Zhiheng Explains Doubts | When the Court Asks for "Self-Proof of Innocence": A Lawyer's Professional Persistence in the Vortex of the Burden of Proof- Zhiheng Law Firm

Author | Attorney Xu Xiulan

Introduction

In current judicial practice, the allocation of the burden of proof is often a decisive factor in determining the outcome of a case. Especially in civil lending disputes, where the nature of the evidence can range from simple to complex and the difficulty of proving a case can vary widely, the allocation of the burden of proof by judges often determines the direction in which the scales of justice tip. Taking a typical private lending dispute as a starting point, this article seeks to analyze the legal principles underlying the allocation of the burden of proof and the discrepancies between theory and practice, and thereby explores the strategies for lawyers practicing in complex judicial environments.

Case Background and Key Points of Dispute

Plaintiff A and Defendant B were once classmates and business partners, while Defendant B and Defendant C were once romantically involved. Between 2016 and 2019, A, acting on B’s instructions, made three separate transfers to C; some of the transfer notes indicated “intercompany transactions” or “payment for goods,” while others contained no remarks whatsoever. In 2024, B provided A with a supplementary receipt confirming that the funds were used jointly by B and C and constituted a joint loan.

Currently, A is suing B and C for joint repayment, alleging that B and C are in a de facto marital relationship and that their finances are commingled.

The particularity of this case lies in:

1. Lack of direct evidence

There are no loan agreements or authorization letters, or any other such documents, among the parties.

2. The flow of funds is complex.

C has provided evidence showing that, on the same day each payment was received, an equivalent amount was transferred to a third party (as instructed by B).

3. Dispute over the burden of proof

On the basis of A’s provision of the bank transfer receipt and B’s issuance of a receipt, it is claimed that B and C are in a de facto marital relationship, with commingling of finances during their cohabitation. An application was made to the court to obtain all of C’s bank transaction records. The court approved the request; however, since the records could not be obtained, the court ordered C to provide complete transaction histories for three bank accounts used for receiving payments, covering the period from 2016 to 2019.

A Jurisprudential Analysis of the Allocation of the Burden of Proof

(I) The basic principle of "whoever asserts, whoever proves"

Article 91 of the Interpretations of the Civil Procedure Law establishes the fundamental principle that “he who asserts must prove.” In this case, A asserts the existence of a loan relationship and that B and C have engaged in commingling of finances; the burden of proof for both of these key facts to be established shall rest with A.

A The evidence currently provided includes:

· Transfer voucher:It can only demonstrate the flow of funds but cannot directly prove that the payment constitutes a loan (particularly when some remarks indicate “trade receivables/payables” or “goods payment”).

· Receipt issued by B after the fact:It is binding only on Party B and has no binding effect on Party C (because there is no signature or confirmation by Party C, and Party C denies having agreed to the loan).

It is worth noting that A’s claim that “B and C maintained a de facto marriage or cohabitation characterized by commingling of finances” constitutes a new fact to be proven, which A must substantiate separately—e.g., by presenting evidence of cohabitation and evidence of jointly owned property; however, A has not yet submitted any valid evidence in this regard.

(II) The dynamic shift of the burden of proof

The burden of proof in civil litigation is not fixed.Once one party has completed its initial burden of proof, the other party must present rebuttal evidence to render the fact in question “neither clearly proven nor clearly disproven”; at that point, the burden of proof may shift back to the original proponent.

In this case, C has provided evidence to prove that:

· Upon receipt of each payment, the full amount is transferred on the same day to a third party (as instructed by B), thereby proving that C did not actually possess or use the funds.

This evidence has already challenged A’s claims regarding the “agreement to borrow” and that the funds were jointly used by B and C.It constitutes reasonable doubt, leaving the fact in question in a state of uncertainty as to its truth or falsity. At this point, the burden of proof should shift back to Party A, which must then provide further evidence.(e.g., proof of the existence of an affiliated relationship between Party C and a third party, the ultimate use of funds, etc.),rather than requiring C to prove its “innocence”。

(III) Analysis of the Unreasonableness of the Court's Requirements

The court has requested that C provide the complete transaction records for three bank accounts over a period of three years, which raises the following issues:

1. Beyond the scope of the burden of proof:In essence, this amounts to indirectly shifting the burden of proof that should have been borne by A to C, thereby violating the principle of “he who asserts must prove.”

2. Violation of the principles of relevance and necessity (Article 95 of the Interpretations of the Civil Procedure Law):

· Lack of relevance:The central issue in this case is the nature and purpose of the “three specific transfers,” rather than C’s overall financial situation. C has provided the transfer records for these three payments, which are sufficient to demonstrate their destination. Requesting a review of all transaction records amounts to an unlimited expansion of the scope of the investigation and is not directly relevant to the facts at issue.

· Insufficient necessity:Given that C has demonstrated that the funds were not held in its account, there is no evidence to suggest that any other transaction records are relevant to the dispute in this case. The court, without first examining whether evidence A was sufficient, directly required C to provide irrelevant bank statements, which lacked any necessary basis.

1. Prerequisites for the application of the rule on “evidence obstruction” (Article 112 of the Interpretations of the Civil Procedure Law):

The prerequisite for the application of the doctrine of evidence obstruction (where refusal to produce evidence results in the presumption that the asserted claim is established) is:

· The documentary evidence is under the control of C (in this case, the transaction records are indeed controlled by C);

· A has only preliminarily demonstrated that the evidence is relevant to the facts at issue (in this case, A has failed to prove that the “entire transaction record” is related to the loan or to the commingling of funds).

The court is not authorized to threaten C with “evidence obstruction” and compel the production of irrelevant evidence when Party A has failed to meet its initial burden of proof.

(IV) Analysis of the Court's Actions

1. The court’s unsuccessful attempt to obtain C’s transaction records does not imply that C has an obligation to provide them.

The court had previously agreed to subpoena the transaction records but was unable to do so (possibly due to account closure, technical issues, or other reasons); this does not alter the allocation of the burden of proof. One cannot, upon failure to obtain the evidence, simply order C to provide it; this constitutes a procedural error.

2. Party A has not exhausted all available means of presenting evidence.

The court failed to order Party A to submit further evidence—such as requiring Party A to explain why it alleges financial confusion, to provide preliminary proof of cohabitation, or to clarify the ultimate use of the funds—and instead directly required Party C to produce its entire transaction record, which is clearly unfair.

Legal Classification of Financial Confusion and Cohabitation

(I) Limitations of Financial Confusion

A’s true objective in alleging financial confusion is to attempt, by demonstrating that “B and C have commingled assets,” to indirectly infer that C actually used the loan proceeds, thereby extending B’s personal liability to C. However:

Even if there is financial commingling, it only demonstrates that the property management of B and C is disorganized and does not directly equate to an agreement by C to borrow money. For example, the rule on financial commingling among shareholders under corporate law (Article 23 of the Company Law) is not applicable to cohabiting relationships between natural persons.

(II) Legal Effect of Cohabitation

Current laws do not contain specific provisions regarding debts incurred during cohabitation:

· The Civil Code only regulates marital joint debts (Article 1064);

· Article 11 of the now-repealed “Several Opinions on the Trial by People’s Courts of Cases Involving Cohabitation in the Capacity of Husband and Wife Without Having Registered Marriage” (which was effective at the time the borrowing occurred) provided: “Upon termination of an unlawful cohabitation relationship, any debts and claims arising during the cohabitation period for the purposes of joint production or living may be treated as joint debts and claims.” However, its application is subject to the simultaneous fulfillment of the following conditions:

o The debt was incurred during the cohabitation period;

o The debt is clearly intended to serve the common interests of both parties (e.g., joint business operations, renting a home, childcare, etc.).

In this case, C has proven that the funds were transferred to a third party on the same day, thereby completely eliminating the possibility of “joint benefit.”

The Path of Steadfastness for Attorneys-at-Law

Based on the aforementioned in-depth analysis, after the initial presentation and challenge of evidence, C’s counsel did not rush to comply with the court’s directive requiring C to provide the complete transaction records for all three bank accounts used to receive payments. Instead, after meticulous and thorough deliberation and legal analysis, focusing on the core issue of burden of proof allocation implicated by the court’s action, we adopted a poised and measured approach, submitted to the court our “Opinion on the Court’s Allocation of the Burden of Proof,” and maintained ongoing professional communication with the judge.

As the second hearing approached, the court issued a relatively formal and principled response to the aforementioned legal opinion: “All parties are legally obligated to truthfully state the facts of the case.” The truthful presentation of facts is not only a fundamental requirement of litigation procedures but also the cornerstone for ensuring judicial fairness and upholding the order of litigation. Any false statement or intentional concealment of material facts shall be subject to the corresponding legal liabilities.

The trial aims to ascertain the facts through the parties’ statements, presentation of evidence, and cross-examination, and to ensure the proper application of the law. Parties are entitled, in accordance with the law, to present evidence, challenge evidence, and engage in debate; at the same time, they are also obligated to actively fulfill their duties, such as submitting evidence and truthfully stating the facts of the case. Rights and obligations are mutually reinforcing; fully exercising one’s rights and conscientiously fulfilling one’s duties is not only essential for safeguarding one’s own interests but also the foundation for ensuring that legal proceedings are conducted lawfully and in an orderly manner.

We hope that all parties will clearly understand and strictly abide by legal provisions, and jointly uphold the seriousness and fairness of litigation.

This response conveyed pressure, but the attorney representing the client withstood it and steadfastly refrained from voluntarily submitting C’s bank statements.He then redirected his efforts toward thoroughly preparing for the second trial, paying particular attention to a meticulous review of Article 47 of the “Several Provisions of the Supreme People’s Court on Evidence in Civil Litigation” (Fa Shi [2019] No. 19):

Article 47 In the following circumstances, the party in control of documentary evidence shall submit such evidence:

(I) Documents that the party in control of documentary evidence has previously cited in the litigation;

(II) Documentary evidence prepared for the benefit of the other party;

(III) Documentary evidence that the opposing party is entitled to review and obtain in accordance with the law;

(IV) Ledgers and original accounting vouchers;

(V) Other circumstances where the people's court deems documentary evidence should be submitted.

With respect to the documentary evidence listed in the preceding paragraph, if it involves state secrets, trade secrets, the privacy of a party or a third party, or any other circumstance where confidentiality is required by law, such evidence shall not be subject to public cross-examination upon submission.

What is thought-provoking is,At the subsequent court hearing, the judge did not mention at all the requirement that Defendant C provide bank transaction records.The entire trial progressed smoothly through the professional and efficient interaction between the defense counsel and the judge. Throughout the process, the precise legal exchanges, concise and succinct expressions, and even the subtle interplay of glances and facial expressions all contributed to…The attorney representing the client was deeply moved: What mindset should one uphold in the practice of law?

What core values should we uphold? And why should we uphold them? How can we maintain a balanced, confident demeanor that naturally emerges in professional confrontations?All of this was vividly experienced and thoroughly elucidated within the confines of the courtroom.

Insights: Expertise, Steadfastness, and Value

1. Burden of proof: the form of procedure, the soul of substance.

The allocation of the burden of proof is by no means a mere procedural step; it directly affects the realization of substantive justice. When confronted with unfair distribution, lawyers should:

1. Uphold legal principles:Deeply understand and steadfastly uphold fundamental principles such as “he who asserts must prove,” and remain unmoved by any temporary inclinations or pressures from judges.

2. Construct a rigorous argument:By comprehensively applying statutory provisions, rules of evidence, and doctrinal precedents, a logically rigorous and irrefutable argumentative framework is constructed.

l Make effective use of procedural rights: With regard to unreasonable requests for evidence, promptly raise lawful objections and request that they be recorded in the minutes, thereby laying the groundwork for subsequent proceedings (such as an appeal).

3. Maintain professional composure:No matter how complex the judicial environment may be, we adhere to the highest professional standards and rely on sound legal analysis to persuade the adjudicators.

4. Emphasize the art of communication:While upholding principles, it is important to pay attention to communication methods and strategies, so that one’s views are more easily understood and accepted by the judge.

On the battlefield of the burden of proof, we are not only advocates for our clients but also guardians of legal principles. Each time we firmly advocate for a just outcome, we are not only upholding the fairness of individual cases but also safeguarding the very foundation of public trust in the judicial system.

2. Mental Fortitude: Surpassing Yourself Under Pressure

In the real-world judicial environment, the outcome of a case is undoubtedly important,However, a lawyer’s professional competence and spiritual outlook are likewise refined and elevated through the process of rigorous practice. As long as you do:

1. Substantive and logically sound;

2. Possesses a solid and well-grounded theoretical foundation;

3. Steadfast in will, neither arrogant nor servile.

This enables one to achieve self-improvement throughout the course of handling a case, and may even inspire judges who possess professional integrity. “Justice resides in the hearts of people,” but it is often realized through dynamicGame theory and balance. As legal professionals, we cannot and should not remain aloof; rather, we must be active participants.

When faced with pressure as overwhelming as "thousands of troops and horses,"That intense sense of pressure is precisely the ideal crucible for summoning quick wit and summoning every ounce of one’s strength. Cherish every experience like this, because no two cases are ever exactly the same. The vitality of a trial lies precisely in this seemingly tug-of-war between prosecution and defense.

Those subtle shifts in atmosphere, exchanges of glances, and changes in tone can all be keenly perceived by the observant.When the parties, their representatives, and the judge achieve a certain level of professional resonance, a tacit understanding can emerge.

As Dworkin has said, “Law is a practice that is constantly being refined.” And lawyers are the indispensable artisans in this great endeavor, advancing the wheels of the rule of law with their meticulous attention to every single case.

Author

Introduction

Xu Xiulan

Senior Partner,

Business areas:Legal services for the cross-border e-commerce industry (including cross-border equity structures, cross-border intellectual property, and cross-border tax and financial compliance, etc.);Corporate law practice: ongoing legal counsel, equity incentives, dispute resolution, etc.;Investment, financing, mergers and acquisitions, and private equity legal matters.

Attorney Xu Xiulan specializes in legal services for the cross-border e-commerce industry, corporate law practice, investment and financing, mergers and acquisitions, and private equity and corporate governance. She has represented investment firms and financed enterprises in hundreds of investment, financing, and M&A transactions across various stages and rounds, covering sectors such as real estate, TMT, biopharmaceuticals and healthcare, education and training, intelligent manufacturing, retail and consumer goods, food and beverage, and cross-border e-commerce.

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Zhiheng · Introduction