HungryPanda Au Pty Ltd v Fantuan Australia Pty Ltd - [2023] VSC 102

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

S ECI 2022 00588

HUNGRYPANDA AU PTY LTD (ACN 630 315 132) & ORS (according to the attached Schedule)	Plaintiffs
v
FANTUAN AUSTRALIA PTY LTD (ACN 656 561 492)	Defendant
and
EASI GLOBAL LIMITED (HK) (A COMPANY INCORPORATED IN HONG KONG WITH COMPANY NUMBER (2754411)) & ORS (according to the attached Schedule)	Third Parties

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JUDGE:	ATTIWILL J
WHERE HELD:	Melbourne
DATE OF HEARING:	1 and 2 September 2022
DATE OF RULING:	15 March 2023
CASE MAY BE CITED AS:	HungryPanda AU Pty Ltd & Ors v Fantuan Australia Pty Ltd & Ors
MEDIUM NEUTRAL CITATION:	[2023] VSC 102

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PRACTICE AND PROCEDURE – Application by defendant and some third parties to temporarily stay the proceeding – Application also by third parties to temporarily stay the third party proceeding – Plaintiffs commenced earlier proceeding in the High Court of Justice, Business and Property Courts of England and Wales – Defendant not a party to the proceedings in the High Court of Justice – Third parties are defendants to, or are recipients of a ‘letter before action’ from the plaintiffs’ solicitors in relation to, the proceedings in the High Court of Justice – Common alleged facts and similar issues in both proceedings – Advantages and disadvantages of a temporary stay of the proceeding and of a temporary stay of the third party proceeding – Effect of a foreign jurisdiction clause in an agreement made between the plaintiffs and some third parties – Whether the proceeding or the third party proceeding should be temporarily stayed – Sections 29 and 30 of the Supreme Court Act 1986, ss 7, 8 and 9 of the Civil Procedure Act 2010, Sterling Pharmaceuticals Pty Ltd v Boots Co (Aust) Pty Ltd (1992) 34 FCR 287, Tucker v State of Victoria [2021] VSCA 120 and Global Partners Fund Ltd v Babcock & Brown Ltd(in liq) (2010) 79 ACSR 383 applied – Application to temporarily stay the proceeding granted until further order – Application to temporarily stay the third party proceeding dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr J W S Peters AM QC with Mr M P Costello, Ms J Nikolic and Mr A Terzic	White & Case
For the Defendant	Mr D J Williams AM QC with Mr S Clement	Macpherson Kelley
For the 1^st to 5^th and 9^th Third Parties	Mr R Heath QC with Mr D Kim	DLA Piper Australia
For the 6^th to 8^th and 10^th Third Parties	Mr C H Truong QC with Ms J Zhou	Neo Legal

TABLE OF CONTENTS

INTRODUCTION............................................................................................................................... 1

PARTIES’ MATERIALS..................................................................................................................... 3

BACKGROUND.................................................................................................................................. 6

Parties.............................................................................................................................................. 6

Asset Purchase Agreement........................................................................................................ 13

Sale and Joint Venture documents........................................................................................... 17

P&L Group Holdings Pty Ltd................................................................................................... 22

Fantuan Australia........................................................................................................................ 23

High Court proceeding.............................................................................................................. 24

Victorian proceeding.................................................................................................................. 37

Federal Court proceedings........................................................................................................ 51

Stay applications......................................................................................................................... 54

APPLICABLE PRINCIPLES............................................................................................................ 54

SUBMISSIONS................................................................................................................................... 60

ANALYSIS......................................................................................................................................... 77

Which proceeding was commenced first?............................................................................... 77

Which was the first substantive proceeding?................................................................ 78
Did the HungryPanda Companies choose to commence a proceeding
against the Sellers first?................................................................................................... 79
Did Fantuan Australia delay in commencing the third party proceeding?.............. 82

Whether the termination of one proceeding is likely to have material effect

on the other.................................................................................................................................. 85

Legal effects........................................................................................................................ 85
Material effect as a practical matter................................................................................ 91

Public interest.............................................................................................................................. 94

Public interest factor submitted by the HungryPanda Companies........................... 94
Public interest factor submitted by Fantuan Australia................................................ 97

The undesirability of two courts competing to see which one determines

common facts first....................................................................................................................... 98

Consideration of the circumstances relating to witnesses.................................................. 101

Whether work done in preparation may be wasted............................................................ 103

How far advanced proceedings are in each court................................................................ 104

The law should strive against permitting multiplicity of proceedings in

relation to similar issues........................................................................................................... 106

The undesirability of substantial waste of time and effort if it becomes a common practice to bring actions in two courts involving substantially the same issues................................ 111

Generally balancing the advantages and disadvantages to each party............................ 116

The HungryPanda Companies and the opportunity to obtain
meaningful relief and the timely resolution of their claims..................................... 116
Is it unlikely that the HungryPanda Companies will obtain
injunctive relief in the Victorian proceeding as it is ‘anti-competitive’?.. 119
If the Victorian proceeding is stayed, will the HungryPanda
Companies be able to obtain meaningful injunctive relief against
Fantuan Australia in the Victorian proceeding?.......................................... 120
If the Victorian proceeding is stayed, are the HungryPanda
Companies able to obtain meaningful injunctive relief against
Fantuan Australia by alternate means? For example, by joining
Fantuan Australia to the High Court proceeding or by commencing
a new proceeding against it in England?....................................................... 121
Are damages an adequate remedy for the HungryPanda Companies’ claims in the Victorian proceeding?...................................................................................... 123
Assuming that a stay of the Victorian proceeding is a disadvantage
to the HungryPanda Companies’ claims in the Victorian proceeding,
is that disadvantage addressed by any other matters?............................... 123
Conclusion........................................................................................................... 124

Fantuan Australia and its intended reliance upon the judgment of the High Court 124
Fantuan Australia and the prosecution of its third party claims in the event
that the third party proceeding is stayed................................................................... 126
Fantuan Australia and the enforcement of judgment against it if the third
party proceeding is stayed............................................................................................ 134
Third parties and the possibility of being involved in two proceedings and
two trials in the event of no stay.................................................................................. 135

Is the third party proceeding the consequence of the way in which the

HungryPanda Companies have chosen to make their claims in the Victorian proceeding? 137

Is the third party proceeding an abuse of process as a result of the third party

statement of claim incorporating allegations from the High Court proceeding,

and, if so, what is the effect?.................................................................................................... 139

Foreign jurisdiction clause in the Asset Purchase Agreement........................................... 142

Applicable laws to the dispute in the Victorian proceeding.............................................. 148

English law....................................................................................................................... 148
Australian law.................................................................................................................. 149

Did Fantuan Australia delay in making the application for a stay?.................................. 151

SUMMARY OF FACTORS............................................................................................................ 153

EXERCISE OF DISCRETION......................................................................................................... 156

CONCLUSION................................................................................................................................ 160

HIS HONOUR:

INTRODUCTION

On 15 October 2021, the plaintiffs (HungryPanda Companies) entered into an agreement entitled ‘Asset Purchase Agreement’ with the first to fourth third parties (Sellers) concerning the purchase of a business, which included an online take-away food ordering service business known as ‘EASI’ carried on in Australia (Asset Purchase Agreement).[1]
[1]First Nomikos affidavit, exh VN-2, 13-94.

On 16 February 2022, the HungryPanda Companies commenced a proceeding in the High Court of Justice, Business and Property Courts of England and Wales against the Sellers in which they allege, among other things, breaches by the Sellers of the Asset Purchase Agreement (High Court proceeding).[2]
[2]Ibid exh VN-2, 95-97 and 152-230.

On 28 February 2022, the HungryPanda Companies commenced this proceeding against the defendant (Fantuan Australia) in which they allege, among other things, that Fantuan Australia induced or procured the Sellers to breach the Asset Purchase Agreement (Victorian proceeding).

On 28 February 2022, HungryPanda AU Pty Ltd (the first plaintiff in the Victorian proceeding and first claimant in the High Court proceeding) commenced a proceeding in the Federal Court of Australia against QINN International Group Pty Ltd and a number of alleged contractors and employees of HungryPanda AU Pty Ltd (Federal Court proceeding).[3] The Federal Court proceeding was transferred to this Court. On 8 June 2022, Croft J ordered, by consent, that the transferred proceeding be wholly discontinued, upon various undertakings, including an undertaking given by HungryPanda AU Pty Ltd not to bring particular proceedings identified in the undertaking.[4]
[3]Lee affidavit, [5]; See also First Nomikos affidavit, [10] in which she deposes that it was commenced on 8 March 2022. I prefer the evidence of Mr Lee as he acted for some of the respondents in the Federal Court proceeding: Lee affidavit, [5]-[6].
[4]Lee affidavit, exh CLL-1, 6-9.

On 15 June 2022, Fantuan Australia filed a summons in which it seeks a stay of the Victorian proceeding pending the determination or resolution of the High Court proceeding or until further order.

On 29 July 2022, Fantuan Australia commenced third party proceedings in the Victorian proceeding (third party proceedings) against:

(a)the Sellers, Junquan (Peter) Liu and Ye (Gary) Ge (Sellers and Executives Third Parties);
(b)Xiaoyun (Sharon) Wang, Helin (Will) Wang, Yingmin (Evan) Li and Aijuan (Annie) Shi (Other Executives Third Parties);

(collectively the Third Parties).

On 26 August 2022, the Other Executives Third Parties filed a summons in which they seek a stay of the Victorian proceeding pending the determination or resolution of the High Court proceeding or until further order. Alternatively, they seek a stay of the third party proceeding pending the determination or resolution of the High Court proceeding or until further order ‘on the basis that any findings made in the proceedings between the plaintiff [sic] and the defendant during the period of the third party proceeding is stayed are not binding on the third parties’.[5]
[5]Other Executives Third Parties’ summons filed 26 August 2022.

On 29 August 2022, the Sellers and Executives Third Parties filed a summons in which they seek a stay of the third party proceeding until a determination of the High Court proceeding.[6]
[6]Sellers and Executives Third Parties' summons filed 29 August 2022.

As a result, the primary issues presently before the Court are whether:

(a)the Victorian proceeding should be stayed pending the determination or resolution of the High Court proceeding or until further order; or
(b)the third party proceeding in the Victorian proceeding should be stayed pending the determination or resolution of the High Court proceeding or until further order.

The HungryPanda Companies oppose a stay of the Victorian proceeding but do not oppose a stay of the third party proceeding.[7] The HungryPanda Companies submitted that a stay of the third party proceeding was likely but it was a matter for the Court.[8]
[7]Transcript of Proceedings (HungryPanda AU Pty Ltd & Ors v Fantuan Australia Pty Ltd & Ors, Attiwill J) on 1 September 2022 (‘Transcript of Proceedings 1 September 2022’) 165.8-12 (Mr Peters QC). See also the HungryPanda Companies’ further submissions, [14].
[8]Transcript of Proceedings 1 September 2022 (n 7) 165.8-12 (Mr Peters QC).

For reasons I am about to give, I will stay the Victorian proceeding until further order.

PARTIES’ MATERIALS

The parties did not rely upon substantial parts of the affidavits (including exhibits) filed on these applications.[9]
[9]The parties each filed a document on 5 September 2022 that identified the material upon which they relied.

The HungryPanda Companies relied upon:

(a) an affidavit of Jinwan (Tina) Sun, director of HungryPanda AU Pty Ltd, made 15 March 2022 (Sun affidavit);[10]
[10]At exh JS-1, 223–227.

(b) an affidavit of Victoria Nomikos, principal solicitor of Macpherson Kelley, solicitors for Fantuan Australia, made 6 June 2022 (First Nomikos affidavit);[11]
[11]At exh VN-2, 54 (cl 35.1), 56 (cl 41).

(c) affidavits of Bradley Strahorn, partner of White & Case, solicitors for the HungryPanda Companies, made 7 June 2022 (First Strahorn affidavit)[12] and 24 June 2022 (Second Strahorn affidavit);[13]

(d) an affidavit of Victoria Burton, partner of White & Case, made 16 June 2022 (Burton affidavit);[14]

(e) submissions filed 24 June 2022 (HungryPanda Companies’ submissions) and further submissions filed 30 August 2022 (HungryPanda Companies’ further submissions)[15] (together with bundles of authorities).

[12]At [6], [7(c)], [23]-[31], [63]; at exh BSJ-5, 50-51, 66; at exh BSJ-6.

[13]At exh BSJ-9, 9–19.

[14]At [6], [34], [39]-[51].

[15]The HungryPanda Companies abandoned the submissions in [5]: Transcript of Proceedings 1 September 2022 (n 7) 110.11-16 (Mr Peters QC). This concerned the standing of the Other Executives Third Parties to make an application to stay the Victorian proceeding.

Fantuan Australia relied upon:

(a) the Sun affidavit;[16]

(b) the First Nomikos affidavit[17] and an affidavit of Victoria Nomikos made 16 June 2022 (Second Nomikos affidavit);[18]

(c) submissions filed 24 June 2022 (Fantuan Australia’s submissions)[19] and further submissions filed 30 August 2022 (Fantuan Australia’s further submissions) (together with a bundle of authorities).

[16]At [78]-[79].

[17]At [1]-[10], [24]-[31]; exh VN-1, 13-93, 102-135, 155-235, 302-312, 314-319.

[18]At [8].

[19]The document filed by Fantuan Australia on 5 September 2022 noted that it relied on its submissions filed 24 June 2022 save for paragraph 22.

The Sellers and Executives Third Parties relied upon:

(a)an affidavit of Gowri Kangeson, partner of DLA Piper Australia, former solicitors for the Sellers and Executives Third Parties, made 28 August 2022 (Kangeson affidavit);[20] and
(b)submissions filed 29 August 2022 (Sellers and Executives Third Parties’ submissions) and further submissions filed 2 September 2022 (Sellers and Executives Third Parties’ further submissions) (together with a bundle of authorities).

[20]At GK-1, 22-98, 100-289, 292-441, 536-540, 544-627, 632-633. On 2 February 2023, DLA Piper Australia filed a notice of ceasing to act and Delany J gave leave to do so on 23 February 2023 with respect to those persons and entities with an address outside of Victoria. The orders made by Delany J dispensed with the requirement that the order be served on the second third party on the basis that it had been deregistered. On 15 March 2023, the plaintiffs and the sixth to eighth and tenth third parties informed chambers by email that they were aware of the deregistration of the second third party. As a result, a reference in these Reasons to the ‘Sellers’ taking future action, or future action being taken against them, in the Victorian proceeding or the High Court proceeding does not include a reference to the second third party.

The Other Executives Third Parties relied upon:

(a)the Burton affidavit;[21]
(b)an affidavit of Chang Loon Lee, solicitor of Neo Legal, solicitors for the Other Executives Third Parties, made 26 August 2022 (Lee affidavit);[22]
(c)the Kangeson affidavit;[23]
(d)submissions filed 26 August 2022 (Other Executives Third Parties’ submissions) (together with bundles of authorities), the HungryPanda Companies’ submissions[24], Fantuan Australia’s submissions[25] and the Sellers and Executives Third Parties’ submissions;[26] and
(e)a document titled ‘Pleadings – Comparison table updated’ provided to Chambers on 1 September 2022 (Other Executives Third Parties’ Pleadings Comparison Table).[27] This was a further version of the document that was attached to the Other Executives Third Parties’ submissions.

[21]At [24], [25], [43], [46].

[22]At 1-4; exh CLL-4, 47.

[23]At exh GK-1, 296-377, 399-408, 419-429. They also relied upon cl 41 of the Asset Purchase Agreement.

[24]At [12].

[25]At [13]-[22].

[26]Whole document.

[27]The document was sent by Neo Legal, solicitors for the Other Executives Third Parties, to Chambers at 8.34am on 1 September 2022. The document compares the allegations made in the particulars of claim in the High Court proceeding, the draft amended points of claim in the High Court proceeding, the statement of claim in the Victorian proceeding and third party statement of claim in the Victorian proceeding.

Counsel for the parties made submissions at the hearing of the applications.

BACKGROUND
Parties

It is convenient to set out a table of the relevant entities and persons in relation to the Victorian proceeding and the High Court proceeding. This includes those entities and persons who have received a ‘letter before action’ from the HungryPanda Companies’ solicitors in relation to the High Court proceeding.[28]
[28]A ‘letter before action’ is part of a process under the Practice Direction on Pre-Action Conduct and Protocols contained in the Civil Procedure Rules used by the High Court in civil cases.

PERSON/ENTITY	ROLE UNDER ASSSET PURCHASE AGREEMENT	VICTORIAN PROCEEDING	HIGH COURT PROCEEDING
HungryPanda AU Pty Ltd	‘Purchaser’ under Asset Purchase Agreement.	First plaintiff	First claimant
HungryPanda Japan Ltd	‘Purchaser’ under Asset Purchase Agreement.	Second plaintiff	Second claimant
HungryPanda (NZ) Ltd	‘Purchaser’ under Asset Purchase Agreement.	Third plaintiff	Third claimant
Fantuan Australia Pty Ltd	Incorporated on 14 January 2022. Activated its platform for online takeaway food ordering services on 26 February 2022 and announced its official launch on 1 March 2022.	Defendant	Not a party
EASI Global Limited (also referred to as ‘EASI Global Limited (HK)’ and ‘EASI Global’)	‘Seller’ under Asset Purchase Agreement.	First third party	Third respondent Referred to as a member of the ‘EASI Defendants’ (HungryPanda Companies’ particulars of claim, [2]). Also referred to as a member of the ‘EASI Conspiracy Defendants’ (HungryPanda Companies’ particulars of claim, [17]).
Chongqing Meikelaifuyireer Technology Co Ltd (also referred to as ‘EASI China’)	‘Seller’ under Asset Purchase Agreement.	Second third party	Fourth respondent Referred to as a member of the ‘EASI Defendants’ (HungryPanda Companies’ particulars of claim, [2]). Also referred to as a member of the ‘EASI Conspiracy Defendants’ (HungryPanda Companies’ particulars of claim, [17]).
Yan (Linda) Liu	‘Seller’ under Asset Purchase Agreement.	Third third party Alleged to be EASI Global’s Business Advisor and referred to as a ‘Senior EASI Executive’ (HungryPanda Companies’ statement of claim, [8(b)]). Also alleged to be a member of the ‘Assumed Employees’ under the Asset Purchase Agreement (HungryPanda Companies’ statement of claim, [35(c)]).	First respondent Referred to as a member of the ‘EASI Defendants’ (HungryPanda Companies’ particulars of claim, [2]). Also referred to as a member of the ‘EASI Conspiracy Defendants’ (HungryPanda Companies’ particulars of claim, [17]). Also referred to as a member of the ‘Senior EASI Executives’ (HungryPanda Companies’ particulars of claim, [56]). Alleged owner (through a holding company) of 63% of the shares in EASI Global (HungryPanda Companies’ particulars of claim, [3]).
Jie Shen	‘Seller’ under Asset Purchase Agreement.	Fourth third party	Second respondent Referred to as a member of the ‘EASI Defendants’ (HungryPanda Companies’ particulars of claim, [2]). Alleged owner (through a holding company) of 24% of the shares in EASI Global (HungryPanda Companies’ particulars of claim, [3]).
Junquan (Peter) Liu	Fifth third party Alleged to be EASI Global’s Chief Executive Officer and referred to as a ‘Senior EASI Executive’ (HungryPanda Companies’ statement of claim, [8(a)]). Also alleged to be a member of the ‘Assumed Employees’ under the Asset Purchase Agreement (HungryPanda Companies’ statement of claim, [35(c)]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors. Referred to as a member of the ‘Senior EASI Executives’ (HungryPanda Companies’ particulars of claim, [56]).
Xiaoyun (Sharon) Wang	Sixth third party Alleged to be EASI Global’s Chief Financial Officer and referred to as a ‘Senior EASI Executive’ (HungryPanda Companies’ statement of claim, [8(c)]). Also alleged to be a member of the ‘Assumed Employees’ under the Asset Purchase Agreement (HungryPanda Companies’ statement of claim, [35(c)]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors. Referred to as a member of the ‘Senior EASI Executives’ (HungryPanda Companies’ particulars of claim, [56]). Alleged to have commenced employment with ‘HungryPanda’ on 25 October 2021 as the Chief Financial Officer and also referred to as a member of the ‘EASI Key Employees’ (HungryPanda Companies’ particulars of claim [31(2)(a)]).
Helin (Will) Wang	Seventh third party Alleged to be EASI Global’s Investment and Legal Advisor and referred to as a ‘Senior EASI Executive’(HungryPanda Companies’ statement of claim, [8(d)]). Also alleged to be a member of the ‘Assumed Employees’ under the Asset Purchase Agreement (HungryPanda Companies’ statement of claim, [35(c)]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors. Referred to as a member of the a ‘Senior EASI Executives’ (HungryPanda Companies’ particulars of claim, [56]). Alleged to have commenced employment with ‘HungryPanda’ on 25 October 2021 as the investment and legal manager and also referred to as a member of the ‘EASI Key Employees’ (HungryPanda Companies’ particulars of claim, [31(2)(d)]).
Yingmin (Evan) Li	Eighth third party Alleged to be EASI Global’s Chief Investment Officer and referred to as a ‘Senior EASI Executive’(HungryPanda Companies’ statement of claim, [8(e)]). Also alleged to be a member of the ‘Assumed Employees’ under the Asset Purchase Agreement (HungryPanda Companies’ statement of claim, [35(c)]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors. Referred to as a member of the ‘Senior EASI Executives’ (HungryPanda Companies’ particulars of claim, [56]). Alleged to have commenced employment with ‘HungryPanda’ on 25 October 2021 as the Chief Technology Officer and also referred to as a member of the ‘EASI Key Employees’ (HungryPanda Companies’ particulars of claim, [31(2)(b)]).
Ye (Gary) Ge	Ninth third party Alleged to be EASI Global’s Chief Technology Officer and referred to as a ‘Senior EASI Executive’(HungryPanda Companies’ statement of claim, [8(f)]). Also alleged to be a member of the ‘Assumed Employees’ under the Asset Purchase Agreement (HungryPanda Companies’ statement of claim, [35(c)]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors. Referred to as a member of the ‘Senior EASI Executives’ (HungryPanda Companies’ particulars of claim, [56]).
Aijuan (Annie) Shi	Tenth third party Alleged to be EASI Global’s Chief Marketing Officer and referred to as a ‘Senior EASI Executive’(HungryPanda Companies’ statement of claim, [8(g)]). Also alleged to be a member of the ‘Assumed Employees’ under the Asset Purchase Agreement (HungryPanda Companies’ statement of claim, [35(c)]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors. Referred to as a member of the ‘Senior EASI Executives’ (HungryPanda Companies’ particulars of claim, [56]). Alleged to have commenced employment with ‘HungryPanda’ on 25 October 2021 as the Chief Marketing Officer and also referred to as a member of the ‘EASI Key Employees’ (HungryPanda Companies’ particulars of claim, [31(2)(c)]).
Leping Wu	Not a party Alleged to be a director, and Chief Executive Officer, of Fan Tuan Holding Ltd (ie ‘Fantuan Canada’) (HungryPanda Companies’ statement of claim, [13]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors.
Yaofei Feng	Not a party Alleged to be a director of Fan Tuan Holding Ltd (ie ‘Fantuan Canada’)(HungryPanda Companies’ statement of claim, [13]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors.
Fan Tuan Holding Ltd (also referred to as ‘Fantuan Canada’)	Not a party Alleged to have had the ‘Common Intention’ with the Sellers in relation to the establishment and launch of the Fantuan business (HungryPanda Companies’ statement of claim, [9(a)].	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors.
Just Order Enterprise Co	Not a party Alleged to be the sole shareholder of AU Fan Tuan Pty Ltd (HungryPanda Companies’ statement of claim, [20]).	Not a party Recipient of a ‘letter before action’ from the HungryPanda Companies’ solicitors.

Asset Purchase Agreement

The Asset Purchase Agreement provides for a payment of $55M by the HungryPanda Companies (ie the ‘Purchasers’ under the Asset Purchase Agreement) for the purchase of the ‘Business’ as a going concern, less certain liabilities, employee entitlements and adjustments, from the Sellers.[29] The ‘Business’ includes, inter alia, ‘all business activities carried on by the Sellers and any other member of the Sellers’ Group on the date of this Agreement in Australia’ and ‘the online take-away food ordering service business carried on by the JV Entities and the Franchisees on the date of this Agreement in Australia’.[30] The assets include assets concerning the EASI business in Australia. The Asset Purchase Agreement provides for a ‘First Closing Date’ and a ‘Second Closing Date’ for the purchase of the assets.[31]
[29]First Nomikos affidavit, exhVN-2, 13-94, cl 5.1.
[30]Ibid exhVN-2, 13-94, cl 1.1.
[31]Ibid exhVN-2, 13-94, cl 2.1. See also schedules 2 and 3.

Ms Nomikos, principal solicitor of Macpherson Kelley, solicitors for Fantuan Australia, gave evidence that the EASI business is primarily a food delivery application service that operates in a niche market focusing on Asian restaurants.[32] The application coordinates ordering and delivery of food items from merchant restaurants to customers.[33]
[32]Ibid [6].
[33]Ibid.

I will now refer to some of the key provisions of the Asset Purchase Agreement referred to by the parties.

Clause 23.1 of the Asset Purchase Agreement provides for, inter alia, a number of post-completion restrictions in the form of undertakings given by the Sellers:

23.1 Each of the Sellers severally undertakes that it shall not and shall procure that each other member of the Sellers’ Group (and in the case of (d) below, JV Entity or Franchisee) shall not, directly or indirectly, either alone or jointly with or as agent for any other person or in any capacity whatsoever:
(a) neither pending nor within two (2) years following the Second Closing Date, carry on or be engaged or otherwise interested in, in each case directly or indirectly, any business which competes with the Business or any part of the Business (including any coupon deal marketplace business relating to the Business) in the Target Countries[34], the Republic of South Korea, Singapore, France or Italy;
[34]The Asset Purchase Agreement defined ‘Target Countries’ as ‘Australia, New Zealand, Japan, the United Kingdom, the United States of America and Canada’: First Nomikos affidavit, exh VN-2, 13-94, cl 1.1.
(b) neither pending nor within three (3) years following the Second Closing Date, solicit the custom of any person who is or at any time during the two (2) years immediately preceding the Second Closing Date has been a customer or client of any member of the Sellers’ Group, JV Entity or Franchisee in relation to the Business;
(c) neither pending nor within three (3) years following the Second Closing Date solicit or entice away any Assumed Employee or any person who was employed by any member of the Sellers’ Group in the Business at any time during the twelve (12) months immediately preceding the Second Closing Date or employ any such person;
(d) at any time after the First Closing Date (other than as permitted by Clause 23.4):
(i) use:
(A) the EASI Name Rights;
(B) any other trade, business or domain name or trade mark, logo or design that has previously been used in the Business; or
(C) any trade, business or domain name or trade mark, logo or design which is, in the opinion of the Purchasers, capable of being confused with any of the foregoing described in (A) or (B); or

(ii) challenge the validity or enforceability of any of the EASI Name Rights; or

(e) assist or incite any other person to do any of the above.

Clause 25.1 provides for confidentiality undertakings by the Sellers.

Clause 35 provides:

35. Third Party Rights
35.1This Agreement is made for the benefit of the Parties and their successors and is not intended to benefit any other person, and no other person shall have any right to enforce any of its terms, except that Clause 3.3 (Excluded Liabilities), Clause 4 (JV Businesses and Franchisee Businesses), Clause 11 (VAT), Clause 12 (Risk and Insurance), Clause 15 (Transfer of Contracts), Clause 17 (Employees), Clause 23 (Post-completion Restrictions), Clause 25 (Confidentiality), Clause 27 (Assignment) and Clause 29 (Wrong Pockets), are intended to benefit members of the Purchasers’ Group, Clause 18.7 (Sellers’ Warranties) is intended to benefit all Assumed Employees, any present or past employee engaged to any extent in the Business, or any present or past Agent of any member of the Purchasers’ Group, and Clause 30 (Entire Agreement) is intended to benefit a Party’s Related Persons, and each such Clause shall be enforceable by any of them to the fullest extent permitted by law, subject to the other terms and conditions of this Agreement.
35.2The Parties may amend or vary this Agreement in accordance with its terms without the consent of any other person.

Clause 41 provides:

41. Governing Law and Jurisdiction
41.1This Agreement, including any non-contractual obligations arising out of or in connection with this Agreement, is governed by and shall be construed in accordance with English law.
41.2The Parties agree that the courts of England shall have exclusive jurisdiction to hear and determine any suit, action or proceedings arising out of or in connection with this Agreement (including any non-contractual obligations arising out of or in connection with this Agreement) (“Proceedings”) and, for such purposes, irrevocably submit to the jurisdiction of such courts. Nothing in this Clause shall (or shall be construed so as to) limit the Purchasers’ right to take Proceedings against the Sellers in any other court of competent jurisdiction nor shall the taking of Proceedings in any one or more jurisdictions preclude the taking of Proceedings in any other jurisdiction (whether concurrently or not) if and to the extent permitted by law.

The First Closing Date was 25 October 2021 and the Second Closing Date was 14 December 2021.[35]
[35]Statement of claim, [6(c)], defence, [6(a)].

Ms Sun, director of HungryPanda AU Pty Ltd, gave evidence concerning market share and the purpose of the acquisition by the HungryPanda Companies of the EASI business:[36]
[36]Sun affidavit, [78]-[79].

78.Prior to the Acquisition, the share of the market in Australia for food delivery services to the overseas Chinese community was around:
a. HungryPanda AU ~ 40%
b. EASI ~ 40%
c.Non-specialised food delivery services such as UberEats, Deliveroo and Door Dash~ 20%.

79.The purpose of the Acquisition from HungryPanda’s perspective was to take advantage of the departure of EASI from the Australian market and significantly increase HungryPanda AU’s market share in a short period of time, to around 70 – 80%.

Sale and Joint Venture documents

On 10 January 2022 Fan Tuan Holding Ltd (ie ‘Fantuan Canada’) and EASI Global Ltd (ie the first third party in the Victorian proceeding and the third respondent in the High Court proceeding) signed a letter entitled ‘Offer to acquire all of EASI Global Ltd, and its related entities’ business activities in Australia and all other countries’ (Letter of Intent).[37] It provides, inter alia:
[37]Ibid exh JS-1, 212-220. The existence of this document is admitted by Fantuan Australia in its defence subject to its production at the trial, [9(b)(i)].

This letter of intent (“Letter of Intent”) is further to the discussions to date between Yan Liu, as the largest shareholder of the Corporation (“Liu”) and Fan Tuan Holding Ltd. (the “Buyer”). The Buyer understands that the Liu is the largest legal and beneficial owner of all of the outstanding shares in the capital of EASI Global Ltd. (referred to herein as the “Corporation” or the “Seller”). The provisions of this Letter of Intent will confirm the interest of the parties with respect to the Buyer’s proposed purchase from the Seller of all the rights, interests property and titled owned by the Seller as set out below (the “Proposed Transaction”) in connection with all business activities carried out by the Seller and its related entities in Australia and other countries (the “Business”).
…
3. Purchase Price
The aggregate purchase price (the “Purchase Price”) for the Business will be an aggregate of up to AUD$55,000,000 in cash, payable by wire transfer, plus the issuance of 14% of outstanding common shares of the Buyer (the “Fan Tuan Payment Shares”), subject to the following:
…
4. Key Employees
Before or on the Closing Date, each of Yan Liu (Business Advisor), Annie Shi (CMO), Evan Li (CIO), Sharon Wang (CFO), Gary Ge (CTO), together with any other individuals identified by the Buyer during the course of its due diligence (collectively, the “Key Employees”) will have entered into employment agreements with the Buyer and the Corporation obligating them to employment to the Corporation from the Closing Date until at least the date that is three years thereafter, on terms and conditions as those parties may agree, each acting reasonably.
…
6. Closing and Conditions of Closing
The parties intend that the Closing Date will occur no later than June 30, 2022. The closing of the Proposed Transaction will be subject to the usual conditions of closing in favour of a Buyer, all of which will be included in the Definitive Agreement, including the following:
(a) the termination of the Asset Purchase Agreement, dated October 15, 2021, between Seller and an undisclosed purchaser; which shall include, but not be limited to, terms with respect to the return, by such purchaser, of the purchased assets (“Returned Assets”) to the Seller and waiver of any claims by such purchasers, all such terms to the satisfaction of the Buyer;

…
15. No Negotiations with Other Parties
The Seller agrees to send official termination notice approved by the Buyer to the undisclosed purchaser of the Asset Purchase Agreement, dated on October 15, 2021, within two days after signing this Letter of Intent.

The Letter of Intent is signed by Leping Wu on behalf of Fan Tuan Holding Ltd and Yan Liu on behalf of EASI Global Ltd.

On 10 January 2022 Fan Tuan Holding Ltd and EASI Global Ltd signed a document entitled ‘Side Letter Agreement’ (Side Letter Agreement).[38] It provides, inter alia:
[38]Second Strahorn affidavit, exh BJS-9, 18-19. The existence of this document is admitted by Fantuan Australia in its defence, subject to its production at the trial, [9(b)(ii)].

This side letter agreement (this “Side Letter Agreement”) is entered into on or about [January 10] , 2022, in connection with the letter of intent, entered into on this date by and between Fan Tuan Holding Ltd. (“Fan Tuan”) and EASI Global Ltd. (“EASI”) in connection with Fan Tuan’s offer to acquire all of EASI’s and its related entities’ business activities in Australia and worldwide (the “LOI”), all subject to and pursuant to terms set forth in the LOI.
EASI and its controlling shareholder Yan Liu represent (collectively referred to as the “Sellers”) to Fan Tuan that they have an intention to terminate the Asset Purchase Agreement (“Termination and Restitution”), dated October 15, 2021, between EASI and an undisclosed purchaser (the “APA” and the “Purchaser”, respectively).

The parties to this Side Letter Agreement agree to that subject to EASI’s compliance with the terms of the LOI, in the event that EASI’s Termination and Restitution is challenged by the Purchasers, then Fan Tuan agrees to reimburse the Sellers (jointly and not individually) for the following expenses:
a. fifty percent of the documented legal fees incurred by EASI as of the completion of the LOI in defending claims by the Purchaser regarding the Termination and Restitution, Fan Tuan shall have a right, at its sole discretion to accept or reject the amount of such legal fees; and
b. fifty percent of any termination fees agreed to pay by EASI to Purchaser as part of settling a dispute with respect to the Termination and Restitution, provided that as a condition to such reimbursement, Fan Tuan shall have a right, at its sole discretion to accept or reject the amount of such termination fees.

The Side Letter Agreement is signed by Leping Wu on behalf of Fan Tuan Holding Ltd and Yan Liu on behalf of EASI Global Ltd.

Fantuan Australia alleges that as the Sellers did not terminate the Asset Purchase Agreement the condition precedent in paragraph 6(a) of the Letter of Intent was not satisfied and that the Letter of Intent and Side Letter Agreement were thereby rendered null and void and that there was no sale or transfer of assets owned by EASI Global Ltd to any Fantuan entity.[39]
[39]Defence, [15A].

There was no issue between the parties that the Asset Purchase Agreement has not been terminated. As I set out later in these Reasons, the HungryPanda Companies instituted the High Court proceedings on 16 February 2022 to enforce it.

On 10 January 2022, Fan Tuan Holding Ltd and P&L Group Holdings Pty Ltd also signed a document entitled ‘Joint Venture Term Sheet’ (Joint Venture Term Sheet).[40] It provides, inter alia:

This joint venture term sheet sets out the principal terms between Fan Tuan Holdings Ltd. (“FT”) and P&L Group Holdings Pty Ltd. (“PL” and, together with FT, and including their respective designated affiliates, the “JV Parties” and each a “JV Party”) for the creation of a joint venture to operate and manage the online take-away food ordering services business in Australia, through a newly created corporation (the “Joint Venture”).

[40]Sun affidavit, exh JS-1, 223-227. The existence of this document is admitted by Fantuan Australia in its defence, subject to its production at the trial, [9(b)(iii)].

The Joint Venture Term Sheet is signed by Leping Wu on behalf of Fan Tuan Holding Ltd and Bowen Xu on behalf of P&L Group Holdings Pty Ltd.

On 10 February 2022, AU Fan Tuan Pty Ltd, P&L Group Holdings Pty Ltd and Fantuan Australia entered into written agreement entitled ‘Joint Venture Agreement’ (Joint Venture Agreement).[41] This is admitted by Fantuan Australia.[42] This was a few weeks prior to Fantuan Australia activating its platform for online take-away food ordering services and announcing its official launch on 1 March 2022.[43]
[41]First Strahorn affidavit, BJS-6, 196-238.
[42]Defence, [19].
[43]Statement of claim, [34] and defence [34] in the Victorian proceeding.

It is marked as a confidential exhibit but the Court was informed at the hearing that the claim for confidentiality had been resolved.[44] It provides, inter alia:
[44]First Strahorn affidavit, exh BJS-6, 196-238. Mr Peters QC, for the HungryPanda Companies, made extensive submissions on its terms in open court: Transcript of Proceedings (HungryPanda AU Pty Ltd & Ors v Fantuan Australia Pty Ltd & Ors, Attiwill J) on 2 September 2022 (‘Transcript of Proceedings 2 September 2022’) 60.12-22.

BACKGROUND
Fan Tuan and P&L have agreed to enter into a joint venture to own, operate and manage an online take-away food ordering services business in Australia
Fan Tuan and P&L as Shareholders in the Company wish to record the commercial terms of their agreement for the:
(a) the activities and management of the Company; and
(b) the shareholding and share transfer of their shares in the Company; in this agreement.

The Company has been made party to this Agreement in order to acknowledge the terms of this Agreement and to bind it to any obligations imposed on it by this Agreement.
…
2. Initial Shareholdings in the Company
2.1 Initial Meetings
Within seven (7) Business Days of the date of exaction of this Agreement, the Company must cause the following meetings to be held to consider and pass the resolutions referred to in the table below:

2.2 Share Subscription

Meeting of Shareholders

Appointment of Directors nominated by Fan Tuan and P&L;

Appointment of additional Director nominated by P& L;

Meeting of Directors

Nominated of person authorised to operate the Company bank account;

Notification to Company bank of change of authorised persons; and

Issue of Ordinary Shares to Fan Tuan and P&L.

Subject to the holding of the meetings referred to in clause 2.1:
(a)Fan Tuan agrees to subscribe for 510 Shares in the Company for the subscription price of $5,000,000 being the 1^st instalment payable in accordance with clause 10 of this Agreement; and
(b)P&L agrees to subscribe for 390 Shares for the subscription price of $5,000,000 being the 1^st instalment payable in accordance with clause 10 of this Agreement.

2.3 Nominations of Directors and Authorised Persons
Immediately following execution of this Agreement:
(a) Fan Tuan must:
(i)Nominate three person to be appointed as Directors of the Company; and
(ii) Nominate persons to be authorised to operate the Company bank account.

(b) P&L must:
(i)Nominate an additional person to be appointed as Director of the Company; and
(ii)Nominate persons to be authorised to operate the Company bank account.

The Joint Venture Agreement provides, inter alia, for the appointment and removal of the directors of the joint venture company,[45] financing of the joint venture company[46] and for senior management to share in the profits of the joint venture company.[47]
[45]First Strahorn affidavit, exh BJS-6, 196-238, cl 4.1.
[46]Ibid exh BJS-6, 196-238, cl 10.
[47]Ibid exh BJS-6, 196-238, cl 11.

The Joint Venture Agreement is signed by Leping Wu on behalf of AU Fan Tuan Pty Ltd and Bowen Xu on behalf of P&L Group Holdings Ltd and Fantuan Australia.

On 31 March 2022, AU Fan Tuan Pty Ltd, P&L Group Holdings Pty Ltd and Fantuan Australia entered into a written agreement entitled ‘Amendment to Joint Venture Agreement’ (Amendment to Joint Venture Agreement).[48] This is admitted by Fantuan Australia.[49] Similarly, it is also marked as a confidential exhibit and the Court was informed at the hearing that the claim for confidentiality had been resolved. It made amendments to, inter alia, provisions concerning the initial shareholding in the joint venture company, financing of the joint venture of the company and to the economic interest and distribution policy.
[48]Ibid exh BJS-7, 239-241.
[49]Defence, [27].

The Amendment to Joint Venture Agreement is signed by Leping Wu on behalf of AU Fan Tuan Pty Ltd and Bowen Xu on behalf of P&L Group Holdings Ltd and Fantuan Australia.

P&L Group Holdings Pty Ltd

P&L Group Holdings Pty Ltd was incorporated on 6 January 2022.[50] Upon its incorporation, Mr Xu was the sole director and shareholder of P&L Group Holdings Pty Ltd.[51] Ms Sun gave evidence that Mr Xu was formerly engaged as a delivery operations dispatcher in connection with the EASI business, and then with the HungryPanda Companies, following the Asset Purchase Agreement.[52] Fantuan Australia admits that Mr Xu was engaged as a delivery operation dispatcher by QINN International Pty Ltd (who was alleged to have provided staff to the HungryPanda Companies and was a respondent in the Federal Court proceeding) from 31 May 2021 to 19 January 2022 and provided services in connection with the EASI business.[53]
[50]First Strahorn affidavit, exh BJS-5, 130.
[51]Ibid exh BJS-5, 131.
[52]Sun affidavit, [15(a)].
[53]Defence, [47(b)].

Fantuan Australia

Fantuan Australia was incorporated on 14 January 2022.[54] Upon its incorporation, the sole director of Fantuan Australia was Bowen Xu[55] and the company had 100 issued shares for the sum of $100,[56] which were held by P&L Group Holdings Pty Ltd.[57]
[54]First Strahorn affidavit, exh BJS-5, 121.
[55]Ibid exh BJS-5, 122.
[56]Ibid.
[57]Ibid.

Fantuan Australia now has 1,000 issued shares for the sum of $2,000,100.[58] Its current shareholders are P&L Group Holdings Pty Ltd (490 shares, being the initial 100 shares and 390 additional shares) and AU Fan Tuan Pty Ltd (510 shares).[59] This is consistent with cl 2.2 of the Joint Venture Agreement concerning share subscriptions in Fantuan Australia.
[58]Ibid exh BJS-5, 141.
[59]Ibid.

Mr Strahorn, partner of White & Case, solicitors for the HungryPanda Companies, gave evidence:[60]

Based on the information summarised above, Fantuan Australia has received only AUD 2,000,100 in share capital contributions. AUD 2,000,000 of those contributions were received in mid-May 2022, over 2 months after Fantuan Australia entered the market. As Fantuan Australia has not provided access to its financial information, HungryPanda has not been able to confirm what funds Fantuan Australia received and from whom to enable it to launch a business in Australia on 1 March 2022 and to continue trading for a significant period of time before making its first substantial share issue. Nor has HungryPanda been able to ascertain the amount of those funds paid as share capital have been consumed on it ordinary trading activities and commitments.

[60]Ibid [28].

Mr Xu remains a director of Fantuan Australia[61]. There are now four other directors of Fantuan Australia.[62] These include Yaofei Feng and Leping Wu, who have both received a ‘letter before action’, in relation to the High Court proceeding, and are also alleged to be directors of Fan Tuan Holding Ltd (ie ‘Fantuan Canada’).
[61]Ibid exh BJS-5, 140.
[62]Ibid.

The results of the search of the national property ownership register of Fantuan Australia show that it does not hold any real property in Australia.[63]
[63]Ibid [29].

On 26 February 2022, Fantuan Australia activated its platform for online take-away food ordering services and announced its official launch on 1 March 2022.

High Court proceeding

On 16 February 2022, the HungryPanda Companies commenced the High Court proceeding against the Sellers by filing a ‘Claim Form’.[64] The addresses stated in the Claim Form for the Sellers are as follows:
[64]First Nomikos affidavit, exh VN-2, 95-97.

(a) Yan Liu: 440 Docklands Dr, Docklands, Victoria 3008, Australia;

(b) Jie Shen: 17 Lansell Road, Toorak, Victoria 3142, Australia;

(c) EASI Global Ltd: Rooms 1001-03, 10/F, Wing On Kowloon Centre, 345 Nathan Road, KL, Hong Kong; and

(d) Chongqing Meikelaifuyireer Technology Co Ltd: 1802, No 164, Xinnan Road, High-Tech District, Chongqing, China (Postcode 40000).

The Claim Form set out ‘[b]rief details of claim’:[65]
[65]Ibid.

1.By an agreement dated 15 October 2021, the Defendants agreed to sell and the Claimants agreed to purchase, the entire “EASI” Business (as defined) together with the Assets (as defined), as a going concern (“the APA”).

2. In breach of the APA, the Defendants:
(a)failed to transfer certain First Closing and Second Closing Assets (“the Withheld Assets”);

(b) acted in breach of various post-completion restrictions;
(c) otherwise acted in breach of the APA.

3. As a result, the Claimants have suffered loss and damage.
4. The Defendants claim:
(1)Specific performance of the Defendants’ obligations to deliver the Withheld Assets, together with ancillary relief;
(2)An injunction preventing further breaches of the post-completion restrictions;

(3) Declaratory Relief;
(4) Damages to be assessed;
(5)Damages as an alternative to (1) and (2) pursuant to section 50 of the Senior Courts Act 1981;

(6) Interest pursuant to section 35A of the Senior Courts Act 1981;
(7) Further ancillary or other relief.

On 16 February 2022, the HungryPanda Companies also filed an ‘Application Notice’ in which they sought the following orders:[66]

The Defendants:
(a)transfer to the Applicants the Critical Withheld Assets (as defined in Kelu Liu 1);
(b)refrain from competing with the Business (as defined in the asset purchase agreement between the parties dated 15 October 2021 (the “APA”));
(c)refrain from soliciting/employing Assumed Employees (as defined in the APA); and
(d)pay the Claimants’ costs of an occasioned by this Application, such costs to be the subject of detailed assessment on the indemnity basis if not agreed.

[66]Kangeson affidavit, exh GK-1, 182-185, 182. This is an unfiled version.

The ‘Application Notice’ set out the following grounds:[67]

The Defendants are bound by the APA, pursuant to which they were required to transfer the Assets of the Business to the Applicants on the First and Second Closing Dates (as defined in the APA) and pursuant to which they are bound by provisions restraining them from competing with the Business and from soliciting/employing Assumed Employees, as more fully set out in the attached witness statement, Kelu Liu 1.

[67]Ibid.

The application was supported by a witness statement of Kelu Liu, the founder and Chief Executive Officer of the ‘HungryPanda corporate group’, in which he stated, inter alia:[68]
[68]First Nomikos affidavit, exh VN-2, 114-115.

39Yet worse, it has very recently emerged that HungryPanda's largest global competitor in the Asian-food delivery space, 'Fantuan' (which had no existing market-share in the region), appears to be moving into the Australian market. On 22 January 2022, an entity named Fantuan Australia Pty Ltd was registered in Australia for GST (Australia value-added-tax) purposes, shortly after incorporation the week before on 14 January 2022…
40As noted above, the purpose of the Acquisition to HungryPanda was the absorption of the EASI Business as the vehicle for HungryPanda’s expansion in Australasia. The business rationale is obvious – as succinctly recognised in press commentary at the time: “In finalising the deal, HungryPanda took out its only material competitor in the Australian market, which has now become its largest, with a total of 3.5 million active customers, 60,000 merchants and roughly 40,000 drivers”…
41As a result of the Sellers’ continued control over the EASI Business via the IT Systems that they are withholding in beach of the APA, however, HungryPanda has not ‘taken out’ its only material competitor in the Australian market, nor has it been able to absorb that competitor to become a dominant force in the Australian market.
42Now, Fantuan, HungryPanda's global competitor, is seeking to enter the Australian market, and it appears to be doing so via the very Goodwill and ex-employees of the EASI Business that were supposed to be acquired by HungryPanda. In particular, information from HungryPanda merchants and representatives strongly indicates that Fantuan is seeking to build its network in Australia, using the contacts and services of former EASI representatives to accelerate that establishment:
(a)On 9 February, a merchant owner in the Burwood area of Sydney sent a WeChat message to Shenghua Liu, regional manager of HungryPanda in Sydney, saying: “the previous BD for Easi Burwood [Zhiwei Mao]…Visited our store on behalf of Fantuan hahaha…wish us to use/go online with Fantuan”…I understand from Qinglin Li that Zhiwei Mao was a contractor transferred to the Applicants on the First Closing Date, who resigned on 21 January 2022.
(b)I understand from Xiaochen Yi (HungryPanda business development representative) that Annie Shi (ex-CMO for EAS[69]) and Ring Yang (ex-Regional Manager for Melbourne) are being represented to merchants as leaders of the Fantuan team – i.e. providing business continuity as successors to the EASI operations.
(c)I understand from Raymond Zhou (head of HungryPanda delivery management) that EASI’s delivery riders are being poached by Fantuan with wage offers of AU$ 350 per day.

[69]This is an incorrect reference to ‘EASI’.

The HungryPanda Companies’ application was listed for an urgent hearing on 22 February 2022. The HungryPanda Companies’ application was dismissed, by consent, on that day, upon the Sellers (ie the respondents) giving a number of undertakings:[70]
[70]Kangeson affidavit, exh GK-1, 189-195.

A.The Respondents shall forthwith (and by no later than 4:00pm GMT on Wednesday 23 February 2022) transfer, or procure the transfer to the Applicants of, all Critical Withheld Assets as set out in the attached Schedule, that have not been transferred to the Applicants as at the date hereof.

B. Each Respondent:
(a)will not use Critical Withheld Assets and will not prevent, hinder or in any way interfere with the Applicants’ use and enjoyment of the Critical Withheld Assets;
(b)will not carry on or be engaged or otherwise interested in, directly or indirectly, any business that competes with the Business or any part of the Business in the Target Countries[71], the Republic of South Korea, Singapore, France or Italy (as those terms as defined in the APA) for a period of two years from 14 December 2022;
(c)will not solicit, entice away and/or employ any Assumed Employee or any person who was employed by any member of the Sellers’ Group at any time in the twelve months preceding 14 December 2021 (as those terms are defined in the APA), for a period of three years from 14 December 2021;
(d)will not assist or incite any other person to any of (a), (b) or (c) above;
(e)will not procure that each member of the Sellers’ Group (as defined in the APA) shall not, directly or indirectly, either alone or jointly with or as agent for any other person or in any capacity whatsoever act as prohibited in (a), (b), (c) and (d) above.

[71]See above n 34.

The schedule to the order is titled ‘Critical Withheld Assets’ and describes assets ‘critical to the running of the Business’. It includes administrator accounts, passwords and authentication, software security protections and social media accounts.[72]
[72]Kangeson affidavit, exh GK-1, 189-195.

The High Court also ordered, by consent, that the Sellers pay £139,526.16 to the HungryPanda Companies.[73]
[73]Ibid.

On 24 March 2022, the HungryPanda Companies filed an amended claim form.[74] It set out the following amended ‘[b]rief details of claim’:
[74]Lee affidavit, [7]; Kangeson affidavit, exh GK-1, 200-202. A more readable version is at Burton affidavit, exh VJB-1, 122-124. The amendments are shown in these Reasons by the addition of underlining (they are shown in red text in the original).

1.By an agreement dated 15 October 2021, the Defendants agreed to sell and the Claimants agreed to purchase, the entire “EASI” Business (as defined) together with the Assets (as defined), as a going concern (“the APA”).

2. In breach of the APA, the Defendants:
(a)failed to transfer certain First Closing and Second Closing Assets (“the Withheld Assets”);

(b) acted in breach of various post-completion restrictions;
(c) otherwise acted in breach of the APA.
2A.The Defendants conspired between themselves and with others: (i) to sell the EASI Business and/or its Assets to another purchaser, (ii) to carry on, be engaged in, or otherwise interested in a business competing with the EASI Business, (iii) to solicit, or entice away or employ any Assumed Employee (as defined) or any person who was employed by any member of the Sellers’ Group (as defined) in the EASI Business at any time during the twelve months immediately preceding the Second Closing Date (as defined) and/or (iv) to otherwise act in breach of the APA.

2B.In further breach of the APA, the Defendants transferred Assets which included the Claimants’ confidential information to others, in breach of confidence.
2C.The Defendants have induced and/or procured each other’s breaches of the APA.

3. As a result, the Claimants have suffered loss and damage.
4. The Defendants[75] [sic] claim:
[75]This is obviously an erroneous reference and should be a reference to ‘the Claimants’.
(1)Specific performance of the Defendants’ obligations to deliver the Withheld Assets, together with ancillary relief;
(2)An injunction preventing further breaches of the post-completion restrictions;

(3) Declaratory Relief;
(4) Damages to be assessed;
(5)Damages as an alternative to (1) and (2) pursuant to section 50 of the Senior Courts Act 1981;

(5A)     An account of profits;
(6)       Interest pursuant to section 35A of the Senior Courts Act 1981;
(7)       Further ancillary or other relief.

On 6 May 2022, the HungryPanda Companies filed a document entitled ‘Particulars of Claim’.[76] In summary, the primary causes of action are:
[76]Kangeson affidavit, GK-1, 203-286 (‘Particulars of claim’).

(a) The EASI Defendants (ie the Sellers) failed to transfer and/or deliver the ‘Withheld Assets’ in breach of the Asset Purchase Agreement.[77]
[77]Ibid [112]-[117].

(b) The EASI Defendants breached other clauses of the Asset Purchase Agreement, including cls 18.1, 23.1, 25 and 28.[78] The allegations of breach of cl 23.1(a) concern, inter alia, allegations that the EASI Defendants have directly carried on and been engaged with or otherwise interested in businesses that compete with the Business, namely Fantuan Australia and Fantuan Canada.[79]

(c) The EASI Conspiracy Defendants (ie the first, third and fourth defendants) breached an obligation of confidence by using or disclosing the EASI Databases without the HungryPanda Companies’ consent.[80]

(d) The EASI Conspiracy defendants engaged in an unlawful means conspiracy.[81] This includes an allegation that the EASI Conspiracy Defendants combined with others, including Peter Liu and Fan Tuan Holding Ltd, with the common aim of establishing a competing business in Australia (under the Fantuan name) using assets, employees and contractors of the EASI Business acquired by the HungryPanda Companies in order to compete with the Hungry Panda Companies and the Business.[82]

[78]Ibid [118]-[132] and [134].

[79]Ibid [118]-[120].

[80]Ibid [133].

[81]Ibid [135]-[158].

[82]Ibid [17].

The HungryPanda Companies seek the following relief in the particulars of claim:[83]
[83]Ibid prayer for relief.

AND THE CLAIMANTS CLAIM

As against the Defendants:
(a)Specific performance of the Defendants’ obligations to deliver the Withheld Assets listed in Annex I, together with ancillary relief as set out in paragraph 164(3) above;
(b)An injunction preventing further breaches of Clause 23 and 25, in terms set out at paragraph 166 above;

(c) Damages to be assessed;
(d) Declaratory relief, in terms set out at paragraph 164(2) above;
(e)Damages as an alternative to (1) and (2) pursuant to section 50 of the Senior Courts Act 1981;

(f)       Equitable damages;
(g)       An account of profits;
(h)      Interest pursuant to section 35A of the Senior Courts Act 1981;
(i)        Further ancillary or other relief.

As against the First, Third and Fourth Defendants, exemplary damages.

The terms of the proposed injunction are set out in the particulars of claim:[84]
[84]Ibid [167].

The terms of the injunction order which HungryPanda seeks are as follows:
(1)that the Sellers shall not carry on or be engaged or otherwise interested in, directly or indirectly, any business which competes with the Business or any part of the Business in the Target Countries[85], the Republic of South Korea, Singapore, France or Italy for a period of two years from 14 December 2021, in accordance with the Sellers’ obligations pursuant to Clause 23.1(a);
[85]See above n 34.
(2)that the Sellers shall not solicit entice away and/or employ any Assumed Employee or any person who was employed by any member of the Sellers’ Group in the Business at any time during the twelve (12) months immediately preceding the Second Closing Date, for a period of three years from 14 December 2021, in accordance with the Sellers’ obligations pursuant to Clause 23.1(c);
(3)that the Sellers shall not solicit the custom of any person who is or at any time during the two (2) years immediately preceding the Second Closing Date has been a customer or client of any member of the Sellers’ Group, JV Entity or Franchisee in relation to the Business, for a period of three years from 14 December 2021, in accordance with the Sellers’ obligations pursuant to Clause 23.1(b);
(4)that the Sellers shall not assist or incite any other person to do (1), (2) or (3);
(5)that the Sellers shall procure that each members of the Sellers’ Group shall not, directly or indirectly, either alone or jointly with or as agent for any other person or in any capacity whatsoever act as prohibited in (1), (2), (3), (4) above.
(6)that neither the Sellers nor any members of the Sellers’ Group shall instruct, encourage and/or in any way influence any HungryPanda employee to delete or destroy Business Information (including without limitation any data held in mobile devices or computers issued to such employees in connection with their employment);
(7)that the Sellers shall treat as confidential, shall not use, shall not disclose, and shall procure that each member of the Sellers’ Group shall treat as confidential, shall not use and shall not disclose, the EASI Merchant Database, the EASI Delivery Driver Database and the EASI Customer Database to any third party, in accordance with the Sellers’ obligations pursuant to Clause 25.1;
(8)that the Sellers shall confirm that no Business Information has been provided to any third party, and, following the transfer of all the Withheld Assets to HungryPanda:
(a)no Business Information (including in particular but without limitation any merchant contact details) will be retained by or on behalf of the Sellers, any other member of the Sellers’ Group and/or any of their associates or related persons, and
(b)the Sellers will procure the irretrievable deletion of any copies of such data in the possession and/or control of all such persons.

On 9 May 2022, the solicitors for the HungryPanda Companies sent a letter entitled ‘letter before action’ to Fan Tuan Holding Ltd and Just Order Enterprise Corp in which they referred to them jointly as ‘Fantuan Canada’ and stated, inter alia:[86]
[86]First Nomikos affidavit, exh VN-2, 231-235. See also Burton affidavit, [25].

Unlawful means conspiracy
12It is clear from certain documents recovered by McGrathNicol that Fantuan Canada have conspired with the Defendants and others to use unlawful means to cause loss or damage to HungryPanda. HungryPanda’s claims in unlawful means conspiracy are summarised at paragraphs 135-158 of the POC and set out in detail in that document. By way of summary, Fantuan Canada are liable to HungryPanda for the reasons set out below.
13As set out at paragraph 135 of the POC, the Defendants, the Senior EASI Executives (as defined at paragraph 56 of the POC) and Fantuan Canada have combined with the common aim of establishing a competing business in Australia using the Fantuan name to compete with the EASI Business. In this regard, Fantuan Australia Pty Ltd was incorporated on 14 January 2022, and officially launched its business in Australia on 1 March 2022.
14As set out at paragraphs 140-158 of the POC, the Defendants, the Senior EASI Executives and Fantuan Canada intended to injure HungryPanda, by seeking to benefit at HungryPanda’s expense. Such benefit and injury was the inevitable result of using, and transferring from HungryPanda, assets, staff and information of the EASI Business, and in establishing and operating a business in Australia using the same, in order to compete with HungryPanda.
15As set out at paragraphs 37-134 of the POC, in pursuit of the combination, Fantuan Canada and others have taken the unlawful actions detailed in those paragraphs.
16As set out at paragraphs 159-163 of the POC, HungryPanda has suffered the following loss and damage:
(a)Loss suffered as a result of breach of contract and breach of confidence (as set out at paragraphs 112-132 and 160-163 of the POC);
(b)Managerial time spent investigating and dealing with the consequences of the launch of Fantuan Australia (with personnel being significantly diverted from their usual activities and the launch of Fantuan Australia having significantly disrupted the business of HungryPanda); and
(c)McGrathNichol’s fees of AUD 320,718.40 plus GST to date, and estimated to total AUD 520,000 plus GST.

Procuring a breach of contract
17Further, and in the timescales outlined below, HungryPanda intends to amend its POC to include claims against Fantuan Canada for inducing and/or procuring breaches of the APA. These claims will be based on the facts and matters as pleaded in the POC.
Action required
[sic, paragraph number 17 is used twice in this letter]
17We strongly urge you to seek English law advice in relation to the matters outlined in this letter and in the POC.
18For the reasons set out in this letter and the POC, Fantuan Canada are co-conspirators to the unlawful means conspiracy perpetuated against HungryPanda and are liable to pay damages and to provide other relief.
19Accordingly, HungryPanda intends to join Fantuan Canada as defendants to the Proceedings. Pursuant to CPR Part 19.2(2), HungryPanda will apply to the English High Court to add Fantuan Canada as defendants and for these purposes will seek to: (i) re-amend its Amended Claim Form; and (ii) amend the POC.
20By 4:00pm GMT on 27 May 2022, please confirm whether Fantuan Canada consent to be joined as defendants in the Proceedings, and provide any response to the matters alleged against Fantuan Canada in this letter and the POC.
21Should Fantuan Canada’s consent to be joined as parties to the Proceedings not be forthcoming in the timeframe requested, HungryPanda will apply to the English High Court as outlined above to add Fantuan Canada as defendants to the Proceedings, and for permission to serve the relevant documents on Fantuan Canada outside the jurisdiction. Any additional costs incurred by HungryPanda in connection with addition of Fantuan Canada to the Proceedings as defendants, or for service of proceedings on Fantuan Canada (including but not limited additional costs incurred in connection with the application for permission to serve out of the jurisdiction) will be sought on the indemnity basis.

On 20 May 2022, the solicitors for the HungryPanda Companies sent similar letters, also each entitled ‘letter before action’, to Leping Wu, Junquan (Peter) Liu, Xiaoyun (Sharon) Wang, Helin (Will) Wang, Yaofei Feng and Ye (Gary) Ge.[87] In the letter to Sharon Wang it is stated, inter alia:[88]
[87]Kangeson affidavit, exh GK-1, 388-414. See also Lee affidavit, exh CLL-2, 11-20.
[88]Ibid exh GK-1, 399-403, 401 and 403.

Unlawful means conspiracy
12It is clear from certain documents recovered by McGrathNicol that you have conspired with the EASI Conspiracy Defendants and others to use unlawful means to cause loss or damage to HungryPanda. HungryPanda’s claims in unlawful means conspiracy are summarised at paragraphs 135-158 of the POC and set out in detail in that document.
13By way of summary, you are liable to HungryPanda for the reasons set out below.
…
15The EASI Conspiracy Defendants, Fan Tuan Holding Ltd (“Fantuan Canada”), and you, have combined with the common aim of establishing a competing business in Australia using the Fantuan name to compete with the EASI Business (see paragraph 135 of the POC). In this regard, Fantuan Australia Pty Ltd was incorporated on 14 January 2022, and officially launched its business in Australia on 1 March 2022.
16You intended to injure HungryPanda, by seeking to benefit at HungryPanda’s expense. Such benefit and injury was the inevitable result of using, and transferring from HungryPanda, assets, staff and information of the EASI Business, and in establishing and operating a business in Australia using the same, in order to compete with HungryPanda (see paragraph 136 of the POC).
…
20Further, and in the timescales outlined below, HungryPanda intends to amend its POC to include claims against you for inducing and/or procuring breaches of the APA. These claims will be based on the facts and matters as pleaded in the POC.
…
22For the reasons set out in this letter and the POC, you are a co-conspirator to the unlawful means conspiracy perpetuated against HungryPanda and you are liable to pay damages and to provide other relief.
23Accordingly, HungryPanda intends to join you as a defendant to the Proceedings. Pursuant to CPR Part 19.2(2), HungryPanda will apply to the English High Court to add you as a defendant and for these purposes will seek to: (a) re-amend its Amended Claim Form; (b) amend the POC; and (c) apply for permission to serve you out of the jurisdiction.

24 By 4:00pm GMT on 3 June 2022, please:
(a) confirm whether you consent to be joined as a defendant in the Proceedings;
(b) provide an address for service of proceedings in England or Wales; and
(c) provide any response to the matters alleged against you in this letter and the POC.

On 30 May 2022, the solicitors for Junquan (Peter) Liu, Xiaoyun (Sharon) Wang, Helin (Will) Wang and Ye (Gary) Ge sent letters to the solicitors for the HungryPanda Companies in which they stated that, inter alia, they would endeavour to respond by 1 July 2022.[89]
[89]Burton affidavit, exh VJB-1, 242-245.

Ms Burton gave evidence that, as at 16 June 2022:[90]

In addition to following the procedural timetable described above, HungryPanda intends to join a number of additional defendants to the English Proceeding. The proposed additional defendants include Fantuan Canada and Just Order Enterprises Corp. (together, the Fantuan Canada Entities), Leping Wu and Yaofei Feng (directors of the Fantuan Canada Entities), and six senior executives of the EASI Business, Junquan “Peter” Xu, Xiaoyun “Sharon” Wang, Helin “Will” Wang, Yi “Gary” Ge, Aijuan “Annie” Shi and Yingmin “Evan” Li (the EASI Executive Defendants).

[90]Ibid [24]. Also exhibited to Kangeson affidavit, exh GK-1, 430-439.

On 17 June 2022, the HungryPanda Companies’ solicitors also sent letters each entitled ‘letter before action’ to Aijuan (Annie) Shi and Yingmin (Evan) Li in very similar terms to the letters they sent to the other persons on 20 May 2022.[91]
[91]Kangeson affidavit, exh GK-1, 419-429.

On 14 July 2022, the EASI Defendants filed an ‘Application Notice’ in which they seek, inter, the following order:[92]
[92]Ibid exh GK-1, 289-291.

1. Pursuant to CPR 3.4(2)(a) the Claimants’ non-contractual claims, being:
(i) its claim in the tort of unlawful means conspiracy pleaded at paragraphs 17, 25(4), 52-54, 135-159, 168 and 169 (insofar as it relates to the claim for unlawful means conspiracy) of the Particulars of Claim (“the Conspiracy Claim”); and
(ii) an equitable and/or tortious claim for breach of confidence pleaded at paragraphs 102-104, 159(1) (insofar as it relates to the claim for breach of confidence), 162 and 166 (insofar as it relates to the claim for breach of confidence, and in particular sub-paragraphs (3) and (4)) of the Particulars of Claim and paragraphs (f) and (g) of the Prayer of Relief) (the “Breach of Confidence Claim”),

stand stuck out and the Amended Claim Form and Particulars of Claim shall be (re-)amended accordingly.

Some of the impugned paragraphs, the subject of the strike out application, are relied upon by Fantuan Australia in its third party notice in the Victorian proceeding (ie paragraphs [102]-[104] of the particulars of claim in the High Court proceeding).[93]
[93]See third party statement of claim in the Victorian proceeding, [21(b)].

On 28 July 2022, the Sellers filed a further ‘Application Notice’ in which they seek, inter alia, orders for the HungryPanda Companies to provide further information and clarification with respect to a number of requests for information.[94]
[94]Kangeson affidavit, exh GK-1, 292-295.

The HungryPanda Companies have provided draft ‘Amended Particulars of Claim’.[95] The key new proposed allegations in the draft amended particulars of claim include:

(a) further allegations of knowledge in support of the claim of unlawful means conspiracy;[96]

(b) a new substantive claim that the ‘EASI Conspiracy Defendants’ engaged in fraudulent misconduct.[97]

[95]Ibid exh GK-1, 296-377 (‘draft amended particulars of claim’).

[96]Ibid [140].

[97]Ibid [158A].

The Sellers and Executives Third Parties informed the Court that the strike out application was set down for hearing early this year but that there was no evidence before the Court of this.[98]
[98]Transcript of proceedings 1 September 2022 (n 7) 162.8-28 (Mr Heath QC).

Ms Burton gave evidence:[99]

Assuming the English Proceeding progresses with the joinder of the additional defendants and service out of the jurisdiction, in my view, the first CMC would likely not be listed before the Easter term in 2023 (i.e., late April or May 2023). Accordingly, it is likely that the main trial would not be listed until around April 2024 at the earliest. Depending on the conduct of the EASI Defendants and/or the proposed additional defendants, it may take significantly longer to reach the first CMC and the main trial.
[99]Burton affidavit, [34]. See also at [6]. Also exhibited to Kangeson affidavit, exh GK-1, 430-439.

Victorian proceeding

Ms Burton gave evidence:[100]

10.Following the transfer of certain of the Critical Withheld Assets, HungryPanda discovered that certain of the defendants (namely, Yan Liu, EASI Global and EASI China (together, the EASI Conspiracy Defendants)) had deleted documents and information, including approximately 81% of the data in the EASI Microsoft Exchange system, which hosted the electronic records of the EASI Business, including email records. The data recovery specialists engaged by HungryPanda on 25 February 2022, McGrathNicol, have since recovered a significant volume of the deleted material.
11.Upon reviewing the recovered material, HungryPanda learnt that, from at least 24 November 2021, the EASI Conspiracy Defendants conspired with Fan Tuan Holding Ltd (Fantuan Canada) with the common aim of establishing an online food delivery business in Australia (under the Fantuan name) using assets, employees and contractors of the EASI Business.
12.Shortly thereafter, Fantuan Australia announced that it intended to launch the Fantuan business in Australia on 1 March 2022, a soft opening having commenced on 26 February 2022. This prompted HungryPanda to commence the Australian Proceeding seeking interim injunctive relief restraining Fantuan Australia from supplying food delivery and related services in Australia.

[100]Burton affidavit, [10]-[12]. Also exhibited to Kangeson affidavit, exh GK-1, 430-439.

On 28 February 2022, the HungryPanda Companies commenced the Victorian proceeding against Fantuan Australia by writ and an indorsement of claim. The indorsement included:

(a) allegations concerning the deletion of data;[101]

Fantuan Australia also relied upon the following observation of Hammerschlag J, the primary judge in Global Partners:[568]

It is in my view only faintly (if at all) arguable that the substantive law of Australia will play any (let alone a significant) role in the determination of the rights and liabilities of the parties. It is accepted that English law governs the construction and operation of the Partnership Agreement. None of the conduct complained of occurred in this jurisdiction. It is not suggested that any damage was suffered here.

[568][2010] 267 ALR 144, [157].

I have set out cl 41.1 earlier in these Reasons.[569] It provides that the Asset Purchase Agreement, including any non-contractual obligations arising out of or in connection with the Asset Purchase Agreement, is governed by and shall be construed in accordance with English law.
[569]Reasons, [25].

First, Fantuan Australia did not identify any particular substantive English law that may need to be applied in determining whether the Sellers breached cl 23 of the Asset Purchase Agreement as alleged in the statement of claim at [56(d)], [57(b)] and [58(c)].

Secondly, Fantuan Australia did not identify any other particular substantive English law that may need to be applied in determining the HungryPanda Companies’ claims.

Thirdly, the observations of Hammerschlag J in Global Partners do not assist Fantuan Australia. Relevantly, in the Victorian proceeding:

(a) the Court may also need to apply the substantive law of Australia, including concerning, inter alia, accessorial liability for breach of fiduciary duty, damages and injunctive relief;

(b) the impugned conduct of Fantuan Australia appears, on the present evidence, to have taken place in Australia;

(c) the first plaintiff is an Australian company and may have suffered damage here.

As a result, this a neutral factor.

Australian law

Fantuan Australia refers, in its defence at paragraphs 82 and 83, to various evidence in the High Court and Victorian proceeding and then alleges:

84. At all material times, section 50 of the Competition and Consumer Act 2010 (Cth) provided that a corporation must not directly or indirectly acquire assets of a person if the acquisition would have the effect, or be likely to have the effect, of substantially lessening competition in any market.
85. HungryPanda did not obtain informal clearance nor authorisation from the Australian Competition and Consumer Commission prior to entering into and giving effect to the acquisition of EASI (at least insofar as the transaction affects Australia).
PARTICULARS
That is to be inferred by reason of the following:
(i). There is no reference to the acquisition on the ACCC’s mergers register nor public informal merger reviews register.
(ii). Fantuan Australia’s points of defence dated 23 March 2022 raised the allegation set out in this paragraph.
(iii).By orders made on 25 March 2022, the plaintiff was ordered to make general discovery in this proceeding by 19 April 2022.
(iv). By reason of the foregoing, if any communications between HungryPanda (or any of them or their agents) and the ACCC existed, then those documents were required to be discovered.
(v). HungryPanda’s affidavit of documents (being an affidavit of Jinwan (Tina) Sun sworn on 20 April 2022) did not disclose any correspondence between HungryPanda (or their agents) and the ACCC and, by necessary implication, that those documents do not exist and have never existed.

86. Further and in the alternative to the matters set out in this Defence, if Ms Sun’s evidence set out above is accepted (which is not admitted), then for the reasons set out in immediately above, HungryPanda’s acquisition of EASI pursuant to the Asset Purchase Agreement (at least insofar as the transaction affects Australia):
(a) may have contravened section 50 of the Competition and Consumer Act 2010 (Cth);
(b) as a consequence, HungryPanda may, among other things, be ordered to divest itself of those assets pursuant to Part VI of the Competition and Consumer Act 2010 (Cth); and
(c) by reason thereof, HungryPanda’s damages (if any) do not extend to loss of profits in relation to a business which it is not lawfully entitled to retain.

The HungryPanda Companies referred to Fantuan Australia’s defence concerning s 50 of the Competition and Consumer Act[570] and described it as a ‘curious pleading’ as it does not plead a ‘breach’ of that Act.[571] It then submitted:[572]

…it tends against the stay, because it's a peculiarly Australian provision, a peculiarly Australian defence that Australian courts are suited to deal with, rather than UK courts who have no jurisdiction to hear the matter, in terms of anti-competitive conduct.

[570]Defence, [82]-[86].

[571]Transcript of proceedings 2 September 2022 (n 44) 66.6-8 (Mr Peters QC).

[572]Ibid 67.4-9 (Mr Peters QC).

First, Fantuan Australia does not allege that the HungryPanda Companies have contravened s 50 of the Competition and Consumer Act. It alleges that they ‘may’ have contravened the provision. Fantuan Australia does not seek any orders or any other relief (eg a declaration) based upon any alleged contravention of s 50 of the Competition and Consumer Act 2010. It has not filed any counterclaim.

Secondly, in the event that the Victorian proceeding is stayed, these allegations would be determined in the Victorian proceeding but not until after the stay comes to an end (eg after the determination of the High Court proceeding). They would not be determined in the High Court proceeding unless the HungryPanda Companies joined Fantuan Australia to the High Court proceeding and sought to make these allegations. They have not expressed any intention of joining Fantuan Australia to the High Court proceeding to date.

Finally, in my opinion, these claims may need to be more clearly expressed if they are maintained. Fantuan Australia alleges in paragraph 86(c) of the defence that any damages suffered by the HungryPanda Companies ‘do not extend to loss of profits in relation to a business which it is not lawfully entitled to retain’.[573] This plea relies upon the allegations in paragraphs 86(a) and (b) of the defence that allege that the HungryPanda Companies ‘may’ have contravened s 50 and that they ‘may’ be ordered to divest themselves of assets. The basis for the plea in paragraph 86(c) does not appear to be presently supported by the pleas in paragraphs 86(a) and (b).
[573]Defence, [86(c)] (emphasis added).

As a result, this is not a relevant factor.

Did Fantuan Australia delay in making the application for a stay?

The HungryPanda Companies and the Other Executives Third Parties submitted that Fantuan Australia delayed in making its application for a stay.

The HungryPanda Companies also submitted:[574]

Now, since His Honour Justice Riordan made that statement [concerning an expedited trial], the defendant has taken advantage of that statement to oppose the granting of an interlocutory injunction. The defendant sought programming orders as to points of claim to exchange documents and take other steps and a trial date has been proposed of 31 January 2023. There's an indication of an early trial date. That's the orders of 28 June. Now, no stay was sought until 7 June.[575]

[574]Transcript of proceedings 2 September 2022 (n 44) 51.5-13 (Mr Peters QC).

[575]Fantuan Australia’s summons is dated 7 June 2022 but was not filed until 15 June 2022.

It is convenient to set out the following matters relevant to this issue:

(a) the High Court proceeding was commenced on 16 February 2022. The claims concerned breaches by the Sellers of the Asset Purchase Agreement;

(b) the Victorian proceeding was commenced on 28 February 2022;

(c) on 15 March 2022, the HungryPanda Companies filed points of claim in the Victorian proceeding. The claims against Fantuan Australia were based upon an alleged breach of confidence. No claim was based upon inducing or procuring breaches by the Sellers of the Asset Purchase Agreement;

(d) on 20 April 2022, the HungryPanda Companies filed amended points of claim in the Victorian proceeding. As I have already said in these Reasons, the amended points of claim set out the claims against Fantuan Australia by making extensive allegations concerning the involvement of the Third Parties.[576] Further, the claims set out in the amended points of claim:
[576]See amended points of claim (n 95) for example, [11], [20], [21(a)(iii)], [26], [30], [31], [34], [39], [40], [42], [44].

(iv) concerned a substantial number of additional claims against Fantuan Australia to those in the points of claim, including claims based upon inducing or procuring breaches by the Sellers of cl 23.1 of the Asset Purchase Agreement;[577] and
[577]Ibid Part C.

(v) set out that ‘[o]n 16 February, HungryPanda commenced proceedings in the High Court of Justice of England and Wales against the Sellers alleging that the Sellers had failed to transfer certain assets in breach of the Asset Purchase Agreement, and had otherwise acted in breach of post-completion restrictions, including cl 23.1…’.[578]

(e) on 12 May 2022, Fantuan Australia’s solicitors sent a letter to the HungryPanda Companies’ solicitors referring to the amended points of claim and the High Court proceeding. It stated, inter alia, that the breaches alleged by the HungryPanda Companies against the Sellers in the High Court proceeding are the same breaches that the HungryPanda Companies allege were induced or procured by Fantuan Australia[579] and asked them how their clients intended to ‘redress the issues caused by the hearing of three separate proceedings [ie including the Federal Court proceeding] dealing with the same facts and allegations.’[580] Further correspondence was then exchanged from the date of that letter to 3 June 2022.[581]

(f) on 15 June 2022, Fantuan Australia filed its summons for a temporary stay.[582]

[578]Ibid [12].

[579]First Nomikos affidavit, exh VN-2, 302-304, [4].

[580]Ibid exh VN-2, 302-304, [7].

[581]Ibid exh VN-2, 305-319.

[582]The Other Executives Third Parties erroneously submitted that the first stay application was brought in the period July/August 2022: Transcript of proceedings 1 September 2022 (n 7) 103.2-5 (Mr Truong QC).

In my opinion, Fantuan Australia delayed in making its application for a stay but that delay was not significant in the context of these proceedings. This is because, upon the filing of the amended points of claim, Fantuan Australia was on notice that the claims against it now included inducing or procuring breaches by the Sellers of cl 23.1 of the Asset Purchase Agreement, being the breaches alleged by the HungryPanda Companies against the Sellers in the High Court proceeding. Fantuan Australia then took 3 weeks to raise these issues with the HungryPanda Companies. It then took 2 weeks to file the application for a stay after the parties had exchanged correspondence on this issue.

As a result, this is a factor in favour of a stay of the third party proceeding, but only marginally so.

SUMMARY OF FACTORS

It is convenient to provide a brief summary of the factors for and against a stay of the Victorian proceeding and a stay only of the third party proceeding.

The following are significant factors in support of a stay of the Victorian proceeding:

(a) the Victorian proceeding and the High Court proceeding concern a substantial number of alleged common facts. It is undesirable for this Court and the High Court to, in effect, compete to see which one determines those common facts first. This may also result in inconsistent findings on those alleged common facts;

(b) the Victorian proceeding and the High Court proceeding concern a substantial number of similar issues. The law should strive to avoid a multiplicity of proceedings concerning similar issues;

(c) the HungryPanda Companies bring two proceedings in two jurisdictions concerning a common substratum of facts and a substantial number of alleged common facts and similar issues. This is the result of choices made by them concerning forum for their claims against the Sellers;

(d) the material effect of the determination of the High Court proceeding first, as a practical matter, is likely to be greater than the determination of the Victorian proceeding first.

There are also factors in support of a stay of the Victorian proceeding that may be attributed to the way in which the HungryPanda Companies chose to make their claims in the Victorian proceeding:

(a) the Sellers being vexed by two proceedings. This is a significant factor;

(b) the risk of the Sellers taking steps to rely upon the findings and judgment in the Victorian proceeding to make a preclusive plea or pleas and an application in the High Court proceeding to dismiss or permanently stay it, based upon the legal effects of the findings or judgment in the Victorian proceedings, and the resulting risk of wasted time and costs of the High Court proceeding. This is a marginal factor; and

(c) the burden and inconvenience to those witnesses who would have to prepare and be involved in both the Victorian proceeding and also the High Court proceeding. This is a marginal factor.

The following are significant factors against a stay of the Victorian proceeding:

(a) a stay will substantially delay the Victorian proceeding which is contrary to the public interest in the timely and efficient determination of legal proceedings. This is especially the case given the allegations of serious misconduct. The Victorian proceeding is further advanced than the High Court proceeding;

(b) a stay will likely cause a disadvantage to the HungryPanda Companies as it will substantially delay the determination of their claims and will deprive them of the opportunity to obtain meaningful injunctive relief in the Victorian proceeding. Fantuan Australia will be able to continue to engage in the impugned conduct;

(c) a stay may result in work done, including costs incurred, in the Victorian proceeding being wasted;

(d) I accept the HungryPanda Companies’ submissions that there is no evident prejudice to Fantuan Australia from the continuation of the Victorian proceeding.

Fantuan Australia’s delay in:

(a) making the application for a stay; and

(b) commencing the third party proceeding;

are marginal factors in support of a stay of only the third party proceeding.

It is a marginal factor against a stay of only the third party proceeding that Fantuan Australia would have the burden of proving its claims against the Third Parties in a separate trial without the benefit of the findings made in the trial between the HungryPanda Companies and Fantuan Australia. The following factors are significant factors against a stay only of the third party proceeding:

(a) the HungryPanda Companies chose to commence a proceeding against Fantuan Australia by making claims against it that rely upon the alleged wrong doing of others (ie the Third Parties) without joining them as defendants to their claims. The third party proceeding is a consequence of that choice;

(b) a stay of the third party proceeding has the potential to significantly compound the multiplicity of proceeding in relation to similar issues;

(c) a stay of the third party proceeding may cause a substantial disadvantage to Fantuan Australia:

(vi) Fantuan Australia may be exposed to the burden and expense of two trials in this Court;

(vii) the Third Parties would not be bound by the decision made in the proceeding between the HungryPanda Companies and Fantuan Australia and there is a risk Fantuan Australia may be found liable to the HungryPanda Companies but fail in its claims against the Third Parties. There is a risk of inconsistent findings in this Court;

(d) the objects of the third party procedure may be defeated if the third party proceeding is stayed.

EXERCISE OF DISCRETION

In all of the circumstances, having weighed the various factors I have addressed in these Reasons, I am satisfied that it is in the interests of justice to temporarily stay the Victorian proceeding and not to only stay the third party proceeding. I have also concluded that practical considerations based on common sense and fairness dictate that the High Court proceeding should proceed first. In particular, I emphasise the following matters.

First, the Victorian proceeding and the High Court proceeding are each a very substantial proceeding. The HungryPanda Companies are parties to both proceedings and both proceedings concern a common substratum of fact. They have a substantial number of alleged common facts and similar issues and have some common parties. In those circumstances:

(a) it is undesirable for this Court and the High Court to, in effect, compete to see which one determines those common facts first. This may also result in inconsistent findings on those alleged common facts; and

(b) the law should also strive to avoid a multiplicity of proceedings concerning similar issues.

Secondly, presently the HungryPanda Companies bring two proceedings in two jurisdictions concerning a common substratum of facts and a substantial number of alleged common facts and similar issues. This is the result of choices made by them concerning forum for their claims against the Sellers.

Thirdly, the HungryPanda Companies chose to commence a proceeding in this Court only against Fantuan Australia. They chose to not make claims against the other persons and entities who are alleged by the HungryPanda Companies to have engaged in wrongful conduct and which conduct forms the basis of their claims against Fantuan Australia. The HungryPanda Companies describe this conduct as ‘serious misconduct’.[583] This includes conduct by, among others, the Third Parties. The HungryPanda Companies have chosen to, in effect, make those and similar claims in the High Court proceeding. It has already made claims against the Sellers in the High Court proceeding and are taking steps to join the remaining Third Parties, among others, to the High Court proceeding to make those claims against them. The third party proceeding, insofar as it refers to and repeats parts of the statement of claim against the Third Parties, is the consequence of the way in which the HungryPanda Companies chose to make their claims in the Victorian proceeding. In my opinion, the difficulties caused by the third party proceeding may be attributed to the way in which the HungryPanda Companies chose to make their claims in the Victorian proceeding. These are the difficulties I have previously addressed in these Reasons.[584]
[583]HungryPanda Companies’ submissions, [15].
[584]Reasons, [309].

Fourthly, a stay only of the third party proceeding may cause significant disadvantage to Fantuan Australia for the reasons I have already given. The objects of the third party procedure may also be defeated if only the third party proceeding is stayed.

Fifthly, a stay only of the third party proceeding has the potential to significantly compound the multiplicity of proceedings in relation to similar issues. This is because it may result, as a practical matter, in a separate trial of the third party proceeding.

Sixthly, the allegations in the third party statement of claim, that refer to and repeat paragraphs from the particulars of claim in the High Court proceeding, and that are impugned as an abuse of process, may be appropriately addressed upon an interlocutory application (eg a strike out application). Their existence in the third party statement of claim does not support a stay of the third party proceeding.

Seventhly, a stay only of the third party proceeding would not reduce the number of alleged common facts and similar issues in the Victorian proceeding and the High Court proceeding except insofar as it concerns those allegations in the third party statement of claim that refer to and repeat paragraphs from the particulars of claim in the High Court proceeding, and that are impugned as an abuse of process. As I have already said these may be appropriately addressed upon an interlocutory application (eg a strike out application).

Eighthly, the material effect of the determination of the High Court proceeding first, as a practical matter, is likely to be greater than the determination of the Victorian proceeding first. It is the more substantial proceeding.

Ninthly, I do not consider that Fantuan Australia’s delays in making the application for a stay and in commencing the third party proceeding are significant factors. They are marginal factors in favour of a stay only of the third party proceeding.

Tenthly, a stay of the Victorian proceeding is likely to cause significant disadvantage to the HungryPanda Companies as it will substantially delay the determination of their claims and will deprive them of the opportunity to obtain meaningful injunctive relief in the Victorian proceeding. I accept a stay of the Victorian proceeding may also result in wasted time and costs for the HungryPanda Companies. In my opinion, these disadvantages:

(a) are outweighed by the other significant factors in support of a stay of the Victorian proceeding; and

(b) I take into account that the damages in the High Court proceeding may be a significant remedy.

Eleventhly, the observations made by Riordan J on 3 March 2022 about an expedited trial being in the parties’ interests, and the course adopted by his Honour at that time of having an expedited trial and not determining the claim for interlocutory injunctive relief, were made in the context of the circumstances at that time and have been overtaken by developments in the Victorian proceeding and the High Court proceeding.

Twelfthly, although there is no evident prejudice to Fantuan Australia from the continuation of the Victorian proceeding, there are other significant factors in support of a stay of the Victorian proceeding.

As a result, I am satisfied that I should exercise my discretion to:

(a) order a stay of the Victorian proceeding until further order. This means that if there is a change in circumstances concerning the Victorian proceeding or the High Court proceeding which make it appropriate to lift the stay the HungryPanda Companies, or any other party, are at liberty to apply to end the stay of the Victorian proceeding;[585] and

(b) not to order only a stay of the third party proceeding in the Victorian proceeding.

[585]This was the course taken by Hargrave J in UDP Holdings, see [39](last sentence) and [69]; and also by Bowen CJ in Hughes Motor Service Pty Ltd v Wang Computer Pty Ltd (1978) 35 FLR 346, 355.

Accordingly, I will exercise my discretion to temporarily stay the Victorian proceeding until further order.

CONCLUSION

In conclusion, I will stay the Victorian proceeding until further order.

I will hear from the parties on the precise form of order and on costs. The parties are requested to confer and provide a draft form of order, or in the absence of agreement, forms of order and submissions (limited to 3 pages), to chambers by 4:00pm on 24 March 2023.

SCHEDULE OF PARTIES

HUNGRYPANDA AU PTY LTD (ACN 630 315 132)	First Plaintiff
HUNGRYPANDA JAPAN LTD (a company incorporated in Japan with company number 1200-01-232400)	Second Plaintiff
HUNGRYPANDA (NZ) LTD (a company incorporated in New Zealand with company number 6570802)	Third Plaintiff
- and -
FANTUAN AUSTRALIA PTY LTD (ACN 656 561 492)	Defendant
EASI GLOBAL LIMITED (HK) (a company incorporated in Hong Kong with company number 2754411)	First Third Party
CHONGQING MEIKELAIFUYIREER TECHNOLOGY CO. LTD. (a company incorporated in China with company number 91500000MA60CREU1D)	Second Third Party
YAN (LINDA) LIU	Third Third Party
JIE SHEN	Fourth Third Party
JUNQUAN (PETER) LIU	Fifth Third Party
XIAOYUN (SHARON) WANG	Sixth Third Party
HELIN (WILL) WANG	Seventh Third Party
YINGMIN (EVAN) LI	Eighth Third Party
YI (GARY) GE	Ninth Third Party
AIJUAN (ANNIE) SHI	Tenth Third Party