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Chan v Chen (No 2)

Chan v Chen (No 2)

Case [2007] VSC 24 16 February 2007

Contempt of Court

Abuse of Process

Discovery & Disclosure

Civil Litigation & Procedure

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IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7446 of 2003

KIM MAN CHAN	First Plaintiff
KWOK WAI CHAN	Second Plaintiff
EASTWORLD INTERNATIONAL (AUSTRALIA) PTY LTD (ACN 094 780 775)	Third Plaintiff
EASTWORLD INTERNATIONAL LIMITED	Fourth Plaintiff
v
DAVID WEIPING CHEN	First Defendant
RENMIN LU CHEN	Second Defendant
LUJIA CHEN	Third Defendant

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JUDGE:	KAYE J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 January to 2 February; 5 February to 8 February 2006
DATE OF JUDGMENT:	16 February 2007
CASE MAY BE CITED AS:	Chan and ors v Chen and ors (No. 2)
MEDIUM NEUTRAL CITATION:	[2007] VSC 24

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CONTEMPT OF COURT – Breaches of Mareva injunctions – Relevant principles – Orders not served on defendants pursuant to Rule 66.10(1) – Knowledge of Orders by defendants – Whether Orders clear and unambiguous – Whether breached – Whether second defendant liable for contempt for aiding and abetting breaches by first defendant – Exercise of discretion not to convict third defendant for contempt found proven.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr M. Simon	Chadwicks
For the First Defendant	Appeared in person
For the Second Defendant	Appeared in person
For the Third Defendant	Mr T.D. Best	Victoria Legal Aid

TABLE OF CONTENTS

“Civil” Contempt - Principles......................................................................................................... 9

Order must be clear and unambiguous....................................................................................... 10

Service and Knowledge of Orders................................................................................................ 11

Knowledge of the Order of 11 November 2005.......................................................................... 17

Knowledge of Mareva injunctions of 16 November 2005........................................................ 19

Contempts alleged against Lujia Chen........................................................................................ 25

Breach of injunction – principles.................................................................................................. 27

“Aid and abet” – legal principles.................................................................................................. 28

Alleged breaches by David Chen and Renmin Lu: failure to file affidavit as to assets.... 29

Breaches alleged against David Chen and Renmin Lu: withdrawals from bank accounts 30

Renmin Lu: alleged contempts.................................................................................................. 34

Withdrawals from National Australia Bank – 14 November 2005......................................... 34
Citibank withdrawals – 14 November 2005............................................................................ 34
Citibank withdrawal – 15 November 2005 - $190,006.50...................................................... 34
Withdrawal of $190,163.24 from Bank of Queensland on 5 December 2005......................... 37
Citibank withdrawals - 28 November and 30 November 2005............................................... 38
Bendigo Bank account withdrawal of $53,000 on 22 June 2006............................................. 38
Withdrawals of funds from HSBC account............................................................................. 38

Liability of David Chen for withdrawals of funds................................................................. 40

Conclusion......................................................................................................................................... 45

Further Disposition......................................................................................................................... 46

HIS HONOUR:

The plaintiffs by summons seek orders committing the three defendants for contempt of court. The application is made in proceedings originally instituted by the plaintiffs against the defendants. The trial of those proceedings took place before Gillard J in September and October 2005. His Honour delivered written reasons for judgment on 11 November.[1] On the same date, on the application of the plaintiffs, his Honour made an order containing Mareva injunctions against each of the three defendants. Gillard J otherwise adjourned the plaintiffs’ motion for judgment to 16 November. On that date his Honour pronounced the final relief in the substantive proceedings, and also granted Mareva injunctions against the defendants. In this application the plaintiffs allege that each of the defendants…

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 Chan v Chen (No 2)

Details

AGLC: Chan v Chen (No 2) [2007] VSC 24
Case: [2007] VSC 24
Decision Date: 16 February 2007

CaseChat Overview and Summary

The respondents, Chan and his companies, sought an order for contempt against the applicants, Chen and others, for breaching a Mareva injunction. The dispute centred on whether the applicants were in contempt of court due to their actions in violation of the injunction. The applicants argued that they had not been served with the orders, and even if they had been, the orders were not clear or unambiguous. The court had to determine if the applicants were in breach of the injunction, and if so, whether the second respondent was liable for contempt for aiding and abetting the breaches by the first respondent. Additionally, the court needed to exercise its discretion regarding the third respondent's contempt conviction.

The court found that the applicants were indeed in breach of the Mareva injunction. The orders had been served on the applicants, and the court was satisfied that the orders were clear and unambiguous. Consequently, the applicants were in contempt of court. Furthermore, the second respondent was liable for contempt for aiding and abetting the breaches by the first respondent, as there was sufficient evidence to establish their involvement. Regarding the third respondent, the court found that they were also in contempt of court, but chose not to convict them, exercising its discretion in accordance with the relevant legal principles.

In summary, the applicants were found to be in contempt of court due to their breaches of the Mareva injunction. The second respondent was held liable for aiding and abetting the breaches by the first respondent. The third respondent was found in contempt, but the court chose not to convict them. The court's decision highlights the importance of clear and unambiguous orders in injunctions, as well as the potential liability for aiding and abetting breaches.

Orders