Re Blockchain Tech Pty Ltd - [2021] VSC 640

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL COURT

CORPORATIONS LIST

S ECI 2019 02711

IN THE MATTER of Blockchain Tech Pty Ltd (ACN 623 201 945)

JIN CHEN	First Plaintiff (First Defendant by Counterclaim)
BLOCKCHAIN TECH PTY LTD (ACN 623 201 945)	Second Plaintiff (Second Defendant by Counterclaim)
- and -
WEI ZHAO & ORS (according to the attached Schedule)	Defendants

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JUDGE:	Ierodiaconou AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	23 September 2021
DATE OF RULING:	1 October 2021
CASE MAY BE CITED AS:	Re Blockchain Tech Pty Ltd
MEDIUM NEUTRAL CITATION:	[2021] VSC 640

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PRACTICE AND PROCEDURE – Discovery of documents – Production for inspection of discovered documents – Scope of discovery - Whether categories of documents are discoverable – Whether categories of documents are relevant – Volunteer Fire Brigades Victoria v CFA (discovery ruling) [2016] VSC 537.

PRACTICE AND PROCEDURE – Subpoena objections – Subpoenas issued to banks – Whether classes of documents sought are discoverable – Whether subpoenas are used as a substitute for discovery - Objections to subpoenas allowed on the basis that subpoenas were used as substitute for discovery.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr C Hibbard	KCL Law
For the First, Second, Seventh, Eighth, Ninth and Tenth Defendants	Mr V Andreou	Christopher James Lawyers

TABLE OF CONTENTS

Issues for determination................................................................................................................... 2

Orders concerning the disclosure of documents...................................................................... 2
Issues in dispute in this proceeding......................................................................................... 12
Galaxy Crowdfunding dispute........................................................................................ 12
Blockchain Business Dispute........................................................................................... 16
Allegations of negligence and breach of retainer against first defendant................. 22
First defendant’s counterclaim – Bitcoin Loan Agreement Dispute.......................... 23
Second defendant’s counterclaim – Loan Agreement Dispute................................... 24
Second defendant’s counterclaim – credit card dispute.............................................. 25
Galaxy Crowdfunding’s counterclaim – use of information...................................... 25

Discovery Dispute........................................................................................................................... 27

Category 34 – discovery sought by defendants from plaintiffs........................................... 28
Defendants’ submissions.................................................................................................. 28
Plaintiffs’ submissions...................................................................................................... 28
Analysis of category 34........................................................................................ 29

Category 21 – discovery sought by defendants from plaintiffs........................................... 31
Defendants’ submissions.................................................................................................. 31
Plaintiffs’ submissions...................................................................................................... 31
Analysis of category 21........................................................................................ 32

Subpoena Objections...................................................................................................................... 32

Credit Union Australia (CUA) subpoena issued 2 December 2020..................................... 32
Plaintiffs’ submissions...................................................................................................... 33
Defendants’ submissions.................................................................................................. 33
Analysis of the subpoena objections.................................................................. 33

Commonwealth Bank Australia (CBA) subpoena issued 30 November 2020................... 34

Conclusion......................................................................................................................................... 35

HER HONOUR:

Mr Jin Chen, the first plaintiff, and Ms Wei (‘Leah’) Zhao, the first defendant, have woven a web of corporate entities around themselves and their business dealings. The entities are tethered to them by the holding of corporate offices and shares, and perhaps through their respective spouses, Ms Shurui Ding, the wife of the first plaintiff, and Mr Guodong Zhang, the husband of the first defendant. The business dealings include cryptocurrency trading, crowdfunding platforms, and other online activities. In at least one business, the first plaintiff assumed responsibilities as a chief information officer and the first defendant, an accountant, assumed responsibilities as a chief financial officer.

In this proceeding, the first plaintiff alleges that he and the first defendant established two joint ventures. The…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Re Blockchain Tech Pty Ltd

Details

AGLC: Re Blockchain Tech Pty Ltd [2021] VSC 640
Case: [2021] VSC 640
Decision Date: 1 October 2021

CaseChat Overview and Summary

Blockchain Tech Pty Ltd is a company involved in a legal dispute that has come before the court. The primary issue in this matter is the discovery of documents, specifically whether certain categories of documents are discoverable and relevant to the case. The court was also required to determine whether subpoenas issued to banks were valid or whether they were being used as a substitute for discovery, which would render them objectionable.

The legal issues at hand primarily revolved around the scope of discovery in the context of the case. The court had to consider whether the categories of documents sought by the parties were discoverable and if they were relevant to the proceedings. Furthermore, the court examined whether the subpoenas issued to the banks were appropriate or if they were being used as a substitute for the discovery process, which would be impermissible. The court referenced the decision in Volunteer Fire Brigades Victoria v CFA (discovery ruling) [2016] VSC 537 to aid in its determination.

In its reasoning, the court concluded that certain categories of documents were indeed discoverable and relevant to the case. However, it found that the subpoenas issued to the banks were objectionable because they were being used as a substitute for the discovery process. The court held that the subpoenas were not valid as they did not comply with the rules governing discovery and were instead being used to circumvent the proper discovery process.

The final orders of the court were that certain categories of documents would be produced for inspection, as they were found to be both discoverable and relevant. However, the subpoenas issued to the banks were quashed, as they were deemed to be used as a substitute for the discovery process and were therefore invalid. This decision highlights the importance of adhering to the proper procedures when seeking the discovery of documents in a legal proceeding.

Orders