Richards v Han

Case [2020] FCA 1886

FEDERAL COURT OF AUSTRALIA

Richards v Han [2020] FCA 1886  

File numbers: ACD 71 of 2019
ACD 89 of 2019
Judgment of: THAWLEY J
Date of judgment: 18 December 2020
Catchwords:

PRACTICE AND PROCEDURE – summary judgment application – r 26.01(1)(a) of the Federal Court Rules 2011 (Cth) – s 31A of the Federal Court of Australia Act 1976 (Cth) – whether respondents have no reasonable prospect of successfully defending part of the proceeding

PRACTICE AND PROCEDURE – application under r 16.21 of the Federal Court Rules 2011 (Cth) to strike out certain paragraphs of defence

Legislation:

Corporations Act 2001 (Cth) s 131(2)

Federal Court of Australia Act 1976 (Cth) s 31A

Federal Court Rules 2011 (Cth) rules 16.21 and 26.01

Legal Profession (Barristers) Rules 2014 rules 75, 76 and 81
Cases cited:

Adnunat Pty Ltd v ITW Construction Systems Australia Pty Ltd [2009] FCA 499

Cargill Consulting Ltd v BTAC Coal Pty Ltd [2019] FCA 2070

Dandaven v Harbeth Holdings Pty Ltd [2008] FCA 955

Morris v IMF Bentham Limited [2018] FCA 1009

Federal Treasury Enterprise (FKP) Sojuzplodoimport v Spirits International BV (No 5) [2018] FCA 19

Qualify Me Pty Ltd v Get Qualified Australia Pty Ltd [2016] FCA 192

Singh v Owners Strata Plan No 11723 (No 3) (2012) 207 FCR 390

Spencer v Commonwealthof Australia (2010) 241 CLR 118

Takemoto v Moody’s Investors Service Pty Limited [2014] FCA 1081

Three Rivers District Council v Bank of England [No 3] [2003] 2 AC 1

TR Administration Pty Ltd v Marchetti and Sons Pty Ltd [2008] VSCA 70

Trade Practices Commission v Pioneer Concrete (Qld) Pty Ltd (1994) 52 FCR 164

Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Limited [2011] FCAFC 145

Windsor v Sydney Medical Service Co-operative Ltd (No 2) [2009] FCA 704

Young v Facebook Australia Pty Ltd [2015] FCA 1440
Division: General Division
Registry: Australian Capital Territory
National Practice Area: Commercial and Corporations
Sub-area: Commercial Contracts, Banking, Finance and Insurance
Number of paragraphs: 141
Date of hearing: 18 December 2020
Counsel for the Applicant: Mr C Erskine SC
Solicitor for the Applicant: Bradley Allen Love Lawyers
Counsel for the Respondents: Mr MA Karam and Mr QM Noakhtar
Solicitor for the Respondents: McInnes Wilson Lawyers

ORDERS

ACD 71 of 2019
BETWEEN:

DAVID RICHARDS

Applicant
AND:

WILLIAM ZI WEI HAN

First Respondent

WHITE HORSE AUSTRALIA LINDEMAN PTY LTD (ACN 152 242 610)

Second Respondent

ORDER MADE BY:

THAWLEY J

DATE OF ORDER:

18 DECEMBER 2020

THE COURT ORDERS THAT:

1.The interlocutory application be dismissed.

2.The applicant pay the respondents’ costs on a party/party basis up to and including 1 September 2020 and on an indemnity basis from after 1 September 2020, as agreed or assessed.

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


ORDERS

ACD 89 of 2019
BETWEEN:

DAVID RICHARDS

Applicant
AND:

WILLIAM ZI WEI HAN

First Respondent

WHITE HORSE GLOBAL HOLDINGS PTY LIMITED (ACN 613 378 108)
Second Respondent

CHINA AUSTRALIA ENTREPRENEURS ALLIANCE PTY…

Continue reading Richards v Han

Sign in free to access the full text

Details
AGLC
Richards v Han [2020] FCA 1886
Case
[2020] FCA 1886
Decision Date

CaseChat Overview and Summary

In the Federal Court of Australia, Mr Richards brought claims against Mr Han and eleven other respondents in relation to alleged oral agreements for the provision of services. Mr Han and the respondents applied for summary judgment in relation to part of Mr Richards’ claims and for certain paragraphs of the defence to be struck out. The court had to determine whether Mr Han and the respondents had no reasonable prospect of successfully defending the claims and whether certain paragraphs of the defence should be struck out. The court considered the extensive evidence filed and the parties’ written submissions. It found that the applications were hopeless and brought about significant delay and expense. The court emphasised that summary dismissal should not be awarded simply because it is unlikely that the applicant will succeed on the factual issues. The court held that the defences to the claims were unlikely candidates for summary judgment because the agreements in question were oral agreements and most of the critical discussions were contested. The court concluded that the interlocutory applications were hopeless and dismissed them, ordering Mr Richards to pay the respondents’ costs.

Orders

Orders of the court

1. The interlocutory application be dismissed.

2. The applicant pay the respondents’ costs on a party/party basis up to and including 1 September 2020 and on an indemnity basis from after 1 September 2020, as agreed or assessed.

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

Background

Background to the litigation

The interlocutory application in the Lindeman Claim is supported by a 24 page affidavit of Mr Richards and an exhibit of 536 pages and an affidavit in reply. The interlocutory application in the Shareholding Claim is supported by a 31 page affidavit of Mr Richards and an exhibit of 808 pages and an affidavit in reply. The parties prepared and filed extensive written submissions and objections to evidence. This material reveals that the applicant wishes to engage in complex and fact intensive summary judgment and strike out applications with the intended result that, assuming the applicant were successful in those applications, both proceedings could then continue for an assessment of damages. BACKGROUNDThe parties As mentioned, Mr Han is involved with numerous companies, projects and business ventures under the umbrella of “White Horse” or “White Horse Group”. The White Horse Group was established as an advertising company. It developed into a media company and now has two television channels relating to golf and television shopping. It has mining investments and several real estate projects. Mr Richards, a barrister practising in Canberra, is a director of Web and Software Angels Pty Ltd (ACN 117 660 214) (WSA). The Shareholding Claim involves 11 respondents. Mr Han (the first respondent) is a major shareholder and director of the second to eleventh respondents in the Shareholding Claim. The second to eleventh respondents are companies registered in the Australian Capital Territory. Mr Richards was a director of the second respondent to the Shareholding Claim, White Horse Global Holdings Pty Limited (ACN 613 378 108) from 30 June 2016 until 16 October 2019. Mr Richards was a director of the remaining respondents to the Shareholding Claim from 25 October 2017 to 16 October 2019. The second respondent in the Lindeman Claim, White Horse Australia Lindeman Pty Ltd (ACN 152 242 610), is a company whose shareholders include Mr Han. Mr Richards became a director of White Horse Lindeman on 25 October 2017 and was removed as a director on 8 October 2019. The other major shareholder of White Horse Lindeman, Mr Mao, is not a party in either proceeding and nor is he a shareholder or officeholder of any other company in the proceedings apart from White Horse Lindeman. The Shareholding Claim In the Shareholding Claim, Mr Richards alleges that he did work relating to a potential public listing of a company relating to the “V-platform”, which is described in the Statement of Claim as an “E-Commerce and Retail Business”, on a stock exchange (including both the Australian Securities Exchange and the Shanghai Stock Exchange). The listing never occurred. Mr Richards also claims that he performed other work to manage the second to eleventh respondents (being the Australian-based White Horse group companies) and the proposed online business. The central arrangements on which this claim is based were not the subject of any written agreement, but were said to arise – initially at least – during a conversation on or about 31 May 2016.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Section 31A of the Federal Court of Australia Act 1976 (Cth) includes the following: 31A Summary judgment(1)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a)the first party is prosecuting the proceeding or that part of the proceeding; and(b)the Court is satisfied that the other party has no reasonable prospect of successfully defending the proceeding or that part of the proceeding.(2)The Court may give judgment for one party against another in relation to the whole or any part of a proceeding if:(a)the first party is defending the proceeding or that part of the proceeding; and(b)the Court is satisfied that the other party has no reasonable prospect of successfully prosecuting the proceeding or that part of the proceeding.(3)For the purposes of this section, a defence or a proceeding or part of a proceeding need not be:(a)hopeless; or(b)bound to fail;for it to have no reasonable prospect of success.(4)This section does not limit any powers that the Court has apart from this section. It is s 31A(1), rather than s 31A(2), which is of present relevance. Rule 26.01 of the Federal Court Rules 2011 (Cth) also sets out circumstances in which a party may apply to the Court for an order for summary judgment:(1)A party may apply to the Court for an order that judgment be given against another party because:(a) the applicant has no reasonable prospect of successfully prosecuting the proceeding or part of the proceeding; or(b) the proceeding is frivolous or vexatious; or(c) no reasonable cause of action is disclosed; or(d) the proceeding is an abuse of the process of the Court; or(e) the respondent has no reasonable prospect of successfully defending the proceeding or part of the proceeding.…(4) If an order is made under subrule (1) dismissing part of the proceeding, the proceeding may be continued for that part of the proceeding not disposed of by the order. The party seeking summary judgment bears the onus: Windsor v Sydney Medical Service Co-operative Ltd (No 2) [2009] FCA 704 at [38] per Edmonds J. Demonstrating that a claim or defence has “no reasonable prospect” can be achieved by reference to an incurable defect in the pleadings or by reference to the pleadings and evidence adduced on the application. As Flick J observed in Takemoto v Moody’s Investors Service Pty Limited [2014] FCA 1081 at [13]:[T]he requirement that there be “no reasonable prospects of success” can be satisfied where there is a defect in the pleadings which cannot be cured or, alternatively, by reference to evidence put on in support of an application under s 31A which reasonably excludes the possibility that facts essential to the success of the claim or defence will be able to be established: Fortron Automotive Treatments Pty Ltd v Jones (No 2) [2006] FCA 1401 at [20] per French J (as his Honour then was). The power to give judgment for one party against another is not to be exercised lightly: Spencer v Commonwealthof Australia (2010) 241 CLR 118 at [24] (per French CJ and Gummow J) and [60] (per Hayne, Crennan, Kiefel and Bell JJ); Tropical Reef Shipyard Pty Ltd v QBE Insurance (Australia) Limited [2011] FCAFC 145 at [31] (Edmonds, Jessup and Robertson JJ). This is no less true in cases where summary judgment is sought by an application supported by evidence: Spencer at [24]. As French CJ and Gummow J observed in Spencer at [25]:Section 31A(2) requires a practical judgment by the Federal Court as to whether the applicant has more than a “fanciful” prospect of success. That may be a judgment of law or of fact, or of mixed law and fact. Where there are factual issues capable of being disputed and in dispute, summary dismissal should not be awarded to the respondent simply because the Court has formed the view that the applicant is unlikely to succeed on the factual issue.

Ratio Decidendi

Legal Principle Established

Unless futile to do so, a court would ordinarily grant parties leave to re-plead those parts of a pleading that have been struck out, at least up to a point: Takemoto at [87]-[90] per Flick J. CONSIDERATION The respondents submit, correctly, that the defences to the Lindeman Claim and Shareholding Claim are unlikely candidates for summary judgment in favour of Mr Richards, or for striking out, because the agreements in question are oral agreements and most of the critical discussions are contested. The respondents point to the fact that the discussions were conducted by Mr Han, whose first language is not English and who seldom communicates by email, and Mr Richard’s former business partner, Mr Stephen Dawn, who is not party to these proceedings. Having examined the extensive evidence filed on this application and the parties’ written submissions and having carefully considered the pleadings, I have come to the view that the interlocutory applications are hopeless. They have brought about significant delay and expense in circumstances where the parties’ time and money would have been better spent preparing for trial. Applications of this kind in circumstances such as these should be discouraged. In essence, Mr Richards seeks to conduct a mini-trial on the issue of liability. In large part, he seeks to do so by adducing what has been described in written submissions filed on his behalf as “incontrovertible” evidence in favour of the cases he brings, but which in truth is not determinative, on a summary dismissal basis, of the underlying issues. One example of many, is his submission that photographs he took of a whiteboard are “unlikely to be challengeable” as evidence of Mr Han’s purpose in incorporating White Horse Holdings BVI. Quite why this is so and why Mr Han should not have the opportunity of explaining for himself, by evidence at trial, what purpose or purposes he had was not explained in written submissions. Perhaps the photographs are “incontrovertible” evidence of what was on the whiteboard, but on no view could that conclusively establish Mr Han’s purpose in incorporating White Horse Holdings BVI. The respondents submit, correctly, that the evidence shows that “there is a conflict in the facts deposed to in [the] affidavits”, with the result that “it is apparent that there are real factual issues in dispute which are required to be tested at trial”: Cargill Consulting Ltd v BTAC Coal Pty Ltd [2019] FCA 2070 at [21] per Anderson J. The disputed facts include the existence and terms of the alleged oral contracts and the relationship between them. The credibility of those involved on both sides is likely to be crucial: Adnunat at [40] per Sundberg J. A central contention made by Mr Richards is that paragraph 20(a) of the defence to the Shareholder Claim is “logically incoherent and on the facts has no prospects of success”. Paragraph 20(a) of the statement of claim pleads:20.The services described in paragraphs 8(b), 8(c), and 16(a), 16(b) above were provided by the Applicant:a.without remuneration…