New Zealand is a melting pot of multiple cultures and ethnicities. Last week the Supreme Court provided timely judicial guidance for how to navigate different cultural influences in Deng v Zheng. The key issue for the Court to determine was whether the business relationship between the two parties could be seen as a 'partnership'. The legal point behind this was because partners owe each other a fiduciary duty, which includes an obligation to treat each other fairly and to act in good faith towards each other.

A difficulty with this case was that almost all of the primary records, the parties' correspondence, and several of the testimonies were in Mandarin Chinese, which required the Court to engage with the complex Chinese customs which flavoured the interactions between the parties.

Echoing the Court of Appeal's "note of caution" to recognise that "there is a real risk of nuances in expression and context being lost in translation", the Supreme Court has set out some good principles to guide the judiciary when assessing cases within a cultural context.

Facts

Mr Zheng and Mr Deng began a working relationship in the late 1990s, which came to an end in 2015. The issue was the nature of their business relationship between 2010 and 2015. Mr Zheng claimed that he and Mr Deng were partners engaged in property development and construction projects. Mr Deng denied this and argued that their relationship was based on various separate corporate and contractual structures but without an overarching partnership or fiduciary elements.

A key part of the case was the Supreme Court's consideration of the concepts of 公司 (gōngsī) and 关系 (guānxi). The Court's analysis of 关系 began with the acknowledgment that it was a "complex term with multi-faceted meanings" that could be understood as 'interpersonal connections,' 'social capital' or the 'set of personal connections' used in business or social life. The Court emphasised its importance in Chinese customs, where "Chinese people are less likely to conduct business using a formal contract and more likely to do so via a 'handshake' because written contracts are perceived as evidence for transactions and appear "distrusting".

The Court heard submissions from the parties as to the impact of these cultural concepts, but ultimately found that it was not determinative of any relationship in this particular case. Instead, the Court relied on analysing the inferences drawn from the contemporaneous written material, which pointed to a relationship of partnership.

Nevertheless, the Supreme Court went on to provide guidance for dealing with cases with a strong cultural component or background.

Cultural Context

The Court made some general observations that:

• Cases where the parties have a cultural background different to the judge are common in New Zealand courts and are likely to become more common in the future

• Judges should approach such cases with caution

• The Judge should recognise that some of the methods used for assessing credibility may have limited application in these cultural cases. For example, assessing the 'normal'/'usual' approach of parties can be culturally specific, and what is 'normal' in one culture may not be the case in another

• Most of the usual ways for judges to assess credibility remain available. The Supreme Court does not suggest that in all cases with a 'cultural dimension' the parties have to call social and cultural framework evidence

But in the cases where it is appropriate for judges to receive information as to the social and cultural framework, the Court should take care to note that:

• It is open to witnesses to explain their own conduct by reference to their own social and cultural background

• Where parties have been in a relationship (business or otherwise), they may explain the way in which the relationship played out by reference to the social and cultural framework in which they operated

• Expert evidence and specific provisions of the Evidence Act 2006 remain available. There are provisions to allow 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 or art (section 129), and these are accessible in these cases

• Difficulty may arise where a litigant wishes to introduce social and cultural framework information to explain not their own or joint conduct but rather that of another party. In this situation, the information as to cultural background is likely to be best provided by an expert or under sections 128 and/or 129

• People who share a particular ethnic or cultural background should not be treated as a homogenous group, and that the more generalised the evidence or information, the greater the risk of stereotyping

The Supreme Court has had an opportunity to contribute to this discussion, but the intricacies of applying New Zealand law to cases set within a different cultural environment are far from over.

An obvious tension exists. New Zealand only has one legal system. Not one where there are different laws for different cultures. The law applies equally to all people regardless of their cultural background. However, recognition and understanding of cultural differences is fundamental when the courts are interpreting the facts of a case and applying New Zealand law to different scenarios.

New Zealand is more ethnically diverse than New York City and London, and that diversity is increasing. With our borders reopening, immigration will again be the key driver to New Zealand's population growth. These guidelines from the Supreme Court are instrumental for creating an inclusive judicial system which adequately considers wider cultural contexts. We can expect to see these recommendations cited frequently by judges to help them reach the most appropriate findings, and to provide a framework by which to acknowledge cultural complexities.