Shun Sheng Pty Ltd v Lei (No 4) - [2024] NSWSC 635

Supreme Court

New South Wales

Medium Neutral Citation: Shun Sheng Pty Ltd v Lei (No 4) [2024] NSWSC 635
Hearing dates: 20 May 2024
Date of orders: 20 May 2024
Decision date: 27 May 2024
Jurisdiction: Equity
Before: Parker J
Decision:
See [47]

Catchwords:
CIVIL PROCEDURE — recusal of trial judge — apprehended prejudgment — partnership proceedings — receiver previously appointed to assets of partnership — determination of claim by partner against third party allegedly holding partnership assets — successful application to put proceedings on hold pending determination of appeal — no application to stay receivership order — comments on receiver’s power to pursue claims for partnership assets — no intimation that any such claim would be successful — recusal application dismissed

Legislation Cited:
Nil

Cases Cited:
Polsen v Harrison [2021] NSWCA 23
Shun Sheng PtyLtd v Lei [2023] NSWSC 1176
Shun Sheng PtyLtd v Lei [2024] NSWCA 43
Shun Sheng Pty Ltd v Lei (No2) [2023] NSWSC 1623
Shun Sheng Pty Ltd v Lei (No3) [2024] NSWSC 72

Texts Cited:
Nil

Category: Procedural rulings
Parties: Notice of Motion filed 14 May 2024
Shun Sheng Pty Limited (First Plaintiff / First Cross-Defendant / First Applicant)
Sunshine Island (Aust) Pty Limited (Second Plaintiff / Second Applicant)
Xue Feng Wei (Third Plaintiff / Second Cross-Defendant / Third Applicant)
Jun Lei (First Defendant / First Cross-Claimant / Respondent)
Alan John Hayes (Receiver)
Representation:
Notice of Motion Filed 14 May 2024
Counsel:
D Allen (Applicants)
M S White SC/ B R Adam (Respondent)
J R Anderson (Receiver)
Solicitors:
Du & Associates (Applicants)
Lloyd & Lloyd Solicitors (Respondent)
Mangioni Biggs & Co (Receiver)

File Number(s): 2021/365823
Publication restriction: Nil

JUDGMENT- Ex Tempore

Revised from transcript and annotated; issued on 27 May 2024

Before the Court is an application that I recuse myself from hearing these proceedings any further.
The proceedings are complicated partnership proceedings involving claims and cross-claims between the two individuals who were formerly in partnership, and parties associated with them. I have delivered judgment dealing with the disputes as to when, and on what terms, the partnership was terminated, and appointing a receiver (“the Receiver”) to wind up the partnership's affairs: Shun Sheng Pty Ltd v Lei [2023] NSWSC 1176 ("J1"). I have also made some consequential orders for account and delivered two judgments on applications by the plaintiffs for asset preservation orders pending the final resolution of the proceedings: Shun Sheng Pty Ltd v Lei (No 2) [2023] NSWSC 1623 ("J2") and Shun Sheng Pty Ltd v Lei (No 3) [2024] NSWSC 72 ("J3").
The recusal application is made by the plaintiffs/cross-defendants. It is opposed by the first defendant/cross-claimant. The Receiver has appeared but has taken no position on the application. For convenience, I will refer to the parties as the "plaintiffs" and the "defendant" respectively.

Background and procedural history

At J2 [3]-[20], I summarise the claims and issues in the proceedings, my findings on those claims, and the post-judgment procedural history, up to December last year. A…

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.

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Details

Case: [2024] NSWSC 635
Decision Date: 27 May 2024

CaseChat Overview and Summary

The case of Shun Sheng Pty Ltd v Lei (No 4) involved the plaintiff, Shun Sheng Pty Ltd, which sought the recusal of the trial judge on the basis of apprehended prejudgment. The dispute centred around partnership proceedings, where the plaintiff was a partner in a partnership, and the defendant, Lei, was another partner. The plaintiff had previously appointed a receiver to the partnership assets, and the proceedings sought to determine a claim by the plaintiff against a third party who allegedly held partnership assets. The court had to decide whether the trial judge should recuse himself due to the apprehended prejudgment and whether the receiver had the power to pursue claims for partnership assets.

The primary legal issues before the court were whether the trial judge should recuse himself due to apprehended prejudgment and if the comments made by the judge regarding the receiver's powers could be considered as prejudicing the outcome of the case. The court had to balance the need to maintain impartiality with the importance of ensuring that the proceedings were conducted fairly and without bias.

In dismissing the recusal application, the court held that there was no basis for the trial judge to recuse himself. The comments made by the judge did not indicate any prejudgment of the issues in the case, nor did they suggest that any claim by the receiver would be successful. The court found that the comments were made in the context of the broader legal framework governing receivers and partnership assets, and did not constitute an apprehension of bias. The court also noted that there had been no application to stay the receivership order, and therefore the issue of the receiver's powers was not before the court in the recusal application.

The court ultimately dismissed the application for the trial judge to recuse himself and ordered that the proceedings continue as scheduled. No further orders were made regarding the receiver's powers or the claims for partnership assets.

Orders