Chang v Chang
[2025] VSC 391
•2 July 2025
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2021 01122
BETWEEN:
| VICTOR CHANG (otherwise known as SHENGLI CHANG) | Plaintiff |
| v | |
| HOLLY CHANG (otherwise known as HONG CHANG) | Defendant |
S ECI 2022 04357
BETWEEN:
| HOLLY CHANG (otherwise known as HONG CHANG) | Plaintiff |
| v | |
| VICTOR CHANG (otherwise known as SHENGLI CHANG) | Defendant |
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JUDGE: | Daly As |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 11 June 2025 |
DATE OF JUDGMENT: | 2 July 2025 |
CASE MAY BE CITED AS: | Chang v Chang |
MEDIUM NEUTRAL CITATION: | [2025] VSC 391 |
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PRACTICE AND PROCEDURE — Application to set aside judgment pursuant to r 46.08 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) — Civil Procedure Act 2010 (Vic), s 56(2) — Where there have been ongoing failures to comply with discovery obligations and orders of the Court in relation to discovery — Where the party has failed to provide a plausible and reasonable explanation for her failure to engage in the proceeding and appear at the application for judgment — Whether the result would have been any different — Ren v Sinicorp Pty Ltd [2021] VSC 728 and National Builders Group IP Holdings Pty Ltd v ACN 092 675 164 Pty Ltd (in liq) [2015] VSCA 260 referred to — Application refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff in S ECI 2021 01122/Defendant in S ECI 2022 04357 | Mr C Banasik of counsel | |
| The Defendant in S ECI 2021 01122 /Plaintiff in S ECI 2022 04357 in person |
HER HONOUR:
Introduction
Holly Chang, the defendant in S ECI 2021 01122 (‘Victor’s proceeding’) and the plaintiff in S ECI 2022 04357 (‘Holly’s proceeding’), and Victor Chang, the plaintiff in Victor’s proceeding and the defendant in Holly’s proceeding, are siblings. On 18 June 2025, I delivered a written ruling dismissing applications made by Holly to set aside default judgment entered against her in Victor’s proceeding and to set aside an order dismissing Holly’s proceeding. Holly had also made applications to amend her defence, join parties, and to stay any enforcement action taken by Victor. These applications were dismissed without adjudication as to their merits. These reasons are an augmented and slightly modified version of the ruling delivered on 18 June 2025.
In his statement of claim in Victor’s proceeding filed on 15 April 2021, Victor alleges that in September 2010, Holly and Victor entered into an agreement to jointly purchase a property on Ormond Esplanade, Elwood, Victoria (‘Elwood property’). Victor agreed to provide Holly with all the funds required for the purchase and mortgage repayments of the Elwood property. Victor claims that Holly’s interest in the Elwood property was to be held beneficially for Victor, and Holly and their parents would have a right of occupation. Settlement was effected on 23 November 2010.
Victor also claims that he later decided to sell the Elwood property, and on 27 February 2015, Victor and Holly executed a contract of sale with a purchaser. Two days before the settlement was scheduled to take place, Holly directed that 50 percent of the proceeds of sale be transferred to her. Between May and June 2015, Holly threatened to release confidential personal information that she had obtained from Victor’s iPad to the media, and other sensitive personal information to business associates. On 5 June 2015, Victor instructed his solicitor to release 50 percent of the proceeds of sale of the Elwood property, being $894,933.20 to Holly, doing so, he says, under duress from Holly.
Victor also claimed that in 2011, Holly misappropriated funds from Victor’s bank accounts to fund the purchase of a new luxury car, a Mercedes Benz E250 (‘motor vehicle’).
Victor seeks declarations that Holly held her legal title in the Elwood property on trust for the Victor, and that Victor has a charge over the motor vehicle. Victor also seeks interest in relation to the proceeds of sale for the Elwood property, and in relation to the funds Holly misappropriated to fund the purchase of the motor vehicle.
Holly maintains that the Elwood property was held on trust by Victor and Holly for the wider Chang family, including their father Fuan Chang, and their sister Hanna. Holly admits to purchasing a motor vehicle in April 2011, but states that Victor sold the vehicle to his employer and the funds from the sale were paid into Shengli Investments Pty Ltd, the trustee company of the Chang family trust.
In her statement of claim in Holly’s proceeding filed on 22 October 2022, Holly seeks declarations that the balance of funds held in a family trust, including properties in South Yarra (‘Howitt Street property’), St Kilda (‘St Kilda property’), and Toorak (‘Toorak property’) supposedly owned by the family trust, are held by Victor on trust for Holly, Fuan, her sister and her son[1] (‘Chang family’). Holly claimed that pursuant to an oral agreement, she and Victor held the Elwood property on trust for the Chang family.
[1]It is not entirely clear who Holly is referring to.
Holly also seeks an injunction directing the Land Titles Office to transfer the titles of the Howitt Street property, St Kilda property, and Toorak property to Holly, Fuan, and her sister. Holly says that she made significant contributions to the family wealth and that it was understood by oral agreement that the titles to the Howitt Street property, St Kilda property, and Toorak property were to be held on trust for the Chang family, including Holly.
Victor denies that the Howitt Street property, St Kilda property, Toorak property and the Elwood property are held on trust for the Chang family.
Fuan is the plaintiff in a third proceeding involving the Chang family (‘Fuan Chang proceeding’). In the Fuan Chang proceeding, Fuan claims that Holly’s son, Jet Gu, holds the Howitt Street property (in which Fuan Chang and Holly Chang both live) on trust for Fuan.
Victor’s proceeding and Holly’s proceeding were initially set down for trial on 20 August 2024 and were to be jointly heard given that the proceedings involve the same parties. The proceedings were not ready to proceed to trial and the trial date was vacated in July 2024. The Fuan Chang proceeding is now listed for trial on 2 September 2025.
On 4 April 2023, orders were made that the parties make discovery by 8 September 2024. On 19 July 2024, I made orders that Holly make discovery of four categories of documents, providing detailed reasons in ‘Other Matters’. Holly failed to comply with the discovery order. At a hearing on 3 October 2024, I made a further order providing detailed guidance as to what Holly was required to do to comply with the discovery order and extended the time for compliance with the discovery order, again giving detailed reasons in ‘Other Matters’. An affidavit filed by Holly on 28 October 2024 failed to comply with the discovery orders. Holly did not appear at a hearing held on 12 November 2024, at which time I made a fixed costs order in favour of Victor with respect to the costs of and incidental to the hearing on 3 October 2024.
On 29 November 2024, Victor filed an application to dismiss Holly’s defence in Victor’s proceeding, enter judgment in favour of Victor, and dismiss Holly’s proceeding (’29 November application’).
The 29 November application was listed for hearing on 4 February 2025. Holly seeks orders setting aside the orders I made on 4 February 2025, which:
(a) struck out the defence in Victor’s proceeding, and gave judgment for the plaintiff, Victor, pursuant to s 56(2)(j) of the Civil Procedure Act 2010 (Vic) (‘CPA’); and
(b) dismissed Holly’s proceeding pursuant to s 56(2)(j) of the CPA.
(‘4 February orders’).
Holly was not in attendance at Court when I made the 4 February orders, despite being served with the summonses which led to the scheduling of the hearing of the 29 November application. Her sister, brother-in-law, and father were present at the hearing on 4 February 2025. The Court’s records show that the 4 February orders, which included detailed reasons in ‘Other Matters’, were emailed to the parties, including Holly, on 5 February 2025 at 3.48pm.
The discovery orders, the 29 November application, and the set-aside application
On 19 July 2024, I made orders that Holly provide discovery of documents concerning her acquisition of three properties in Victoria and New South Wales (‘particular discovery order’). I agreed these documents were relevant to the claim made by Victor in Victor’s proceeding that funds paid to Holly from the proceeds of sale of the Elwood property, of which Victor and Holly were joint proprietors, be returned to him. Victor claims that Holly held her share of the Elwood property on trust for him, and the payment to Holly of a half share of the net proceeds of sale of the Elwood property was procured by duress.
The documents referred to in the preceding paragraph are relevant to the claim in Victor’s proceeding that the funds paid to Holly from the proceeds of sale of the Elwood property could be traced into other properties purchased by Holly.
The particular discovery order also included an order that Holly discover financial documents and other records with respect to properties and businesses owned by her in the years leading up to the purchase of the Elwood property, which are relevant to Holly’s contention in both proceedings that she contributed to the acquisition of the Elwood property and other properties owned by members of the Chang family or the Chang family trust. The particular discovery order also provided that the evidence and discovery in Holly’s proceeding be the evidence and discovery in Victor’s proceeding.
On 3 October 2024, I made orders (‘further discovery order’) following Holly’s non-compliance with the particular discovery order, as follows:
1.By 4:00pm on 1 November 2024, the defendant file and serve an affidavit which, by reference to each of the numbered paragraphs in Schedule A to the Discovery Order, deposes as to the following matters:
(a)whether she has any of the document specified in each paragraph (‘documents’) in her possession, custody or control, and if she does, list the documents she has in her possession, custody or control;
(b)if she does not have any of the documents, what she believes happened to the documents, and the current whereabouts of the documents;
(c)where the documents are said to be in the possession of the ATO, banks and other financial institutions, accountants and tax agents, solicitors and conveyancing agents, and/or past and current business associates, what steps she has taken to recover the documents, and if the documents are not able to be recovered, the reason why,
and exhibits all correspondence evidencing the enquiries made in respect of sub-paragraph (c) above.
2.For the avoidance of doubt, the term 'possession, custody or control' includes documents which may be in the possession of others, but which the defendant is entitled to call for production, such as documents in the possession of her current or former agents.
3.For the avoidance of doubt, the Discovery Order remains in force, save that the time for compliance with the Discovery Order has been extended to 1 November 2024.
On 12 November 2024, I made orders that Holly pay Victor’s costs of and incidental to the hearing of 3 October 2024, fixed at $22,168.08, and gave directions for the filing and service of any application by Victor to strike out Holly’s claims or defences in the event of any further non-compliance. As noted earlier in these reasons, Holly did not attend this hearing.
The 29 November application was issued on that date, seeking relief under s 56 of the CPA, and was returnable on 4 February 2025. Holly did not appear at the hearing on 4 February 2025, and I granted the relief sought by Victor in the 4 February orders.[2]
[2]Save for a reduction in the interest payable on the judgment sum in Victor’s proceeding by reason of the delay by Victor in issuing Victor’s proceeding.
On 20 May 2025 Holly issued a summons in Victor’s proceeding (‘set-aside application’), seeking the following relief:
That the default judgment entered against the Defendant on 4 February 2025 be set aside pursuant to Rule 24.05 of the Supreme Court (General Civil Procedure) Rules 2015 and/or the Court's inherent jurisdiction.
That the Defendant be granted leave to file and serve an Amended Defence within 14 days.
That the Defendant be granted an extension of time to comply with the discovery orders made on 19 July 2024 and 3 October 2024.
That the Plaintiff’s caveat (Caveat No. AT182276A) over the Defendant’s property at 22 Tacoma Street, Park Orchards (Volume 11083 Folio 242) be removed pursuant to s 90(3) of the Transfer of Land Act 1958.
That the Plaintiff, Victor Chang, whether by himself, his agents, or otherwise howsoever, be restrained under further order from:
(a)Dealing with or disposing of any assets of the estate of Xiuzhen Ding or the Chang Family Trust;
(b)Accessing, modifying, or using the Death Certificate of Xiuzhen Ding pending final determination of this proceeding;
(c)Transferring, encumbering, or dealing with the property located at 29 Howitt Street, South Yarra, without leave of the Court.
That the costs of this application be reserved.
A draft amended summons was provided to the Court (but not filed) on or about 20 May 2025 seeking to add her son, Jet Gu as a defendant to counterclaim in Victor’s proceeding.[3]
[3]There is some overlap between the issues in each of the three proceedings, namely, whether the ultimate source of wealth of the Chang family originated from the earnings and business activities of Victor, or from the earnings and business activities of Holly, and/or the proceeds of sale of valuable properties owned by Fuan Chang and his late wife in China.
On 2 June 2025 Holly issued a summons in Holly’s proceeding seeking the following relief:
1.That the orders made on 4 February 2025 be set aside pursuant to Rule 24.05 of the Supreme Court (General Civil Procedure) Rules 2015.
2.That the Plaintiff be granted leave to file an amended Defence and continue the proceeding.
3. That the enforcement of the orders made on 4 February 2025 be stayed.
4. Such further or other orders as the Court sees fit.[4]
[4]It seems from the affidavits and submissions filed in support of the set-aside application that Holly now seeks to join Jet Gu to Holly’s proceeding as a defendant, rather than as a defendant by counterclaim in Victor’s proceeding.
Given that the 4 February orders concerned both proceedings, and arose from orders with respect to discovery in both proceedings (‘discovery orders’), there is no reason to differentiate between the issues in the set-aside application in each proceeding, and these reasons apply to both proceedings. Further, these reasons only concern the application to set aside the 4 February orders, as the ancillary relief sought by Holly in her summonses and proposed amended summons only becomes relevant if the 4 February orders are set aside.
Relevant legal principles
The set-aside application seeks that the 4 February orders be set aside pursuant to r 24.05 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’). However, I shall proceed on the basis that the summonses seek relief pursuant to r 46.08 of the Rules. Rule 46.08(a) provides as follows:
The Court may set aside or vary an order which affects a person where the application for the order was made on notice to that person, but the person did not attend the hearing of the application.
The learned authors of ‘Civil Procedure Victoria’[5] made the following observations in their commentary upon the operation of r 46.08:
…the application to set aside should be determined according to the considerations that are relevant on an application under r 21.07 to set aside or vary a judgment regularly entered or given in default of appearance or defence. A material matter on an application under r 21.07 is the explanation of the defendant for not taking the step in question.[6]
[5]Neil J Williams, Civil Procedure Victoria.
[6]Ibid [I 46.08.5].
The learned authors refer to the following matters as being relevant to the exercise of the discretion to set aside a regularly obtained default judgment in an application under r 21.07 of the Rules:
(a) whether the defendant has a defence on the merits;
(b) the reason for the default of the defendant in consequence of which the judgment was obtained;
(c) whether the application to set aside the judgment was made promptly after the judgment came to the knowledge of the defendant; and
(d) whether if the judgment was set aside the plaintiff would be prejudiced in any respect which could not be adequately compensated for by a suitable award of costs and the giving of security.[7]
[7]Ibid [I 21.07.15].
In his submissions, counsel for Victor referred to the decision of the High Court in Allesch v Maunz,[8] which referred to two criteria said to be critical to determining whether a decision made in default of appearance of a party ought be set aside, namely:
that an explanation, reasonable to the circumstances, is provided for the party’s absence or other default; and
that the party in default has a material argument which, if heard and decided on its merits, might reasonably affect the determination of the rights and duties of the parties in a way different from that in the impugned order.[9]
[8](2000) 203 CLR 172.
[9]Ibid [48].
Justice Kirby explained further as follows:
If no reasonable explanation is given for the default, it is not an injustice to deny the party in default a second opportunity to be heard. That opportunity is taken to have been waived or forfeited. Nowadays, the consideration of the reasonableness of an explanation will take into account the legitimate interests of any other party affected by the court’s order (including any innocent third parties) as well as the general public. The interests at stake include a general respect for the finality of judicial orders and for the efficient management of judicial proceedings that is consistent with their fundamental objectives, including the attainment of justice.
Similarly, there will be no miscarriage of justice if the party affected by the impugned order cannot demonstrate an arguable case that reopening the matter might reasonably produce a materially different result which is more favourable to that party. If the process by which that order is made is flawed, but it is not shown that the outcome might reasonably be materially different, the party offended by the process may be upset by a sense of procedural injustice. However, upon analysis, that feeling will not find reflection in the ultimate disposition of the rights and duties of the parties with which the law is finally concerned. Correction concentrates on any supposed error in the ultimate judicial orders and not exclusively on the procedures leading to, or reasons given for, those orders.[10]
[10]Ibid [49]-[50].
One thing to note before turning to the evidence and submissions relied upon by the parties is that in the current application, evaluating whether there is an arguable case that the 4 February orders would not have been made had Holly appeared at the hearing of the 29 November application, does not, at least directly, call for an evaluation of the merits of the parties’ claims and defences in these proceedings, or for an evaluation or revisiting of the rationale for making the discovery orders. Rather, the issue is whether there is an arguable case that the outcome of the 29 November application would have been different had Holly appeared on 4 February 2025 to resist the 29 November application. The 29 November application sought final determination by reason of Holly’s failure to comply with the discovery orders. Assessing the merits of the 29 November application therefore requires some analysis of the disputes between the parties regarding discovery, and the circumstances in which the 29 November application was brought and the 4 February orders made.
Further, the 4 February orders were made pursuant to s 56(2)(j) of the Civil Procedure Act 2010 (Vic) (‘CPA’).
Section 56 of the CPA provides as follows:
Court may order sanctions
(1)A court may make any order or give any direction it considers appropriate if the court finds that there has been—
(a) a failure to comply with discovery obligations; or
(b)a failure to comply with any order or direction of the court in relation to discovery; or
(c)conduct intended to delay, frustrate or avoid discovery of discoverable documents.
(2)Without limiting subsection (1), a court may make an order or give directions—
(a) that proceedings for contempt of court be initiated;
(b)adjourning the civil proceeding, with costs of that adjournment to be borne by the person responsible for the need to adjourn the proceeding;
(c)in respect of costs in the civil proceeding, including indemnity cost orders against any party or a legal practitioner who is responsible for, or who aids and abets, any conduct referred to in subsection (1);
(d) preventing a party from taking any step in the civil proceeding;
(e) prohibiting or limiting the use of documents in evidence;
(f)in respect of facts taken as established for the purposes of the civil proceeding;
(g)awarding compensation for financial or other loss arising out of any conduct referred to in subsection (1);
(h)in respect of any adverse inference arising from any conduct referred to in subsection (1);
(i)compelling any person to give evidence in connection with any conduct referred to in subsection (1), including by way of affidavit;
(j)dismissing any part of the claim or defence of a party who is responsible for any conduct referred to in subsection (1);
(k)in relation to the referral to an appropriate disciplinary authority for disciplinary action to be taken against any legal practitioner who is responsible for, or who aids and abets, any conduct referred to in subsection (1).
In Ren v Sinicorp Pty Ltd,[11] Matthews AsJ provided a helpful overview of the operation of s 56 of the CPA:
[11][2021] VSC 728.
It is clear from the terms and structure of s 56 that the Court must find, as a threshold matter, that conduct meeting the description of ss 56(1)(a), (b) or (c) has occurred. Where such a finding is made, jurisdiction to make an order pursuant to s 56(2), including dismissal pursuant to s 56(2)(j), is established.
The applicant for orders under s 56(2) bears the onus of establishing that there has been conduct meeting the description of ss 56(1)(a), (b) or (c). I do not consider that it is necessary in every case to show that specific documents exist but have not been discovered, as this would impose a different or greater burden on an applicant than required by the terms of s 56(1). Further, and for obvious reasons, a requirement to show that specific documents exist may be unduly difficult or even impossible to meet.
Once conduct meeting the description of ss 56(1)(a), (b) or (c) is established, it falls to the Court to determine whether it is appropriate to make an order dismissing the party’s claims and defences, or some other order. While the circumstances in which the power may be exercised have not been exhaustively defined, the exercise of the discretion is not at large.
In Jia v Lee, Derham AsJ considered an application under r 24.02 of the Rules and s 56(2)(j) of the CPA to strike out a defence for failure to comply with orders for discovery. In the course of that decision his Honour cited with approval the approach taken by Vickery J in Hodgson v Amcor with respect to the factors guiding the Court’s discretion to dismiss or strike out pleadings for non-compliance with orders. In that case, after reviewing the authorities Vickery J said:
All matters relevant to the exercise of the power should be weighed. In different cases, the factors may assume greater or lesser significance. Such factors may include the following considerations, which are examples derived from the case law examined:
(a)the effect of the contravening conduct on the just resolution of the real issues in the proceeding in an efficient, timely and cost-effective manner;
(b)the extent of any delay caused by the contravening conduct and the prejudice associated with it, and whether the delay was inordinate and inexcusable;
(c)whether the history of non-compliance by a party is such as to indicate an unwillingness or inability to co-operate with the Court and the other party or parties in having the matter ready for trial within an acceptable period. In determining whether the defaulting party is either subjectively unwilling to cooperate or, for some reason, is unable to do so, the cumulative effect of the party’s defaults may be taken into account;
(d)whether the non-compliance is continuing and is continuing to occasion unnecessary delay, expense or other prejudice to the other party (that is, a significant continuing default which continues to impose an unacceptable burden on another party);
(e)the prejudice which might reasonably be assumed to follow for the other party arising from the contravening conduct, and that which is shown to have arisen;
(f)the extent to which the achievement of efficiency in the conduct of proceedings by other parties in other cases before the Court have been compromised;
(g)the veracity and reasonableness of any explanation given for the contravening conduct;
(h)whether the default was intentional or the product of contumelious conduct;
(i)whether any alternative remedy by way of a lesser, but equally efficient, sanction is available;
(j)whether the contravening conduct has rendered it impossible to conduct a fair trial, or would make any judgment in favour of the offending party unsafe, or which would render any further proceedings unsatisfactory and prevent the Court from doing justice, or there is a real risk of any of these things happening; and
(k)whether the object of the order which has been contravened is ultimately secured (eg. the late production of a document which has been withheld on discovery).
Given the gravity and effect of a striking out order, it should only be made in a clear case where the exercise of the discretion properly calls for this to occur and when the sanction ordered is the least that is necessary to achieve the ends of appropriate case management. Further, as observed in Lenijamar the power conferred on the Court must be “administered sensibly and with an appreciation both of the fact that some delays are unavoidable, and unpredictable … and of the likely serious consequences to [the party in default]”.
That a dismissal or striking out of a party’s case is a measure of ‘last resort’ is well established in the context of the Court’s inherent power to supervise, and take appropriate action in order to prevent injustice in the management of, a proceeding before it. This applies with equal force to the powers conferred on the Court by the CPA.[12]
[12]Ibid [97]-[101].
Further, in National Builders Group IP Holdings Pty Ltd v ACN 092 675 164 Pty Ltd (in liq),[13] the Court of Appeal considered whether a primary judge’s decision to strike out a defence was a disproportionate sanction for non-compliance with discovery. In dismissing the appeal, Maxwell P and Kaye JA stated as follows:
[13][2015] VSCA 260.
The legislature has seen fit to treat default in discovery as warranting its own separate provision, containing its own wide range of available sanctions. As the Attorney-General pointed out, the CPA prescribes in s 56(1) three different circumstances in which the default powers are exercisable, namely where there has been:
(i) a failure to comply with discovery obligations;
(j)a failure to comply with any order or direction in relation to discovery; or
(k)conduct intended to delay, frustrate or avoid discovery of discoverable documents.
Had the legislature intended to confine the strike-out power to circumstances involving conduct properly to be characterised as an abuse of process, provision to that effect could readily have been made. The position is, however, quite to the contrary. The language of s 56(2)(j) makes unambiguously clear that the power which it confers is available in respect of “any conduct referred to in subs (1)”. The only limitation on the exercise of the power is that it be exercised lawfully, that is, within the conventional limits governing the exercise of any judicial discretion.[14]
[14]Ibid [37]-[38].
Procedural history
The following chronology of events provides the context in which the discovery orders and the 4 February orders were made.
Date Event
15 April 2021 Writ and statement of claim filed in Victor’s proceeding.
31 March 2022 Period of the validity of the writ in Victor’s proceeding extended, orders made for substituted service upon Holly.
19 May 2022 Victor makes an application for judgment in default of appearance in Victor’s proceeding.
23 June 2022 Judgment granted by Irving AsJ in Victor’s proceeding (‘default judgment’).
12 July 2022 Warrant of execution issued by Victor.
23 November 2022 An application for leave to appeal against the default judgment was dismissed by the Court of Appeal on the basis that the proper course of action was for Holly to apply to set aside the default judgment under r 21.07 of the Rules.
22 October 2022 Writ and statement of claim filed in Holly’s proceeding.
15 December 2022 Default judgment set aside by Irving AsJ. Orders made that Holly pay Victor’s costs on an indemnity basis.
21 March 2023 Orders made by Matthews AsJ that Victor’s proceeding and Holly’s proceeding be managed together, and that the parties make discovery pursuant to r 29.01 of the Rules by 9 June 2023.
4 April 2023 Orders made by consent that discovery be completed by 8 September 2023.
19 March 2024 Orders made fixing Victor’s proceeding and Holly’s proceeding for trial to commence on 20 August 2024.
17 June 2024 Victor filed a summons seeking particular discovery from Holly.
19 July 2024 Particular discovery order made, granting most, but not all of the relief sought by Victor in the summons filed on 17 June 2024, requiring Holly provide discovery by 15 August 2024, and providing that Holly pay 75 percent of Victor’s costs of the discovery application.
25 September 2024 Proceedings listed for mention at the request of Victor on the basis that Holly had failed to comply with the particular discovery order.
3 October 2024 Directions hearing held. Further discovery order made extending the time for Holly to provide discovery to 1 November 2024, and to facilitate compliance with the particular discovery order. An informal application by Holly to vacate the particular discovery order on the grounds of lack of relevance was refused. Victor’s costs of and incidental to the hearing that day were reserved for determination at the directions hearing listed for 12 November 2024.
18 October 2024 Judicial mediation before Gobbo AsJ.[15]
28 October 2024 Holly filed and served affidavits of documents in purported compliance with the particular discovery order and the further discovery order.
12 November 2024 Directions hearing held. No appearance by Holly. Other family members in attendance. Directions made for the issue and timetabling of the 29 November application, and orders made that Holly pay Victor’s costs of the hearing on 3 October 2024, fixed at $22,168.08.
4 February 2025 Hearing of 29 November application. No appearance by Holly. Other family members in attendance. 4 February orders made.
13 May 2025 Letter of demand sent by Victor’s former solicitors to Holly demanding payment of the judgment debt arising from the 4 February orders within 7 days.
20 May 2025 Summons filed in Victor’s proceeding to set aside 4 February orders.
2 June 2025 Summons filed in Holly’s proceeding to set aside 4 February orders.
11 June 2025 Hearing of set-aside application.
[15]I understand that on this day, the mediation was adjourned to enable further discussions to take place. The mediation concluded on 6 December 2024.
The material before the Court
Both parties filed affidavits and written submissions prior to and after the hearing of the set-aside application on 11 June 2025. In the interests of expedition, I will only summarise the material before the Court briefly.[16] Further, in addition to the material filed in support of the current application, I have also had regard to the evidence and submissions filed on behalf of Victor in support of the 29 November application, namely, the affidavits of Julian Gillard affirmed on 29 November 2024 and 3 February 2025, and the submissions filed on 20 December 2024.
[16]At the hearing of the set-aside application, Holly requested that I rule upon the set-aside application before a hearing listed for 19 June 2025 before a Judicial Registrar to consider Victor’s application that Holly be orally examined in aid of enforcement of a costs judgment. For a range of reasons, not the least of which being that the Fuan Chang proceeding is listed for trial to commence on 2 September 2025, I agree that the set-aside application should be dealt with promptly.
In her affidavit sworn on 16 May 2025 in Victor’s proceeding, Holly largely deposed as to matters concerning the merits of her defence in Victor’s proceeding, and matters relevant to her proposed counterclaim against her son, Jet Gu, who she said breached his fiduciary duties to her when he held her power of attorney in 2015. She deposed that she received the sum of $894,933.20 from the sale of the Elwood property, denied that the payment was made to her under duress, and said that this payment represented only part of her entitlement to the proceeds of sale of the Elwood property. She exhibited a number of documents said to support her defence in Victor’s proceeding and her proposed counterclaim.[17]
[17]These documents are referred to in more detail later in these reasons.
In her affidavit sworn on 20 May 2025 in Victor’s proceeding, Holly:
(a) deposed that the Howitt Street property was held on trust for her and other members of the Chang family;
(b) raised concerns regarding the inaccuracy of the death certificate of her late mother, and the possible misuse of the inaccurate death certificate; and
(c) sought wide ranging relief from the Court in relation to the death certificate, and sought documents relating to Victor and Jet Gu’s dealings with the properties of the Chang family trust and her late mother’s estate.
On 22 May 2025, Holly filed submissions in support of her summons and amended summons in Victor’s proceeding, which are reproduced below:
Background
1.The judgment dated 4 February 2025 was entered in the Defendant’s absence. The Defendant submits that her non-attendance and non-compliance were not deliberate or contumelious, but rather the result of her exclusion from key trust documents and a 2016 injunction that severely restricted access to materials necessary for compliance.
2.The Defendant has since re-engaged with the proceeding and taken steps to regularise her position, including the filing of affidavits sworn on 16 May 2025 and 20 May 2025, supported by exhibits HC-1 to HC-11.
Merits of the Application
3.The proposed Amended Defence and Counterclaim raises serious and triable issues, including a dispute over the Defendant’s 50% legal and beneficial interest in the jointly owned property at 31 Ormond Esplanade, Elwood, sold in 2015 for approximately $6 million.
4.The Defendant alleges that the sale proceeds were misappropriated by the Plaintiff and her attorney, Zi Chen (Jet) Gu, constituting a breach of fiduciary duty, misuse of Power of Attorney, and diversion of trust and estate assets.
5.The proposed joinder of Mr Gu as Second Defendant by Counterclaim is necessary for the complete and just resolution of the issues. His actions are central to the alleged misconduct and his inclusion will avoid duplicative proceedings.
Delay and Discovery
6.The Defendant acknowledges earlier non-compliance with discovery obligations. However, the delay arose due to the Plaintiff’s exclusive control over relevant trust and financial records and the constraints of the injunctions obtained in 2016 and 2018.
7.The Defendant is now in a position to comply and is committed to engaging in the proceeding in good faith.
Injunctive Relief
8.The injunctive relief sought is necessary to preserve the status quo pending final resolution. The Plaintiff has dealt with assets of the Chang Family Trust and the estate of Xiuzhen Ding unilaterally, including the lodging of a caveat over the Defendant's home at 22 Tacoma Street, Park Orchards.
9.Without interim orders, there is a risk of further dissipation or misuse of trust and estate assets before trial.
Conclusion
10.This proceeding concerns serious allegations involving family trust property, fiduciary duties, and misuse of powers of attorney. The Defendant seeks leave to properly defend the claim and pursue related counterclaims, ensuring that all necessary parties are before the Court.
11.The interests of justice strongly favour the grant of the relief sought, enabling the Defendant to be heard and the matters in dispute to be properly determined.
On 30 May 2025, Victor affirmed an affidavit in opposition to the set-aside application in Victor’s proceeding, in which he deposed, in summary, as follows:
(a) he exhibited records showing the payment of $894,933.20 from the proceeds of sale of the Elwood property held in his former solicitor’s trust account to Holly on 10 June 2015;
(b) Holly did not communicate with either his former solicitors or the Court for over 100 days after the making of the 4 February orders;
(c) on 13 May 2025, his former solicitors made a final demand for payment pursuant to the 4 February orders. The set-aside application was made on around 16 May 2025, and seeks other relief, which Victor considers to be premature;
(d) Holly has refused to allow inspection of the Howitt Street property or pay outstanding costs orders in the Fuan Chang proceeding;
(e) he has incurred $209,597.44 in legal costs in Victor’s proceeding;
(f) Holly has failed to pay any amount towards any of the costs orders made against her in these proceedings;
(g) on 7 May 2025, Holly sold the motor vehicle which was the subject of the 4 February orders for less than market value; and
(h) he deposed as follows:
Because of Holly’s actions, I am genuinely worried that if the judgment is set aside, she will keep getting rid of assets or ignoring court orders, making it very hard or impossible for me to recover what the Court has already ordered.
This enforcement prejudice, together with my financial and non-financial losses, should weigh strongly against setting aside the judgment.
On the following day, on 31 May 2025, Victor filed a further affidavit in Victor’s proceeding exhibiting a bankruptcy notice he had issued on 29 May 2025 based upon the costs order made in these proceedings on 12 November 2024.
Victor also filed a written outline of submissions in Victor’s proceeding on 30 May 2025. Victor submitted, in summary, as follows:
(a) Holly’s defence was struck out in the 4 February orders ‘due to her persistent and contumelious failure to comply with the Court’s orders concerning discovery’;
(b) despite the presence of Holly’s family members in Court on 4 February 2025, the set aside application was not made for many months, shortly after a final demand was made by Victor with respect to the judgment debt arising from the 4 February orders;
(c) he referred to the test set out in Allesch v Maunz[18] (see paragraphs 29 and 30 of these reasons);
[18](2000) 203 CLR 172.
(d) the affidavit filed by Holly on 28 October 2024 (’28 October affidavit’) did not comply with the particular discovery order or the further discovery order;
(e) it is reasonable to draw an inference that Holly was aware of the hearing listed for 4 February 2025 but chose not to appear because she had no reasonable position to put before the Court;
(f) Holly’s affidavits do not disclose any explanation for her non-attendance on 4 February 2025 or any material in response to the 29 November application; and
(g) if the set-aside application is granted, Victor will suffer prejudice which cannot be remedied by an order for costs, given that numerous outstanding costs orders against Holly remain unpaid.
On 31 May 2025, in her written outline of submissions in Holly's proceeding, Holly submitted, in summary, as follows:
(a) she has faced substantial constraints in this proceeding, including an injunction granted in favour of Victor in 2016 (‘2016 injunction’),[19] which has restricted her access to key documents, lack of legal representation and financial capacity, and constraints imposed by an intervention order granted in April 2022;
[19]In 2016, this Court granted an interim injunction in favour of Victor restraining Holly from using or disclosing documents accessible from Victor’s iPad.
(b) she has bona fide claims raising serious allegations, which should be resolved at a hearing, not summarily; and
(c) she submitted as follows:
I was not afforded the opportunity to be heard prior to judgment being entered;
My absence and non-compliance were due to genuine and documented circumstances beyond my control;
The issues in dispute are substantial and complex, and their determination should not be precluded by a procedural default;
The Defendant will not suffer prejudice if the matter is reopened; and
It is in the interests of justice that these interrelated proceedings be resolved consistently and fairly.
On 31 May 2025, Holly filed a further affidavit in Holly’s proceeding which sought a stay of all enforcement orders pending the determination of the set-aside application. Also on that day, she filed an affidavit in support of a summons for leave to amend her statement of claim in Holly’s proceeding.
On 2 June 2025, Holly filed a further affidavit in Holly’s proceeding (dated 16 May 2025) which referred to Jet Gu as the second defendant to Holly’s proceeding. This affidavit went into some detail about her claims against Victor and Jet Gu in relation to the Elwood property, the management of the properties and affairs of the Chang family trust, and their alleged breaches of fiduciary duty. In this affidavit, Holly deposed as to having received $894,933.20 from the proceeds of sale of the Elwood property by agreement with Victor.
On 2 June 2025, Holly filed submissions in Holly’s proceeding in response to the 29 November application. Holly submitted that the 29 November application was ‘premature, misconceived and inconsistent with the procedural history of the matter’. She submitted that the 29 November application was issued while the parties were still engaged in the mediation process, contrary to the Court’s directive that negotiations were to continue until 6 December 2024.
Holly submitted as follows:
The Plaintiff opposes the application on the following grounds:
(a)Prematurity: The matter has not progressed to a stage where it is appropriate for final issues to be determined summarily. Discovery remains incomplete and there are substantial factual disputes that require resolution at trial.
(b)Existence of Triable Issues: The proceeding raises serious allegations including breach of trust, misuse of fiduciary powers, and the unauthorised transfer of trust assets. These issues are factually and legally complex and require determination at trial.
(c)Procedural Fairness: The Defendant seeks to preclude adjudication on the merits of the Plaintiff’s claims. To dismiss the proceeding at this stage would amount to a denial of procedural fairness, particularly in a matter involving allegations of equitable fraud.
(d)Costs: The Defendant’s request for indemnity costs is not justified. The Plaintiff has participated in mediation in good faith and has continued to engage with the proceedings despite financial hardship and without legal representation.
Holly filed a further affidavit on 2 June 2025, in which she deposed, in summary, as follows:
(a) she denies having avoided service or having failed to comply with her legal obligations in this and other proceedings;
(b) Victor’s filing of a bankruptcy notice appears intended to pre-empt the determination of the set-aside application, and the Court should stay all enforcement steps pending the determination of the set-aside application;
(c) she became aware of the 4 February orders in late April 2025, following which she made the set-aside application promptly;
(d) she denied receiving $894,933.20 from the sale of the Elwood property;[20]
[20]No formal application has been made by Holly to withdraw the admission in paragraph 16 of her defence, but at the hearing of the set-aside application she said that any funds paid to her must have been paid to her by an unknown third party for a different purpose.
(e) the set-aside application was not brought in response to enforcement action. The letter of demand was the first communication she had received about the 4 February orders;
(f) matters relating to her conduct in the Fuan Chang proceeding are not relevant to the set-aside application; and
(g) the sale of the motor vehicle was not intended to frustrate enforcement or conceal assets. Rather, she is experiencing genuine financial hardship. In 2015 she purchased a parcel of land in Park Orchards (‘Park Orchards property’), intending to build a home upon it, but Victor failed to pay her $3 million share of the proceeds of sale from the Elwood property, and has placed a caveat on the title of the Park Orchards property.
Holly filed a further affidavit in Victor’s proceeding on 2 June 2025, in which she deposed, in summary, as follows:
(a) she filed the 28 October affidavit in compliance with the further discovery order;
(b) while she acknowledges that Victor has asserted that her discovery was deficient, she has:
acted in good faith and provided documents to the best of my ability and recollection, despite lacking legal representation and having limited access to records.
(c) she has been unable to obtain documents by reason of her removal as a director of the trustee of the Chang family trust; and
(d) she deposed as follows:
I respectfully submit that any deficiencies in my discovery could have been addressed through appropriate procedures, such as a request for clarification or an application for further directions. At no time prior to the Plaintiff’s strike-out application was I served with any notice or motion compelling me to provide further discovery or to remedy alleged deficiencies.
Prior Participation and Conduct
I have actively participated in this proceeding prior to the events of February 2025. I filed affidavits, attended directions hearings, and made all reasonable efforts to comply with orders of the Court.
I did not attend the hearing on 4 February 2025 because my father’s solicitor had ceased to act for him shortly beforehand, and my father, who cannot speak English, was unable to represent himself. I was also attempting to obtain legal aid without success. After participating in two unsuccessful mediations, I felt overwhelmed, distressed, and uncertain about how to proceed. I was unaware that my defence would be struck out and only became aware of the orders in late April 2025 after being contacted by the Plaintiff’s solicitors.
I filed my set-aside application promptly on 16 May 2025, supported by affidavits sworn on 16 May, 20 May, and 1 June 2025.
I deny any assertion that I was deliberately avoiding the Court or ignoring my obligations.
Financial Position and Cost Orders
I am currently experiencing significant financial hardship and have been unable to pay certain costs orders made in this proceeding. I do not seek to avoid liability, but respectfully submit that my financial means are limited. My only asset is [the Park Orchards property], over which the Plaintiff, Victor Chang, lodged a caveat in or about 2020, thereby further restricting my ability to deal with the property.
I have not received legal aid and continue to represent myself due to financial constraints.
I have not been contacted by the Plaintiff to resolve cost issues by negotiation. I remain open to addressing costs fairly, should the Court permit this proceeding to continue on the merits.
Also on 2 June 2025, Holly filed further written submissions in Victor’s proceeding, which largely repeated the matters set out in her earlier affidavits and submissions, save that she denied that she had failed to comply with her discovery obligations. She submitted that at no time did Victor file a notice to produce or make a further application to compel discovery. She submitted as follows:
The Defendant did not attend the hearing on 4 February 2025 due to genuine hardship and confusion arising from a lack of legal representation and language barriers affecting her co-defendant (her father).
The Defendant was not notified in advance that her defence would be struck out. No application was served on her, and she only became aware of the orders in late April 2025.
The Defendant filed her application to set aside the orders on 20 May 2025 and has since supported it with three affidavits (sworn 16 May, 20 May, and 1 June 2025).
This application was made promptly, with detailed reasons, and supported by evidence. The principles in Gillespie v Swift Australia Pty Ltd [2009] VSC 560[21] apply in favour of setting aside the judgment.
[21]This decision does not exist. There is a decision of the Queensland Court of Appeal with respect to the named parties, being [2009] QCA 316, but this decision concerns an application for an extension of a limitation period. The decision with the citation [2009] VSC 560 is not relevant.
On 3 June 2025, Holly filed a further affidavit in Victor’s proceeding regarding her removal as a director of the trustee of the Chang family trust (‘trustee’) in April 2014 and her lack of access to the books and records of the trustee and the Chang family trust since that time.
On 4 June 2025, Holly filed a further affidavit in Holly’s proceeding. In this affidavit, Holly referred to a warrant of seizure and sale dated 19 September 2022, which she said should be stayed pending the determination of the set-aside application, along with enforcement action taken by Victor with respect to the 4 February orders. She also sought the removal of Victor’s caveat over the Park Orchards property.
On 6 June 2025, Holly filed a further outline of submissions in Holly’s proceeding in support of her application to file and serve a further amended statement of claim and to join Jet Gu as a defendant to Holly’s proceeding, along with an affidavit in support of her claims against Jet Gu as a second defendant to Holly’s proceeding.
On 6 June 2025, Holly filed a further affidavit in Victor’s proceeding in support of her application to join Jet Gu as a defendant to counterclaim in Victor’s proceeding, and in support of her proposed counterclaim.
On 6 June 2025, Holly filed a further outline of submissions in Victor’s proceeding, where she said that she did not appear at the hearing on 4 February 2025 owing to ongoing family violence proceedings and the operation of active intervention orders, difficulties in obtaining legal representation and accessing discovered documents, and Victor’s ‘failure to make full financial disclosure relating to trust property and fiduciary obligations’. She submitted that her earlier non-compliance was not intentional or negligent and that she has now complied with her discovery obligations. Further, Victor will not suffer irremediable prejudice if the set-aside application is granted, and she seeks the opportunity to be heard and to present a full defence on the merits.
At the hearing of the set-aside application on 11 June 2025, Holly read from two prepared scripts, one concerning the set-aside application, and another concerning the application to file an amended statement of claim and join Jet Gu as a defendant to Holly’s proceeding. The script in relation to the set-aside application is reproduced below:
I, Holly Chang, appear today as the Defendant in this proceeding. I make this application in support of my Summons dated 21 May 2025, seeking:
-An order setting aside the default judgment entered on 4 February 2025 pursuant to Rule 24.05 of the Supreme Court (General Civil Procedure) Rules 2015;
- An extension of time to comply with discovery obligations; and
- Leave to re-engage in the proceeding and file an Amended Defence.
The default judgment was entered in my absence following alleged non-compliance with procedural orders. However, I respectfully submit that my non-appearance and delay were not intentional or negligent, but were caused by:
-Ongoing family violence proceedings, including active Intervention Orders;
-Difficulties obtaining legal representation and accessing key documents, some of which remain affected by the 2016 injunction;
-The Plaintiff’s failure to make full financial disclosure regarding trust property.
I wish to bring to the Court’s attention that on 12 April 2022, I was granted a Final Family Violence Intervention Order against the Plaintiff, Victor Chang, in Magistrates’ Court proceeding G13459025.
Despite that IVO being in effect, on 4 May 2022 — less than a month later — Victor Chang and my son, Jet Gu, caused my elderly father and me to be dispossessed from our residence at [address], without notice or consent. We had been residing at that property under the protection of the IVO.
This act of dispossession is relevant not only to the broader context of this dispute, but also to my difficulties in engaging with these proceedings and complying with discovery obligations. It also underpins the trust-related claims in this proceeding and related matters.
I have now complied with my discovery obligations and have filed affidavit evidence, including Exhibits HC-1 to HC-11. I have a defence on the merits, including that I hold a 50% beneficial interest in 31 Ormond Esplanade, and that the sale and distribution of proceeds involved misuse of Power of Attorney by Jet Gu and breach of trust by the Plaintiff.
I respectfully submit that it is in the interests of justice that the default judgment be set aside, and that I be granted leave to defend the proceeding and pursue proper equitable relief.
In addition to reading the script reproduced above, at the hearing on 11 June 2025 Holly submitted, in summary, as follows:
(a) her non-compliance with a procedural order was not intentional or negligent, and her ability to access documents has been impeded by ongoing family violence orders and the 2016 injunction;
(b) by reason of the documents exhibited to the affidavits in support of the set-aside application, she has now complied with her discovery obligations; and
(c) given the nature of her claims and defences in these proceedings, it is in the interests of justice that the 4 February orders be set aside.
During the course of the hearing on 11 June 2025, I had the following exchange with Holly:
HER HONOUR: As I understand it, the – Victor’s position is that the Ormand Esplanade property was beneficially owned by him. That’s a matter in dispute. But what actually happened on the sale was that the proceeds of sale were collected by the solicitors. There was a mortgage which was paid off which left approximately one point seven something million dollars, and that half of that was provided to you, the $894,000. Now, in your original defence you admitted receiving those funds, but in your affidavits and submissions you say that you didn't receive those funds.
MS CHANG: Yes, Your Honour. Can I explain it? The house was six million sold by my son under power attorney. I was initially - I thought my receive 895,000 was from the sales. After the expert's expel - exam my evidence, they say it’ s not related. It’s not from the lawyer form to transport to my account from a third party. So that’s why I request this is not related, 895,000. Totally not related for the sale. It’s after one more - one month later we sold, and all the money distribute – [transferred] to my brother. Is a month later, my brother ask someone else, third party - maybe Mr Wong. So gave me 895,000.
HER HONOUR: Okay.
MS CHANG: Yeah.
HER HONOUR: But - - -
MS CHANG: It’s not related at all.
HER HONOUR: I see.
MS CHANG: Yeah.
HER HONOUR: Okay. So you don’t say that you didn’t receive [894,000]; it’s just you say that it was - that was not part of the proceeds of sale or Ormand Esplanade.
MS CHANG: Yeah. So the [plaintiff] have [to] explain what’s money for, and well [transfer] to my account. He got it explain this part because I have no idea.[22]
[22]Transcript of hearing (11 June 2025) T5 L24-T6 L26.
Holly concluded her oral submissions by saying, in response to my direct request, that she would comply with the particular discovery order and the further discovery order.
In response, counsel for Victor referred to the relevant legal principles governing the set-aside application, and noted that it was clear that Holly was aware of the hearings on 12 November 2024 and 4 February 2025, but had provided only a cursory explanation as to why she did not attend. She has not put forward anything which would provide the Court with any confidence or comfort that she will comply with the discovery orders going forward. It was open to Holly to prepare an affidavit of documents, but instead she has chosen to relitigate the discovery issue.
In reply, Holly says that in the three years that these proceedings have been on foot, she has not had an opportunity to present her claims. She said that she has also been impeded by stress and illness. She said that she only learned about the 29 November application recently, and she would have attended the hearing on 4 February 2025 if she had known about it.
Holly rejected the contention that she had failed to provide an explanation for her non-compliance and non-attendance, referring to the intervention orders, ongoing family violence issues, difficulties in obtaining legal representation, the 2016 injunction and the failure of Victor to provide full disclosure as impeding her participation in this proceeding.
By way of rejoinder, counsel for Victor queried why Holly is adopting a new position with respect to the $894,000 paid to her in June 2015, suggesting that she may be submitting that she is not required to produce documents relevant to Victor’s tracing claim. Counsel submitted that there is no evidence concerning any stress or sickness, and Holly’s assertion that she did not understand what was being sought by the 29 November application was not credible, given that she is an experienced litigant.
On 12 June 2025, following the hearing of the set-aside application, Holly sent to the Court a further affidavit and further written submissions in Victor’s proceeding for the purpose of addressing what were said to have been misrepresentations and omissions in Victor’s statement of claim.
On 13 June 2025, without leave, Holly sent to the Court a further affidavit in Victor’s proceeding regarding the source of funds and beneficial ownership arrangements with respect to the Elwood property, and exhibited documents which she said supported her assertion that she was the principal contributor to and beneficiary of the Elwood property.
On 15 June 2025, Holly sent to the Court a further affidavit and further written submissions in Victor’s proceeding, again without leave. The further affidavit referred to Victor having never filed any affidavit in support of his allegations in the statement of claim. She denied the allegations in the statement of claim, including the allegations that she had purchased her motor vehicle with Victor’s funds. She referred to the orders made by Irving AsJ on 15 December 2022 setting aside the default judgment and associated warrant as demonstrating that ‘the Court previously accepted that I had not been properly served and that I should be given a fair opportunity to defend the proceeding’.
Also on 15 June 2025, Holly filed further submissions in Holly’s proceeding in support of her application for leave to amend her statement of claim and for joinder of Jet Gu.
Given that I had received and reviewed the further affidavits and submissions provided by Holly to the Court after the hearing of the set-aside applications,[23] I provided Victor with the opportunity to file further submissions, which he did, on 17 June 2025. Victor largely relied upon the transcript of the hearing on 11 June 2025 to support the following submissions:
[23]On 16 June 2025 my associate informed the parties that no further material would be accepted from the parties, save for a response by Victor to the additional materials filed by Holly.
(a) Holly understood the risk of dismissal at the hearing on 4 February 2025, but made a conscious and deliberate decision not to attend the hearing;
(b) Holly is not a naïve or inexperienced litigant, and is aware that the Court treats non-attendance seriously;
(c) Holly expected that those proceedings would not be dismissed by reason of her non-attendance and non-compliance because they were connected with the Fuan Chang proceeding;
(d) Holly now asserts that she has complied with her discovery obligations by reason of the affidavits and documents she has filed in support of the set-aside application, notwithstanding her earlier statements that she will comply with her discovery obligations;
(e) given the above, the Court can infer that if the set-aside application is granted and orders are made with respect to discovery, Holly will then contend that she has complied with her discovery obligations; and
(f) Victor submitted as follows:
Holly’s approach is designed to secure the setting aside of the [4 February] orders while avoiding any genuine engagement with the discovery process or production of further documents.
Consideration
As observed in the authorities (see paragraphs 34 to 35 of these reasons), to dismiss a party’s claim or defence in a proceeding for failure to comply with their discovery obligations is a grave matter, and is a measure of last resort. Accordingly, it is necessary to look at the context in which the 29 November application was brought, and in which the 4 February orders were made.
It is evident from the reasons provided with the discovery orders and the 4 February orders and the extensive affidavits on the Court files prepared by Victor’s former solicitors, that the discovery process in these proceedings has been fraught, protracted, and, for Victor at least, costly. It remains my firm view that most, if not all, of the responsibility for these difficulties lies with Holly, who has resisted making discovery of relevant and forensically significant, although perhaps not critical documents since March 2024.[24] While the particular discovery order did not require Holly to produce all of the documents sought by Victor in his discovery application at the hearing on 19 July 2024, Holly’s submissions to the effect that the documents sought by Victor were irrelevant to the issues in the proceeding were largely rejected. Notwithstanding this, Holly continued to maintain at the directions hearing on 3 October 2024 that she should not be required to comply with the particular discovery order because the documents referred to in the schedule to that order were irrelevant, or could not be found. The hearing on 3 October 2024 was the last occasion upon which Holly attended Court until after she issued the set-aside application.
[24]See sixth affidavit of Julian Gillard affirmed on 14 June 2024 in Victor’s proceeding, paragraphs 20 ff.
The 28 October affidavit was filed by Holly in purported compliance with the particular discovery order and the further discovery order. However, despite the specificity of the categories of documents referred to in the particular discovery order, and the detailed instructions provided in the further discovery order, the 28 October affidavit did not comply with the discovery orders. Rather, in the 28 October affidavit, Holly:
(a) referred to the particular discovery order, and said that on 19 August 2024 she had filed an affidavit explaining why some of the documents referred to in the particular discovery order did not exist or could not be found;
(b) set out a list of 17 Australian properties and 14 Australian businesses (or types of businesses) which were largely not the subject of the particular discovery order;
(c) deposed as to her communications with the Australian Taxation Office (‘ATO’), which did not address the requirements of the particular discovery order or the further discovery order, but addressed other matters;
(d) deposed as to the issues in these proceedings;
(e) exhibited an email from Victor’s accountant to Victor dated 7 May 2015 which referred to a purported loan of $550,000 from Holly’s parents to her for the purchase of the Park Orchards property;
(f) said that the preceding paragraphs of the affidavit addressed the further discovery order; and
(g) said further that she could not produce documents relevant to the purchase and sale of two properties because these transactions were carried out by Peter Beyer (Holly’s brother-in-law), a director of Sirque International Holding Pty Ltd t/as Holly Chang Real Estate.
Exhibited to the 28 October affidavit was the original affidavit of documents sworn by Holly on 8 September 2023, her further affidavit of documents sworn on 19 August 2024 in response to the particular discovery order, and correspondence with the ATO. The affidavit of documents filed on 19 August 2024 did refer to a small number of documents concerning the businesses operated by Holly, and some transactional documents concerning the purchase of the Park Orchards property, but, critically, did not refer to any bank statements or other financial records showing the flow of funds for the purchase and sale or the discharge of mortgages with respect to any of the three properties referred to in the particular discovery order.
It was against this background that I came to consider the 29 November application. Before me at the hearing on 4 February 2025 were affidavits sworn by Victor’s former solicitor, Mr Julian Gillard, on 29 November 2024 and 3 February 2025, which, among other things, comprehensively enumerated the delays and defaults of Holly in her conduct of these proceedings with respect to, among other things, discovery. No evidence was filed by Holly in opposition to the 29 November application, despite Holly being on notice of the 29 November application,[25] and despite having been served with all of the evidence, submissions, timetabling orders, and hearing notices.
[25]On 6 December 2024, Holly emailed the chambers of Gobbo AsJ, copying in my chambers, attaching the 29 November application, including the ninth affidavit of Julian Gillard.
It was in that context, and in the context of Holly’s failure to appear at the hearing of the 29 November application, that I made the 4 February orders. In ‘Other Matters’ I said, relevantly, as follows (in relation to Victor’s proceeding):
In particular, judgment should be entered in favour of the plaintiff for the following reasons:
(a) the original discovery order was made nearly two years ago;
(b)as stated in my reasons for making an order for costs in favour of the plaintiff on 12 November 2024, the defendant’s failure to make proper discovery has been wilful and repeated;
(c)the discovery orders were detailed, precise, and provided a comprehensive explanation of what was required to be done to comply with the discovery orders;
(d)I agree that the defendant's failure to disclose documents relevant to the plaintiff’s tracing claim has caused significant prejudice to the plaintiff. Further, the defendant’s assertion that there are no documents available to support her contentions with respect to the source of the Chang family’s wealth casts doubt upon the merits of the defendant’s defence in this proceeding, as well as the merits of her claim in the related proceeding; and
(e)the defendant's failure to comply with the discovery orders, her attempts to relitigate the discovery orders, and her failure to engage with the dismissal application support a conclusion that the defendant does not intend to comply with the discovery orders.
I have no doubt that it was appropriate to make the 4 February orders in the context and the circumstances in which they were made. As set out in paragraph 72 of these reasons, Holly failed to comply with the discovery orders, and thus the jurisdiction to make orders under s 56(2) of the CPA was enlivened. Given that Holly had failed to attend Court, without explanation, and had failed to engage with the particular discovery order or the further discovery order, it seemed to me that imposing a lesser sanction, such as a self-executing order, would only have delayed the inevitable.
However, the question in the current application is whether, given that Holly has elected to re-engage with these proceedings and has said that she will comply with her discovery obligations,[26] the 4 February orders should be set aside. In order to do so, she must provide a reasonable explanation for her past defaults and her non-appearance on 4 February 2025, and persuade me that, had she adduced evidence and made submissions at the hearing on 4 February 2025, there is a real prospect that there would have been a materially different result: that is, a lesser sanction may have been imposed, or even no sanction at all.
[26]However, as observed by Victor in his submissions on 17 June 2025, it seems that Holly’s current position is that, by reason of the documents she has filed in the set-aside application, she has now complied with her discovery obligations.
In my view, Holly has not provided a reasonable explanation for her failure to attend the hearing on 4 February 2025. First, I do not accept that she did not receive notice of the 29 November application, the documents filed by Victor in support of the 29 November application, or the 4 February orders. The evidence and the Court’s records show that all of these documents were sent to the email address habitually used by Holly, and she has given no evidence to the effect that she could not access or did not access her email account during this period.
Secondly, I do not accept the proposition that Holly did not understand the relief sought by the 29 November application or the meaning and consequences of the 4 February orders. While Holly is self-represented, she is an experienced litigant, having been a party to at least four proceedings in this Court over the past 10 years. While English is not her first language, she has lived and worked in Australia for nearly 30 years, and by her own account has owned and operated a number of successful businesses. Holly is clearly intelligent and astute, and her written material and submissions in Court show that she understands the issues she needs to address in the set-aside application.
Thirdly, Holly submitted that she did not attend the hearing on 4 February 2025, or engage with the proceedings generally, because she was stressed and overwhelmed by the proceedings, and specifically by her concerns about she and her father losing their home by reason of her father now being self-represented in the Fuan Chang proceeding. Further, at the hearing on 11 June 2025, Holly said that she was very ill as a consequence of the stress caused by these three proceedings.
I accept that being a participant in litigation, particularly litigation involving family members, can be stressful, and no doubt those stresses are compounded by being self-represented. However, no medical evidence has been filed to support any contention that Holly’s physical and/or psychological condition prevented her from attending Court or engaging with the proceedings for more than five months. No attempt was made to explain to the other party or the Court at the time as to why she was unable to attend Court, or to comply with the timetable set down for the hearing of the 29 November application.
Finally, as for the submission that the making of the 29 November application was inconsistent with the mediation process underway in late November/early December, the timetabling orders for the 29 November application were made at the hearing on 12 November 2024, which Holly did not attend, with no explanation whatsoever, given that her father was still represented by lawyers in the Fuan Chang proceeding. When making those orders, I was aware that the mediation process was still underway, and the timetabling orders were made on the basis that the mediation would be concluded before 29 November 2024. As it turns out, the mediation did not conclude prior to 29 November 2024, but neither party approached the Court to vary the timetable to take into account the fact that discussions were ongoing. It was not improper for Victor to bring the 29 November application on that day. Indeed, if he had not done so, and waited for the mediation process to conclude, the 29 November application may have been met with an argument that he had failed to comply with the Court’s orders of 12 November 2024.
In any event, the mediation concluded on or shortly after 6 December 2024, approximately two months prior to 4 February 2025. There was ample time for Holly to re-engage with the proceedings and the 29 November application, and she chose not to do so.
Given that I have found that Holly has not provided a reasonable explanation for failing to appear at the hearing on 4 February 2025, that is arguably the end of the matter. However, for completeness, in my view, if Holly had attended the hearing on 4 February 2025, and put forward substantially the same submissions and evidence that she has put forward in support of the set-aside application, I am not satisfied that there was a real prospect that the result may have been different. In particular, based upon the evidence before me in the set-aside application, no explanation (or no reasonable explanation) would have been provided for Holly’s failure to comply with the discovery orders, and no meaningful or reliable commitment would have been made by Holly to comply with the discovery orders had a further indulgence been granted in response to the 29 November application.
To explain further, if Holly had appeared on 4 February 2025, the following options would have been available to the Court:
(a) the 29 November application be granted, and the proceeding brought to an end;
(b) a self-executing order be made, requiring Holly to comply with the particular discovery order and the further discovery order by a certain time, with the proceedings to be dismissed if she failed to comply;
(c) an order granting an extension of time without imposing any conditions; or
(d) vacating the particular discovery order and the further discovery order.
Turning to the above options in reverse order, it is highly unlikely that I would have vacated the particular discovery order. The particular discovery order was made after full argument about the relevance of the categories of documents sought by Victor. The documents ordered to be discovered were relevant to Victor’s tracing claim in Victor’s proceeding, and to Holly’s claims in both proceedings to the effect that she made a substantial financial contribution to the purchase of the Elwood property and other Chang family assets. Victor’s application that Holly produce all of her banking records over a lengthy period of time was rejected as being too broad and intrusive.[27]
[27]In hindsight, if I was revisiting the matter now, I might take a different view.
As for the further discovery order, these orders were facilitative in nature, as they provided, in effect a more detailed explanation as to what Holly was required to do in order to comply with the particular discovery order.
Holly has not sought to set aside the particular discovery order or the further discovery order, or to appeal either of the discovery orders. She has, however, in her submission at the hearing on 11 June 2025, made an assertion contrary to the admission in her defence, being that funds she received in June 2015 were not paid to her from the proceeds of sale of the Elwood property, which, if correct would arguably render the documents relevant to Victor’s tracing claim irrelevant. However, while Holly has not applied for leave to withdraw this admission, I doubt that leave would be granted, because, based upon the available evidence, that proposition is nonsensical. The trust account statement exhibited to Victor’s affidavit of 30 May 2025 clearly shows that the proceeds of sale of the Elwood property were distributed as follows: the deposit of $499,924.88 was paid to the trustee, and the funds paid at settlement were paid in two equal shares to the trustee and Holly. I share Victor’s suspicion that Holly’s assertion that she received no funds from the sale of the Elwood property pursuant to an agreement with Victor (which he says was procured by duress) is directed at undermining the rationale for making the particular discovery order with respect to the documents relevant to Victor’s tracing claim.
Accordingly, I would not have vacated the particular discovery order or the further discovery order. I also consider that, given the delays and defaults in making discovery, it is highly unlikely that I would simply have extended time for compliance with the discovery orders without more, such as making a self-executing order, and/or possibly an order requiring Holly to pay Victor’s costs associated with enforcing compliance with the discovery orders.
Rather, the real choice before me at the hearing on 4 February 2025 had Holly attended the hearing and fully engaged with the 29 November application would have been between granting an extension of time with reasonably onerous conditions, or dismissing the proceeding pursuant to s 56(2)(j) of the CPA.
Having regard to the material before me on the set-aside application, and the principles governing applications under s 56(2) of the CPA (see paragraph 34 of these reasons), I do not consider that there was a reasonable prospect that I would have reached a different view than I did that day. In summary:
(a) Holly had failed to comply with the discovery orders;
(b) no plausible explanation had been provided for Holly’s failure to comply with the discovery orders either prior to the hearing on 4 February 2025, or during the course of the set-aside application;
(c) as at 4 February 2025, nearly two years had elapsed since the making of the original discovery order, and the particular discovery order was made more than six months earlier;
(d) the failure of Holly to comply with the discovery orders has impeded the progress of these proceedings to trial, and, given the connection between the issues in Holly’s proceeding in particular and the Fuan Chang proceeding, ran the risk of delaying the further conduct of the Fuan Chang proceeding;
(e) Holly’s delays and defaults over the past 12 months, along with her initial failure to file a notice of appearance in Victor’s proceeding, and her misguided appeal to the Court of Appeal, have consumed considerable Court resources;
(f) it is clear from Holly’s submissions in the set-aside application to the effect that she has complied with her discovery obligations, and the purported withdrawal of her admission in Victor’s proceeding regarding her receipt of funds from the proceeds of sale of the Elwood property, that she does not consider she is required to comply with the discovery orders, and does not intend to do so; and
(g) for that reason alone, making a self-executing order in response to the 29 November application would be ineffective in securing Holly’s compliance with the discovery orders, would be productive of further argument and costs, and would only postpone the inevitable.
I accept that granting the 29 November application was a harsh remedy, as is refusing to set aside the 4 February orders, and that the prejudice to Holly of not being able to pursue her claims in Holly’s proceeding, and being exposed to a substantial judgment in Victor’s proceeding is greater than the prejudice to Victor of not being able to obtain satisfactory discovery. However, the prejudice caused to Victor by Holly’s non-compliance with her discovery obligations is relevant to the outcome of the set-aside application. Victor has incurred considerable costs in pursuing proper discovery, which remain unpaid. These proceedings, which became active in late 2022, and concern events which took place a decade or more ago, are no closer to trial. While Holly would have been more forensically prejudiced than Victor by her inability and/or refusal to produce documents showing that she was a woman of considerable means who made substantial contributions to the Chang family wealth, the documents relevant to the tracing claim are important, given Holly’s recent statements that she is impecunious. Accordingly, while the prejudice to Victor occasioned by Holly’s conduct is not the primary reason for dismissing the set-aside application, it is a relevant matter to take into account, particularly in circumstances where I have no confidence, and as at 4 February 2025 would have had no confidence, that Holly would comply with her discovery obligations.
In particular, Holly’s explanation as to why she has failed to comply with her discovery obligations is telling. She says that she had been impeded from doing so by reason of the intervention orders in place, the 2016 injunction, her lack of access to the books and records of the Chang family trust, and Victor’s failure to provide full financial disclosure.
However, the particular discovery order was directed at documents which are, if they exist, either in Holly’s custody or control, or have been in the past, not documents which are or may have been in the custody of Victor. I can understand why it may be difficult to access business records from 20 years ago, but Holly could have deposed as to the efforts she has made and the results of those efforts. It is clear from her evidence that she has engaged with the ATO for purposes which suit her, but she has made no such effort to seek the documents described in the particular discovery order. She has completely failed to engage with the requirement that she discover documents relevant to Victor’s tracing claim. Her statement that she does not have custody or control over documents concerning two of the three properties purchased and sold by her in recent years because the transactions were conducted by Peter Beyer is, with respect disingenuous. Mr Beyer is her brother-in-law, and is also apparently a business associate. He has been in Court on a number of occasions over the past 12 months, and I believe he was present in the background at the hearing on 11 June 2025.
Equally concerning is Holly’s contention that, as a consequence of filing her affidavit on 20 May 2025 (but dated 16 May 2025) and its exhibits, she has now complied with her discovery obligations. The exhibits to this affidavit include the follows:
(a) a title search for the Elwood property;
(b) a power of attorney executed by Holly in favour of Jet Gu on 1 September 2014;
(c) a copy of the contract of sale for the Elwood property;
(d) a copy of a further power of attorney in favour of Jet Gu with respect to the sale of the Elwood property;
(e) email correspondence concerning the release of a share of the proceeds of sale of the Elwood property to her;
(f) documents concerning Holly’s purported resignation as a director of the trustee of the Chang family trust;
(g) a summons issued by Victor in this Court on 21 October 2016 which resulted in the grant of an interim injunction restraining Holly from disclosing information held on Victor’s iPad;[28]
[28]This injunction was also said by Holly to have impeded her ability to comply with her discovery obligations.
(h) the statement of claim in Victor’s proceeding;
(i) email correspondence between Holly, Victor and Victor’s accountant in April 2014 regarding the refinancing and purchase of properties in St Kilda and Toorak; and
(j) statements of financial position of Victor and the Chang family trust.
Some of the documents above may well be relevant to the issues in these proceedings. However, none of these documents remotely address the categories of documents in the particular discovery order. Accordingly, Holly’s contention that the provision of these documents amounts to compliance with her discovery obligations causes me great concern.
Accordingly, Holly has failed to provide a plausible and reasonable explanation for her failure to engage with the 29 November application and attend the hearing on 4 February 2025. Further, I am not satisfied that, had she done so, there was a real prospect that the outcome would have been any different. The set-aside application will be dismissed. If I had granted the set-aside application, I would have done so only by making a self-executing order with respect to the particular discovery order and the further discovery order, and also possibly on the condition that Holly pay the outstanding costs orders in Victor’s favour.