Case Note: Deng v Zheng and evidence relating to cultural considerations

Barbara Relph and Jacqui Thompson*

At a time of growing diversity in New Zealand’s population, the recent Supreme Court | te Kōti Mana Nui o Aotearoa decision in Deng v Zheng [2022] NZSC 76 gives useful guidance in cases where one or more parties has a different cultural background to that of the judge (excluding tikanga Māori). 1

Mr Deng and Mr Zheng had been in a business relationship for 25 years, ending in 2015. The key issue before the court was whether that relationship was in effect a partnership, which would place fiduciary duties on the parties. Mr Zheng claimed that he and Mr Deng were partners and that they had been involved in property development and construction projects conducted in the names of companies. Mr Deng countered that the projects were carried out by companies, and the shareholdings and account balances of those companies reflected the interests of both parties.

Mr Deng was successful in the High Court, but the Court of Appeal overturned that judgment. The Supreme Court gave leave to appeal on the issue of whether the Court of Appeal was correct to make a declaration that there was a partnership between the parties. The Supreme Court also suggested that it might be necessary to consider issues about the “the cultural setting in an arrangement between two Chinese parties” and in particular, the significance of 关系 (guānxi).

The Supreme Court dismissed the appeal, finding that the development project could only be explained on the basis that the parties were partners. However, it commented on introducing evidence of cultural factors.

The Court noted that guanxi is a complex term with multi-faceted meanings, but in this context, it implied a range of personal connections which could be relied upon to secure resources or advantage when doing business. Guānxi’s bases include kinship or co-working. The relationship between the parties was consistent with these concepts, particularly the apparent significance to them of family relationships and pre-existing friendships in terms of those with whom they did business and the relative lack of formal agreements. 2

At trial there had been little evidence about guānxi and it was not referred to by the High Court Judge in his judgment. While not of critical importance in this case (as the relationship emerged clearly from contemporaneous documentation), the Supreme Court said that in other cases the social and cultural framework within which one or more of the parties operated might be of greater significance.

The Court provided guidance as to how relevant information can be brought to the attention of the court. It made the following general observations:

• Cases involving parties with different cultural backgrounds from the judge are common and likely to be even more common in future.

• Each case must be approached with caution, but judges need to develop “… a mental red-flag cultural alert system which gives them a sense of when a cultural dimension may be present so that they may actively consider what, if anything, is to be done about it.” 3

• Judges need to understand that that some of the usual rules of thumb they use for assessing credibility may have no or limited utility.

• Most of the usual ways that judges assess credibility remain available, such as assessing the consistency of a narrative over time and with other evidence (particularly contemporaneous documents) and general plausibility. The Court emphasised that it was not suggesting that parties were required to call social and cultural framework evidence in all cases with a “cultural dimension”.

In cases where information on social or cultural framework is relevant the Court noted that:

• It is open for witnesses to explain their behaviour by referring to their social and cultural background.

• Where there was a relationship between parties (business or personal), the cultural and social framework might be relevant for explaining the way in which the relationship played out.

• These explanations can be supported by testimony, as sections 128 and 129 of the Evidence Act 2006 allows judges to consider sources of information of unquestionable accuracy (section 128) and admit reliable published documents in relation to matters of public history, literature, science and art (section 129).

• Introducing social or cultural information to explain the conduct of another party should be provided by an expert or under sections 128 or 129 of the Act.

The Court sounded a warning about the risk of stereotyping by assuming, without case-specific evidence, that the parties behaved in ways said to be characteristic of that ethnicity or culture. General evidence about social and cultural framework can be used to help in, rather than replace, a careful assessment of the case specific evidence.

As we work towards inclusivity and cultural sensitivity in other areas of life, Deng v Zheng takes the judicial system a step closer. Forming a habit of approaching cases with a culturally open mind reduces the risk of any unconscious bias or stereotyping (at[81(a)]), leading to improved judicial outcomes for parties of all cultures.

In some circumstances, it might also be helpful to appoint an expert in relation to cultural context. This can be done under r 9.36 of the High Court Rules 2016 and r 9.27 of the District Court Rules 2014.

The final observation is that that it is usually up to parties to put relevant information before the court. Judges can inquire of the parties if they consider that they would be assisted by additional information as to social and cultural context. In many instances, such information will be able to be supplied by submission, relying, if necessary, on s 129.

* Barbara Relph is a writer, editor and proof-reader - www.barbararelph.com.

Jacqui Thompson is the Executive Director of the Bar Association

1. The Court excluded tikanga Māori from its comments, recognising that tikanga raises special legal and historical issues.

2. Deng v Zheng [2022] NZSC 76 at [75] – [76].

3. Emilios Kyrou “Judging in a Multicultural Society” (2015) 24 JJA 223 at 226.