New South Wales Crime Commission v Lee

[2017] NSWSC 1503

Supreme Court

New South Wales

Medium Neutral Citation:	New South Wales Crime Commission v Lee & Ors [2017] NSWSC 1503
Hearing dates:	25 October 2017; 31 October 2017
Date of orders:	02 November 2017
Decision date:	02 November 2017
Jurisdiction:	Common Law
Before:	Campbell J
Decision:	(1) Under r 2.7 Uniform Civil Procedure Rules 2005 (NSW), the Notice of Motion filed by Jason Lee and Seong Won Lee on 13 July 2017 is dismissed for want of due dispatch and prosecution. (2)   The Lees are to pay the Commission's costs of the application.
Catchwords:	CIVIL PROCEDURE – Summary disposal – Dismissal of proceedings – Dismissal of motion to set aside consent orders – Where motion to set aside consent orders stayed by operation of s 471B Corporations Act 2001 (Cth) – Want of due dispatch
Legislation Cited:	Corporations Act 2001 (Cth) Criminal Assets Recovery Act 1990 (NSW) Uniform Civil Procedure Rules 2005 (NSW)
Cases Cited:	Lee v New South Wales Crime Commission (2013) 251 CLR 196; 213 HCA 39
Category:	Procedural and other rulings
Parties:	New South Wales Crime Commission (Applicant) Mr Do Young (aka Jason) Lee (First Respondent) Mr Seong Won Lee (Second Respondent)
Representation:	Counsel: Mr I Temby QC (Applicant) Messrs Lee in person Mr Brown, solicitor for liquidator   Solicitors: New South Wales Crime Commission (Applicant) Matthews Folbigg (liquidator of Third Defendant)
File Number(s):	2010/118966

oral Judgment (REVISED)

1. I am dealing with a motion filed in Court on 18 September 2017 and referred to me by the Registrar on 24 October 2017 when I was sitting as Duty Judge.

2. The motion filed by the New South Wales Crime Commission seeks an order that a motion (the first motion) filed by Mr Jason Lee and Mr Seong Won Lee on 13 July 2017 be dismissed for want of due dispatch and prosecution. The motion filed by Messrs Lee sought to set aside final consent orders made on 30 October 2015, as it happens by me.

History of the proceedings

3. It is necessary to set out the history of the proceedings in brief.

4. By summons filed on 13 May 2010 the Commission sought final relief under the Criminal Assets Recovery Act 1990 (NSW) (the Act) by way of a Proceeds Assessment Order pursuant to s 27 of the Act in respect of Mr Jason Lee and a declaration that he had effective control of the interests in property of J & Lee Property Investment Group Pty Ltd (now in liquidation) (the company).

5. On the same day, the Court made a restraining order under s 10A of the Act restraining all the interest in property of Mr Jason Lee, including his interest in property held in the company's name.

6. On 2 September 2010, by consent, the Company was joined as third defendant to the proceedings, and on 19 December 2010 Mr Seong Lee was joined as fourth defendant.

7. Much of the history of this litigation and of the criminal charges brought against Mr Jason Lee, which are now stayed) are narrated in the decision of the High Court of Australia in Lee v New South Wales Crime Commission (2013) 251 CLR 196; 213 HCA 39. It is unnecessary for me to say more about those matters.

8. The final consent orders were entered at a time when the Lees were legally represented. They are self-represented before me.

9. The orders are set out in full in documents numbered 1 and 2 (pages 3 to 19) attached to Mr Seong Lee's affidavit sworn on 24 August 2017 and filed in support of the first motion. It is unnecessary for me to set out the orders fully. Central to the orders, however, is Order 18 which is in the following terms:

“Pursuant to s 27(1) of the Act, the Third Defendant pay to the Treasurer the sum of $8,500,000 (“the proceeds assessment order”)."

The third defendant, as I have said, is the company. Moreover, the parties agreed that order 18 be supported by a charge under s 31 of the Act. Under Order 28 the Lees were authorised to sell or mortgage at a price agreed to by the Commission any of the property affected by the restraining orders to enable the proceeds assessment order to be satisfied. This brings me to the present application.

The present application

10. As I have tried to make clear, the central and substantial obligations imposed by the final consent orders fell on the company. On 13 February 2017, some five months before the first motion was filed, the Court made an order winding up the company. This order was made at the suit of the Chief Commissioner of State Revenue following the failure of the company to comply with a statutory demand in respect of unpaid land tax; it was not made at the suit of the New South Wales Crime Commission.

11. I record that the orders made on 30 October 2015 have been partly, not fully, satisfied only. I repeat, the substantial obligations imposed by the final consent orders fell on the company. For this reason, the company is a necessary party to the application to set aside the orders either as applicant or respondent.

12. Given the winding up order, the company could not be made an applicant other than by action of the liquidator, which he has not taken. It could not be made a respondent to proceedings by virtue of the provisions of s 471B Corporations Act 2001 (Cth). That provision is very familiar to all litigation lawyers and is in the following terms:

“While a company is being wound up in insolvency or by the Court, or a provisional liquidator of a company is acting, a person cannot begin or proceed with:

(a) a proceeding in a court against the company or in relation to property of the company; or

(b) enforcement process in relation to such property;

except with leave of the Court and in accordance with such terms, if any, if the Court imposes.”

13. I am satisfied that the first motion to set aside the consent orders falls within the description “a proceeding in a court against the company or in relation to property of the company" and is caught by the stay of proceedings imposed by federal law. The first motion cannot proceed except with leave of the Court.

14. Appreciating this, the Commission drew the Registrar's attention to the statutory stay and he ordered that any application for leave of the Court to continue the first motion was to be filed and served by Friday, 25 August 2017. No step has been taken to comply with this order, although I note that Mr Seong Lee, at least, has appeared before Justice Brereton in the Corporations List on 22 May 2017 and 16 August 2017.

The position of each party

15. The essence of the Commission's application is that given the statutory stay and the failure of the applicants to take any step to obtain leave over the last two months the first motion should be dismissed.

16. Mr Brown, solicitor, has appeared before me for the liquidator of the company. The liquidator submits to the order of the Court save as to costs. However, I infer from what he told me that the liquidator would not consent to an application for leave under s 471B were one to be made, an important but not decisive consideration for the exercise of the Court's discretion under that section.

17. Mr Jason Lee and Mr Seong Lee have difficulty understanding why the Commission's later application has been brought on for hearing before the first motion. They submitted that they are desirous of obtaining a hearing date as soon as possible. It may be that they suspect of some intrigue. Of course there has been no such thing. But they fail to understand that their application cannot be advanced in any way because of the operation of the federal statute which they have failed to take any step to comply with.

18. Mr Jason Lee spoke for both of them. He submitted that the winding up order had nothing to do with the first motion and he said that was “about the liquidator”. He emphasised that the first motion was about the final consent orders. He indicated that the argument he wished to advance to have those orders set aside was based upon the proposition that if any part of the orders was “wrong” the whole of the orders must be set aside. In this regard he pointed to the property described in Schedule 5 and, in particular, the property I will refer to as "the Mascot property". It is described as being held by the company as tenant in common with another entity.

19. Mr Lee tendered the Certificate of Title which was, in any event, exhibited to Mr Seong Lee's affidavit. It shows that the company is the sole registered proprietor of that property. Mr Lee said because that was “wrong” the whole of the final consent orders should be set aside.

20. He also advanced arguments seeking to vitiate his consent and the consent of Mr Seong Lee. He submitted, in substance, that he was forced to sign by the lawyers. He seemed to say that undue pressure or fraud or duress was brought to bear upon him and Mr Seong Lee not by the Commission but by his lawyers then acting.

Decision

21. Given the stay, it is not for me to make any comment about the merit of the first motion, except for this: obviously, the strength of their application is a factor which may inform the exercise of the Court's discretion whether or not to dismiss the proceedings for want of prosecution. For that purpose, I make the following observations.

22. Doubtless, a consent judgment, in general terms, may be impugned on grounds that would vitiate the contract upon which it is based. However, it seems to me that none of the arguments Mr Lee advances fall into that category. His complaints against his lawyers who acted as his agents in negotiating the contract do not, as between him and the Commission, even arguably, vitiate that consent or undermine the legal basis of the agreement.

23. To the extent to which there may be a misdescription of the interest of the company in the Mascot property, it does not seem to me that the misdescription is capable of undermining the agreement and Mr Lee's arguments to the contrary, with respect, are misconceived.

24. I am satisfied that, at best, the application to set aside the consent orders is, if not hopeless, very weak.

25. I turn then to the Commission's application. It should be pointed out that the first motion seeking to set aside the final consent orders was brought nearly two years after the orders had been entered. Given the principle of finality, a very strong argument indeed would be required to engage the power of the Court to consider whether the final consent orders should be set aside. As I have said, the first motion is not strong.

26. Although the delay in complying with the Registrar's order of 24 August 2017 is not, in absolute terms, long and I acknowledge that leave under s 471B can be granted nunc pro tunc, given the statutory stay and what seems to me to be the inherent weakness of the first motion, I am of the view that the failure of the Lees to take any step whatsoever to comply with the Registrar's order over these last two months does constitute a want of due dispatch.

27. Before pronouncing orders, I noticed in reading Justice Brereton's judgments that it seems likely that there may be a surplus of assets over liabilities in the liquidation of the company and by some considerable measure. Partly for that reason, and partly because of the pending application first motion, when making orders appointing the liquidator as receiver of trust property formerly controlled by the company, His Honour stipulated that leave of the Court was required before any property could be sold.

28. Mr Seong Lee has appeared but has failed to make any application in the winding up proceedings. It is not a matter relevant my judgment, but one might think that the Lees could better direct their forensic efforts in that field rather than this. That is a matter for them and not for me.

29. I make the following orders:

1. Under r 2.7 Uniform Civil Procedure Rules 2005 (NSW), the Notice of Motion filed by Jason Lee and Seong Won Lee on 13 July 2017 is dismissed for want of due dispatch and prosecution.

2. The Lees are to pay the Commission's costs of the application.

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Decision last updated: 03 November 2017