The Supreme Court, Confucianism and Western values and the impact on the law

The Supreme Court recently granted leave to appeal the Court of Appeal’s decision in Zheng v Deng (Donglin Deng v Lu Zheng [2021] NZSC 43 [14 May 2021] (“Deng v Zheng (SC)”), granting leave to appeal against Zheng v Deng [2020] NZCA 614 (“Zheng v Deng (CA)”). The Supreme Court stated that the appeal raises potential issues about the interpretation of documents translated from Mandarin and the cultural setting in an arrangement between two Chinese parties whose business relationship appears to have been conducted in Mandarin (Deng v Zheng (SC) at [1]).
The approved question is whether the Court of Appeal was correct to make a declaration that there was a partnership between the parties in which they were equal partners and to make orders that were consequential on that finding (Deng v Zheng (SC) at 1). The Court of Appeal had acknowledged that:
“language is used in a broader linguistic and cultural setting, by reference to background assumptions about personal and business relationships and the ways in which dealings are normally structured, that the parties will have shared but that the Court may not be aware of or understand” (Zheng v Deng (CA) at [88] [emphasis added]).
The Court of Appeal was conscious of the need to be:
“sensitive to the importance of social and cultural context and, in particular, to be cautious about drawing inferences based on our preconceptions about ‘normal’ or ‘appropriate’ ways of structuring and recording business dealings” (Zheng v Deng (CA) at [89]).
The Supreme Court said it may be necessary to explore these issues in order to resolve the appeal, and invited the New Zealand Law Society to consider intervening in the appeal after consultation with NZ Asian Lawyers (Deng v Zheng (SC) at [2]).
The Supreme Court’s move is emblematic of the growing awareness that in an increasingly culturally and linguistically diverse New Zealand an understanding of the intersection between law and culture is essential for judges and practitioners (see Mai Chen “Latest cases on CALD parties in litigation and lessons from the Court of Appeal in Zheng” (April 2021) Employment Law Bulletin).
It is therefore timely to share reflections on Confucianism and Western values and the impact on the law by Professor Mindy Chen, who recently presented at the New Zealand Asian Leaders’ Virtual Speaker Series 2021. Professor Chen-Wishart is the Dean of Law at Oxford University and an expert in contract, unjust enrichment and comparative contract law, and is leading a six-book project on the contract laws of Asian jurisdictions.
Professor Chen-Wishart identified the common “law on the books” but divergent “law in action”, in undue influence cases decided in England and Singapore (see also Mindy ChenWishart (2013), Legal Transplant and Undue Influence: Lost in Translation or a Working Misunderstanding? International and Comparative Law Quarterly). She outlined three key differences between Confucianism and Western values that may contribute to our understanding of the divergence in application.
The exemplar cases cited by Professor Chen-Wishart relate to the scenario where a primary debtor who is in financial trouble (“the debtor”) gets a family member (“the guarantor”) to guarantee a loan from the bank (“the lender”). When the debtor defaults on the loan, can the lender enforce the guarantee where it is tainted by the debtor’s undue influence?
According to “clear, simple and practically operable” requirements laid down by the House of Lords in Royal Bank of Scotland v Etridge (“Etridge”) [2001] UKHL 44, [2002] AC 773, a guarantee is unenforceable if:
In usual situations without any special features (such as evidence that the lender knows of point 1 above, or the heightened risk of point 1), the lender is protected if it ensures that a legal advisor certifies that the guarantor understands what he or she is doing.
There are two categories of undue influence developed in Allcard v Skinner (1887) LR 36 Ch D 145:
All of this has been accepted as the law of Singapore, yet a comparison of the reasoning and outcomes of English and Singaporean cases reveals a stark practical divergence.
Exemplar English cases:
In contrast are these Singaporean cases:
The cases demonstrate that Singaporean courts are very reluctant to find undue influence in the family business context:
So, what accounts for the difference in approach? Professor Chen-Wishart outlined three key and overlapping differences between Confucianism and Western values that may help to explain why the doctrine of undue influence manifests as it does in Singapore.
Professor Chen-Wishart explained that Confucianism is an integral part of Chinese culture and social organisation and synonymous with Chinese civilisation – “it’s part of the DNA”. Confucianism is a guide to proper behaviour – but more than that, it is all embracing, being built into the heritage of language, ritual and tradition. Some aspects like ancestor worship, and the strong preference for sons is declining. Some aspects of Confucianism are remarkably persistent, chiefly the core value of filial piety / submission.
In the West, social order and harmony is achieved by a system of rights that can be agreed by equals, and this is protected by law.
In the East, social order is achieved by observing a very comprehensive code of conduct based on a rigid hierarchy according to generational sequence, gender and age. Where you are in the hierarchy (and what this requires) is expressed in an elaborate terminology of titles.
The core relationship is between father and son – fathers having almost absolute power over the child. The father-son relationship is generalised into all other relationships in the family, the community, country and universe. Violations are seen as ethically or morally evil.
The West places primary importance on the person and his or her uniqueness. The person is the subject of its most significant ideas – such as freedom, salvation, reason, contract, and love.
Meanwhile, Confucianism puts primary importance on conformity to roles. Ritualised conduct is given an aesthetic dimension in the cultivation of the good life.
This reduces the importance and legitimacy of individual differences, and individual choice. The concept of an individual right is alien in the Chinese tradition.
In the West, love is the prescribed emotion between family members. However, in Chinese societies it is respect, which requires no personal involvement. Submission in the latter analysis is not to persons, but to a pattern of personal relationships that is held to have ultimate validity.
In the West, emphasis is on the moral worth and rights of the individual. Key concepts are freedom and autonomy.
Confucianism emphasises kinship relationships, and mutual dependence. Maintaining collective security and wellbeing is prioritised over individual interests. The individual is seen as insignificant without the family and the wider community. So the family, not the individual, is the basic unit of society.
This collectivism expresses itself in a call for self-sacrifice, self-restraint, self-effacement and the avoidance of conflict. Transgressions dishonour the whole family. The imperative to conform makes shame the effective control technique, rather than guilt, a more personal and Western concept.
These differences may explain how the equitable doctrine of undue influence has developed differently in England and Singapore. The Western worldview sees the parties as individuals rather than as part of the collective, and regards unquestioning obedience, trust and self-sacrifice not as virtues, but as conditions that may demand equity’s protection. In contrast, finding undue influence in the family business context in Singapore runs against the informal legal order. It amounts to saying that a father does something wrong in getting his wife or children to support the family business. It impliedly supports patriarchal ‘loss of face’ by countenancing the disobedience of his wife or child. It would support conduct which is shameful and disgraceful.
The issue is not which is better – East or West. Rather it is the importance of understanding the underlying assumptions of different cultures and legal systems, and the impact it may have on what the judge expects to see, how they interpret what certain behaviours mean about intention and the credibility of witnesses.
Both East and West recognise and value different aspects of an ethical flourishing life: the good of belonging to the community and social responsibility (East), versus respect for the individual (West). Both East and West hold their dangers: failing to protect the individual’s interests against the community’s demands (East), versus an excessively ‘atomistic’ or ‘individualistic’ conception of human beings and ignoring their social nature (West).
To understand culture, and thus its impact on law, we have to step outside our own world and enter the world of the other. Even if we recognise differences, we may not be able to appreciate their appeal, share their beliefs, or place the same importance on them relative to other values that we hold. But, says Professor Chen-Wishart, we should try.