In the matter of Sunnya Pty Ltd

[2024] NSWSC 415

Supreme Court

New South Wales

Medium Neutral Citation:

In the matter of Sunnya Pty Ltd [2024] NSWSC 415

Hearing dates:

25 March 2024

Date of orders:

25 March 2024

Decision date:

25 March 2024

Jurisdiction:

Equity - Corporations List

Before:

Black J

Decision:

Orders made in accordance with the Short Minutes of Order.

Catchwords:

PRACTICE AND PROCEDURE – service of Notice of Motion initiating contempt proceedings – whether service in New Zealand should be effected under the Uniform Civil Procedure Rules 2005 (NSW) or the Trans-Tasman Proceedings Act 2010 (Cth).

PRACTICE AND PROCEDURE – service outside of Australia – whether leave should be granted for service of originating process outside Australia under r 11.5(4) of the Uniform Civil Procedure Rules 2005 (NSW).

Legislation Cited:

- Civil Procedure Act 2005 (NSW)

- Trans-Tasman Proceedings Act 2010 (Cth)

- Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

- Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41

- Bhagat Global Custodian Ltd [2002] NSWCA 160

- CFMEU v Boral Resources (VIC) Pty Ltd (2015) 256 CLR 375

- Gottlieb v Baumann [2019] FamCA 422

- Re Struthers, Liquidator of PACI Pty Ltd (No 3) [2005] 64 NSWLR 392; [2005] NSWSC 1113

Category:

Procedural rulings

Parties:

Sunnya Pty Ltd (First Plaintiff/Applicant)

Representation:

Counsel:
M Condon SC/B Mustafa (Plaintiffs/Applicants)

Solicitors:
Auyeung Hencent and Day Lawyers (Plaintiffs/Applicant)

File Number(s):

2022/329426

Judgment – EX TEMPORE (Revised 25 March 2024)

Nature of the application

1. By Notice of Motion filed on 1 March 2024, the Plaintiffs in the substantive proceedings, Sunnya Pty Ltd and Jatcorp Limited, apply for orders under Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”) rr 11.5 and 11.8AB granting leave to serve a Notice of Motion filed 11 December 2023, an affidavit in support of the application, and an exhibit to that affidavit on Mr Wu in New Zealand. Rule 11.5 of the UCPR provides, relevantly, for the Court to grant leave to serve an originating process outside of Australia, where service is not permitted under Sch 6 of the UCPR, and UCPR r 11.8AB deals with service of other documents, relevantly the affidavit and exhibit, outside of Australia. The Plaintiffs' Notice of Motion filed 11 December 2023, to which the application relates, seeks, relevantly, an order that Mr Wu be found liable for contempt as charged in the annexed statement of charge and be punished for contempt as charged. That Notice of Motion also sought other interlocutory relief, on an ex parte basis, which was not granted when the matter was previously heard on 11 December 2023.

Affidavit evidence

2. The Plaintiffs read the affidavit dated 8 December 2023 of their solicitor, Mr Zhu, in support of the application and tender a voluminous exhibit to that affidavit. Broadly, that affidavit sets out the circumstances in which certain documents were produced, and relied upon, by Defendants in the substantive proceedings, including Mr He which recorded dealings between Mr He and other Defendants and Mega Aqua Ltd (“Mega Aqua”), a company incorporated in New Zealand. Mr He and other Defendants relied on those documents in order to justify significant payments made out of the jurisdiction, at a time that a freezing order was sought against them. In particular, those documents included a statement signed by Mr Wu referring to the circumstances in which the transactions had taken place and certain sale contracts had arisen. It is sufficient, for present purposes, to note that significant issues have now arisen in the substantiative proceedings as to the accuracy of the information contained in those documents, and as to whether those documents correctly recorded the relevant transactions.

3. By a second affidavit dated 19 February 2024, Mr Zhu provides information as to Mr Wu's residence in New Zealand, and in a third affidavit notes there is no reason to think that Mr Wu is resident in Australia, and refers to an attempt made, without success, to serve the relevant contempt application in Australia when Mr Wu was then in Australia to give evidence in the substantiative proceedings. By his third affidavit dated 21 March 2024, Mr Zhu refers to correspondence in respect to the application, and again acknowledges that he is not aware of any information indicating that Mr Wu is an Australian citizen.

The applicable rules

4. I have been provided with comprehensive written submissions of Mr Condon, with whom Mr Mustafa appears, in respect of the application. They address a somewhat technical, but important, question whether service upon Mr Wu is properly effected under rr 11.5 and 11.8AB of the UCPR, or should instead take place under the Trans-Tasman Proceedings Act 2010 (Cth) (“TTP Act”). That partly turns on the terms of UCPR which requires, first, that the contempt motion can properly be characterised as an “originating process”. Plainly, the contempt motion is not an Originating Process, in the sense of the document by which separate proceedings are commenced in this List. Mr Condon submits, however, and I accept that it is an originating process, for the purposes of UCPR r 11.5, adopting the definition in s 3 of the Civil Procedure Act 2005 (NSW), being the process by which proceedings are commenced. Mr Condon also submits, and I accept, that contempt proceedings, and specifically proceedings for criminal contempt as distinct from civil contempt, are properly regarded as a separate proceeding, although they may be commenced, as here, by a Notice of Motion filed in the substantiative proceedings.

5. On that basis, Mr Condon submits, and I accept, that the contempt motion is an originating process, for the purposes of the relevant rule, where it commences a separate proceeding, being the contempt proceeding, within the substantive proceedings. That approach is both consistent with the case law to which Mr Condon refers, including Re Struthers, Liquidator of PACI Pty Ltd (No 3) [2005] 64 NSWLR 392; [2005] NSWSC 1113 at [22], and consistent with the substantive position, namely that the contempt proceeding will here take place as a separate substantiative proceeding, likely before a different judge, to the proceedings which were commenced in the first instance by Sunnya and Jatcorp against Mr He and others.

6. Second, Mr Condon submits that the contempt motion is not an originating process that may be served under Pt 2 Div 2 of the TTP Act and is not a "local judicial document" under Pt 11A of the UCPR, in order to address other factors which might have had the consequence that UCPR r 11.5 does not apply. He submits, and I accept, that the TTP Act applies to a "civil proceeding" commenced in an Australian court, and that is defined in s 4 of the TTP Act as a proceeding that is "not a criminal proceeding". The phrase "criminal proceeding" is there defined in an expansive way, as extending beyond a prosecution for an offence, to include a procedure other than a prosecution that, under an Australian law, may be used to determine liability for an offence or impose a penalty for an offence. I am comfortably satisfied that a proceeding for criminal contempt answers the description of "an offence" and that is apparent from the case law to which Mr Condon refers, including Bhagat Global Custodian Ltd [2002] NSWCA 160 at [33]. While Mr Condon notes that the proceeding against Mr Wu is likely not a "prosecution for an offence", falling within the first of the elements of the definition of "criminal proceeding" in the TTP Act, it seems to me to fall within the alternative category of a procedure, not being a prosecution, that will determine Mr Wu's liability for an offence, namely the criminal contempt which is alleged against him in respect of the proceedings.

7. The decision in CFMEU v Boral Resources (VIC) Pty Ltd (2015) 256 CLR 375 is not inconsistent with that position, although the High Court there held that a contempt proceeding for criminal contempt was not a "criminal proceeding" for the purposes of relevant provisions of the Supreme Court (General Civil Procedure) Rules 2005 (Vic), where that proposition appears to have been directed to the concept of "criminal proceeding" reflected in the first limb of the definition in the TTP Act, and not the expanded definition of a procedure under Australian law that would determine liability for, or impose a penalty for, an offence.

8. As I noted above, Mr Condon also addresses the question whether the relevant proceedings are a "local judicial document" under UCPR Pt 11A, such that they could properly be served, or should properly be served, under the Convention on the Service Abroad of Judicial and Extra-Judicial Documents in Civil or Commercial Matters (“Hague Convention”). Mr Condon points out that, the definition of "civil proceeding" in UCPR Pt 11A is a "judicial proceeding in relation to civil or commercial matters". While the contempt application plainly has a connection with the substantive proceedings, which themselves involve civil or commercial matters, it seems to me that its criminal character, having regard to the case law which I referred above, has the consequence that it is not properly described, for the purposes of Pt 11A, as being a judicial proceeding in relation to a civil or commercial matter, at least for the purposes of permitting service under the Hague Convention. That result is consistent with the decision in Gottlieb v Baumann [2019] FamCA 422 to which Mr Condon refers.

9. In these circumstances, the alternatives which might exclude service under UCPR r 11.5, and provide for service in another manner, are not presently available, and I am satisfied that service under UCPR rr 11.5 and 11.8AB is the correct form of service of the relevant contempt application outside the jurisdiction. Mr Condon rightly points out that, here, leave is required, where service would not be within the scope of UCPR Sch 6.

Whether leave should be granted

10. I am also satisfied that there is affidavit evidence that addresses the matters contemplated by UCPR r 11.5(4), namely matters relating to the desirability of the Court assuming jurisdiction, including the fact that Mr Wu, is in New Zealand, or at least possibly may be in New Zealand, and that he is not an Australian citizen, as I have noted above.

11. Mr Condon refers to the matters that need to be satisfied for a grant of leave under UCPR, as specified in r 11.5(5), namely that the claim has a real and substantial connection with Australia; Australia is an appropriate forum for the trial; and in all the circumstances the Court should assume jurisdiction. I am satisfied of those matters, on both a simpler and more complex basis. The simpler basis is that the claim plainly has a real and substantial connection with Australia, where it alleges a contempt committed which would have had a real effect upon the conduct of Australian proceedings; Australia is an appropriate forum for the trial, where the contempt is a contempt of this Court, and this Court is plainly the appropriate forum to determine whether that contempt was committed; and, for those reasons, the Court should assume jurisdiction, since only this Court could properly determine whether such a contempt was committed against it.

12. Mr Condon also addresses the proposition that, in order to support service under UCPR r 11.5(5), the Plaintiffs may need to establish that the claim is properly arguable, at least in the sense noted in Agar v Hyde (2000) 201 CLR 552; [2000] HCA 41 at [57] and [59], applying the same test as would be applied in respect of domestic proceedings, so that the Court should allow a matter to proceed to a determination on the merits unless it has a high degree of certainty that the proceedings would fail if allowed to go to trial in the ordinary way. Mr Condon submits that here the claim is properly arguable on that basis. He refers to the matters that were addressed in Mr Wu's statement, on which the Plaintiffs would rely to establish the relevant contempt, and the matters which found an attack upon the truth of that statement, as to the existence of the contracts to which that statement referred, or at least the information provided in that statement as to the dates and circumstances of those contracts. Where the matter may proceed to a substantive hearing, and where it is at least possible that I would be hearing that matter, it seems to me that I should not say any more than is necessary to determine this application at this point. I am comfortably satisfied that the position raised in the contempt application is properly arguable.

13. I note that Mr Condon addressed, for completeness, observations which I had made at the hearing of an earlier application on 11 December 2023 in that respect, but there was no inconsistency between those observations and a conclusion that the application is properly arguable. In the ex parte hearing on 11 December 2023, I declined to grant an ex parte application for an arrest warrant against Mr Wu, applying the Briginshaw standard, where that warrant would have had the consequence that he was arrested, immediately after giving evidence in proceedings in this Court, and potentially held in custody in the period shortly before Christmas, preventing him from returning to New Zealand. I there observed that, by any standard, the remedy sought was an intrusive remedy, and indicated that I was not satisfied that the evidence reached the level necessary to grant that intrusive remedy. It was, however, implicit in the observations that I there made, particularly at page 26 of the transcript, that I there accepted that the evidence to which I had been taken may ultimately support an inference that contracts were misdated to create a false impression that they existed on a date on which they did not exist, a matter on which reliance would be placed to establish the contempt, but found that the evidence of that matter did not rise to the level necessary to satisfy the Briginshaw standard, on the evidence being before me, and to support the very intrusive relief that was then sought.

14. The position here is, of course, entirely different, because the Plaintiffs now seek relief which will have no more than the consequence that Mr Wu is given an opportunity to defend the contempt application, upon its merits, before this Court. In the contempt application, as the Plaintiffs point out, they will have access to processes for the compulsory disclosure of documents, at least by way of the issue of a subpoena to Mega Aqua, and they have foreshadowed that they will seek to issue such a subpoena, to access further documents and evidence which is capable of supporting their case. Here, the position is, it seems to me, that the case as it stands is a properly arguable one, and, as is ordinarily the case when proceedings are commenced, the Court should have regard to the fact that a properly arguable case may well be strengthened by the use of the compulsory processes available to a plaintiff in pursuing that case.

15. I am therefore comfortably satisfied that, while the evidence presently available to the Plaintiffs did not warrant the very intrusive relief which was sought in December, it is sufficient to support the relief that is now sought which, as I noted above, will simply bring about the determination of the contempt application on its merits in the Court in which it is properly determined.

16. For these reasons, I make orders in accordance with the short minutes of order initialled by me and placed in the file. I make a further order that these orders be entered forthwith.

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Decision last updated: 18 April 2024