Liu v Chan

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SUPREME COURT OF QUEENSLAND

CITATION:

Liu v Chan & Ors  [2021] QSC 352

PARTIES:

CHENG BIN LIU

(plaintiff)

v
STANLEY KIN CHAN
(first defendant)
AMY SIU MAN SHUM
(second defendant)
AE DEVELOPMENTS PTY LTD
ACN 136 649 502
(third defendant)
LC INTERNATIONAL CORPORATION PTY LTD
ACN 136 885 704
(fourth defendant)
CMO HOLDINGS PTY LTD
ACN 139 313 060

(fifth defendant)

FILE NO/S:

BS No 7428 of 2015

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

17 December 2021

DELIVERED AT:

Brisbane

HEARING DATE:

31 March 2021

JUDGE:

Davis J

ORDERS:

1.   The stay of proceedings ordered on 18 June 2020 is dissolved.

2.   The application for an extension of time is dismissed.

3.    The plaintiff pays the defendants’ costs of both applications on the indemnity basis.

CATCHWORDS:

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - DISCOVERY AND INTERROGATORIES - DISCOVERY OF DOCUMENTS - where the plaintiff failed to make proper disclosure of documents - where the plaintiff’s claim was stayed - where the plaintiff made further disclosure - where the plaintiff sought to dissolve the stay - where the plaintiff sought an extension of time to comply with the orders - where the plaintiff remained in breach of orders - whether the stay should be dissolved

Uniform Civil Procedure Rules 1999, r 430, r 668

Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225, cited
Di Carlo v Dubois [2002] QCA 225, followed
Federal Treasury Enterprise (FKP) Souzplodoimport v Spirits International BV (reg’d) in the Netherlands [2019] FCA 802, followed
Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, cited
Palavi v Radio 2UE Sydney Pty Ltd [2011] NSWCA 264, cited
Rosniak v Government Insurance Office (1997) 41 NSWLR 608, followed
Tomlinson v Ramsey Food Processing (2015) 256 CLR 507, cited

COUNSEL:

M Steele with M Walker for the plaintiff (applicant)

D Keane with D Tay for the defendants (respondents)

SOLICITORS:

Rapport Lawyers for the plaintiff (applicant)

Bartley Cohen for the defendants (respondents)

  1. The plaintiff, Cheng Bin Liu, applies to lift a stay of the proceedings that was ordered by me on 18 June 2020.  Mr Liu, who was in default of orders, also seeks an extension of time to comply with those orders in some respects.  Both applications are resisted by all defendants.

    Background

  2. Mr Liu is a businessman living in China.  He says that in 2009 he met with Stanley Kin Chan, the first defendant, and discussed with him the prospects of Mr Chan helping Mr Liu and his family emigrate to Australia.

  3. Mr Liu says that an agreement was struck whereby sums of money would be paid to Mr Chan for the purposes of acquiring real estate in Australia for Mr Liu to facilitate the qualification of Mr Liu and his family to live here.

  4. Mr Liu alleges that the money was paid to Mr Chan and has been misappropriated.  It is unnecessary…

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Details
Case
[2021] QSC 352
Decision Date

CaseChat Overview and Summary

In the case of Liu v Chan, the plaintiff, Cheng Bin Liu, sought to lift a stay of proceedings that was previously ordered on 18 June 2020. Mr Liu also sought an extension of time to comply with the orders, which were resisted by all defendants. The plaintiff, a businessman living in China, alleged that in 2009, he entered into an agreement with the first defendant, Stanley Kin Chan, to facilitate his family's emigration to Australia. Liu claimed that sums of money were paid to Chan for acquiring real estate in Australia, which were subsequently misappropriated. The defendants disputed Liu's claims and alleged different versions of the underlying agreement. The case revolved around the proper disclosure of documents, particularly relating to the building projects and the involvement of Chengdu Dacheng Real Estate Co Ltd (CDRE). The court found that Liu had not made proper disclosure of documents and ordered him to serve a list of documents and deliver copies of each document to the defendants.

The legal issues in this case were whether the stay should be dissolved, whether the time for compliance should be extended, and whether further compliance should be excused. The court considered that there had been substantial compliance with the orders made in March 2020, but Liu remained in breach of the orders. The court found that there was no reason to discharge the orders made in March 2020, and it was not necessary to extend the time for compliance, as Liu remained in breach. The court also found that the stay should be dissolved, as Liu had not fulfilled his obligations to make disclosure and his assertion that he had no control over CDRE was found to be false.

The court ordered that the stay of proceedings ordered on 18 June 2020 be dissolved, the application for an extension of time be dismissed, and the plaintiff pay the defendants' costs of both applications on the indemnity basis. This case highlights the importance of proper disclosure of documents in civil proceedings and the consequences of failing to comply with court orders.

Orders

Orders of the court

1. The stay of proceedings ordered on 18 June 2020 is dissolved.

2. The application for an extension of time is dismissed.

3. The plaintiff pays the defendants’ costs of both applications on the indemnity basis.

Background

Background to the litigation

The plaintiff, Cheng Bin Liu, applies to lift a stay of the proceedings that was ordered by me on 18 June 2020. Mr Liu, who was in default of orders, also seeks an extension of time to comply with those orders in some respects. Both applications are resisted by all defendants.Background Mr Liu is a businessman living in China. He says that in 2009 he met with Stanley Kin Chan, the first defendant, and discussed with him the prospects of Mr Chan helping Mr Liu and his family emigrate to Australia. Mr Liu says that an agreement was struck whereby sums of money would be paid to Mr Chan for the purposes of acquiring real estate in Australia for Mr Liu to facilitate the qualification of Mr Liu and his family to live here. Mr Liu alleges that the money was paid to Mr Chan and has been misappropriated. It is unnecessary to delve into the alleged liability of the other defendants save that it is alleged that they are involved in the breach by Mr Chan of his obligations to Mr Liu. Mr Liu claims relief against the defendants who counterclaim. Various amended pleadings have been filed. It is unnecessary to analyse the pleadings. Mr Chan gives a different version of the underlying agreement which he reached with Mr Liu. He accepts that money was received by him, but he did not misappropriate it. He says that it was expended as directed by Mr Liu. For present purposes, the important issue is that Mr Liu says that there was an ongoing business relationship between Mr Liu and Mr Chan which involved Mr Chan’s business carrying out architectural design work for companies controlled by Mr Liu. There were two significant projects; the Tianyi Xianguin Project and the Dacheng Project. The money, or at least most of it, was paid in relation to those arrangements. A company in which Mr Liu is involved, Chengdu Dacheng Real Estate Co Ltd (CDRE) was involved in the projects. On Monday, 25 November 2019, the trial commenced before me. It was heard for a number of days up to 6 December 2019 and then adjourned. The trial resumed on 9 March 2020. Mr Liu gave evidence and was cross-examined. His cross-examination has not been completed. A dispute arose as to disclosure. It is unnecessary to descend into detail of that dispute. In essence, the defendants complained that Mr Liu had not made proper disclosure of documents relevant to the building projects in respect of which Mr Chan has said he did work. Central to that issue was CDRE, its involvement in the projects, its involvement with Mr Chan, and Mr Liu’s control over it. On 11 March 2020, I made various orders, relevantly here:“1By 4pm on 22 April 2020, the plaintiff must serve a list of documents and deliver copies of each document, and in the event that any document is written in a Chinese language, a copy of a translation in English of the document, including of any signature, to the solicitor for the defendants in relation to any of the following documents in his possession or control:(a)Documents referred to in the email from Rachel Liang[1] to Edwin So on 10 March 2020 at 9:33pm;[1]A solicitor employed by the firm of solicitors representing the defendants.(b)Documents relating to Chengdu Dacheng Real Estate Co. Ltd.’s engagement by Huaxi Securities Co. Ltd., on the project referred to as Phase II Project of Plot D6 of Huaxi Securities Co. Ltd.; (c)The tender documents submitted by Chengdu Dacheng Real Estate Co Ltd., to Huaxi Securities Co. Ltd., for the project referred to as Phase II Project of Plot D6 of Huaxi Securities Co. Ltd.;(d)Correspondence relating to the design work submitted as part of the tender referred to at paragraph 1 (c) above;(e)Records relating to the employment or engagement of Hao Song and Ling Ling Jiang with Chengdu Dacheng Real Estate Co. Ltd.;(f)Records relating to the employment or engagement of Hao Song and Ling Ling Jiang with Huaxi Securities’ Phase II Project of Plot D6 Construction Department referred to in paragraph 1.1 and 1.2 of the Supplementary Agreement to the Joint Construction Agreement for Phase II Project of Plot D6 on Huaxi Securities Co. Ltd.;(g)An impression of the chop or seal described in 1.4.6 of the Supplementary Agreement to the Joint Construction Agreement for Phase II Project of Plot D6 on Huaxi Securities Co Ltd.;(h)Any document recording the involvement of Hao Song and Ling Ling Jiang in carrying out the works pursuant to the Joint Construction Agreement for Phase II Project of Plot D6 on Huaxi Securities Co. Ltd.;(i)Any company documents between 2009 and 2011 recording the person that held the position of General Manager of Chengdu Lan ling Investment Co. Ltd. or Lanling Investment Co. Ltd.;(j)Any document in relation to the plaintiff’s role or interest in relation to Chengdu Lanling Investment Co. Ltd. or Lanling Investment Co. Ltd.;(k)Any documents in relation to the plaintiff’s role or interest in relation to the project referred to as the Tianyi Xiangyun Project;(l)Any emails between Hao Song, Ling Ling Jiang, or any other person on behalf of Chengdu Dacheng Real Estate Co. Ltd., to the first defendant, Hong Mei ‘Crystal’ Zhou, Tina Ka, Alex Shen, Sun Shun and Steven Seto relating to, the design of the Phase II Project of Plot D6 of Huaxi Securities Co. Ltd.; and(m)Any communications between the plaintiff and Hao Song relating to the project referred to as the Tianyi Xiangyun Project or Phase II Project of Plot D6 of Huaxi Securities Co. Ltd.2To the extent that any documents referred to in order 1 do not exist or have passed out of the possession or control of the plaintiff, by 4pm on 29 April 2020, the plaintiff must file and serve an affidavit stating:(a)That the relevant document or class of document does not exist or has never existed;(b)The circumstances in which the relevant document or class of documents ceased to exist or passed out of the possession or control of the plaintiff. …”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Document 94 concerns communications between Mr Liu and Hao Song relating to the projects. No documents have been disclosed. Mr Liu swears in his affidavit that there is no relationship between him and Hao Song and that explains why no documents are disclosed.Consideration and conclusions Mr Liu remains in breach of the orders made in March 2020. There is, for example, no attempt to identify documents which have been in the possession or under the control of CDRE but no longer are. There is also no attempt to explain what happened to any such documents. Some of the explanations given by Mr Wang to Mr So give no great confidence that full disclosure has otherwise been given. However, in my view, there has been substantial compliance. Three issues therefore arise:1.Should further compliance be excused?2.Should the stay be lifted?3.Should the time for compliance be extended?Should further compliance be excused? For reasons which follow, I intend to lift the stay. However, the defendants achieved the orders which were made in their favour in March 2020. It is clear that there has not been complete and total compliance with those orders. It may be that during the proceedings the failure to comply will achieve a significance justifying the remaking of the stay. Further, the defendants may seek other and different remedies consequent upon the failure to comply. In my view, there is no reason justifying the discharge of the orders made in March 2020.Should the time for compliance be extended? There is no point in doing this as Mr Liu remains in breach. Should the stay be dissolved? As at March 2020, Mr Liu had clearly not fulfilled his obligation to make disclosure. As at June 2020, Mr Liu had not fulfilled his obligations as to disclosure. His assertion that he had no control over CDRE was found, in June 2020, to be false and there was no appeal against the orders made consequent upon that finding. Subsequently, Mr Liu seemingly easily engineered access to CDRE’s documents providing further proof of the finding made that he did in fact have access to those documents. Since June 2020, Mr Liu has contacted CDRE and steps were put in place for the documents to be made available to Mr Liu through Mr Wang. That occurred, although Mr So has sworn on information and belief that there are no further documents. A major issue outstanding is whether Mr Liu is in a position to disclose whether documents that have not been disclosed were in existence, whether they were in the possession of CDRE and in what circumstances they passed from the possession of CDRE. That information is said not to be within the personal knowledge of Mr Liu. He has sworn that he has no knowledge of the documents held by CDRE. That assertion may very well be challenged by cross-examination, and perhaps evidence at the trial and that may reignite further considerations in relation to disclosure. However, as the evidence presently sits, Mr Wang has made inquiries and searches and has disclosed those results as best that he can to Mr So. The only rational inference to draw is that Mr Wang did not identify whether CDRE ever held the documents or where they went. Whether he could, with further searching, is another issue.