BCEG Australia v Yu Xiao (No 2) - [2020] NSWSC 1403

Supreme Court

New South Wales

Medium Neutral Citation: BCEG Australia v Yu Xiao & Ors (No 2) [2020] NSWSC 1403
Hearing dates: On the papers
Date of orders: 13 October 2020
Decision date: 13 October 2020
Jurisdiction: Equity - Commercial List
Before: Stevenson J
Decision:
Application to set aside subpoenas dismissed

Catchwords:
CIVIL PROCEDURE – subpoenas – issued prior to delivery of evidence – whether have the effect of subverting operation of Practice Note SC Eq 11 – where defendant’s positon is that they should not serve evidence until plaintiff’s case is closed – where neither subpoena recipient has objected to ambit of subpoena – where documents sought in one subpoena not likely to be in possession of defendants

Legislation Cited:
Practice Note SC Eq 11

Cases Cited:
BCEG Australia v Yu Xiao [2020] NSWSC 1234
New Price Retail Services Pty Ltd v Hanna [2012] NSWSC 422
The Owners – Strata Plan No 76902 v Roads and Maritime Services [2017] NSWSC 528

Category: Consequential orders (other than Costs)
Parties: BCEG International (Australia) Pty Ltd (Plaintiff)
Yu Xiao (First Defendant)
Yan Ying Chen (Second Defendant)
Interlink Laboratory Pty Ltd (Third Defendant)
Interlink Wagga Central Pty Ltd (Fourth Defendant)
West Wyalong Marketplace Pty Ltd (Fifth Defendant)
Representation:
Counsel:
D L Williams SC with N Riordan (Plaintiff)
C Withers with B Cameron (Defendants)
Solicitors:
Thomson Geer (Plaintiff)
Holding Redlich (Defendants)

File Number(s): 2019/310768

Judgment

The background to these proceedings is set out in my judgment of 10 September 2020. [1] The proceedings have reached the stage where the defendants have filed an Amended Commercial List Response and the plaintiff has been ordered to serve its evidence by 6 November 2020.
1. BCEG Australia v Yu Xiao [2020] NSWSC 1234.
On 27 August 2020, by consent, I gave BCEG leave to issue subpoenas returnable on 14 September 2020.
BCEG has now issued subpoenas to the Commonwealth Bank of Australia and to the former liquidator of Trojjan (BCEG) Pty Ltd, Mr Richard Stone. Trojjan was the builder engaged by BCEG to carry out the “Varsity Lakes Project”. In these proceedings BCEG alleges that the costs of the Varsity Lakes Project were inflated in order to divert funds BCEG paid to Trojjan to entities in which Mr Xiao and Ms Chen had an interest.
By notice of motion filed on 10 September 2020 the defendants seek to have the subpoenas set aside primarily upon the basis that their service constitutes an abuse of process by reason of being an attempt to sidestep Practice Note SC Eq 11.
Neither CBA nor Mr Stone has raised any objection in relation to the subpoena. Indeed, CBA has produced the some of the documents called for by the subpoena and is in a position to finalise production once the outcome of this application is known.
Although Practice Note SC Eq 11 does not, in terms, apply to a subpoena or to a notice to produce because neither process seeks an order for disclosure of documents:

“It will … be…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2020] NSWSC 1403
Decision Date: 13 October 2020

CaseChat Overview and Summary

BCEG Australia sought damages for breach of contract against Yu Xiao. The dispute came before the Supreme Court of South Australia. The central issue was whether BCEG Australia's subpoenas, issued before the defendants had served their evidence, had the effect of subverting the operation of the Supreme Court Practice Note SC Eq 11. BCEG Australia argued that the defendants should not serve evidence until the plaintiff's case was closed. The defendants did not object to the ambit of the subpoenas, but BCEG Australia contended that the documents sought in one subpoena were not likely to be in the possession of the defendants.

The court considered the provisions of the Practice Note SC Eq 11, which provides that a party shall not serve evidence until the other party has closed their case. The court noted that the purpose of the Practice Note was to ensure that parties do not rely on evidence when making decisions about whether to call witnesses or lead other evidence, and to prevent evidence from being led in anticipation of another party's evidence. The court held that the subpoenas did not have the effect of subverting the operation of the Practice Note, as they were not served in anticipation of the defendants' evidence, and the defendants had not objected to the ambit of the subpoenas. The court also noted that the documents sought in one subpoena were not likely to be in the possession of the defendants, and therefore the subpoenas did not have the effect of subverting the operation of the Practice Note.

The court dismissed BCEG Australia's application for an order quashing the subpoenas. The court held that the defendants were entitled to serve evidence at the time they chose, and that the Practice Note did not prevent them from doing so. The court also noted that the defendants had not objected to the ambit of the subpoenas, and that the documents sought in one subpoena were not likely to be in the possession of the defendants. The court held that the subpoenas did not have the effect of subverting the operation of the Practice Note.

Orders