Bank of China Limited v Chen (No 2)

By a summons filed on 24 December 2020, the plaintiff, Bank of China Limited, sought the following relief against the defendant, Ying Chen:

That matter was heard before me on 25 August 2022 and, at the end of the hearing, I made the following orders and directions, and reserved my reasons:

My reasons for making those orders are as set out below.

The summons was served on the defendant, Ms Chen, in China on 7 January 2021. On 21 April 2021, Ms Chen challenged the service of the summons by filing a notice of motion seeking to set aside the plaintiff’s summons on the basis that the summons had not been duly served on the defendant in China because leave to serve the summons out of the jurisdiction had not been obtained as required by r 11.5 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR). In response, the plaintiff contended that, by operation of r 11.4 and Sch 6(m) of the UCPR leave was not required because the originating process “sought to recognise or enforce any judgment” and the “judgments” of the People’s Court referred to in prayers 1 and 2 of the summons were “judgments” for the purposes of Sch 6(m).

The plaintiff’s notice of motion was heard by Harrison AsJ on 18 February 2022. On 7 June 2022, her Honour handed down her judgment, Bank of China Limited v Chen [2022] NSWSC 749, and made the following orders:

Her Honour’s judgment recorded that the parties’ submissions were not limited to the question of whether the “judgments” of the People’s Court referred to in prayers 1 and 2 were “judgments” within the meaning of Sch 6(m) to the UCPR but also included submissions concerning the enforcement at common law of this type of judgment.

Harrision AsJ made findings as to how the “judgments” of the People’s Court referred to in prayers 1 and 2 came about and concluded that they were “judgments” within Sch 6(m). In addition, her Honour dealt with the issue of enforcement, relevantly holding as follows (referring to the applicable authorities, affidavit evidence and experts’ reports which she accepted):

The references to “the Documents” and an “MTS” were explained in the judgment.

The People’s Court outcomes sought to be enforced in the present case were 民事调解书, which has been translated in various ways, as illustrated by her Honour at [31] and [32]. Accepting Harrision AsJ’s unchallenged and very helpful findings and analysis, I have referred to the 民事调解书 in this case as “civil mediation judgments” and accepted that they are “judgments” within the meaning of Sch 6(m) to the UCPR.

In addition, I understood her Honour’s finding at [88] to the effect that the defendant’s name and ID card number were the same in relation to both the civil mediation judgments and in relation to the present proceedings meant that the parties to the judgments and the parties to these proceedings were identical. This followed from the fact that there was no dispute as to the identity of the Bank of China Limited, which was the judgment creditor in respect of the two civil mediation judgments as well as being the plaintiff in the present proceedings.

I noted that there had been no appeal from Harrison AsJ’s judgment, which took effect as a judgment of the Supreme Court by virtue of s 118(4) of the Supreme Court Act 1970 (NSW). Further and in any event, even if it were necessary for me to reach any conclusions in relation to the enforceability of the civil mediation judgments, based on the evidence before me I was satisfied that the same conclusion should be reached that the civil mediation judgments in proceedings (2019) Lu 0282, Civil Trial No. 4209 and (2019) Lu 0282, Civil Trial No. 4210 were enforceable by this Court under the principles stated in Bao v Qu; Tian (No 2) [2020] NSWSC 588 for the reasons her Honour gave, which I respectfully adopted.

Apart from the fact that the defendant did not appear at the hearing of the summons, I could discern no reason of public policy which might amount to basis for not recognising and enforcing the civil mediation judgments of the People’s Court in this case.

As noted above, the orders made by Harrison AsJ on 7 June 2022 included order (3) requiring the Bank of China to file and serve an affidavit deposing to the current amount of the judgment debts by 20 June 2022. This was done since quantification of the amount outstanding under the civil mediation judgments was the only outstanding issue and in order to permit consideration of whether final relief should be granted, as sought in the summons, on an expeditious and properly informed basis.

An affidavit affirmed on 20 June 2022 by Junxian Huang dealing with the then current amount of the judgment debts (including interest) was filed on 23 June 2022.

On 30 June 2022, the proceedings were before the Registrar and Dr Townsend appeared for the plaintiff and Mr Chan appeared for the defendant. On that occasion, no point was apparently taken that Junxian Huang’s affidavit of 20 June 2022 was filed and served late, and the summons was set down for final hearing on 25 August 2022. Directions were also made for the filing and serving of written submissions by the parties during August 2022.

On 5 July 2022, the defendant’s solicitors filed a notice of intention to file and serve a notice of ceasing to act.

On 3 August 2022, the foreshadowed notice of ceasing to act by the solicitors for the defendant was filed and, as required, that notice gave the last known business or residential address, email address and telephone number for the defendant, Ying Chen.

On 12 August 2022, Xiaoyu (Franky) Sun one of the solicitors for the plaintiff sent emails to the defendant’s last known email address attaching a copy of the plaintiff’s written submissions dated 12 August 2022 and noting that the proceedings were listed for hearing on 25 August 2022 at 10:00. There was nothing to indicate that these emails were not delivered to the defendant’s email address.

The evidence of Tong Qiu, a lawyer with Beijing DHH (Qingdao) Law Firm, was that he was instructed by the plaintiff’s solicitors to serve on the defendant the correspondence between the plaintiff’s solicitor and the defendant on 12 August regarding the hearing on 25 August 2022 and the plaintiff’s written submissions of 12 August 2022.

Tong Qiu gave evidence of two unsuccessful attempts to serve those documents on the defendant, although contact was made with her by telephone on a number of occasions. Eventually, on 19 August 2022 a female was observed to collect the correspondence and written submissions left for the defendant in the lobby of the building the defendant occupied. On that day, Tong Qiu also sent copies of those documents and a letter explaining what had occurred in relation to the documents left in the lobby to the defendant by express post to the address nominated in the notice of ceasing to act. I accepted Tong Qiu’s evidence.

On 22 August 2022, Franky Sun received an email from the defendant in response to the emails of 12 August 2022 which stated (in translation):

On 22 August 2022, Franky Sun responded to the defendant’s email in the following terms:

On 24 August 2022 at 15:48, Franky Sun sent to the defendant an email attaching copies of: the affidavit of Xiaoyu Sun affirmed 23 August 2022; the affidavit of Tong Qiu affirmed 24 August 2022; and, the affidavit of Junxian Huang affirmed 24 August 2022. The first two of those affidavits dealt with service of the documentation referred to above and the third affidavit updated the amount outstanding under the civil mediation judgments as at 24 August 2022.

On 24 August 2022 at 19:50, the defendant replied in Mandarin to the email of Franky Sun sent earlier that day. This email was translated into English by Ms June Liu, a partner in the firm of solicitors retained by the plaintiff. Ms Liu’s native language is Mandarin and she speaks and writes English consistent with her practising as a solicitor in New South Wales. Her translation of Ms Chen’s email was:

Based on the evidence of Junxian Huang, which I accepted, I was satisfied that each of the civil mediation judgments provided that interest was to be calculated in accordance with the terms of the underlying loan agreements, which were somewhat complex. As a result, the quantum of outstanding interest from time to time was calculated by the Bank of China’s internal computer system, which was programmed to make the calculations in accordance with the relevant loan agreements. In some cases, the loan was denominated in a currency other than Renminbi yuan and a conversion into that currency was required.

I was informed that the calculation of the total amount outstanding under each of the civil mediation judgments took into account sums already recovered by the plaintiff in satisfaction of those judgments including interest.

In all the circumstances, I was satisfied that as at 24 August 2022 the amounts outstanding were as follows:

As noted above, I was also satisfied that both of these judgments were enforceable by this Court and, in the circumstances of the present case, I considered that orders should be made accordingly.

Since the plaintiff was entirely successful, it was in my view appropriate that costs should follow the event.

In order, however, to take into account that Ms Chen was not represented at the hearing before me and in order to ensure that she was given an opportunity to challenge any orders made disposing of the summons, if she wished to do so, I included in the orders and directions:

Finally, I note that, in the form of orders and directions made on 25 August 2022, the appropriate symbol (¥) to denote that the currency was Renminbi (RMB) yuan was inadvertently not included. Accordingly, under the slip rule, r 36.17 of the UCPR, the orders made on 25 August 2022 are corrected by the insertion of “¥” in orders (1) and (2) so that the orders and directions read as follows: