Fortune Holding Group Pty Ltd v Zhang (No 2)
[2017] VSC 738
•11 December 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMERCIAL COURT
S CI 2013 4855
| FORTUNE HOLDING GROUP PTY LTD (ACN 141 953 773) | First Plaintiff |
| FORTUNE HOLDING DEVELOPMENTS PTY LTD (ACN 142 122 852) | Second Plaintiff |
| FORTUNE HOMES PTY LTD (ACN 143 589 388) | Third Plaintiff |
| YI JUN QUAN | Fourth Plaintiff |
| v | |
| IAN YAN ZHANG | Defendant |
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JUDGE: | ZAMMIT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16 March 2017, 1-2 August 2017, 12 September 2017 |
DATE OF JUDGMENT: | 11 December 2017 |
CASE MAY BE CITED AS: | Fortune Holding Group Pty Ltd v Zhang (No 2) |
MEDIUM NEUTRAL CITATION: | [2017] VSC 738 |
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CONTEMPT OF COURT – Civil contempt – Breach of freezing order – Exceptions to order – Onus of proving exceptions – Whether expenses in ordinary and proper course of business – Application allowed – Witham v Holloway (1995) 193 CLR 525; ASIC v Sigalla (No 4) (2011) 80 NSWLR 113; CFMEU v Boral Resources (Vic) Pty Ltd (2015) 256 CLR 375 discussed – CC Containers Pty Ltd v Lee (No 8) [2015] VSC 478 distinguished – R (on the application of the Chief Examiner) v DA (a Pseudonym) [2016] VSCA 325 followed – Supreme Court (General Civil Procedure) Rules 2015 r 75.06.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiffs | Ms L Keily (16 March 2017) Ms S Hooper (1-2 August 2017, 12 September 2017) | HWL Ebsworth Lawyers |
| The Defendant appeared in person |
HER HONOUR:
The plaintiffs, by further amended summons filed 28 March 2017 and pursuant to r 75.06 of the Supreme Court (General Civil Procedure) Rules 2005 (‘the Rules’), seek orders that the defendant, Mr Ian Yan Zhang, be punished for contempt of court.
The plaintiffs allege the defendant, on 38 occasions between 26 September 2013 and 4 June 2014, breached the terms of his freezing order (‘the order’), which prohibited him disposing of, dealing with or diminishing the value of his assets up to an unencumbered value of $169,000, subject to four exceptions.[1] They contend that these breaches place the defendant prima facie in contempt of court.[2]
[1]A summons for contempt, containing three charges, was filed on 16 October 2014. An amended summons, containing 58 charges, was filed on 20 November 2014. A further amended summons, filed 28 March 2017, reduced the number of charges to 40. In the course of oral argument, however, the plaintiffs abandoned two of these charges: see [72] below.
[2]The plaintiffs rely upon Deputy Commissioner of Taxation v Gashi (No 2) (2011) 84 ATR 175, 180 [17] (Dixon J) (‘Gashi (No 2)’); CC Containers Pty Ltd v Lee (No 8) [2015] VSC 478 [79] (Ginnane J) (‘CC Containers (No 8)’).
By way of background I should state that the order relates to damages and costs arising out of a civil trial in which it was successfully contended by the plaintiffs that the defendant, who formerly was employed by the first plaintiff, misappropriated funds, breached his fiduciary duties and violated the terms of his employment. Justice Riordan delivered judgment on 24 May 2016 in favour of the plaintiffs, finding that they had proved their claims in the sum of $792,370.07, and ordered that the defendant pay the plaintiffs the sum of $792,370.07 (together with interest of $218,319.37) as well as the plaintiffs’ costs to be taxed.[3]
[3]Fortune Holding Group Pty Ltd v Zhang [2016] VSC 273 [48]-[49].
My findings in this proceeding are not based on any of the matters set out in the previous paragraph. They are based solely on the evidence that was before me at the hearing of the summons. I should add that, at trial and again before me, the defendant was self-represented.
For the reasons that follow, I consider that the defendant has breached the order and, as a consequence, is prima facie in contempt of court.
The terms of the order
The order was originally made by Macaulay J on 18 September 2013. Paragraph 6 stated:
a)You [i.e. the defendant] must not remove from Australia or in any way dispose of, deal with or diminish the value of any of your assets which are in Australia (‘Australian assets’) up to the unencumbered valued of AUD$169,000.00 (‘the relevant amount’).
b)If the unencumbered value of your Australian assets exceeds the relevant amount, you may remove any of those assets from Australia or dispose of or deal with them or diminish their value, so long as the total unencumbered value of your Australian assets still exceeds the relevant amount.
c)If the unencumbered value of your Australian assets is less than the relevant amount and you have assets outside Australia (‘ex-Australian assets’)—
a.you must not dispose of, deal with or diminish the value of your Australian assets and ex-Australian assets up to the unencumbered value of your Australian and ex-Australian assets of the relevant amount; and
b.you may dispose of, deal with or diminish the value of any of your ex-Australian assets, so long as the unencumbered value of your Australian assets and ex-Australian assets still exceeds the relevant amount.
The order prohibited (and continues to prohibit) the defendant from in any way disposing of, dealing with or diminishing the value of his assets up to the unencumbered value of $169,000.
The order that was served contained the required Penal Notice describing the possible consequences of breaching the order.
Paragraph 10 of the order set out four exceptions to the prohibition stipulated in paragraph 6. These allow the defendant to:
a)pay up to $500 a week on his ordinary living expenses;
b)pay $10,000 on his reasonable legal expenses;
c)deal with or dispose of his assets in the ordinary and proper course of his business, including paying business expenses, bona fide and properly incurred; and
d)in relation to the matters not falling into 10(a), (b) or (c), deal with or dispose of any assets in discharge of obligations bona fide and properly incurred under a contract entered into before the freezing order was made, provided that before doing so the defendant gave the plaintiffs, if possible, at least two working days’ written notice of the particulars of the obligation.
On 20 September 2013, at the return of the order, Macaulay J extended it until 27 September 2013. Relevantly, at this hearing, the defendant was represented by counsel.[4]
[4]Order dated 20 September 2013 notes attendance of B Murphy for the defendant.
On 27 September 2013, Cavanough J extended the order until 8 November 2013 and varied it so that the defendant could:
a)pay up to $1000 a week on his ordinary living expenses; and
b)pay $20,000 on his reasonable legal expenses.
At this hearing the defendant was once again represented by counsel.[5]
[5]Order dated 27 September 2013 notes attendance of A K Panna SC for the defendant.
On 8 November 2013, the order was extended by Garde J, this time until further order of the Court. The defendant was not legally represented at this hearing and did not appear in person.[6]
[6]There were other orders that varied the terms of the original order but nothing turns on them.
The present proceeding
The plaintiffs’ contempt application was initially listed for hearing before me on 16 March 2017 but was adjourned part heard to 24 July 2017.
The purpose of the adjournment was twofold: to allow the plaintiffs to file and serve an amended summons, with further and better particulars, clarifying the way in which the charges against the defendant were framed; and to give the defendant the opportunity to respond to that summons and marshal any evidence on which he might seek to rely in defending the charges.
The application resumed on 1 August 2017. It was adjourned on 2 August 2017, again part heard, to allow the defendant to make further investigations and organise for witnesses to attend Court to give evidence.
The application concluded on 12 September 2017.
In support of their application, the plaintiffs rely on the following five affidavits:
(i) Ms Wenjie Wu affirmed 16 October 2014;
(ii) Russell Munday sworn 24 October 2014;
(iii) Ms Wenjie Wu affirmed 27 March 2015;
(iv)Scott Lardi sworn 2 December 2015; and
(v) Benjamin Weintraub affirmed 1 August 2017.
In response, the defendant relies on five affidavits affirmed by himself, dated 15 October 2015, 1 August 2017, 28 August 2017, 30 August 2017 and 12 September 2017.
Civil and criminal contempt
The law of contempt aims to prevent interference with the administration of justice.[7]
[7]Alridge, Eady & Smith on Contempt (5th ed., Sweet & Maxwell, 2017) 74–5.
The common law for hundreds of years distinguished between civil and criminal contempt.[8] This distinction was preserved in Australian law.[9] However, in the latter part of the twentieth century it was subjected to increasing scrutiny, a trend which culminated in the decision of the High Court in Witham v Holloway.[10] That case, like the present, concerned civil contempt flowing from breach of a court order. The trial judge had ruled that the requisite standard of proof was on the balance of probabilities.[11] The contemnor appealed on the basis that the criminal standard of proof should have been applied. The High Court allowed the appeal and held that, in all cases of contempt, the requisite standard of proof is beyond reasonable doubt.[12]
[8]See, eg, Wellesley v Duke of Beaufort (1831) 39 ER 538, 548; O’Shea v O’Shea (1890) 15 PD 59, 62.
[9]Australian Consolidated Press Ltd v Morgan (1965) 12 CLR 483, 489, 494, 497–500.
[10](1995) 183 CLR 525 (‘Witham’). See also Australasian Meat Industry Employees’ Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98, 107–8 (Gibbs CJ, Mason, Wilson and Deane JJ) (‘Mudginberri’).
[11]This was consistent with the law at the time: see New South Wales Egg Corporation v Peek (1987) 10 NSWLR 72, 81–3.
[12]The High Court was influenced by the decision of the English Court of Appeal in In re Bramblevale Ltd [1970] Ch 128.
Regrettably, while in some ways Witham clarified the law of contempt, in others it created new confusion. In particular, it has been taken to mean that there is no longer any meaningful distinction between civil and criminal contempt, such that all contempts are essentially criminal proceedings.
This question was taken up with by the Court of Appeal in CFMEU v Grocon Constructors (Victoria) Pty Ltd.[13] It too was a case of civil contempt flowing from breach of a court order (although concerning the rights of companies and other like entities rather than individuals).[14] The Court (Ashley, Redlich and Weinberg JJA) conducted an extensive survey of authorities so as to ascertain the state of the law of contempt. Their Honours made the following general observations:
[13](2014) 47 VR 527 (‘CFMEU v Grocon’).
[14]Ibid 638 [502].
If contempt proceedings are brought in respect of breach of a court order, their object is most often to coerce the recalcitrant party into compliance, and not to punish the party for that breach. Notwithstanding the fact that such conduct is usually described as ‘civil contempt’, the offending party may be imprisoned or fined as an incentive to comply with court orders.
…
It is not in doubt that, in relation to breach of a court order, a finding of contempt can be made whether the breach was technical, wilful or contumacious. It is sufficient to establish that the acts of an alleged contemnor were intentional and were calculated (in the sense of ‘likely’) to interfere with the course of justice. It is unnecessary to establish a specific intention to breach the order of the court or to interfere with the proper administration of justice.
…
The public interest requires that any disobedience more than casual, accidental or unintentional must at least be regarded as wilful. Thus, a deliberate act or omission which is in breach of an injunctive order or an undertaking, will ordinarily constitute wilful disobedience unless the alleged contemnor is able to show, by way of exculpation, that the default was casual, accidental or unintentional.
The intention with which the act was done will, of course, be highly relevant in determining what penalty (if any) is to be imposed by the court. However, liability for contempt is ‘strict’ in the sense that all that needs to be proved is knowledge of the order, and the subsequent conduct of the party bound by that order which is prohibited.
There is a discretionary character to the jurisdiction which enables a court to decline to exercise the contempt jurisdiction at all even though the court may be satisfied that the contempt has been established. Such a discretionary outcome is more likely where the court concludes the contempt to be of a technical nature, as for example where the act or omission may be described as casual, accidental or unintentional. The authorities have rarely regarded such contempts as deserving of punishment by fine or committal.[15]
[15]Ibid 563–4 [136], [138], [140]–[142] (citations omitted).
CFMEU v Grocon contains several passages on the ongoing relevance of the distinction between civil and criminal contempt. Cases such as Mudginberri and Witham, their Honours observed, had ‘the effect of blurring any bright line of distinction between civil and criminal contempt constituted by breach of court orders.’[16] Nevertheless, as the survey of post-Witham authorities showed, the distinction between civil and criminal contempt (between ‘punitive’ and ‘protective’ proceedings) remains an entrenched part of the legal landscape: ‘The purpose for which a proceeding has been brought has continued to be employed as one way in which to characterise the legal nature of the contempt.’[17]
[16]Ibid 568 [163].
[17]Ibid 572 [179]. See also Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117; Markisic v Commonwealth (2007) 69 NSWLR 737; Street v Hearne (2008) 235 CLR 125; Pang v Bydand Boldings Pty Ltd [2011] NSWCA 69.
Their Honours ultimately agreed that contempt proceedings are ‘a form of “hybrid” to which features of both civil and criminal procedure attached’:
While some of the safeguards traditionally associated with the conduct of criminal trials might well be applicable to such prosecutions (e.g., the criminal standard of proof, the right to make a ‘no case’ submission without penalty, and the inapplicability of Jones v Dunkel), it did not follow that each and every one of those safeguards was applicable to such proceedings.[18]
However, while some criminal safeguards may apply, their Honours stressed that civil contempts are for all other intents and purposes civil proceedings. Thus, despite the fact that the law of contempt is in ‘an unsettled, and uncertain, state,’ it is clear that contempt proceedings cannot ‘simply be characterised … as a criminal proceeding.’[19] This is because the ‘full panoply of the criminal law was never imported into the law of civil contempt.’[20]
[18]CFMEU v Grocon (2014) 47 VR 527, 624 [428] (citations omitted).
[19]Ibid 635 [482], 637 [497].
[20]Ibid 561 [127].
The reasoning of the Court of Appeal was subsequently upheld by the High Court in CFMEU v Boral Resources (Vic) Pty Ltd (the same case on appeal).[21] The plurality (French CJ, Kiefel, Bell, Gageler and Keane JJ) observed that, while contempt proceedings may be ‘accusatory’ in nature, this does not take them out of the civil jurisdiction and the purview of the Rules.[22] Their Honours referred back to a crucial passage from Witham:
[T]o say that proceedings for contempt are essentially criminal in nature is not to equate them with the trial of a criminal charge. There are clear procedural differences, the most obvious being that criminal charges ordinarily involve trial by jury, whereas charges of contempt do not.[23]
Their Honours were at pains to emphasise that contempt proceedings are not the equivalent of a criminal trial. One reason for this is that they are brought by private parties and hence the ‘spectre of oppression by the executive government in requiring the accused to assist it in the prosecution of a criminal charge … does not arise.’[24]
[21](2015) 256 CLR 375. The proceedings concerning Grocon Constructors (Vic) Pty Ltd were not appealed to the High Court, which is why the case name refers to Boral Resources (Vic) Pty Ltd instead.
[22]Ibid 388 [40].
[23]Ibid 389 [43].
[24]Ibid 389 [44].
To these passages should be added the following observations from the reasons for judgment of Nettle J:
A proceeding for punishment for contempt constituted by disobedience of an injunction granted in a civil proceeding is not part of the criminal justice system … Failure to obey an injunction is not a criminal offence unless the failure to comply is defiant or contumacious. A proceeding for contempt is not a proceeding for criminal contempt if the proceeding appears clearly to be remedial or coercive in nature as opposed to punitive. A criminal contempt is a common law offence, albeit not part of the ordinary common law. But even a proceeding for criminal contempt is not a criminal proceeding.[25]
His Honour noted that, even in the context of a criminal contempt, the applicable rules of procedure ‘are the rules of procedure which apply to other civil proceedings.’[26] However, as Nettle J put it, this basic position must be qualified as follows:
The qualification is that some of the safeguards applicable to criminal proceedings also apply to a civil proceeding for criminal contempt; including, in the case of a defendant who is a natural person, the privilege against self-incrimination and the privilege against self-exposure to penalty. Their application rests on ‘accepted notions of elementary justice’ and reflects the fact that a proceeding for committal may result in ‘very serious interference with the liberty of the subject’.[27]
[25]Ibid 395 [65] (citations omitted).
[26]Ibid 396 [66].
[27]Ibid 396 [67] (citations omitted).
I note for completeness that it is unsettled whether the Evidence Act 2008 has displaced Witham. This prospect was raised in ASIC v Sigalla (No 4).[28] That case concerned whether the contemnor was entitled to make a ‘no case’ submission at the conclusion of the plaintiff’s case. As a threshold question White J was required to determine whether the proceeding was ‘civil’ or ‘criminal’ for the purposes of the Civil Procedure Act 2005 (NSW) and Uniform Civil Procedure Rules 2005 (NSW). His Honour reasoned—observing that criminal contempt had been alleged—that it was a proceeding for ‘an offence’ as per the definition of that term in the Uniform Evidence Act 1995 (NSW). It followed that the Uniform Civil Procedure Rules 2005 (NSW) did not apply and, as a corollary of that chain of reasoning, that the Evidence Act 1995 (NSW) had displaced Witham.[29]
[28](2011) 80 NSWLR 113 (‘Sigalla’).
[29]Ibid [23]. The relevant provisions of the NSW legislation are mirrored in the Evidence Act 2008.
Significantly, Sigalla has been cited with approval by the learned author of Cross on Evidence, who states that:
The common law rule that the criminal standard of proof applies to all charges of contempt, whether classified as civil or criminal, has been reversed.[30]
Further, in the footnote to the above passage, the author emphatically declares that Jendell Australia Pty Ltd v Kesby[31] has been restored. Jendell was the leading case prior to Witham and authority for the proposition that in a proceeding for civil contempt the requisite standard of proof is on the balance of probabilities.
[30]J D Heydon, Cross on Evidence (LexisNexis Butterworths Australia 10th ed., 2015) 370 [9130].
[31][1983] 1 NSWLR 127.
Yet Victorian courts have declined to follow Sigalla and dicta in CFMEU v Grocon indicates that, far from a logical application of the rules of evidence, contempt proceedings in this State use a ‘hybrid’ of criminal and civil rules.[32] Indeed, CFMEU v Grocon eschews any clear distinction between civil and criminal contempt, reasoning that ‘contempt proceedings … have a certain chameleon-like quality. They take their character from their surrounding circumstances and the context within which the analysis proceeds.’[33] Their Honours disparage Sigalla as an illustration of the ‘extreme and unpredictable consequences of reasoning dictated by the need to characterise a contempt proceeding, in its entirety, as a “criminal proceeding” or a “civil proceeding”.’[34] They state that ‘it seems improbable that, in effect as a side-wind, the civil standard of proof has been restored in the case of civil contempts.’[35]
[32](2014) 47 VR 527, 624 [428].
[33]Ibid 638 [498]. See also Chief Executive Officer of Customs v Labrador Liquor Wholesale Pty Ltd (2003) 216 CLR 161, 198-9 [114]-[115] (Hayne J).
[34]CFMEU v Grocon (2014) 47 VR 527, 578 [209].
[35]Ibid.
Nothing that was said by the High Court in CFMEU v Boral suggests the Court of Appeal was incorrect in its approach. It is therefore prudent to follow CFMEU v Grocon and hence continue to apply Witham.
In any event, I do not need to decide between Witham and Sigalla, since it makes no difference to the present proceeding. As will become clear, were the evidence to be weighed on the balance of probabilities, the defendant would still be prima facie in contempt of court.
Elements of civil contempt
Contempt proceedings in this State are governed by O 75 of the Rules. Relevantly, r 75.06 provides that:
(2) Where the contempt is committed by a party in relation to a proceeding in the Court, the application shall be made by summons in the proceeding.
…
(4) The summons or originating motion shall specify the contempt with which the defendant is charged.
(5) The summons or originating motion and a copy of every affidavit shall be served personally on the defendant, unless the Court otherwise orders.
It is well settled that a failure by a party to comply with a court order constitutes civil contempt.[36] However, where the contempt is shown to be ‘contumacious’ (or the purpose of the proceeding is to punish a past breach rather than coerce obedience with the order), it may be—or may become—a criminal contempt.[37] Ordinarily, this is only relevant at the penalty stage.
[36]Legal Services Board v Forster (No 2) [2012] VSC 633 [43].
[37]Contumacious is often glossed as ‘deliberately defiant’: Witham (1995) 183 CLR 525, 530.
To satisfy a charge of contempt by way of breach of a court order the plaintiffs must establish the following five elements: [38]
[38]National Australia Bank Limited v Juric [2001] VSC 375 [37]; Advan Investments Pty Ltd v DeanGleeson Motor Sales Pty Ltd [2003] VSC 201 [31]; Scott v Evia Pty Ltd [2007] VSC 15 [36]; Chan v Chen (No 2) [2007] VSC 24 [22].
(vi)an order was made by the Court;
(vii) the terms of the order are clear, unambiguous and capable of compliance;
(viii) the order was served on the defendant or excused in the circumstances or service was dispensed with pursuant to the Rules of the Court;
(ix) the defendant had knowledge of the terms of the order; and
(x) the defendant breached the terms of the order.
Satisfaction of these elements will lead the Court to conclude that there has been wilful disobedience, unless the defendant is able to show that the disobedience was casual, accidental or unintentional.[39]
[39]CFMEU v Grocon (2014) 47 VR 527, 564 [141].
The defendant may also adduce evidence raising a reasonable possibility that the impugned withdrawals fall within the stated exceptions to the order. It will then be for the plaintiffs to disprove this proposition beyond reasonable doubt.
Onus of proving the exceptions
It is necessary to say something further about the onus of proof as it relates to the exceptions to the order. This issue arose during the hearing of the application. Counsel for the plaintiffs submitted that:
Insofar as the defendant wants to say the transactions in question fall into any of these exceptions, he bears the onus of establishing that, of the applicability of the exception to any of the transactions in question.
The authority for that proposition comes from the case of CC Containers v Lee, a Victorian Supreme Court case of 2015, and I’ll hand Your Honour a copy of that as well.
…
[It is] the defendant who bears the onus of satisfying the Court of the availability of the exceptions to various of these charges … So it’s not for the plaintiffs to disprove the availability of the exceptions, it’s for the defendant to show they apply.[40]
[40]Transcript of proceedings, Fortune Holding Group Pty Ltd v Zhang (No 2) (Supreme Court of Victoria, Zammit J, 1-2 August 2017, 12 September 2017) (‘T’)9 LL15–21; T153 LL4–9.
CC Containers Pty Ltd v Lee (No 8)[41] was a case of contempt flowing from breach of a freezing order. Justice Ginnane relevantly held that: ‘[The defendant] bore the onus of proving that an exception to the freezing order permitted the withdrawal whether it was a direct debit or other withdrawal.’[42] As authority for this proposition his Honour cited the New South Wales case of ASIC v Sigalla (No 3).[43] That too was a case of contempt flowing from breach of a freezing order. The relevant obiter from White J is as follows:
The onus of establishing that the transfer of funds was for the payment of reasonable ordinary living expenses or reasonable ordinary operating expenses is on [the defendant] … In those circumstances the burden of proof is on the party seeking to rely upon the additional special matter. That burden being on the defendant, on the balance of probabilities, it follows that there is a case to answer.[44]
[41][2015] VSC 478 (‘CC Containers’).
[42]Ibid [72].
[43][2010] NSWSC 1076 (‘Sigalla (No 3)’). As distinct from Sigalla (No 4): see [26] above.
[44]Ibid [46]–[48] (citations omitted).
Justice White’s reasoning in Sigalla (No 3) was in turn based on the reasoning of the High Court in Vines v Djordjevitch.[45] That was not a civil contempt but a negligence case which turned on the correct construction of s 47(1) of the Motor Car Act 1951. The section included a proviso which operated to negative liability. The central question was whether the burden of proving compliance with the proviso lay with the plaintiff or the defendant. This involved consideration of the principles of statutory interpretation and, in particular, the distinction between a ‘proviso’ and an ‘exception’. The High Court relevantly said:
[I]n whatever form the enactment is cast, if it expresses an exculpation, justification, excuse, ground of defeasance or exclusion which assumes the existence of the general or primary grounds from which the liability or right arises but denies the right or liability in a particular case by reason of additional or special facts, then it is evident that such an enactment supplies considerations of substance for placing the burden of proof on the party seeking to rely upon the additional or special matter.[46]
[45](1955) 91 CLR 512 (‘Vines’).
[46]Ibid 519–20 (citations omitted). See also Darling Island Stevedoring & Lighterage Co Ltd v Jacobsen (1945) 70 CLR 635; Barrit v Baker (1948) VLR 491; Dowling v Bowie (1952) 86 CLR 136.
The High Court revisited the application of the proviso/exception distinction in Chugg v Pacific Dunlop Ltd.[47] The leading judgment, delivered by Dawson, Toohey and Gaudron JJ (with whom Brennan and Deane JJ agreed), explained that the distinction is not a matter of formal logic but rather of statutory interpretation:
[47](1990) 170 CLR 249 (‘Chugg’).
For the purpose of assigning the onus of proof, a distinction is made between a requirement which forms part of the statement of a general rule and a statement of some matter of answer, whether by way of exception, exemption, excuse, qualification, exculpation or otherwise (called an “exception”), which serves to take a person outside the operation of a general rule. The distinction does not depend on the rules of formal logic. Rather, the categorization of a provision as part of the statement of a general rule or as a statement of exception reflects its meaning as ascertained by the process of statutory construction. Where some matter is said to be an exception to an offence, the question is whether there is to be discerned a legislative intention ‘to impose upon the accused the ultimate burden of bringing himself within it’. The intention may be discerned from express words or by implication.[48]
Their Honours added that, as a general rule of thumb,
if a matter accompanies the description of an offence, then it will ordinarily be construed as an element of the offence which the prosecution must prove, unless there is something in the form of the language used or in the nature of the subject matter to suggest that it is an exception upon which the defendant bears the onus of proof.
…
Although the form of language may provide assistance, ultimately the question whether some particular matter is a matter of exception is to be determined ‘upon considerations of substance and not of form’.[49]
[48]Ibid 257 (citations omitted).
[49]Ibid 258 (citations omitted).
The principles arising from the above authorities may be summarised as follows:
(a) if the qualification is part of the definition of the grounds of liability then the onus of proof will be on the plaintiff/prosecution to prove that the prove that the proviso does not apply; however
(b) if the qualification is a new matter, which does not form part of the primary grounds of liability but is a special exception or condition defeating or answering liability that otherwise exists, the onus of proof will be on the party seeking to prove the exception.
Both the form and the substance of the provision will be relevant considerations with the ultimate question being whether it is possible to discern a legislative intention to impose upon the defendant the legal burden of proving that his or her conduct falls within the scope of the qualification.[50] A further rule is that, where a qualification relates to a matter that is peculiarly within the knowledge of a defendant, it provides strong grounds for inferring that it is an exception rather than a proviso.[51]
[50]I am indebted to the Judicial College of Victoria’s bench notes for this paragraph.
[51]DPP v United Telecasters Sydney Ltd (1990) 168 CLR 594.
Yet these principles are chiefly relevant to the interpretation of statutory offences, whereas the present proceeding is a civil contempt, specifically contempt arising from breach of a court order, which is a common law offence (although it only becomes an ‘offence’ if the breach is ‘defiant or contumacious’).[52] This suggests a certain amount of caution is required before applying the above line of authority. As the Court of Appeal warned in CFMEU v Grocon:
There is, in our opinion, every reason not to use a conclusion specific to one statutory context to answer a quite different question as to the law of contempt which arises as a matter of general principle.[53]
An unblinking application of principles of statutory interpretation to a contempt proceeding may give rise to error. This seems especially so given Witham’s raising of the requisite standard of proof to beyond reasonable doubt. The notion that the contemnor at any given time bears the legal burden cuts against the grain of the presumption of innocence. The notion that the contemnor bears an evidential burden, on the other hand, does not offend the presumption of innocence and accords with the traditional view that in criminal matters the burden of proof never ‘shifts’.[54]
[52]CFMEU v Boral (2015) 256 CLR 375, 396 [65] (Nettle J).
[53](2014) 47 VR 527, 581 [222].
[54]See generally Sheldrake v DPP; Attorney General’s Reference (No 4 of 2002) [2005] 1 AC 264 [9].
It is convenient at this point to define the terms legal and evidential burden of proof. The learned author of Cross on Evidence does so as follows:
The legal burden of proof is the obligation of a party to meet the requirement of a rule of law that a fact in issue be proved (or disproved) either by a preponderance of the evidence or beyond reasonable doubt, as the case may be.
…
An evidential burden is not a burden of disproof. Rather, the evidential burden is the obligation to show, if called upon to do so, that there is sufficient evidence to raise an issue as to the existence or non-existence of a fact in issue.[55]
The text explains that the ‘evidential burden’ is simply the ‘burden of adducing evidence’.[56] The authorities referred to therein suggest that, where an accused bears an evidential burden, it may be discharged by adducing evidence of a reasonable possibility of the existence of the defence.[57] The burden of negativing the defence rests with the moving party who bears the legal burden of proof.
[55]Heydon, above n 30, 291–2 [7010]–[7015]. See also Momcilovic v The Queen (2011) 245 CLR 1, 242 [665].
[56]Ibid 292 [7015].
[57]R v Zecevic [1986] VR 797, 802; R v Youssef (1990) 50 A Crim R 1, 3 (NSWCCA).
The approach outlined in the preceding paragraph was endorsed by the High Court in Purkess v Crittenden.[58] That was an appeal from the Supreme Court of Queensland concerning the quantum of damages awarded for personal injuries caused by negligence. In their joint reasons for judgment, Barwick CJ, Kitto and Taylor JJ observed that:
The expression ‘burden’ or ‘onus’ of proof, ‘As applied to judicial proceeding … has two distinct and frequently confused meanings: (1) the burden of proof as a matter of law and pleading—the burden, as it has been called, of establishing a case, whether by preponderance of evidence, or beyond a reasonable doubt; and (2) the burden of proof in the sense of introducing evidence’ (Phipson on Evidence, 10th ed. (1963) par. 92). … The position is, we think, correctly stated by the learned author of the work to which we have referred when he says: ‘the burden of proof in the first sense is always stable, the burden of proof in the second sense may shift constantly, according as one scale of evidence or the other preponderates.’[59]
[58](1965) 114 CLR 164 (‘Purkess’).
[59]Ibid 168.
Justice Windeyer, in his agreeing reasons, added the following:
Whether one calls such a conclusion [i.e. that the defendant bears an evidential onus] an inference, a presumption of fact or a presumptio hominis [natural presumption unfettered by strict rule] matters not. It is an inference which any tribunal of fact would ordinarily draw until the defendant had, by evidence elicited in cross-examination or led, provided some material to overcome it—either by proving the contrary or throwing the matter into doubt.[60]
[60]Ibid 171.
The virtue of Purkess is its practicality. Such an approach accords with the logic of our adversarial system: a defendant will carry a ‘tactical burden’ to adduce evidence on any matter that the moving party must overcome in discharging its legal burden.[61] This ‘tactical burden’ is simply another name for the need to adduce evidence at the point where the other party has led sufficient evidence to establish a proposition in dispute. Thus, while the legal burden never ‘shifts’, the evidential burden may move backwards and forwards between the parties.[62] Further, as noted above, an evidential burden does not offend the presumption of innocence.[63] Indeed, while it is not a common feature of the criminal law, it is common enough among statutory regimes.[64]
[61]Heydon, above n 30, 314 [7165].
[62]Ibid 320 [7210].
[63]See generally R v White [1998] 2 SCR 3.
[64]Ian Dennis, Reverse Onuses and the Presumption of Innocence: In Search of Principle (Criminal Law Review 2005) 901, 904.
I note in passing that, insofar as proofs are concerned, s 72 of the Criminal Procedure Act 2009 places an evidential burden on the accused in relation to exceptions, exemptions, provisos, excuses or qualifications. This is so whether the qualification accompanies the description of the of the offence or not. The Criminal Code Act 1995 is framed in similar terms. Section 13.3 provides that a burden of proof that a law imposes on a defendant is an evidential burden only (including any exception, exemption, excuse, qualification or justification provided by the law creating the offence). It too specifies that the qualification need not accompany the description of the offence. By a simple process of extension, since a contempt proceeding is a ‘quasi-criminal’ proceeding in which the standard of proof is beyond reasonable doubt, it follows that at any given time the burden of proof borne by a contemnor must be an evidential burden.
For completeness I should aver to two recent authorities which shed some light on this question and the position taken up by CC Containers (and the line of authority on which it is based). The first, R v Debono,[65] was a decision of this Court; the second, R (on the application of the Chief Examiner) v DA (a Pseudonym), of the Court of Appeal.[66] Neither was a contempt arising out of breach of a court order. Rather, both cases concerned statutory offences, created by ss 36(4) and 49(1)(b) of the Major Crime (Investigative Powers) Act 2004 respectively. More specifically, both concerned the defence of ‘reasonable excuse’, and the question of which party bore the burden of proof in carrying that defence. In this sense, while they are chiefly exercises in the correct approach to be taken in construing statutory instruments, they offer some guidance as to which party bears the burden of proof in relation to the exceptions in the present proceeding.
[65][2013] VSC 408 (‘Debono’).
[66][2016] VSCA 325 (‘DA’).
While each case is complex, and turns on its own facts, it is sufficient to observe that, in Debono, Kryou J held that the examinee bore a legal onus to prove on the balance of probabilities that he had a reasonable excuse, whereas, in DA, Ashley, Redlich and McLeish JJA held that the examinee bore an evidentiary onus to adduce evidence that would give rise to a reasonable possibility of a reasonable excuse. These disparate outcomes arose partly as a result of the application of the proviso/exception distinction and the accompanying rule that, where a matter is peculiarly within the knowledge of one party, the burden will ordinarily be on that party to prove it.[67] In Debono, the defence of reasonable excuse did not form part of the statement of liability, which indicated that it was an ‘exception’; in DA, it did, indicating that it was a ‘proviso’.
[67]See R v Sciretta [1977] VR 139, 140 (Kaye J).
A straightforward application of the proviso/exception distinction to the facts before me suggests that the onus of proving the exceptions to the order (even the use of the word ‘exception’ in the terms of the order is suggestive) lies with the defendant. Yet the Court of Appeal, in DA, stressed that the proviso/exception distinction should not be rigidly applied and reiterated that considerations of substance are to be given greater weight than considerations of form.[68] The Court disapproved the reasoning of King J in R v QX.[69] Their Honours cited with approval the reasoning of the Chief Justice of Canada in R v Whyte to the effect that:
If an accused is required to prove some fact on the balance of probabilities to avoid conviction, the provision violates the presumption of innocence because it permits a conviction in spite of a reasonable doubt in the mind of the trier of fact as to the guilt of the accused.[70]
They added that ‘where the onus of proof should reside will in part be informed by the degree of difficulty with which that onus of proof could be discharged.’[71] These considerations prompt me to look beyond the form of the order to the substance of proceeding for disobedience of a court order. Self-evidently, contempt proceedings may result in punitive outcomes for the contemnor, especially where there is contumacious conduct. What is more, since contempt proceedings attract the criminal standard of proof (and hence presume the contemnor’s innocence), it seems to me that the position articulated in DA must be the correct one.
[68]Chugg (1990) 170 CLR 249, 258–9.
[69][2015] VSCA 784.
[70][1998] 2 SCR 3.
[71]DA [2016] VSCA 325 [33].
The above analysis leads me to the conclusion, contrary to the submission put by counsel for the plaintiffs, that the defendant in this proceeding bears an evidential onus to adduce evidence that raises a reasonable possibility that the impugned withdrawals fall within the ambit of the stated exceptions. It is then for the plaintiffs, who at all material times bear the legal onus, to negative this proposition beyond reasonable doubt.
The defendant as a witness
In addition to the five affidavits tendered into evidence, sworn by the defendant from 15 August 2015 to 12 September 2017, the defendant gave oral evidence.
There were some aspects of the defendant’s evidence that gave me concern as to his credit. For example, his evidence in relation to his understanding and knowledge of the content of the order. The defendant maintained that he was never given any legal advice about the order and that he never appraised himself of its contents. This evidence does not sit comfortably with the fact that:
(a) he had legal representation at the time of the first return date and until 31 October 2013;
(b) upon service he immediately retained a lawyer to act for him and provided them with the order and other relevant documents;
(c) he is fluent in English and attended secondary school and university in Australia;
(d) the email correspondence from his lawyers dated 20 September 2013 is consistent with him knowing the terms of the order; and
(e) the concession that he made in cross-examination that he understood his obligations under the terms of the order.
The defendant’s evidence in relation to the expenditure of $393 on Ugg boots for his 8 month old son and that it was an ‘ordinary living expense’ was tenuous. He deposed that the boots were necessary because it was cold in China and they were travelling to China and that his son was born premature and with kidney infections. There was no evidence of any connection of existence of any medical condition which would justify the need for $393 Ugg boots for an 8 month old infant.
These examples demonstrate the defendant’s evasiveness and reluctance to answer straightforward questions or make appropriate concessions. He volunteered only what he thought was required at any particular time.
I consider the defendant withheld information he would have at his disposal. He chose not to call a number of witness, such as Ms Qi, his previous lawyers and his wife. While it is appropriate that some allowance be made given the nature of this proceeding, the serious consequences that may follow and the defendant’s lack of legal representation, on the whole I did not consider the defendant a candid witness.
Have the plaintiffs proved the charges of contempt?
I am satisfied, and it was not disputed by the defendant, that:
(a) an order was made by the Court;[72]
(b) the terms of the order are clear, unambiguous and capable of compliance; and
(c) the order was personally served on the defendant.[73]
[72]See [6] above.
[73]Exhibit P2.
What is in dispute is whether the defendant had knowledge of the terms of the order and whether he breached the order. The question of knowledge will also inform my finding as to whether the breaches were technical, wilful or contumacious (which will in turn be relevant to penalty).
Did the defendant have knowledge of the terms of the order?
In his affidavit affirmed 25 September 2013, the defendant deposed that he was born in 1983 in China and moved to Sydney, Australia, in 1996. He studied at Parramatta High School and then at University of Technology in Sydney. He deposed:
I regard Australia as my home. I have lived here since I was 12 years old - almost 18 years now. I started and finished high school in Sydney, and attended university in Sydney and Melbourne.[74]
[74]Exhibit P3 [17].
The defendant was twice represented in court by members of counsel, in connection with the order, after it had been served.[75] At the first return of the order, on 20 September 2013, the defendant was represented by McDonald Partners (‘mdp Lawyers’) and Mr Ben Murphy of counsel.[76] At the next return, on 27 September 2013, he was represented by mdp Lawyers and Mr Andrew Panna QC. It was on that date that the living and legal expenses exceptions were increased.[77] The plaintiffs submitted, given these facts, that the defendant plainly knew the terms of the order.
[75]T137, LL8-10.
[76]Orders of Macaulay J made 20 September 2013.
[77]Orders of Cavanough J made 27 September 2013.
In his viva voce evidence, the defendant agreed that the order was served on him on 19 September 2013.[78] He said he did not have a chance to read it because he received it around 4.30pm and had less than 24 hours to secure legal representation for the directions hearing that was to take place on the following day.[79] The defendant engaged mdp Lawyers immediately after being served with the order. His evidence was that he handed all the relevant documents over to mdp Lawyers on 19 September 2013 at approximately 7pm. He said all he knew was that he was being served by Fortune Holding and was not aware of the order until he got to mdp Lawyers’ office in the evening of 19 September 2013.[80]
[78]T136, L22.
[79]T130, LL23-30.
[80]T137, LL15-27.
In cross-examination, the defendant was provided with a copy of the submission he wrote in relation to this application, which stated at paragraph 12:
I honestly knew there is a freezing order, and my assets are frozen. I knew that I had to list all the financial accounts in and out of Australia. I knew that I would not be able to sell any of the frozen assets under my name. I knew that I could use the funds in my accounts to pay for legal fees as well as business expenses.[81]
The defendant agreed that he wrote the submission that was filed with the Court and that it reflected ‘the position’.[82]
[81]T138, LL14-18; LL22-25.
[82]T138, L28.
The defendant later maintained in cross-examination that, after he gave the hard copy of the order to mdp Lawyers, he never had an electronic copy to read. He was asked whether mdp Lawyers gave him advice about the order and replied:
they didn’t give me any – they didn’t give me advice. I – I had a – I had a legal counsel, Ms Kander, who was helping me prepare the affidavit of documents, later in November 2013. She – she briefly – she briefly briefed me the – the freezing order.[83]
The defendant agreed that mdp Lawyers were his lawyers on the record until 31 October 2013, one month after the order was served on him.[84]
[83]T144, LL24-29.
[84]T144, L1.
I consider the defendant had knowledge of the terms of the order. He accepted that he was aware of the order and what it meant. It was upon service of the order that the defendant immediately contacted mdp Lawyers. It can be inferred that he must have read the order as it led him to engage mdp Lawyers that very evening.
Exhibited to the defendant’s affidavit affirmed 1 August 2017 is an email from mdp Lawyers to the defendant dated 20 September 2013.[85] The email relevantly states:
[85]Exhibit D2: Affidavit of Ian Yan Zhang dated 1 August 2017, exhibit IYZ4
Court orders:
I confirm that the following court orders were made today:
1. The application for summons dated 17 September is adjourned to 27 September 2013 in the Practice Court at 10.30am.
As discussed, the application for the freezing order has been adjourned to 27 September. On this date, we may argue for the lifting of the freezing orders.
2. The orders made on 18 September 2013 be extended to 4pm on 27 September 2013.
This means that the freezing orders have been extended to 27 September. Until then, you must obey these orders and not seek to remove your assets up to the value of $169,000.
Similarly we would assume that your bank accounts would continue to be frozen until 27 September.
3. The respondent to the freezing order file and serve any affidavit material on which he seeks to rely on in objection to the summons by 4pm 25 September 2013 …
Meeting on Monday 23 September
I propose we meet on Monday at 9.30am – this is an early start but as you would appreciate, there is a lot of material to go through with you. However, please let me know if this time does not suit you and we can arrange to meet later on Monday.
Try to have a good weekend, and we look forward to seeing you on Monday.
Please feel free to call me if you have any queries.
Kind regards,
Ann Yip lawyer.
The defendant speaks English fluently. He is university educated and has lived in Australia since he was 12 years old. The defendant had legal representation at the critical time in relation to the order including when he deposed to his assets worldwide on 25 September 2013. The defendant in oral evidence agreed that he understood ‘the positon’ in relation to the order.
In light of the above evidence, I consider the defendant understood the contents of the order and his obligations pursuant to it. I reject his evidence that he was not aware and did not understand the terms of the order.
Did the defendant breach the terms of the order?
The further amended summons contains 40 charges. However, in the course of oral argument, counsel for the plaintiffs withdrew charges 31 and 33.[86]
[86]T147, LL21-31.
Each of the transactions, which the plaintiffs say support the dissipation of the defendant’s assets in breach of the order, are identified in bank statements for eight bank accounts belonging to the defendant, exhibited to the affidavit of Ms Wenjie Wu, affirmed 16 October 2014.[87] The bank accounts are as follows:
[87]Exhibit P4: Affidavit of Wenjie Wu dated 16 October 2014, exhibit WW7; Exhibit P1.
Bank Account Number ANZ 202 959 893 ANZ 369 312 725 ANZ 4564 6800 1390 6051 NAB 114 676 295 NAB 114 676 324 NAB 4557 0256 8164 8560 BOM 054 902 018 BOM 5229 6112 0002 3065
For the purposes of the following analysis it will be convenient to follow the form provided by the plaintiffs in their summons. The summons breaks the charges into the ‘weeks’ in which each breach of the order is alleged to have occurred. It is also convenient to adopt the text of the plaintiffs summons insofar as it sets out a description of each charge and the particulars that go to that charge.
Week 1: 26 September 2013 – 2 October 2013
Charge 1
In breach of the Freezing Order, during the week commencing 26 September 2013 and ending 2 October 2013 the defendant did cause the sum of $1277.66 to be dealt with, disposed of or diminished from his bank accounts with National Australia Bank Limited, Bank of Melbourne and Australia and New Zealand Banking Group Limited.
Particulars
The defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions particularised in the below table, which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order.
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 26/09/2013 ATM CCB CCBJIANG SUBRANCH CCBJIANGS FOREIGN CURRENCY AMT CNY 100.00 INCL OVERSEAS TRANSACTION FEE
$0.51
Australia and New Zealand Banking Group Limited (“ANZ”), Ian Yan Zhang and Beili Zhang, 202959893 17.51 2 26/09/2013 VISA DEBIT PURCHASE CARD 4001 CHUNG HWA INT'L COMMUNICA TAIPEI 1,000.00 TWD INC O/S FEE $1.05 EFFECTIVE DATE: 24 SEP 2013 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 36.12 3 26/09/2013 PLUS ATM TRANSACTION FEE ANZ, Ian Yan Zhang and Beili Zhang, 202959893 5.00 4 26/09/2013 DEBIT INTEREST CHARGED ANZ, Ian Yan Zhang, 369312725 0.64 5 26/09/2013 MELBOURNE SHIELD
INVESTME SOUTHBANK
National Australia Bank
Limited (“NAB”), Ian Y Zhang, 4557025681648560
43.89 6 26/09/2013 SUBWAY FRESHWATER SOUTHBANK NAB, Ian Y Zhang, 4557025681648560 11.95 7 26/09/2013 BP EXP CLARENDON 3759 STH MELBOURNE NAB, Ian Y Zhang, 4557025681648560 54.66 8 27/09/2013 WILSON PARKING MEL252 MELBOURNE NAB, Ian Y Zhang, 4557025681648560 12.34 9 27/09/2013 INTEREST ON CASH ADV(S) NAB, Ian Y Zhang, 4557025681648560 14.23 10 27/09/2013 INTEREST ON PURCHASE(S) NAB, Ian Y Zhang, 4557025681648560 81.37 11 30/09/2013 ACCOUNT SERVICE FEE Bank of Melbourne (“BOM”), Ian Yan Zhang, 054902018 5.00 12 1/10/2013 KFC SOUTHBANK SOUTHBANK NAB, Ian Y Zhang, 4557025681648560 24.95 13 2/10/2013 INVESTMENTS 88 PTY. MELBOURNE NAB, Ian Y Zhang, 4557025681648560 970.00 Total 1,277.66
The plaintiffs allege that in the period 26 September to 2 October 2013 the defendant dealt with, disposed of, or diminished the sum of $1,277.66 from his bank accounts.[88] They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support.[89]
[88]Statement of Charges, Schedule A to the Amended Summons for Contempt dated 28 March 2017, 4-5.
[89]Exhibit P1.
In his affidavit affirmed 12 September 2017 the defendant provided an explanation in relation to the 13 transactions at the crux of charge 1.[90] He did not dispute that each occurred. Instead, he claimed the bulk of them fell within the scope of the exceptions to the order, or else were affected by his wife.
[90]Exhibit D2: Affidavits in Response to Plaintiffs’ Amended Summons for Contempt dated 13 October 2015 and 12 September 2017. The former is responsive to an earlier iteration of the summons which contained 58 charges, the latter has been amended to respond to 40 charges.
He deposed that items 1 and 2, the transactions on 26 September 2013 for $17.51 and $36.12 respectively, were affected overseas by his wife. This is supported by international movement records. These show that his wife was overseas at the relevant time and that he was in Australia.[91] The defendant submitted that his wife was not bound by the order and did not conduct the transactions on his behalf, on his instructions, or with his encouragement. Further, in relation to item 3, the defendant deposed that this was a bank fee in relation to item 1.
[91]Ibid, exhibits IYZ1 and IYZ2.
The plaintiffs tendered an affidavit of Mr Lardi, solicitor for the plaintiffs, affirmed 2 December 2015.[92] Mr Lardi deposed that on 10 November 2015 he sent a letter to the defendant requesting: more evidence with regard to the transactions affected by the defendant’s wife; and that the defendant’s wife give evidence. The plaintiffs did not receive any further information from the defendant in relation to these transactions. Mr Lardi deposed that the defendant ‘may be trying to avoid his obligations pursuant to the Freezing Order by stating that many large transactions are business expenses, or were made by his wife, when in reality they were made by [him] for personal expenses’.[93]
[92]Exhibit P7.
[93]Exhibit P7 [11].
The plaintiffs submitted that if one assumes 50/50 ownership of the joint account, and there is a hypothetical $100 in the account, the defendant’s wife is free to do with her $50 share as she pleases. They explained, however, that they have not analysed the bank statements to that level of granularity. The plaintiffs observed that approximately $60 of the $1277.66 was from the joint account but submitted that, even if those transactions were affected by the defendant’s wife, the balance of the expenditure would still exceed the allowance for living expenses.[94]
[94]T12, LL16-20.
The defendant submitted that items 4, 9 and 10, the payments of $0.64, $14.23 and $81.37 respectively, flow from prior obligations. He deposed that these were interest charged on transactions entered into before he was served with the order. He claimed not to understand the terms and obligations of the order, including the notification requirement under paragraph 10(d), and said he was unable to provide the two working days’ notice because these transactions occurred on the day—or the day after—he was served with the order. He expressed regret for not notifying the plaintiffs.[95]
[95]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [5], [8].
The defendant submitted that item 13, the $970 payment on 2 October 2013, was a bona fide business expense.[96] He deposed that he was in the process of establishing a business called Imperial Beam Holdings Pty Ltd (‘Imperial Beam’). Imperial Beam was incorporated on 5 May 2014. The directors were the defendant and Mr Jin.[97] The defendant deposed that:
[I have] tried with many different business opportunities and I have recently established a business channel between China and Australia, whereas I can export there as I can export constructions material from China and sell to the local Australian builders. In addition [my] partner and I have signed an exclusive trading agreement with the Chinese phone appliances manufacturer.[98]
The defendant explained that Imperial Beam was set up to import and sell LED lights in Australia.[99] He said that, after he left Fortune Holding, he tried to sell properties overseas through a company called IB Holding Group.[100] He approached Mr Cheung and a person he referred to as ‘Thomas’ to set up a business but the venture did not go ahead.[101] He claimed that many of the impugned transactions were ‘preparatory’ expenses incurred prior to the incorporation of Imperial Beam. He conceded that Imperial Beam never made a profit or prepared any financial statements.
[96]Ibid [6].
[97]Exhibit D2: Affidavit of Ian Yan Zhang dated 28 August 2017, exhibit IYZ-1.
[98]Defendant’s written submissions dated 14 March 2017.
[99]T140, L14.
[100]T141, L7.
[101]T141, LL17-21.
The defendant further deposed, in relation to item 13, that he was entertaining a Chinese business associate at a karaoke bar as is common in the Chinese business community. He called two witnesses, Thomas Cheung and Shane Cassar, to corroborate the connection between the 2 October 2013 transaction, the karaoke bar and his business dealings.
Mr Cheung’s evidence was that he met the defendant in 2012 through a mutual friend. He said that he was then working as an intermediary between the Chinese and Australian arms of a modular construction joint venture. Mr Cheung’s role was to represent Mr Kyn, the Chinese business partner, in communications with the Australian counterpart.[102] Mr Cheung stated that the defendant approached him in relation to two of Mr Kyn’s building projects, one in Gipp St, Collingwood, and the other in Abbotsford. He deposed that, on several occasions, the defendant invited him, Mr Kyn and the latter’s business partners in Melbourne, to dinner and karaoke. Mr Cheung said:
it’s pretty common … in China … going to karaoke so we’d normally … have a dinner, we just don’t want to finish the day and we just go somewhere you know, sometimes the wine bar, sometimes … the karaoke.[103]
He said it is a common way of ‘build[ing] a relationship in the Chinese culture and vice versa … if [the defendant was] going to China we would show [him] the same’.[104] He was shown a picture of Music Box karaoke bar and confirmed that it was the venue he had attended with the defendant.[105] He could not recall in what year or month.
[102]It may be that there was an issue with transcript and Mr Kyn’s name should be spelled differently.
[103]T112, LL24-29.
[104]T113, LL4-6.
[105]Exhibit D1.
Mr Cassar’s evidence was that he met the defendant in or around 2012 through a property development project in Craigieburn. Mr Cassar was a partner and developer in Taylor Marketing Solutions Group, a sales company, which sold off-the-plan properties. He deposed that the defendant approached him in connection with a business proposal for LED lighting. He said he went to dinner and karaoke several times with the defendant and Yalin Jin, the defendant’s business partner, and that it was either the defendant or Mr Jin who paid. Mr Cassar guessed that these dinners occurred sometime in 2014.[106] In his view the business dealings progressed no further than the due diligence stage.
Conclusion as to charge 1
[106]T123, LL14.
I accept that items 1, 2 and 3 were expenditures by the defendant’s wife from their joint account. The defendant’s international movement records confirm that he was not in China at the time of the transactions relating to items 1, 2 and 3. Accordingly, I accept it was the defendant’s wife who withdrew the sums in China from their joint account. It was not disputed that Mrs Zhang was not bound by the order. She did not give evidence in this case. The bank records confirm that items 1 and 2 were actioned overseas. On the evidence, I do not consider the plaintiffs have discharged their onus in relation to items 1, 2 and 3.
Further, I note that the defendant was served with the order on 19 September 2013 and that items 4, 9 and 10 were withdrawn on 26 and 27 September 2013, from which it follows that he was able to give the plaintiffs the necessary notice.
In relation to item 13, the evidence confirms that the defendant attended a karaoke bar at various times with Messrs Cheung and Cassar, in part for business reasons. Neither witness could confirm the dates of these dinners. I do not accept on the scant evidence before the Court that the $970 was a bona fide business expense. The defendant must adduce more evidence to establish this proposition as a reasonable possibility.
At the time of the $970 transaction Imperial Beam was not incorporated. The defendant appears to have engaged in discussions with Messrs Cheung and Cassar about a possible business venture. There is no evidence of an actual business that was established or close to being established. The only relevant record is that of the incorporation of Imperial Beam well after the date of item 13. There is no evidence of a business activity that was generating a profit or paying business expenses that were bona fide and properly incurred.
In light of the lack of cogent evidence supporting the existence of a business, or any relevantly business-like activities, I do not regard the $970 as falling within the scope of the business expenses exception. Accordingly, and notwithstanding my findings in relation to items 1, 2 and 3, the defendant has exceeded his weekly allowance of $1,000 for ordinary living expenses. Charge 1 is therefore made out.
Charge 2
In breach of the Freezing Order, the Defendant did pay interest in the sum of $1,561.03 on 30 September 2013. If this related to an obligation arising prior to the Freezing Order, the Defendant did fail to give two working days’ notice to the Plaintiffs in writing or at all of the obligation to pay such prior obligation as required by the exception in sub-clause 10(d) of the Freezing Order.
Particulars
The interest was paid from the Defendant’s bank account with National Australia Bank Limited, account name IY Zhang and account number 114676324. The transaction description is “INTEREST”.
On 30 September 2013 the defendant paid interest in the sum of $1,561.03 from his NAB account.[107] The plaintiffs submitted that this payment relates to interest on a mortgage and is in breach of the order. They submitted that, even if this payment related to a prior obligation, the defendant failed to give notice of the particulars of his obligations as is required by the order.[108]
[107]Exhibit P4 117.
[108]T13, LL10-16.
The plaintiffs tendered an affidavit of Ms Wu, solicitor for the plaintiffs, affirmed 27 March 2015.[109] Ms Wu deposed that the plaintiffs and their solicitors did not receive any notice from the defendant in relation to any of the transactions particularised in charges 2, 5, 6, 12, 15, 21, 37, 41, 53, 54 of the Amended Summons.[110]
[109]Exhibit P6.
[110]Ibid [6]–[7].
The defendant submitted that the payment of $1,561.03 was for a prior obligation. He deposed that it was a mortgage payment for his apartment in Southbank.[111] He conceded that he failed to give notice of the particulars of his obligations but claimed not to understand the terms of the order.
Conclusion as to charge 2
[111]T63, LL11-18.
I am satisfied that the defendant knew the terms of the order, including the notification requirement, and is in breach for failing to comply with the notification requirement under paragraph 10(d). Charge 2 is therefore made out.
Charge 3
In the alternative, or in addition to the breach of the Freezing Order set out in Charge 1 above, on 2 October 2013 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, other than on ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Order, the sum of $970.00 from his bank account with National Australia Bank Limited, being account name Ian Y Zhang and account number 4557025681648560.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts at Investments 88 Pty Ltd, also known as Royal City Relax, situated at 547 Elizabeth Street Melbourne VIC 3000. The transaction description is “INVESTMENTS 88 PTY. MELBOURNE”. This is not ordinary living, business or prior expenses because it is a massage parlour.
As charge 3 is pleaded in the alternative to charge 1, and since charge 1 is made out, charge 3 falls away.
Week 2: 10 October 2013 – 16 October 2013
Charge 4
In breach of the Freezing Order, during the week commencing 10 October 2013 and ending 16 October 2013 the Defendant did cause the sum of $1,054.66 to be dealt with, disposed of or diminished from his bank accounts with National Australia Bank Limited, Bank of Melbourne and Australia and New Zealand Banking Group Limited.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions as particularised in the below table which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order.
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 14/10/2013 PAYMENT TO OPTUS 80000798200143 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 39.18 2 14/10/2013 LATE PAYMENT FEE BOM, Ian Y Zhang, 5229611200023065 9.00 3 16/10/2013 INTEREST CHARGED ON PURCHASES ANZ, Ian Yan Zhang, 4564680013906051 625.89 4 16/10/2013 INTEREST CHARGES - PURCH BOM, Ian Y Zhang, 5229611200023065 380.59 Total 1,054.66
The plaintiffs allege that in the period 10 to 16 October 2013 the defendant dealt with, disposed of, or diminished the sum of $1,054.66 from his various bank accounts.[112] They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support.
[112]Statement of Charges, 6-7.
The defendant submitted that these transactions were either affected by his wife or permitted the exceptions to the order. The defendant deposed that item 1 was a payment for his wife’s mobile phone service from their joint account.[113] The plaintiffs replied that, even if this is so, the balance of the expenditure still exceeds the limit for ordinary living expenses.[114] The defendant deposed that item 2 is a bank fee which occurred in circumstances outside his control.
[113]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [11].
[114]T12, LL16-20.
The defendant submitted that items 3 and 4 flowed from prior obligations. He deposed that these transactions were interest charges on ANZ and BOM credit cards respectively. The plaintiffs replied that, in any event, the defendant failed to prove notice of the particulars of these obligations.[115]
Conclusion as to charge 4
[115]T15, LL11-14.
I do not accept that item 1 was affected by the defendant’s wife from their joint account. His evidence is a mere assertion and does not raise a reasonable possibility of this defence. I accept, however, that items 1 and 2 were ordinary living expenses. The difficulty with respect to items 3 and 4 is that the defendant did not give the plaintiffs the necessary notice of the particulars of these prior obligations. Charge 4 is therefore made out.
Charge 5
In breach of the Freezing Order, the Defendant did pay an amount of interest in the sum of $10 on 15 October 2013. If this related to an obligation arising prior to the Freezing Order, the Defendant did fail to give two working days’ notice to the Plaintiffs in writing or at all of the obligation to pay such prior obligation as required by the exception in sub-clause 10(d) of the Freezing Order.
Particulars
The interest was paid from the Defendant’s bank account with National Australia Bank Limited, account name IY Zhang and account number 114676324. The transaction description is “Loan Serv. Fee".
The defendant deposed that this expenditure was interest charged by the bank flowing from a prior obligation.[116] He expressed regret for failing to notify the plaintiffs.
Conclusion as to charge 5
[116]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [14].
Charge 5 illustrates the plaintiffs poor drafting of charges. I fail to see how the sum of $10 warrants a separate charge of contempt. In any event, since the defendant failed to give notice of the particulars of his prior obligations, I reject the defendant’s submission that this transaction is permitted by the exceptions to the order. Charge 5 is therefore made out.
Week 3: 17 October – 23 October 2013
Charge 6
In breach of the Freezing Order, during the week commencing 17 October 2013 and ending 23 October 2013 the Defendant did cause the sum of $1,671.92 to be dealt with, disposed of or diminished from his bank accounts with Australia and New Zealand Banking Group Limited.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions as particularised in the below table which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order.
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 18/10/2013 DEBIT INTEREST CHARGED ANZ, Ian
Yan Zhang, 369312725
0.43 2 21/10/2013 VISA DEBIT PURCHASE CARD 4019 CHANGZHOU DEPARTMENT STOR CHANGZHOU 850.00 CNY INC O/S FEE $4.25 EFFECTIVE DATE: 17 OCT 2013 ANZ, Ian
Yan Zhang and Beili Zhang, 202959893
146.07 3 21/10/2013 ANZ INTERNET BANKING BPAY VIRGIN MONEY (979092) ANZ, Ian
Yan Zhang and Beili
Zhang, 202959893500.00 4 22/10/2013 EFTPOS SPOTLIGHT CTR LOTTO 0001 SOUTH MELBOURNE ANZ, Ian
Yan Zhang and Beili Zhang, 202959893
28.85 5 22/10/2013 ATM CCB CCBJIANGSUBRANCH CCBJIANGS FOREIGN CURRENCY AMT CNY 200.00 INCL OVERSEAS TRANSACTION FEE $0.99 ANZ, Ian
Yan Zhang and Beili Zhang, 202959893
34.01 6 22/10/2013 VISA DEBIT PURCHASE CARD 4001 SAFEWAY 3311 STH MELBOURNE ANZ, Ian
Yan Zhang and Beili Zhang, 202959893
36.41 7 22/10/2013 ANZ ATM STH MELB LIFESTYLE CENTRESTH MELBOURNEVI ANZ, Ian
Yan Zhang and Beili Zhang, 202959893
900.00 8 22/10/2013 PLUS ATM TRANSACTION FEE ANZ, Ian
Yan Zhang and Beili Zhang, 202959893
5.00 9 23/10/2013 VISA DEBIT PURCHASE CARD 4001 MCDONALDS SOUTH MELBO SOUTH MELBOUR EFFECTIVE DATE: 20 OCT 2013 ANZ, Ian
Yan Zhang and Beili Zhang, 202959893
21.15 Total 1,671.92
The plaintiffs allege that in the period 17 to 23 October 2013 the defendant dealt with, disposed of, or diminished the sum of $1,671.92 from his bank accounts. They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support.[117]
[117]Exhibit P1.
The defendant submitted that these transactions, save for item 4, were affected by his wife or else permitted by the exceptions to the order. He deposed that items 1 and 3 were interest charged by ANZ and a payment on his Virgin credit card respectively. The defendant submitted that these expenses related to transactions flowing from prior obligations.[118]
[118]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [17].
The defendant deposed, in relation to items 2 and 5, that these were affected by his wife from overseas. His viva voce evidence was that the transaction on 21 October 2013 occurred in a city in China.[119] He said he was in Melbourne at the time. He did not adduce any evidence in relation to the $34.01 withdrawal on 22 October 2013. In cross-examination the defendant was asked why he had not called his wife to give evidence. He replied that she did not speak English very well.[120]
[119]T136, LL7-13.
[120]T140, LL7.
The defendant deposed that item 8 was an ATM bank fee in relation to item 5.[121] He explained that item 4 was the purchase of a lottery ticket. He expressed regret for making this purchase. He stated that items 6 and 9 were ordinary living expenses totalling less than $1,000.
[121]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [18].
The defendant submitted that item 7, the withdrawal on 22 October 2013 of $900 from an ANZ ATM in South Melbourne, was for his reasonable legal expenses. He deposed that his legal fees were initially paid by a friend, Ms Qi, and that he withdrew the cash to repay her.[122] He tendered a receipt for an electronic transfer of $3,000 on 20 September 2013 from Ms Qi’s bank account to the account of Mr M McDonald of mdp Lawyers.[123] An invoice from mdp Lawyers dated 13 November 2013 was also tendered.[124] The defendant asserted that he repaid Ms Qi in three cash tranches of $1000 each. He said it was more convenient to give Ms Qi cash than transfer the funds electronically.
[122]Exhibit D2: Affidavit of Ian Yan Zhang dated 28 August 2017.
[123]Ibid, exhibit IYZ2. The description for the transaction was ‘LegalFee IANZHANG.’
[124]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017, exhibit IYZ3. It refers to two invoices from mdp Lawyers for the sums of $17,707.29 (3 October 2013) and $5,913.60 (4 November 2013) respectively.
The plaintiffs replied that the invoice postdates the withdrawal by some weeks and, as at 13 November 2013, no amount had been paid toward the firm’s fees. They invited the Court to infer that the defendant did not withdraw the $900 to pay his reasonable legal expenses.[125]
[125]T21, LL10-13.
I put to the defendant that the evidence suggested that the total amount he had paid Ms Qi was $2,900. He replied that he had a ‘spare hundred dollars’, which he gave to Ms Qi, together with the $900 he withdrew on 22 October 2013.[126]
Conclusion as to charge 6
[126]T109, LL12-15.
The evidence shows that Ms Qi made a payment of $3000 to mdp Lawyers. It does not show that the impugned withdrawal of $900 was to repay Ms Qi. The defendant was unable to describe how or when he paid her. I note that Ms Qi was not called as a witness. The defendant said she was in China and uncontactable.[127] I accept that items 6 and 9 were ordinary living expenses. However, as was conceded by the defendant, item 4 is not an ordinary living expense. In relation to items 1 and 3, since the defendant did not give the plaintiffs the particulars of his prior obligations, he cannot rely on the exception to the order. In relation to items 2, 5 and 8, as with the $900 to repay Ms Qi, the defendant merely asserts that the withdrawals were made by his wife. This does not raise a real possibility that the impugned withdrawal was permitted by the order. Charge 6 is therefore made out.
Charge 7
In the alternative, or in addition to the breach of the Freezing Order set out in Charge 6 above, on 22 October 2013 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than on ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Order, the sum of $900.00 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts at the South Melbourne Lifestyle Centre. The transaction description is “ANZ ATM STH MELB LIFESTYLE CENTRESTH MELBOURNEVI”. This is not ordinary living, legal, business or prior expenses because it has been spent at a lifestyle centre.
[127]T143, LL10-15.
As charge 7 was pleaded in the alternative to charge 6, and since charge 6 has been made out, charge 7 falls away.
Week 4: 24 October – 30 October 2013
Charge 8
In breach of the Freezing Order, during the week commencing 24 October 2013 and ending 30 October 2013 the Defendant did cause the sum of $1,778.73 to be dealt with, disposed of or diminished from his bank accounts with National Australia Bank Limited and Australia and New Zealand Banking Group Limited.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions as particularised in the below table which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order.
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 24/10/2013 PAYMENT TO ALLIANZ INSURE 131282723019313297 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 661.16 2 28/10/2013 INTEREST ON CASH ADV(S) NAB, Ian Y Zhang, 4557025681648560 8.20 3 28/10/2013 INTEREST ON PURCHASE(S) NAB, Ian Y Zhang, 4557025681648560 104.37 4 28/10/2013 LATE PAYMENT FEE NAB, Ian Y Zhang, 4557025681648560 5.00 5 29/10/2013 ANZ ATM 230 SWANSTON ST BRANCH
#2MELBOURNE VI
ANZ, Ian Yan Zhang and Beili Zhang, 202959893 1,000.00 Total 1,778.73
The plaintiffs allege that in the period 24 to 30 October 2013 the defendant dealt with, disposed of, or diminished the sum of $1,054.66 from his various bank accounts. They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support.[128]
[128]Exhibit P1.
The defendant submitted each transaction was permitted by the exceptions to the order. He deposed that item 1 was for the purchase of compulsory vehicle insurance and so was an ordinary living expense. Items 2 and 3 were transactions flowing from prior obligations. He explained that item 2 was interest charged by NAB on a cash advance and item 3 was credit card interest charged by NAB. Item 5 was for his reasonable legal expenses. He stated that he withdrew $1,000 from ANZ to pay his legal costs.[129] He reiterated his earlier evidence that this was to repay Ms Qi.
Conclusion as to charge 8
[129]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [26].
For the same reasons given in relation to charge 6, namely that the evidence does not establish a reasonable possibility that the $1000 was to repay Ms Qi, I reject the defendant’s submission that item 5 was for legal expenses. I also reject the defendant’s submission as to his prior obligations because the necessary notice was not given to the plaintiffs. Charge 8 is therefore made out.
Week 5: 31 October – 6 November 2013
Charge 9
In breach of the Freezing Order, the Defendant did pay interest in the sum of $1,564.80 on 31 October 2013. If this related to an obligation arising prior to the Freezing Order, the Defendant did fail to give two working days’ notice to the Plaintiffs in writing or at all of the obligation to pay such prior obligation as required by the exception in sub-clause 10(d) of the Freezing Order.
Particulars
The interest was paid from the Defendant’s bank account with National Australia Bank Limited, account name IY Zhang and account number 114676324. The transaction description is “INTEREST”.
Conclusion as to charge 26
For the same reasons given in relation to charge 1, namely that there was no evidence of a business or business-like activities, I do not accept that items 5 and 6 were bona fide business expenses. Further, I accept the plaintiffs’ submission that even if item 5 was a business expense, the defendant has not apportioned which calls were for personal and which for business purposes. In relation to items 1, 2 and 3, the defendant has not given the necessary notice and so cannot rely on the prior obligations exception. However, I accept item 4 is an ordinary living expense, being his home telephone service. Charge 26 is therefore made out.
Week 14: 13 March – 19 March 2014
Charge 27
In breach of the Freezing Order, during the week commencing 13 March 2014 and ending 19 March 2014 the Defendant did cause the sum of $1,797.74 to be dealt with, disposed of or diminished from his bank accounts with National Australia Bank Limited and Australia and New Zealand Banking Group Limited.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions particularised in the below table which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order.
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 13/03/2014 VISA DEBIT PURCHASE CARD 4001 AUSTRALIA
POST 344233 SOUTH MELBOUR EFFECTIVE DATE: 11 MAR 2014ANZ, Ian Yan Zhang and Beili Zhang, 202959893 6.00 2 13/03/2014 VISA DEBIT PURCHASE CARD 4001 ORIGIN ENERGY HOLDIN ADELAIDE EFFECTIVE DATE: 11 MARCH 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 97.26 3 13/03/2014 VISA DEBIT PURCHASE CARD 4001
WINENERGY/POST MELBOURNE EFFECTIVE DATE: 11 MARCH 2014ANZ, Ian Yan Zhang and Beili
Zhang, 202959893
186.40 4 13/03/2014 VISA DEBIT PURCHASE CARD 4001 WINENERGY/POST MELBOURNE EFFECTIVE DATE: 11 MARCH 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 329.40 5 13/03/2014 ANZ INTERNET BANKING BPAY PRUSHKA MERCANTILE {758096} ANZ, Ian Yan Zhang and Beili Zhang, 202959893 433.95 6 13/03/2014 QANTAS AIRWAYS MASCOT NAB, Ian Y Zhang, 4557025681648560 186.00 7 14/03/2014 VISA DEBIT PURCHASE CARD 4001 SKYBUS COACH SERVICE MELBOURNE EFFECTIVE DATE: 11 MAR 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 18.00 8 14/03/2014 CITY OF PORT PHILLIP ST KILDA NAB, Ian Y Zhang, 4557025681648560 95.10 9 14/03/2014 FINES VIC - INTERNET MELBOURNE NAB, Ian Y Zhang, 4557025681648560 224.00 10 17/03/2014 EFTPOS CLARENCE NEWSAGENCY SYDNEY AU ANZ, Ian Yan Zhang and Beili Zhang, 202959893 28.85 11 17/03/2014 PAYMENT TO OPTUS 80000798200143 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 36.98 12 17/03/2014 GM CABS AUSTRALIA MASCOT NAB, Ian Y Zhang, 4557025681648560 56.80 13 18/03/2014 MYER SYDNEY CITY SYDNEY NAB, Ian Y Zhang, 4557025681648560 99.00 Total 1,797.74
The plaintiffs allege that in the period 13 to 19 March 2013 the defendant dealt with, disposed of, or diminished the sum of $1,797.74 from his bank accounts. They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support.
The defendant deposed that items 1, 2, 3, 4, 8, 9, 10, 12 and 13 totalling $1,122.81, were ordinary living expenses. He expressed regret that the amount exceeded the $1,000 limit and explained that he needed to pay a parking fine. He deposed that item 5 was a transaction affected by his wife from their joint account. He stated that his wife did not perform the transaction on his behalf, on his instructions or with his encouragement. He deposed that items 6 and 7 were for travelling between Sydney and Melbourne in connection with legal proceedings and so were reasonable legal expenses. He stated that these transactions were necessary to attend a hearing in Melbourne.
Conclusion as to charge 27
On the defendant’s own admission he has exceeded the $1,000 threshold for this period. On the scant evidence provided to the Court there is no reason to believe that item 5 was a transaction actioned by the defendant’s wife. I accept, however, that items 6 and 7 are reasonable legal expenses totalling $204. Charge 27 is therefore made out.
Charge 28
In breach of the Freezing Order, on 19 March 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders, the sum of $802.00 from his bank account with National Australia Bank Limited, being account number 4557025681648560 held in the name of Ian Y Zhang.
Particulars
The transaction description of the sum the Defendant did cause to be dealt with, disposed of or diminished from his bank account is “MIGRATION REVIEW SYDNEY”. This is not an ordinary living expense nor was it a legal expense within the exception in clause 10(b) of the Freezing Order.
The plaintiffs allege that on 19 March 2014 the defendant dealt with, disposed of, or diminished the sum of $802 from his NAB account. They claim that this was neither an ordinary living expenses nor a reasonable legal expense.
The defendant deposed that this payment was for a migration review of his wife’s permanent resident visa. He explained that he and his wife married in 2011 and that they had to wait three years for her to apply to become a permanent resident. The defendant stated that he paid the fee from his account, rather than their joint account, because it was a requirement of the migration application that he be able to financially support his wife.[148] He said the review was very important to him and his wife and expressed regret for not notifying the plaintiffs.[149]
[148]T76, LL21-26.
[149]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [89]–[90].
The plaintiffs replied that no notice of an intention to make the payment could cure the breach since this expense did not fall into any of the exceptions to the order.
Conclusion as to charge 28
I accept that the $802 expenditure for a migration review is an ordinary living expense. Charge 28 is therefore not made out.
Week 15: 24 April – 30 April 2014
Charge 29
In breach of the Freezing Order, during the week commencing 24 April 2014 and ending 30 April 2014 the Defendant did cause the sum of $2,356.00 to be dealt with, disposed of or diminished from his bank accounts with National Australia Bank Limited and Australia and New Zealand Banking Group Limited.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions particularised in the below table which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order.
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 24/04/2014 VISA DEBIT PURCHASE CARD 4001 FINES VIC - INTERNET MELBOURNE EFFECTIVE DATE: 21 APRIL 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 22.40 2 24/04/2014 VISA DEBIT PURCHASE CARD 4001 FINES VIC - INTERNET MELBOURNE EFFECTIVE DATE: 22 APR 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 201.60 3 24/04/2014 VISA DEBIT PURCHASE CARD 4001 PRUSHKA RECOVER/POST MELBOURNE EFFECTIVE DATE: 22 APR 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 400.00 4 24/04/2014 PAYMENT TO ALLIANZ INSURE 131282723019814114 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 1,051.17 5 28/04/2014 OVERDRAWN FEE EFFECTIVE DATE: 24 APR 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 6.00 6 28/04/2014 EFTPOS KIDS PLUS CHEMIST 0001 WESTMEAD ANZ, Ian Yan Zhang and Beili Zhang, 202959893 10.50 7 28/04/2014 VISA DEBIT PURCHASE CARD 4001 TRANSPORT FOR NSW CHIPPENDALE EFFECTIVE DATE: 23 APRIL 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 40.00 8 28/04/2014 DEBIT INTEREST CHARGED ANZ, Ian Yan Zhang and Beili Zhang, 202959893 1.10 9 28/04/2014 DEBIT INTEREST CHARGED ADJ INCREASE EFFECTIVE DATE: 28 APR 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 0.05 10 28/04/2014 INTEREST ON PURCHASE(S) NAB, Ian Y Zhang, 4557025681648560 105.39 11 28/04/2014 LATE PAYMENT FEE NAB, Ian Y Zhang, 4557025681648560 5.00 12 29/04/2014 VISA DEBIT PURCHASE CARD PAYPAL *ITAOCARD 4029357733 EFFECTIVE DATE:
26 APRIL 2014ANZ, Ian Yan Zhang and Beili Zhang, 202959893 105.33 13 29/04/2014 VISA DEBIT PURCHASE CARD 4001 WOOLWORTHS 1128 WOLLI CREEK ANZ, Ian Yan Zhang and Beili Zhang, 202959893 8.37 14 29/04/2014 VISA DEBIT PURCHASE CARD 4001 WOOLWORTHS 1128 WOLLI CREEK ANZ, Ian Yan Zhang and Beili Zhang, 202959893 63.18 15 29/04/2014 EFTPOS ALAN LO HURSTVILLE C HURSTVILLE NS ANZ, Ian Yan Zhang and Beili Zhang, 202959893 180.94 16 30/04/2014 VISA DEBIT PURCHASE CARD 4001 COLES HURSTVILLE NSW EFFECTIVE DATE: 29 APR 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 4.00 17 30/04/2014 VISA DEBIT PURCHASE CARD 4001 COLES HURSTVILLE NSW EFFECTIVE DATE: 29 APR 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 5.97 18 30/04/2014 VISA DEBIT PURCHASE CARD 4001 QANTAS AIRWAYS LTD (ECOM) MASCOT ANZ, Ian Yan Zhang and Beili Zhang, 202959893 145.00 Total 2,356.00
The plaintiffs allege that in the period 24 to 30 April 2014 the defendant dealt with, disposed of, or diminished the sum of $2,356 from his bank accounts. They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support
The defendant submitted that items 3 and 15 were transactions affected by his wife from their joint account. He claimed that his wife did not conduct the transaction on his behalf, on his instructions, or with his encouragement. He submitted that items 1, 2, 4, 5, 6, 7, 12, 13, 14, 16 and 17 totalling $1,518.52 were ordinary living expenses.[150] He conceded that he had spent more than his weekly allowance, but said he needed to pay for vehicle insurance, which was ‘prudent’.[151]
[150]In his affidavit dated 12 September 2017 at [93], the defendant incorrectly calculated the total of these items as $1,294.52.
[151]Exhibit D2: Affidavit in Response to Plaintiffs’ Amended Summons for Contempt dated 12 September 2017 [93].
The defendant further submitted that items 8, 9 , 10 and 11 were interest and bank fees flowing from prior obligations. He expressed regret for not notifying the plaintiffs. He submitted that item 18 was a bona fide business expense. He explained that it was for an airfare for a business trip from Sydney to Melbourne. He said that on 1 May 2014 his business partner travelled from China to Melbourne for business meetings. No evidence was adduced to support this.
Conclusion as to charge 29
The defendant conceded that his spending in this period exceeded the $1,000 threshold for ordinary living expenses. For the same reasons given in relation to charge 1, namely that there is no evidence of a business or business-like activities, I reject the defendant’s submission that item 18 is a bona fide business expense. I also reject the defendant’s submission, without further evidence, that items 3 and 15 were affected by his wife. Charge 29 is therefore made out.
Charge 30
In the alternative or in addition to the breach of the Freezing Order set out at Charge 29 above, on 30 April 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders, the sum of $145.00 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 held in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The transaction description of the sum the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts is “VISA DEBIT PURCHASE CARD 4001 QANTAS AIRWAYS LTD (ECOM) MASCOT”.
As charge 30 was pleaded in the alternative to charge 29, and since charge 29 has been made out, charge 30 falls away.
Charge 32
In the alternative or in addition to the breach of the Freezing Order set out at Charge 31 above, on 6 May 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders, the sum of $213.00 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 held in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The transaction description of the sum the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts is “VISA DEBIT PURCHASE CARD 4001 YEONGA NORTH MELBOUR EFFECTIVE DATE: 05 MAY 2014”. This is not ordinary living, legal, business or prior expenses because it is an excessive amount to spend in one evening on ordinary living and it is not a reasonable business expense.
The plaintiffs allege that on 6 May 2014 the defendant dealt with, disposed of, or diminished the sum of $213 from his ANZ account. They claim this is not an ordinary living expense or bona fide business expense.
The defendant submitted that the $213 was a bona fide business expense. He deposed that it was for a dinner with his business partner in Melbourne. The plaintiffs reiterated their submission about the lack of evidence as to a genuine business.
Conclusion as to charge 32
For the same reasons given in relation to charge 1, namely that there is no evidence of a business or business-like activities, I reject the defendant’s submission that item 8 is a bona fide business expense. Charge 32 is therefore made out.
Week 16: 8 May – 14 May 2014
Charge 34
In breach of the Freezing Order, during the week commencing 8 May 2014 and ending 14 November 2014 the Defendant did cause the sum of $3018.80 to be dealt with, disposed of or diminished from his bank account with Australia and New Zealand Banking Group Limited.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions particularised in the below table which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order:
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 8/05/2014 VISA DEBIT PURCHASE CARD 4001 SILVERTOP VIC 131008 EAST SYDNEY EFFECTIVE DATE: 07 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 9.66 2 8/05/2014 VISA DEBIT PURCHASE CARD 4001 OLDTOWN QV AUST PTY LTD MELBOURNE EFFECTIVE DATE: 07 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 31.60 3 8/05/2014 VISA DEBIT PURCHASE CARD 4001 HU TONG DUMPLING BAR MELBOURNE EFFECTIVE DATE: 07 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 70.00 4 8/05/2014 EFTPOS ISHIYA 0001 MELBOURNE ANZ, Ian Yan Zhang and Beili Zhang, 202959893 343.60 5 9/05/2014 VISA DEBIT PURCHASE CARD 4001 PAYPAL *ITAOCARD
4029357733 EFFECTIVE DATE: 06 MAY 2014ANZ, Ian Yan Zhang and Beili Zhang, 202959893 63.07 6 9/05/2014 VISA DEBIT PURCHASE CARD 4001 AUST POST WCC 350748 MELBOURNE EFFECTIVE DATE: 07 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 5.75 7 9/05/2014 EFTPOS BLACK CAB VIC 132227EAST SYDNEY AU ANZ, Ian Yan Zhang and Beili Zhang, 202959893 27.09 8 9/05/2014 EFTPOS STARS ENTERTAINMENT MELBOURNE VIC ANZ, Ian Yan Zhang and Beili Zhang, 202959893 429.00 9 12/05/2014 VISA DEBIT PURCHASE CARD 4001 BLACK CAB VIC 132227 EAST SYDNEY EFFECTIVE DATE: 08 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 11.13 10 12/05/2014 VISA DEBIT PURCHASE CARD 4001 BLACK CAB VIC 132227 EAST SYDNEY EFFECTIVE DATE: 08 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 12.91 11 12/05/2014 VISA DEBIT PURCHASE CARD 4001 MELBOURNE AIRPORT TULLAMARINE EFFECTIVE DATE: 09 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 14.28 12 12/05/2014 VISA DEBIT PURCHASE CARD 4001 COLES EXPR ABBOTSFORD VIC EFFECTIVE DATE: 09 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 76.23 13 12/05/2014 VISA DEBIT PURCHASE CARD 4001 TOP ONE KARAOKE BA MELBOURNE: EFFECTIVE DATE: 10 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 1,000.00 14 12/05/2014 VISA DEBIT PURCHASE CARD QANTAS AIRWAYS LTD (ECOM) MASCOT EFFECTIVE DATE: 11 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 107.16 15 12/05/2014 VISA DEBIT PURCHASE CARD 4001 MYER SYDNEY CITY ANZ, Ian Yan Zhang and Beili Zhang, 202959893 30.00 16 12/05/2014 VISA DEBIT PURCHASE CARD 4001 WOOLWORTHS 1248 SYDNEY ANZ, Ian Yan Zhang and Beili Zhang, 202959893 87.50 17 13/05/2014 VISA DEBIT PURCHASE CARD 4001 PAYPAL *ITAOCARD
4029357733 EFFECTIVE DATE:11 MAY 2014ANZ, Ian Yan Zhang and Beili Zhang, 202959893 125.15 18 13/05/2014 VISA DEBIT PURCHASE CARD 4001 AUTHENTICS AUSTRALIA HAYMARKET EFFECTIVE DATE: 12 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 30.00 19 13/05/2014 VISA DEBIT PURCHASE CARD 4001 HARBOUR CITY GROUP PTY LT SYDNEY EFFECTIVE DATE: 12 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 80.00 20 13/05/2014 EFTPOS HURSTVILLE CTOWN PHARM HURSTVILLENSWAU ANZ, Ian Yan Zhang and Beili Zhang, 202959893 23.85 21 13/05/2014 EFTPOS HURSTVILLE CTOWN PHARM HURSTVILLENSWAU ANZ, Ian Yan Zhang and Beili Zhang, 202959893 49.90 22 13/05/2014 EFTPOS HURSTVILLE CHINESE HURSTVILLENSWAU ANZ, Ian Yan Zhang and Beili Zhang, 202959893 54.60 23 14/05/2014 VISA DEBIT PURCHASE CARD 4001 COCA COLA AMATIL NORTH SYDNEY EFFECTIVE DATE: 12 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 4.00 24 14/05/2014 VISA DEBIT PURCHASE CARD 4001 COLES HURSTVILLE NSW EFFECTIVE DATE: 13 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 7.39 25 14/05/2014 VISA DEBIT PURCHASE CARD 4001 EV HAIR/BEAUTY HURSTVILLE EFFECTIVE DATE: 13 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 7.95 26 14/05/2014 PAYMENT TO OPTUS 80000798200143 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 36.98 27 14/05/2014 EFTPOS SYD TAX AND DUTY FREE MASCOT AU ANZ, Ian Yan Zhang and Beili Zhang, 202959893 280.00 Total 3,018.80
The plaintiffs allege that in the period 8 to 14 May 2014 the defendant dealt with, disposed of, or diminished the sum of $3,018.80 from his bank accounts. They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support.
The defendant submitted that items 2, 3, 4, 8, 13, 14, 19 and 27 were bona fide business expenses. He reiterated his evidence about Imperial Beam and claimed to have incurred these expenses when his business partner visited Australia from 1 to 14 May 2014. The purpose of this trip, he claimed, was to register the company and conduct meetings with local distributors. As there was no company bank account at the time, the defendant paid for all expenses with the expectation that he would be later reimbursed, although this never occurred since the company did not make a profit.[152] The plaintiffs replied that, without evidence as to the company’s financials, the Court could not assess the reasonability of the expenses incurred. Counsel for the plaintiffs described the defendant’s claims as ‘bare assertions’.[153]
[152]T142, LL20-23.
[153]T50, L28.
The defendant deposed that items 15, 25 and 26 were transactions conducted by his wife using their joint account. He did not provide any corroborating evidence. He further deposed that items 1, 5, 6, 7, 9, 10, 11, 12, 16, 17, 18, 20, 21, 22, 23 and 24 were ordinary living expenses totalling less than $1,000.
Conclusion as to charge 34
For the same reasons given in relation to charge 1, namely that there was no evidence of business or business-like activities at the relevant time, I reject the defendant’s submission that these were bona fide business expenses. I also reject, without further evidence, the defendant’s submission that certain impugned withdrawals were affected by his wife. Charge 34 is therefore made out.
Charge 35
In the alternative or in addition to the breach of the Freezing Order set out at Charge 34 above, on 8 May 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living expenses, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders, the sum of $343.60 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 held in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The Defendant did cause to be dealt with, disposed of or diminished from his bank accounts at Ishiya Stone Grill situated at 152 Little Bourke Street, Melbourne VIC 3000. The transaction description is “EFTPOS ISHIYA 0001 MELBOURNE”. This is not ordinary living, legal, business or prior expenses because it is an excessive amount to spend in one evening on ordinary living and it is not a reasonable business expense.
As charge 35 was pleaded in the alternative to charge 34, and since charge 34 has been made out, charge 35 falls away.
Charge 36
In the alternative or in addition to the breach of the Freezing Order set out at Charge 34 above, on 9 May 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders the sum of $429.00 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 held in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The transaction description of the sum the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts is “EFTPOS STARS ENTERTAINMENT MELBOURNE VIC”.
As charge 36 was pleaded in the alternative to charge 34, and since charge 34 has been made out, charge 36 falls away.
Charge 37
In the alternative or in addition to the breach of the Freezing Order set out at Charge 34 above, on 12 May 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders , the sum of $1000.00 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 held in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts at Top One Karaoke Bar situated at Level 1, 15 Heffernan Lane, Melbourne VIC 3000. The transaction description is “VISA DEBIT PURCHASE CARD 4001 TOP ONE KARAOKE BA MELBOURNE: EFFECTIVE DATE: 10 MAY 2014”. This is not ordinary living expenses or reasonable business expenses as it is not reasonable to spent such an amount in one night at a Karaoke Bar.
As charge 37 was pleaded in the alternative to charge 34, and since charge 34 has been made out, charge 37 falls away.
Charge 38
In the alternative or in addition to the breach of the Freezing Order set out at Charge 34 above, on 14 May 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders, the sum of $280.00 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 held in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The transaction description of the sum the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts is “EFTPOS SYD TAX AND DUTY FREE MASCOT AU”. It appears to be luxury goods purchased from a duty-free shop.
As charge 38 was pleaded in the alternative to charge 34, and since charge 34 has been made out, charge 38 falls away.
Week 17: 29 May – 4 June 2014
Charge 39
In breach of the Freezing Order, during the week commencing 29 May 2014 and ending 4 June 2014 the Defendant did cause the sum of $1,535.89 to be dealt with, disposed of or diminished from his bank account with Australia and New Zealand Banking Group Limited.
Particulars
The Defendant did cause the sum to be dealt with, disposed of or diminished from his bank accounts in the several transactions particularised in the below table which did not fall within the exceptions in sub-clauses 10(a)-(d) of the Freezing Order and in particular exceeded the $1,000 permitted for ordinary living expenses by the exception in sub-clause 10(a) of the Freezing Order.
Item Date of Transaction Transaction Type & Description Bank Name, Account Name & Number Sum ($) 1 29/05/2014 VISA DEBIT PURCHASE CARD 4001 SUNRISE DUTY FREE (CHINA) BEIJING EFFECTIVE DATE: 26 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 169.33 2 29/05/2014 VISA DEBIT PURCHASE CARD 4019 WOOLWORTHS 1128 WOLLI CREEK ANZ, Ian Yan Zhang and Beili Zhang, 202959893 26.14 3 2/06/2014 VISA DEBIT PURCHASE CARD 4001 PIZZA HUT EARLWOOD EARLWOOD EFFECTIVE DATE: 29 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 36.85 4 2/06/2014 ANZ ATM HURSTVILLE WESTFIELD L1 HURSTVILLE NS EFFECTIVE DATE: 31 MAY 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 250.00 5 2/06/2014 VISA DEBIT PURCHASE CARD 4019 WOOLWORTHS 1248 SYDNEY EFFECTIVE DATE: 01 JUN 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 94.40 6 2/06/2014 ANZ ATM HURSTVILLE WESTFIELD L1 HURSTVILLE NS EFFECTIVE DATE: 01 JUN 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 120.00 7 3/06/2014 VISA DEBIT PURCHASE CARD 4019 COLES EARLWOOD NSW EFFECTIVE DATE: 02 JUN 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 14.00 8 4/06/2014 VISA DEBIT PURCHASE CARD 4019 HARPERS PHARMACY EARLWOOD EFFECTIVE DATE: 02 JUN 2014 ANZ, Ian Yan Zhang and Beili Zhang, 202959893 3.50 9 4/06/2014 ANZ INTERNET BANKING BPAY ECOLLECT.COM.AU
{924635}
ANZ, Ian Yan Zhang and Beili Zhang, 202959893 304.73 10 4/06/2014 VISA DEBIT PURCHASE CARD 4001 OPTUS BILLING PAY MY BIL MACQUARIE PAR ANZ, Ian Yan Zhang and Beili Zhang, 202959893 516.94 Total 1,535.89
The plaintiffs allege that in the period 29 May to 4 June 2014 the defendant dealt with, disposed of, or diminished the sum of $1,535.89 from his ANZ account. They claim the defendant exceeded his weekly allowance of $1,000 for ordinary living expenses and rely on his subpoenaed bank statements, aggregated above, in support.
The defendant submitted that items 2, 3, 5, 7, 8, and 9 were ordinary living expenses totalling less than $1,000. He claimed that items 1, 4 and 6 were transactions affected by his wife using their joint account. He stated that his wife did not conduct the transactions on his behalf, or his instruction, or with his encouragement. He further submitted that item 10 was a bona fide business expense, namely for the provision of his Optus mobile phone service, which used to make international calls to his business partner in China.
Conclusion as to charge 39
For the same reasons given in relation to charge 1, namely that there is no evidence of a business or business-like activities, I reject the defendant’s submissions that item 10 was a bona fide business expense. I also reject, without further evidence, the defendant’s submission that items 1, 4 and 6 were affected by his wife. Charge 39 is therefore made out.
Charge 40
In addition to or in the alternative to the breach of the Freezing Order set out at Charge 39 above, on 29 May 2014 the Defendant did cause to be dealt with, disposed of or diminished from his bank accounts, on other than ordinary living, legal, business or prior expenses within sub-clauses 10(a)-(d) of the Freezing Orders, the sum of $169.33 from his bank account with Australia and New Zealand Banking Group Limited, being account number 202959893 held in the name of Ian Yan Zhang and Beili Zhang.
Particulars
The transaction description of the sum the Defendant did cause to be dealt with, disposed of or diminished is “VISA DEBIT PURCHASE CARD 4001 SUNRISE DUTY FREE (CHINA) BEIJING EFFECTIVE DATE: 26 MAY 2014”. It appears to be luxury goods purchased from a duty-free shop.
As charge 40 was pleaded in the alternative to charge 39, and since charge 39 has been made out, charge 40 falls away.
Overall Conclusion
The plaintiffs have proved beyond reasonable doubt charges 1, 2, 4, 5, 6, 8, 9, 10, 11, 12, 15, 17, 18, 21, 25, 26, 27, 29, 32, 34 and 39 as set out in their further amended summons dated 28 March 2017. The defendant is therefore prima facie in contempt of court.
Future conduct of proceedings
As I have said, a deliberate act or omission which is in breach of a court order will ordinarily constitute wilful disobedience, unless the contemnor is able to show by way of exculpation that the default was casual, accidental or unintentional.
I pause to note that, as Nettle J opined in Primelife Corporation Ltd v Newpark Pty Ltd,[154] in contempt proceedings:
aggravating features relevant to penalty require proof beyond reasonable doubt. Accordingly, although there may be no general requirement to adopt the view of the facts most favourable to the contemnor, that is the practical effect of the requirement that there be proof beyond reasonable doubt of the facts which tell against him.[155]
[154][2003] VSC 106.
[155]Ibid [39] (citations omitted).
I will invite the parties to make submissions as to whether the breaches were technical, wilful or contumacious, as well as what relevance this has, if any, to the penalty to be imposed.
Despite various amendments to the summons, it is a difficult summons to follow. It is difficult to determine the actual amounts in breach of the order.
I invite the parties, at first instance, to calculate the amounts in breach. Following this I will ask the plaintiffs to file and serve submissions as to amount and penalty by 4pm Friday 15 December 2017. The defendant is to file and serve his reply by 4pm Friday 22 December 2017. I will list the matter for a half-day hearing on Wednesday 31 January 2018 at 9:00am.
At that hearing I will receive oral submissions as to what penalty, if any, should be imposed and whether there is any reason why this Court should not exercise the contempt jurisdiction.
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