CC Containers Pty Ltd v Lee (No 8)
[2015] VSC 478
•9 September 2015
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL AND EQUITY DIVISION
COMMERCIAL COURT
S CI 2010 6056
| 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: | 3 June 2015 – Written submissions 25 June 2015 |
DATE OF JUDGMENT: | 9 September 2015 |
CASE MAY BE CITED AS: | CC Containers Pty Ltd v Lee (No 8) |
MEDIUM NEUTRAL CITATION: | [2015] VSC 478 |
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CONTEMPT – Freezing order – Breach by withdrawals or transfers from bank or gaming accounts – Exceptions to order – Direct debits – Ordinary living expenses – Onus of proof of exceptions - Whether exceptions proved to apply to withdrawals – Lack of proof of who made withdrawal in respect of one charge – Supreme Court (General Civil Procedure) Rules 2005 r 75.6
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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 First Defendant | Mr G L Meehan and Mr M Guthrie | Rothwell 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 summons seek declarations and orders, including orders as to penalties, that the first defendant, Desmond Ming Lee, and the second defendant, Lee Holdings (Australia) Pty Ltd (‘Lee Holdings’), were in contempt of the Supreme Court of Victoria by breaching a freezing order made by the Court.
The application was brought under r 75.06 of the Supreme Court (General Civil Procedure) Rules 2005 (Vic).
During the hearing of the summons, the plaintiffs stated that they did not pursue orders against the second defendant. This followed the disclosure that Mr Lee, the only director of the second defendant, was bankrupt and that there was no-one who could give instructions for it. Counsel for Mr Lee did not also appear for the company.
The plaintiffs’ summons included the following:
Contempt
3.Declarations and orders (including orders as to penalties) that, the first and/or second defendants are in contempt of the Supreme Court of Victoria by:
a.withdrawing the amount of:
i.$302,200 from the NAB, Lee Holdings (Australia) Pty Ltd t/as CC Cartage Business Cheque Account (BSB 083 106, Acc 17004 1892), in three separate withdrawals, one in the amount of $300,000 on 10 November 2010, another in the amount of $1,200 on 11 November 2010 and the other in the amount of $1,000 on 11 November 2010.
ii.$311,000 from a gaming account held at Crown Melbourne Limited in the name of Desmond M Lee (Patron No 259 7366), in three separate withdrawals, one in the amount of $300,000 on 10 November 2010, another in the amount of $5,000 on 10 November 2010 and the other in the amount of $6,000 on 27 November 2010.
iii.$142,733.74 from the NAB, Lee Holdings (Australia) Pty Ltd t/as CC Cartage Business Cash Maximiser Account (BSB – 083 106, Acc 83 416 9793), on 10 November 2010;
iv.$38,987.60 from the Bank of Queensland (BoQ), Mr Desmond Ming Lee Ultimate Account (BSB 124 001 Acc 2021 1322) in ten separate withdrawals made between 27 November 2010 and 27 August 2011;
v.$23,000 from the NAB, Lee Holdings (Australia) Pty Ltd t/as CC Cartage Business Cheque Account (BSB 083 106 Acc 83 181 4769) in five withdrawals, one in the amount of $1000 on 18 November 2010, another in the amount of $12,112.40 on 3 December 2010, another in the amount of $1000 on 3 December 2010, another in the amount of $1000 on 27 January 2011, and the other in the amount of $7,887.60 on 27 January 2011.
b.in circumstances where:
i.on 9 November 2010 the Supreme Court of Victoria ordered that the first and second defendants were restrained from removing from Australia or in any way disposing of, dealing with or diminishing the value of any assets which are in Australia up to an unencumbered value of AUD$1,630,000;
ii.the first and second defendants had been aware of the terms of that order from the time it was made;
iii.the first and second defendants were served with a sealed copy of the Order at 10.00am on 10 November 2010; and
iv.the withdrawals were not reasonably necessary for the first defendant’s ordinary living expenses.
Mr Desmond Ming Lee was a director and sole shareholder of Lee Holdings (Australia) Pty Ltd.
The freezing order
On 9 November 2010, Sifris J made an ex parte freezing order against Mr Lee, Lee Holdings (Australia) Pty Ltd and the third defendant. That order, in relevant parts, stated:
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 deal with as if it were your own (you are to be regarded as having such power if a third party holds or controls the asset in accordance with your direct or indirect instructions); and
(iii)the following assets in particular —
(A)the assets of your business or, if any or all of the assets have been sold, the proceeds of the sale; and
(B)any money in the following account: BSB 083 266, Account Number 872575493 in the name of CC Containers at the Glen Waverley Branch of the National Australia Bank;
(C)any money in the following account: BSB 083 266, Account Number 554405560 in the name of Desmond Ming Lee at the Glen Waverley Branch of the National Australia Bank;
(D)any money in the following account: BSB 083 106, Account Number 831814769 in the name of Lee Holdings Australia at the Altona North Branch of the National Australia Bank;
(b)the value of your assets is the value of the interest you have individually in your assets.
…
EXCEPTIONS TO THIS ORDER
10.This order does not prohibit you from –
(a) the first and third defendants paying up to $1,000 a week on your ordinary living expenses;
(b) paying $20,000 in respect of your reasonable legal expenses;
(c) dealing with or disposing of any of your assets in the ordinary and proper course of your business, including paying business expenses bona fide and properly incurred;
(d) in relation to matters not falling within sub-paragraphs (a), (b) or (c), dealing with or disposing of any of your assets in discharging obligations bona fide and properly incurred under a contract entered into before this order was made, provided that before doing so you give the applicant, if possible, at least two working days written notice of the particulars of the obligation;
but this order does prohibit you absolutely from dealing with or disposing from dealing with or disposing of or diminishing the present value of any of the bank accounts set out in paragraph 7 (a)(iii) above save for payment of the expenses referred to in (a) and (b) above.
The freezing order was returnable on 12 November 2010, and was then continued.
The freezing order that was served contained the required Penal Notice describing the possible consequences of breaching the order.
By way of giving context to the freezing order, I will briefly describe the plaintiffs’ claims against the first and second defendants. The third plaintiff operates an international shipping business transporting containerised cargo. The second plaintiff is its wholly owned agent in Australia and New Zealand. The third plaintiff used the services of CCC Old Co[1] to repair, maintain and store empty containers in Melbourne. That company was controlled by the third and fourth defendants, Kevin Chong and his father, Kain Chong. CC Containers Pty Ltd (‘CCC’), the first plaintiff, was established to purchase and operate CCC Old Co’s business. The first defendant, Mr Lee, was an employee of CCC Old Co.
[1]The name by which the original CC Containers Pty Ltd was referred to in the judgment of Ferguson J.
I have not based my findings in this matter on any of the matters that I have set out in the previous paragraph, but mention them only to provide context. My findings are based only on the evidence that was before me in hearing the summons.
The proceeding came to trial before Ferguson J, who gave judgment for the plaintiffs against several defendants, including Mr Lee, for substantial damages for a number of frauds.[2] An appeal from her Honour’s judgment was dismissed, save for an alteration in the calculation of interest on the judgment sum.[3]
[2]CC Containers Pty Ltd v Lee (No 6) [2014] VSC 151.
[3]Chong & Neale v CC Containers Pty Ltd [2015] VSCA 137.
Mr Lee did not participate in the trial before Ferguson J, nor did he appeal any part of that judgment.
On 2 April 2015, on the application of the first plaintiff, CCC, a sequestration order was made against Mr Lee and he is, as a result, an undischarged bankrupt. The sequestration order followed the service of the bankruptcy notice, which must have occurred at about Christmas 2014, because the act of bankruptcy was on 21 January 2015.
Proof of a civil contempt
In order to prove a civil contempt constituted by a breach of court order, the plaintiffs must prove beyond reasonable doubt that:
(a) an order was made by the court;
(b) the terms of the order are clear, unambiguous and capable of compliance;
(c)the order was served on the alleged contemnor or that service was excused in the circumstances or dispensed with pursuant to the Rules of Court;
(d) the alleged contemnor has knowledge of the terms of the order;
(e) the alleged contemnor has breached the terms of the order.[4]
[4]See Grocon Constructions (Vic) Pty Ltd v Construction, Forestry, Mining and Energy Union (2013) 234 IR 59 [8], [2013] VSC 275 [8].
Proof of matters (a) –(d)
Counsel for Mr Lee conceded that there was proof of the matters (a) to (d). I am satisfied that this concession was appropriately made.
Mr Thompson’s affidavit of 19 December 2012 proves service of the freezing order on Mr Lee on 10 November 2010 at about 10.00am.
Was the contempt civil or criminal?
There was some argument about whether the allegations in this case, if proved, would amount to a civil or a criminal contempt. Counsel for Mr Lee submitted that a civil contempt can amount to a criminal contempt where the conduct was contumacious.[5]
[5]Reliance was placed on the decision in Hearne v Street (2008) 235 CLR 125 [22].
The recent High Court decision in Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd[6] establishes that a contempt involving breach of a civil order of the Court is a civil proceeding, although the standard of proof is beyond reasonable doubt.[7]
[6](2015) 320 ALR 448.
[7]Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd (2015) 320 ALR 448 [3], [35].
Mr Lee’s submission — The significance of Mr Lee’s bankruptcy
Mr Lee submitted that I should stay the proceeding in the exercise of the discretion. He contended that the plaintiffs, after issuing the contempt summons on 20 December 2012, had elected to pursue a completely different approach to the contempt proceeding by taking bankruptcy proceedings against Mr Lee and obtaining a sequestration order. Accordingly, he submitted that the contempt application should be dismissed. Mr Lee would not be able to pay any fine. It was not contended that the court could not hear the contempt proceeding because of the bankruptcy.
Counsel for the plaintiffs disputed this submission and contended that the hearing of the summons had been delayed for a considerable period of time, because of the trial and the time occupied by the delivery of judgment following the trial.
I consider that there is no basis for exercising the discretion to dismiss the contempt charges. The sequestration order was based on a failure to comply with a bankruptcy notice. In contrast, the contempt summons was based on breaches of the freezing order.
The parties provided written submissions about the effect of the recent High Court judgment in Construction, Forestry, Mining and Energy Union v Boral Resources (Vic) Pty Ltd[8], which was delivered after the hearing. They particularly addressed the effect of that judgment on the privilege against self-incrimination possessed by a person charged with contempt of court. I do not read the High Court’s judgment as affecting any issue to be decided on this application.[9] It did not, for instance, affect the issue of the discharge of the onus of proof that a person relying on an exception to the operation of an order will often bear.
[8](2015) 320 ALR 448.
[9]Cf RPS v The Queen (2000) 199 CLR 620[27].
Evidence in support of the summons
Mr Stephen Thompson
The solicitor for the plaintiffs, Mr Stephen Thompson, made a number of affidavits in support of the contempt summons.
Mr Thompson stated that, on 10 November 2010, he met with Mr Lee, together with Mr Kevin Clarke and Mr Alex Ellis, both directors of the second plaintiff, and David Muir, general manager of CCC. The meeting commenced at 10.00am at CCC’s premises in Yarraville. During that meeting, he personally served Mr Lee with a copy of the freezing order. He explained the effect of the order to Mr Lee, saying words to the effect that, subject to the limited exemptions referred to in the freezing order, Mr Lee and the second defendant, Lee Holdings, were not permitted to withdraw or transfer funds from or between accounts or otherwise dispose of assets in Australia without permission of the Court.
Subpoenaed documents
Documents in relation to the bank accounts referred to in the charges contained in the summons were produced on subpoena by the National Australia Bank (“NAB”) and the Bank of Queensland (“BoQ”).
Mr Kirsty Haidar
Two affidavits filed by the plaintiffs explained how the bank account statements and related documents came to be produced to the plaintiffs. Kristy Haidar, an employee of the NAB, made an affidavit describing her involvement in the production of documents held by the NAB in response to subpoenas served on it on behalf of the plaintiffs. She was given responsibility for responding to the subpoenas. She instituted searches of NAB’s records to locate and print copies of the documents that were required to be produced.
Ms Karlee Prior
Mr Karlee Prior, who had been an employee of the BoQ, made an affidavit stating that she had been given responsibility for responding to subpoenas served by the plaintiffs on the BoQ. She instituted searches of BoQ’s records to locate and print copies of the documents required to be produced.
Mr Jacobus Troost
The plaintiffs served a subpoena on Crown Melbourne Ltd (“Crown”) seeking documents about a gaming account in the name of Desmond Ming Lee. Mr Jacobus Troost, Legal Counsel of Crown, made an affidavit describing how Crown complied with that subpoena.
The plaintiffs relied on documents that had been subpoenaed from the two banks and Crown and they were tendered and became evidence. Bank account statements and account balance summaries were in evidence for the accounts from which the relevant withdrawals were made.[10]
[10]Exhibit G 1-29.
The plaintiffs relied on these documents as constituting evidence by reason of s 1305 of the Corporations Act 2001 (Cth) and s 69 of the Evidence Act 2008 (Vic).
Charges 1, 2 and 3
The first three charges were connected and related to transactions that occurred on 10 November 2010, which was the day after the freezing order was made. By those transactions, the sum of $300,000.00 was transferred from NAB account 1770041892 to the Crown gaming account of Patron No 2597366 in the name of Desmond M Lee. The sum of $300,000.00 was used to purchase a chip purchase voucher.
The first charge
The first charge concerned the withdrawal of the sum of $302,200.00 from NAB Account 170041892.
The plaintiffs’ case was that Mr Lee withdrew an amount of $300,000.00 from the Lee Holdings account just after 1.00pm on 10 November 2010 and withdrew two additional amounts of $1,200.00 and $1,000.00, by internet on 11 November 2010.
On 10 November 2010, the day after the freezing order was made and the day on which it was served on Mr Lee at about 10.00am, the sum of $142,733.74 was credited to a NAB account numbered 170041892 in the name of Lee Holdings (Australia) Pty Ltd by an internet transfer from another NAB account in the same name. That second NAB account was account 834169793.
The authority to operate account 170041892 was dated 25 March 2010 and showed that both Mr Desmond Ming Lee and Mrs Jennifer Hu were authorised to conduct transactions on the account.
On 10 November 2010, the sum of $300,000.00 was withdrawn from account 170041892 by transfer leaving a debit balance of $146,311.33. This transaction appears to have occurred at the NAB’s Footscray branch at 1.21pm.[11]
[11]In evidence was a NAB document being ‘a real time gross settlement’ recording the sender’s date as 10 November 2010, 13.24.48 hours and the receiver’s date or time stamp as 13:26.27.
The debit form that was prepared in connection with the withdrawal bears a box with a tick saying “known to staff”. The staff member’s name was recorded as “Kate Trimbol”. The identity of the person who signed the withdrawal or debit form was not established by evidence that identified the signature.
The $300,000.00 was transferred to a HSBC Bank account in the name of Southbank Investments Pty Ltd. The applicant for the tele-transfer was Lee Holdings (Australia) Ltd. On 10 November 2010, at 5.46pm, the $300,000.00 was transferred into a gaming account in the name of Desmond M Lee held with Crown. Mr Desmond Lee was identified in Crown’s account records as patron number 02597366.
The records of the Crown gaming account of Mr Desmond Lee recorded that $300,000.00 was withdrawn from the account on 10 November 2010 and a chip purchase voucher was purchased for that amount. At the same time, $5,000.00 in cash was withdrawn from Mr Lee’s gaming account, leaving a balance of $6,000.00.
On the next day, 11 November 2010, internet payments of $1,200.00 and $1,000.00 were debited to account 170041892. However, there was no evidence of who made the internet payments.
Mr Lee submitted that the Court could not be satisfied beyond reasonable doubt that he made the withdrawals that the plaintiffs relied on as breaching the freezing order. Mr Lee submitted that the plaintiffs had not proved that his signature appeared on the documents that initiated the transactions. The bank documents relied on by the plaintiffs to prove the contempt lacked clarity and their significance and effect were not apparent on their face.
Mr Lee submitted that the plaintiffs had not explained their failure to call the checking officer at the NAB’s branch involved in the transfer of the $300,000.00. The inference should be drawn that her evidence would not have assisted the plaintiffs’ case.[12]
[12]Jones v Dunkel (1959) 101 CLR 298.
Mr Lee contended that, if all the documents which the plaintiffs alleged bore his signature were put to one side, because that signature had not been proved, the Court could not be satisfied beyond reasonable doubt that the charges had been proved. There were few other documents to support the charges.
The plaintiffs relied on the documents that were tendered to prove the withdrawals.
Conclusion on charge 1
The documents in evidence showed that Mr Lee was an authorised signatory to account 170041892. A bank document in evidence showed a withdrawal debit for the sum of $300,000.00 to the account dated 10 November 2010 at 13.21.36.
While there is no direct evidence that Mr Lee caused the transfer of the $300,000.00, I am satisfied that, when the evidence relating to the first three charges is considered in context, it is clear that the $300,000.00 was transferred into Mr Lee’s gaming account. The evidence, considered as a whole, supports the conclusion that Mr Lee caused that transfer. The evidence was that Mr Lee was the only person authorised to operate the second NAB account 834169793, from which, as alleged in charge 3, $142,733.74 was transferred into NAB account 170041892 to enable the transfer of $300,000.00 to occur to his gaming account with Crown.
I am satisfied beyond reasonable doubt that Mr Lee withdrew the sum of $300,000.00, by causing its transfer to his gaming account with Crown. That transfer is the subject of charge 2. His conduct was intentional.
I do not consider that the plaintiffs’ failure to call the bank officer requires any different conclusion. The contents of the documents relating to the first three charges proves the first charge beyond reasonable doubt.
I am satisfied beyond reasonable doubt that Mr Lee arranged the transfer of the $300,000.00 and therefore withdrew that sum in breach of the freezing order after it had been served on him.
I am not satisfied that the plaintiffs have proved beyond reasonable doubt that Mr Lee withdrew the two further amounts of $1,200.00 and $1,000.00 on 11 November 2010. These amounts were proved to have been withdrawn by an internet transaction, but there were two people authorised to conduct transactions on account 170041892: Mr Lee and Mrs Hu. I cannot be satisfied whether either of them carried out the internet transaction.
An issue arose about whether the first charge failed if any of the withdrawals on which it was based had not been proved, including the withdrawals of the amounts of $1,200.00 and the $1,000.00. I do not consider that the charge does fail. The contempt charge 1 is in effect made up of a number of withdrawals. The charge is framed to allege that a contempt by breaching an order occurred by withdrawing the amount of $302,200.00 from NAB account 170041892. But the charge alleges that that occurred by three withdrawals of amounts of $300,000.00 on 10 November 2010, $1,200.00 and $1,000.00 on 11 November 2010. In essence, these three amounts were all allegations of separate breaches of the freezing order. The critical consideration is whether the person charged with contempt received appropriate notice of the charge. [13] I consider that in essence, both in the way the charge 1 was framed, and the way in which it was argued, it was clear that the plaintiffs were contending that charge 1 alleged three withdrawals, each of which was alleged to be a contempt of court.[14]
[13]Construction, Forestry, Energy and Mining Union v Boral Resources (Vic) Pty Ltd [2014] VSCA 261 [237]–[252] and Matthews v ASIC [2009] NSWCA 155.
[14]It was not suggested that such an analysis of the charge would render it duplicitous. In any event, the principles relating to duplicity do not apply to contempt charges for breach of a court order: Matthews v ASIC [2009] NSWCA 155[45].
As previously stated, I am satisfied beyond reasonable doubt that when on 10 November 2010 Desmond Ming Lee withdrew the amount of $300,000.00 from NAB account 170041892 in breach of the freezing order, he committed a contempt of court.
Charge 2 — The Crown Account
The second charge alleged the withdrawal of $311,000.00, in three amounts, from Mr Lee’s gaming account with Crown. The three amounts were $300,000.00 and $5,000.00 at approximately 5.46pm on 10 November 2010, in the manner I have described when considering the first charge, and $6,000.00 on 27 November 2010.
The Crown gaming account documents recorded the deposit of $300,000.00 into Mr Lee’s gaming account on 10 November 2010. That amount was tele-transfered to SouthBank Investments Pty Ltd via the HSBC Bank Australia Ltd, Collins Street, Melbourne. The applicant for the transfer was Lee Holdings Australia. The NAB transfer document also records next to the word ‘Message’ the details ‘Desmond Lee 2597366’. That was Mr Lee’s ‘patron number’ with Crown.
Later on 10 November 2010, the amount of $300,000.00 was withdrawn from Mr Lee’s gaming account to purchase a chip purchase voucher in that amount. That voucher was issued at 17.46.23 on 10 November 2010. The purchase request is signed by Desmond M Lee with his patron number recorded.
The records of Mr Lee’s Crown gaming account show gambling transactions between 10 November 2010 and 6 January 2011 on Mr Lee’s gaming account. His account had reached zero balance by 6 January 2011 when a further $25,000.00 was deposited into it. [15]
[15]Transcript 101.
I am satisfied beyond reasonable doubt that Mr Lee withdrew $305,000.00 from his Crown gaming account on 10 November 2010, after he had been served with the freezing order. His conduct was clearly intentional.
There is no evidence that Mr Lee breached the freezing order by withdrawing the amount of $6000.00 on 27 November 2010.
As in the case of charge 1, I consider that charge 2 alleges separate withdrawals that breached the freezing order. I consider that the plaintiffs have proved the first two withdrawals totalling $305,000.00 beyond reasonable doubt.
I am satisfied beyond reasonable doubt that when on 10 November 2010 Desmond Ming Lee withdrew the amount of $305,000.00 from his Crown gaming account, he committed a contempt of court.
Charge 3- Lee Holdings (Australia) Pty Ltd account 834169793
The second NAB account concerned in the charges was account 834169793 in the name of Lee Holdings (Australia) Pty Ltd, trading as CC Cartage. Mr Desmond Lee was the only person authorised to conduct transactions on this account. The branch concerned was at Altona North.
The plaintiffs’ case was that Mr Lee withdrew $142,733.74 from NAB account 834169793 and transferred it to NAB account 170041892, from which on the same day, 10 November 2010, $300,000.00 was transferred to his Crown gaming account.
The statement of this second NAB statement recorded that, on 9 November 2010, the account had a credit balance of $142,733.74. On the next day, 10 November 2010, that amount was withdrawn by internet transfer. The evidence suggests that it was transferred and credited to NAB account 170041892, which was the account the subject of the first charge.
Mr Lee submitted that there was no evidence of who had made the internet transfers which the plaintiffs relied on as constituting some of the withdrawals, including in respect of the transfer the subject of the third charge. He also submitted that there was no evidence to preclude the possibility that some of the early withdrawals were effected before he was served with the freezing order. I do not accept that submission, as Mr Lee was the sole person able to conduct transactions on the second NAB account. I am satisfied beyond reasonable doubt that he arranged for the transfer of the $142,733.74 from the second NAB account to the first NAB account, as part of a process of transferring money into his Crown gaming account. His conduct was clearly intentional.
I am satisfied beyond reasonable doubt that when on 10 November 2010, Desmond Ming Lee withdrew the sum of $142,733.74 from NAB account 834169793, he committed a contempt of court.
Charge 4 — Bank of Queensland Account – Desmond Ming Lee
Charge 4 concerned a BoQ account in the name of Mr Desmond Ming Lee numbered 202113222, opened on 31 October 2005. Mr Desmond Ming Lee had authority to operate the account. The plaintiffs’ allegation was that Mr Lee had transferred $38,987.60 from that account by 10 separate monthly withdrawals of $3,898.76 between 27 November 2010 and 27 August 2011.
The BoQ statements recorded direct debits to that account in the sum of $3,898.76 by transfers to a loan account on 27 November, 27 December 2010, and in January, February, March, April, May, June, July and August 2011. These withdrawals were proved by the production of the bank statements. Each of the direct debits is described as ‘Transfer to Loan Account’.
Each direct debit was preceded by a credit to the account in the sum of $3,900.00 or $3,950.00. The first credit was described as ‘Direct Credit Desmond M6 Car Loan’. The second was described as ‘Direct Credit Lee Desmond M BOQ M6 Car Loan’. The remainder of the credits bore various descriptions. The final credit is described as ‘Direct Credit Miss Karman Yan Car Loan’.
These features of the direct debits suggest that they were occurred to repay a loan, perhaps a car loan, entered into before the freezing order was made.
Counsel for Mr Lee characterized these direct debits as obligations bona fide and properly incurred under a contract entered into before the freezing order was made. He relied on exception 10(d). If that were the case, they would be withdrawals excepted from the operation of the freezing order. Mr Lee submitted that the withdrawals were automatic payments which had continued.
There was no evidence about any obligation or contract under which the direct debits occurred.
Conclusion on charge 4
The evidence of the BoQ’s statements suggests that the 10 withdrawals were to pay an ongoing obligation. Mr Lee bore the onus of proving that an exception to the freezing order permitted the withdrawal whether it was a direct debit or other withdrawal.[16] However, the contract or the obligation under which the direct debit occurred was not proved. No written notice was given of these direct debits before they were made and no evidence led of whether Mr Lee could have given that notice, within two days or otherwise. Mr Lee’s conduct was intentional in that he permitted the debits to occur and did not give the required notice.
[16]Australian Securities and Investments Commission v Sigalla (No3) [2010] NSWSC 1076 [46] (White J).
I am satisfied beyond reasonable doubt that Desmond Ming Lee made each of the 10 withdrawals totalling $38,987.60 on Bank of Queensland account 20211322 between 27 November 2010 and 27 August 2011 and thereby he committed contempts of court.
Fifth charge — NAB account 831814769 Lee Holdings (Australia) Pty Ltd
The fifth charge concerned five withdrawals totalling $23,000.00 from a third NAB account number 831814769 in the name of Lee Holdings (Australia) Pty Ltd, t/as CC Cartage. Both Mr Desmond Ming Lee and Ms Jennifer Hu were authorised to conduct transactions on the account.
The statements for account 831814769 that were in evidence proved those withdrawals in five recorded debits on that account: one in the amount of $1,000.00 on 18 November 2010, another in the amount of $12,112.40 on 3 December 2010, another in the amount of $1,000.00 on 3 December 2010, another in the amount of $1,000.00 on 27 January 2011, described as for ‘ordinary living expenses’, and the other in the amount of $7,887.60 on 27 January 2011.
The plaintiffs relied on the relevant bank statements to prove the withdrawals.
Conclusion on charge 5
I consider that the plaintiffs have not proved that Mr Lee withdrew the sums which are the subject of charge 5. Both Mr Lee and Mrs Hu had authority to conduct transactions on the account.
There is no evidence as to who received the amounts totalling $23,000.00, which are the subject of charge 5.
Conclusion
I find that the plaintiffs have proved beyond reasonable doubt the following charges of contempt of court contained in their summons dated 20 December 2012:
that Desmond Ming Lee withdrew the amounts of:
a. $300,000 from the National Australia Bank Ltd, Lee Holdings (Australia) Pty Ltd t/as CC Cartage Business Cheque Account (BSB 083 106, Acc 17004 1892), on 10 November 2010;
b. $305,000 from a gaming account held at Crown Melbourne Limited in the name of Desmond M Lee (Patron No 259 7366), in separate withdrawals, in the amounts of $300,000 and $5,000 on 10 November 2010;
c. $142,733.74 from the National Australia Bank Ltd, Lee Holdings (Australia) Pty Ltd t/as CC Cartage Business Cash Maximiser Account (BSB -083 106, Acc 83 416 9793) on 10 November 2010;
d. $38,987.60 from the Bank of Queensland Ltd Account, Mr Desmond Ming Lee Ultimate Account (BSB 124 001 Acc 2012 1322) in ten separate withdrawals made between 27 November 2010 and 27 August 2011.
I will list the matter again to give directions as to the orders, including the imposition of any penalties, that I should make as a result of my findings.
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