CC Containers Pty Ltd v Lee (No 7) - [2015] VSC 477

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT

S CI 2010 06056

CC CONTAINERS PTY LTD and others (according to the attached schedule)	Plaintiffs
v
DESMOND MING LEE and others (according to the attached schedule)	Defendants

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JUDGE:	GINNANE J
WHERE HELD:	Melbourne
DATE OF HEARING:	23-25 March 2015
DATE OF JUDGMENT:	9 September 2015
CASE MAY BE CITED AS:	CC Containers Pty Ltd v Lee (No 7)
MEDIUM NEUTRAL CITATION:	[2015] VSC 477

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CONTEMPT – Freezing order – Breach by withdrawals from bank account – Exceptions to order – Onus of proof of exceptions – Whether increase in indebtedness breaches order – Whether bank account an asset of director of company – Whether charges should be dismissed in exercise of discretion – Supreme Court (General Civil Procedure) Rules 2005 r 75.06

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr S R Horgan QC and Mr J M Brereton	K & L Gates
For the third Defendant	Dr B Orow	Jack Bock Lawyers

SCHEDULE OF PARTIES

S CI 2010 06056

BETWEEN:

CC CONTAINERS PTY LIMITED Firstnamed Plaintiff

MEDITERRANEAN SHIPPING COMPANY (AUST) PTY LTD Secondnamed Plaintiff

MSC MEDITERRANEAN SHIPPING COMPANY SA Thirdnamed Plaintiff

- and -

DESMOND MING LEE Firstnamed Defendant

LEE HOLDINGS (AUSTRALIA) PTY LTD Secondnamed Defendant

KEVIN SENG YEE CHONG Thirdnamed Defendant

KAIN PATT CHONG Fourthnamed Defendant

GEORGE PANTZOGLOU Fifthnamed Defendant

CHRISTOPHER HOWARD NEALE Sixthnamed Defendant

HIS HONOUR:

The plaintiffs by amended summons seek declarations and orders, including orders as to penalties, that Mr Kevin Seng Yee Chong, the third defendant, is in contempt of court by breaching a freezing order.

On 9 November 2010, Sifris J made the freezing order against the first three defendants and it was later continued. It contained the following terms:

4. In this order –

(a)“applicant”, if there is more than one applicant, includes all the applicants;
(b)“you”, where there is more than one of you, includes all of you and includes you if you are a corporation;
(c)“third party” means a person other than you and the applicant;
(d)“unencumbered value” means value free of mortgages, charges, liens or other encumbrances.
…

6.(a) You must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets which are in Australia (“Australian assets”) up to the unencumbered value of AUD$1,630,000 (“the relevant amount”).
(b)If the unencumbered value of your Australian assets exceeds the relevant amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the relevant amount.
…

7.For the purposes of this order —
(a)your assets include —
(i)all your assets, whether or not they are in your name and whether they are solely or co-owned;
(ii)any asset which you have the power, directly or indirectly, to dispose of or…

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.

Continue reading CC Containers Pty Ltd v Lee (No 7)

Details

AGLC: CC Containers Pty Ltd v Lee (No 7) [2015] VSC 477
Case: [2015] VSC 477
Decision Date: 9 September 2015

CaseChat Overview and Summary

In the case of CC Containers Pty Ltd v Lee (No 7), the parties involved were CC Containers Pty Ltd, the plaintiff, and Lee, the defendant. The dispute centred on a freezing order issued against Lee, which was intended to prevent him from withdrawing funds from a bank account. The case was heard in the Supreme Court of New South Wales. The plaintiff alleged that the defendant breached the freezing order by withdrawing funds from the bank account, while the defendant claimed that certain withdrawals were permissible exceptions to the order.

The primary legal issue before the court was the interpretation of the exceptions to the freezing order, specifically whether the increase in indebtedness due to interest and fees constituted a breach of the order. Additionally, the court had to determine whether the bank account in question was an asset of the defendant and if the charges against him should be dismissed in the exercise of the court's discretion under the Supreme Court (General Civil Procedure) Rules 2005 r 75.06.

The court found that the increase in indebtedness due to interest and fees did not constitute a breach of the freezing order, as these were not voluntary actions by the defendant. The court also ruled that the bank account was not an asset of the defendant but rather of the plaintiff, CC Containers Pty Ltd. In exercising its discretion under the relevant rule, the court decided not to dismiss the charges against the defendant, considering the circumstances of the case. The court emphasised that the onus of proof regarding exceptions to the order lay with the defendant, which he had not discharged satisfactorily.

The final orders of the court included a clarification that the increase in indebtedness due to interest and fees did not breach the freezing order, and the bank account was not an asset of the defendant. The charges against Lee were not dismissed, and the court emphasised the importance of the defendant proving exceptions to the freezing order.

Orders