Link Investments Ltd v DC Rd DC Pty Ltd

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FEDERAL COURT OF AUSTRALIA

Link Investments Ltd v DC Rd DC Pty Ltd [2024] FCA 610

Appeal from: Application for leave to appeal: DC Rd DC Pty Ltd v Zhang (No 2) [2024] FCA 157
File number: NSD 292 of 2024
Judgment of: LEE J
Date of judgment: 31 May 2024
Catchwords: APPEAL – where primary judge required to make a practice and procedure decision at an interlocutory stage – where primary judge resolved interlocutory dispute in accordance with the overarching purpose of the civil practice and procedure provisions under the Federal Court of Australia Act 1976 (Cth) – whether it was reasonably necessary in the circumstances to take identified steps to obtain account statements – relevant principles concerning the granting of leave to appeal from a decision of a single judge considered – where primary judge did not mistake the facts, miscarry discretion or act on a wrong principle – orders made dismissing application
Legislation: Federal Court of Australia Act 1976 (Cth) s 37M(1), (3)
Cases cited:

DC Rd DC Pty Ltd v Zhang (No 2) [2024] FCA 157

Decor Corporation Pty Ltd v Dart Industries Inc [1991] FCA 844; (1991) 33 FCR 397

House v The King (1936) 55 CLR 499

In re the Will of F. B. Gilbert (Deceased) (1946) 46 SR (NSW) 318

Mackinnon v Donaldson Lufkin & Jenrette Securities Corp [1986] Ch 482

Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd [2017] FCAFC 98; (2017) 252 FCR 1

Nationwide News Pty Limited v Rush [2018] FCAFC 70

Rawson Finances Pty Ltd v Deputy Commissioner of Taxation [2010] FCAFC 139; (2010) 81 ATR 36

Sabre Corporation Pty Ltd v Russ Kalvin’s Hair Company [1993] FCA 557; (1993) 46 FCR 428
Division: General Division
Registry: New South Wales
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 30
Date of hearing: 31 May 2024
Counsel for the applicant: Mr M Henry SC with Mr D Elliott
Solicitor for the applicant: Amberlake Lawyers Pty Ltd
Counsel for the respondents: Mr C Colquhoun SC with Mr B Smith and Ms M Kearney
Solicitor for the respondents: Corrs Chambers Westgarth

 

ORDERS

NSD 292 of 2024
BETWEEN:

LINK INVESTMENTS LTD CR 2871791

Applicant
AND:

DC RD DC PTY LTD ACN 634 893 459

First Respondent

STANLEY XUE

Second Respondent

SIT FAMILY PTY LTD ACN 617 947 065 (and another named in the Schedule)

Third Respondent

ORDER MADE BY:

LEE J

DATE OF ORDER:

31 MAY 2024

THE COURT ORDERS THAT:

1.The application for leave to appeal filed on 15 March 2024 be dismissed with costs.

Note:   Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


REASONS FOR JUDGMENT
(Delivered ex tempore, revised from the transcript)

LEE J:

A        INTRODUCTION AND BACKGROUND

  1. This is an application for leave to appeal from orders (Orders) made for the reasons explained in DC Rd DC Pty Ltd v Zhang (No 2) [2024]…

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Details
Case
[2024] FCA 610
Decision Date

CaseChat Overview and Summary

In the case of Link Investments Ltd v DC Rd DC Pty Ltd, the primary issue before the Federal Court was whether the primary judge was correct in requiring the defendant, Link Investments Ltd, to take certain steps to obtain account statements that were potentially relevant to the resolution of the dispute. The matter was heard at an interlocutory stage, and the primary judge had made an order requiring Link Investments Ltd to take specified steps to obtain these statements. Link Investments Ltd appealed the decision, arguing that the steps required were unreasonable and burdensome. The court was tasked with determining whether the primary judge's decision was attended with sufficient doubt to warrant an appeal.

The legal issues centered around whether the primary judge's order was reasonable and whether the decision to grant leave to appeal was appropriate. The court considered the overarching purpose of the civil practice and procedure provisions under the Federal Court of Australia Act 1976 (Cth), which emphasize a quick, inexpensive, and efficient resolution of disputes. The court also examined whether the primary judge had mistaken the facts, miscarried in the exercise of discretion, or acted on a wrong principle. After thorough consideration, the court found that the primary judge had not made any such errors. The court acknowledged that the orders required Link Investments Ltd to take steps that were not directly comparable to other orders made in similar cases, but it was open to the primary judge to require these steps to ensure the acquisition of relevant documents.

The court concluded that the primary judge had correctly exercised his discretion in line with the overarching purpose of the civil practice and procedure provisions. The court also noted that the provision of some money to Mr Zhang for the purposes of undertaking the tasks required by the orders was sufficient. The court emphasised the principle that interference with orders of judges at first instance in the exercise of discretion on a point of practice and procedure should be tightly controlled to prevent disastrous consequences for the administration of justice. Given that the appeal lacked persuasive substance and substantial injustice was not likely if leave were refused, the application for leave to appeal was dismissed with costs.

The final orders made by the court were that the application for leave to appeal filed on 15 March 2024 be dismissed with costs. The entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Orders

Orders of the court

1. The application for leave to appeal filed on 15 March 2024 be dismissed with costs.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Given this conclusion, as senior counsel for Link, Mr Henry SC, frankly accepted, the other steps required by Order 2 logically follow. C CONCLUSION AND ORDERS Given that the primary attack on his Honour’s conclusions as to reasonableness and the exercise of his practice and procedure discretion lacks persuasive substance, the decision proposed to be appealed is not attended with sufficient doubt so as to warrant reconsideration. In this regard, when considering reasonableness, it must also be remembered that Link is a litigant before this Court and allegations have been made which are to be resolved in quelling the controversy in accordance with what might be described as the “local rules”: see Mackinnon v Donaldson Lufkin & Jenrette Securities Corp [1986] Ch 482 (at 495 per Hoffman J). Although Mr Henry makes the point, with some force, that the Orders require Mr Zhang to take steps which are not directly comparable to other Sabre orders that have been made, the issue relates to one of principle, and it is plain it was open for his Honour, consistent with the overarching purpose, to require these steps to be taken to ensure that the Link Account Statements, being documents likely to be directly relevant to the disposition of the case were able to be obtained. Further, and considering the second Décor limb, the Orders do provide the provision of some money to Mr Zhang for the purposes of undertaking the tasks required by the Orders. Even if one supposed the decision to be wrong (which I do not accept), it is difficult to see why substantial injustice would result if leave were refused. We are not dealing with the resolution of anything like the final substantive rights between the parties, and this coupled with the fact that the Court should be chary in granting leave to appeal in practice and procedure decisions necessitates a dismissal of this application for leave to appeal with costs.

Ratio Decidendi

Legal Principle Established

Additionally, consistent with the facilitation of a quick, inexpensive and efficient resolution is the principle which emerges from the oft-cited warning of Jordan CJ in In re the Will of F. B. Gilbert (Deceased) (1946) 46 SR (NSW) 318 (at 323), that if a tight rein is not kept upon the interference with orders of judges at first instance in the exercise of discretion on a point of practice and procedure, the result will be “disastrous to the proper administration of justice”.C CONSIDERATION It is unnecessary to deal with each of the grounds of appeal independently, as they interrelate, and, as noted above, the focus of the complaint made about the primary judgment has been brought into sharper focus during the course of oral submissions this morning. More specifically, the core complaint can be expressed as being that his Honour erred in finding, in all the circumstances, that the first step required by Order 2 was reasonable, that is, the step of “arranging for [Mr Zhang] or another director of Link to attend a BOC branch in Hong Kong in person” was reasonable and did not impose an unduly onerous obligation on Mr Zhang. It was submitted that all subsequent steps required to be undertaken by the Order flowed on from this erroneous conclusion. Link contends that this determination involved his Honour mistaking relevant facts in the way contemplated by the third of the errors referred to in House v The King (1936) 55 CLR 499 (at 505). There has been some debate before me today as to whether that is an appropriate characterisation of what his Honour was doing. Although it is obvious that one of the ways that the exercise of a discretion may miscarry in a manner opening the decision to review is where a judge mistakes the facts (see House v The King at 505), the demarcation between a finding of fact which involves an evaluative judgment (such as whether something is reasonable or could be regarded as sufficient), and the ultimate evaluative judgment constituting the exercise of discretion, can be somewhat blurred. It is unnecessary for me to reach any conclusion about this matter of characterisation because I do not consider it reasonably arguable that his Honour mistook the facts or that his discretion otherwise miscarried. His Honour expressly accepted that proposed Order 2, if made, would interfere with Mr Zhang’s liberty but then reached a view that he did not regard that interference as being unreasonably onerous in the circumstances (at [30]). His Honour addressed the steps that would need to be taken by Mr Zhang to travel to Hong Kong to discharge the obligation imposed by the Orders and reached the conclusion, in my view rationally, that in all the circumstances this did not impose an undue burden given the obvious likely relevance (indeed importance) of the Link Account Statements to the just disposition of the case. In any event, his Honour also had before him the fact that the sole shareholder of Link is Langkawi Investments Limited, a company incorporated in the British Virgin Islands of which Mr Zhang is the sole director.