NZCA 407
BETWEEN	YANG CHEN Applicant
AND	JIN ZHU LIN AS ADMINISTRATOR OF ESTATE OF QIMING LIN (DECEASED) Respondent

Court:	White, French and Winkelmann JJ
Counsel:	R Reed and R M Hesketh for Applicant A S R Kashyap for Respondent
Judgment: (On the papers)	3 September 2015 at 11.00 am

JUDGMENT OF THE COURT

1. The application for an extension of time to appeal is granted.
2. Costs on the application are reserved for determination as part of the hearing of the substantive appeal.

____________________________________________________________________

REASONS OF THE COURT

(Given by White J)

Introduction

[1] By application filed on 15 June 2015 Mr Chen applies under r 29A of the Court of Appeal (Civil) Rules 2005 for an extension of time to appeal.
[2] He seeks to appeal a judgment of Associate Judge Doogue delivered in the High Court at Auckland on 23 July 2014.^[1]
[3] By consent, we are dealing with this application on the papers.

The judgment of the New Zealand High Court and the judgments of the Chinese Courts

[4] On Mr Chen’s application, Associate Judge Doogue entered summary judgment against the respondent for RMB 20 million. That was the amount of a judgment entered in favour of Mr Chen against the respondent on 10 March 2011 in the Fuzhou Intermediate People’s Court in China, and subsequently upheld on appeal to the Fujian Higher People’s Court on 27 October 2011 and to the Supreme Court of China on 26 April 2012.
[5] The orders made by the Fuzhou Intermediate People’s Court at first instance included this order:

2. The Defendants Chen Shuqin, Lin Jinzhu, Ling Tingting and Lin Feiteng should refund the transfer amount RMB 20 million and corresponding interest (to be calculated according to the overdue loan interest rate of the same kind in the same period of the People’s Bank of China based on RMB 20 million from May 14, 2009 to the date of repayment confirmed by this Judgment) to the Plaintiff Chen Yang within the scope of inheritance of Ling Qiming’s heritage in 10 days since the effective date of this Judgment.

If failed to perform, the repayment obligation within the time limit specified in this Judgment, double liabilities and interest should be paid for the delay period in performance according to Article 229 of the Civil Procedure Law of People’s Republic of China.

The litigation fee for this case, i.e. RMB 141,800, should be assumed by the Defendants Chen Shuqin, Lin Jinzhu, Lin Tingting and Lin Feiteng.

[6] As is evident from that order, the judgment of the Chinese Courts included interest on the principal sum of RMB 20 million. However, the judgment entered summarily by Associate Judge Doogue did not include interest. He ordered:^[2]

• (a) The courts in China had jurisdiction to make the orders that it did establishing that the respondent/defendant is indebted to the applicant/plaintiff in the sum of RMB 20 million.
• (b) The applicant/plaintiff is entitled to enforce those judgments in New Zealand. On that basis I enter judgment for the applicant/plaintiff in the sum of RMB 20 million.

[7] At Mr Chen’s request, the judgment of Associate Judge Doogue was sealed on 24 September 2014.

Subsequent applications to the High Court

[8] On 4 December 2014, Mr Chen applied to the High Court to recall its 23 July 2014 judgment and reissue it including, in the judgment, the interest which had been awarded by the Chinese Courts.
[9] In a second judgment delivered on 15 December 2014 Associate Judge Doogue reluctantly dismissed that application for recall.^[3] He took the view that, as the judgment had been perfected, r 11.9 of the High Court Rules precluded recall.^[4] He accordingly dismissed the application for recall. In doing so he observed:

[25] At the same time, it is not a result that I consider satisfactory. The Chinese court which had jurisdiction in the matter came to a conclusion on the question of how much interest the defendant should pay. It ought to have been possible for the plaintiff to obtain a judgment in New Zealand which reflected the Chinese Court’s judgment in its entirety. Had the provisions of r 11.9 not governed the position, it is likely that the judgment would have been recalled and modified to reflect that position.

[10] Mr Chen then applied, on 6 March 2015, under r 11.10 of the High Court Rules, for an order correcting an accidental slip in the judgment of 23 July 2014. That application was also unsuccessful. In a third judgment delivered on 12 May 2015, Associate Judge Doogue took the view that the jurisdiction afforded by r 11.10 did not encompass the situation that had occurred here.^[5] He stated:

[9] There can be no doubt that there was a mistake or error in this case, as I have indicated in the judgment that I issued on 15 December 2014. I do not, however, consider that is an error which is capable of being corrected under r 11.10. The plaintiff/applicant seeks variation of the judgment to include an order based upon a separate element of the Chinese Courts judgment, additional to what was included in the original judgment that I entered. This is not a case where the judgment that has been sealed can be corrected, on the basis that it does not correctly reflect the substance of the judgment that I gave on the original summary judgment application. It is to correct errors of that kind that the jurisdiction is conferred by r 11.10. The application to amend the judgment is therefore dismissed.

Teleconference with counsel

[11] Wild J held a teleconference with counsel on 20 August.
[12] In that conference Wild J invited Mr Kashyap to take instructions as to whether opposition to the application was pursued. If it was, counsel were asked to indicate whether they agreed to the application being dealt with on the papers.
[13] In a memorandum filed on 27 August, Mr Kashyap indicated opposition to the application was pursued, on the grounds already advanced, but consented to the application being dealt with on the papers.

Opposition

[14] In succinct submissions in opposition, Mr Kashyap addressed four of the established considerations in turn.^[6] He did not address the prospective merits of the proposed appeal, a consideration to which we turn at [25]–[27].

The length of the delay and the reasons for it

[15] 210 working days elapsed between delivery of the 23 July 2014 judgment and the filing of the application for an extension of time on 12 June 2015. That application was filed 190 working days after the applicant’s right of appeal expired. Mr Kashyap submitted that this delay is significant and without justification.
[16] Turning to the reason for this lengthy delay, Mr Kashyap recounted the events referred to in [7] to [10] above. He made these points:

• (a) The applicant was “premature and imprudent” in sealing the judgment when he knew it did not include the interest awarded by the Chinese Court. This is a point Associate Judge Doogue noted: “Even though the plaintiff’s lawyers were aware of what they thought was a mistake in the judgment, they sealed it ...”.^[7]
• (b) Then the applicant sought recall of the judgment, when clearly that was not available.
• (c) Next, the applicant applied for judicial review but discontinued that application after a statement of claim was filed and served. Agreed costs upon that discontinuance remain unpaid.
• (d) The applicant then applied, inappropriately, under r 11.10 of the High Court Rules for correction of a “slip” in the judgment. It was clear, on the authorities, that r 11.10 did not apply to the situation here.
• (e) Only after embarking unsuccessfully on all these inappropriate courses did the applicant finally seek an extension of time to appeal.

[17] Mr Kashyap submitted all of this cannot amount to a reasonable and satisfactory excuse for the substantial delay involved.

Conduct of the parties

[18] The various steps taken by the applicant were, Mr Kashyap argued, needlessly pursued and thus unnecessarily caused further delay. He submitted the applicant cannot, as he claims, have taken those steps in good faith. Good faith would have resulted in the applicant seeking to appeal much earlier. Because the alternatives had no real prospect of success, they constituted an abuse of process.

Extent of prejudice caused by the delay

[19] Mr Kashyap identified the following prejudice to the respondent from the applicant’s delay:

• (a) The respondent has incurred substantial legal costs as a result of the various unsuccessful applications brought by the applicant.
• (b) The respondent, who has children in New Zealand, has been restricted from leaving China until these claims are settled.
• (c) The applicant has lodged a caveat over the respondent’s property in New Zealand, preventing her from dealing with the land to settle these claims.
• (d) Although the respondent has “an interest in expediting the resolution of this matter”, she has been forced to endure the delays caused by the applicant.

[20] Summarising, Mr Kashyap submitted the applicant should have appealed at the outset. The various unsuccessful steps he took instead do not provide a reasonable excuse for the substantial delay. The applicant’s conduct does not promote efficiency of the Court’s process, indeed amounts to an abuse of it and should not be entertained.
[21] Mr Kashyap also argued this application raises the question whether an appellant who pursues various alternatives to appeal regardless of the likelihood of success can subsequently be granted an extension of time once those alternatives fail. He submitted granting an extension here “may open the floodgates in respect of imprudent litigation which incidentally has considerable policy implications”. For all those reasons he submitted the application for an extension of time should be dismissed.

Decision

[22] The applicant should not have sealed the 23 July 2014 judgment, which he knew was incomplete in that it failed to deal with interest. Doubtless a series of steps to overcome the omission of interest from that judgment has caused delay of about one year. Once he had sealed judgment, the applicant should have appreciated that his only remedy was to appeal.
[23] But the fact that the applicant should have appealed at the outset, rather than a year later, is not a compelling reason for refusing an extension of time to enable him to do so now in the circumstances of this case.
[24] Nor do we accept the delay has resulted in any real prejudice to the respondent. The debt of RMB 20 million was not disputed in the proceeding in China and the three Chinese judgments are not in dispute either. All the prejudice now relied upon by Mr Kashyap could have been averted by the respondent satisfying the Chinese judgment, or by paying the debt and thus avoiding entry of judgment in China in the first place.
[25] The proposed appeal has merit. The Chinese judgment at first instance allowed interest at the bank rate on RMB 20 million from 14 May 2009 to the date of repayment, which was 10 days from the date of judgment (10 March 2011). Thereafter interest was allowed pursuant to art 229 of the Civil Procedure Law of the People’s Republic of China. Given the amount of the debt, and the fact that over six years have elapsed since it was incurred, interest will be a substantial sum.^[8]
[26] Associate Judge Doogue readily accepted his non-award of interest was an oversight on his part, but one he felt unable to remedy because judgment had been sealed.^[9]
[27] We consider the prospective merits of the proposed appeal overwhelmingly require the grant of an extension of time.

Result

[28] The application for an extension of time is granted.
[29] Costs on the application are reserved for determination as part of the hearing of the substantive appeal.

Solicitors:
Prestige Lawyers Ltd, Auckland for Applicant
Aaron Kashyap, Auckland for Respondent

---

^[1] Chen v Lin [2014] NZHC 1727.

^[2] At [57].

^[3] Chen v Lin [2014] NZHC 3210 [rule 11.9 application].

^[4] At [20].

^[5] Chen v Lin [2015] NZHC 998 [rule 11.10 application].

^[6] See My Noodle Ltd v Queenstown-Lakes District Council [2009] NZCA 224, (2009) 19 PRNZ 518 at [19]; Barber v Cottle [2010] NZCA 31 at [6]; Robertson v Gilbert [2010] NZCA 429.

^[7] Rule 11.10 application, above n 5, at [3].

^[8] In his application for an extension of time to appeal, Mr Chen calculated the interest owed to 19 June 2014 as RMB 8,567,202.23.

^[9] Rule 11.9 application, above n 3, at [25]; r 11.10 application, above n 5, at [9].