Tsai v Australia and New Zealand Banking Group Limited

[2023] NSWSC 604

Supreme Court

New South Wales

Medium Neutral Citation:

Tsai v Australia and New Zealand Banking Group Limited [2023] NSWSC 604

Hearing dates:

25 May 2023

Date of orders:

25 May 2023

Decision date:

07 June 2023

Jurisdiction:

Equity - Commercial List

Before:

Stevenson J

Decision:

Equitable discovery granted

Catchwords:

CIVIL PROCEDURE – representative proceedings in Hong Kong – equitable discovery in aid of Hong Kong proceedings sought from defendant banks

Legislation Cited:

Uniform Civil Procedure Rules 2005 (NSW)

Cases Cited:

Austin Engineering Pty Ltd v Podulova [2023] FCA 419

Breen v Williams (1996) 186 CLR 71; [1996] HCA 57

Computershare Ltd v Perpetual Registrars Ltd & Ors [2000] VSC 139

New Aim Pty Ltd v Leung [2021] FCA 1329

Norwich Pharmacal Co v Commissioners of Customs and Excise [1974] AC 133

Petrochemical Commercial Company International Ltd v Commonwealth Bank of Australia [2019] NSWSC 849

Category:

Principal judgment

Parties:

Tsai Lee Ting (First Plaintiff)
Lee Ping Chen (Second Plaintiff)
Australia and New Zealand Banking Group Limited (First Defendant)
Commonwealth Bank of Australia (Second Defendant)
Westpac Banking Corporation (Third Defendant)

Representation:

Counsel:
C Colquhoun SC with W Liu (Plaintiffs)
R Lewin (Solicitor) (Commonwealth Bank of Australia) (Second Defendant)

Solicitors:
Corrs Chambers Westgarth (Plaintiffs)
Australia and New Zealand Banking Group Limited (First Defendant)
Commonwealth Bank of Australia (Second Defendant)

File Number(s):

2023/131713

JUDGMENT

1. The plaintiffs, Tsai Lee Ting and Lee Ping Chen, are also the plaintiffs in representative proceedings commenced in the Hong Kong Court of First Instance. The plaintiffs have brought the Hong Kong proceedings on their own behalf and on behalf of 1,373 other investors who allege that they were fraudulently induced to invest in a Ponzi Scheme and/or fraudulent investment scheme by the “Best Leader Finance Group”.

2. There are 10 defendants in the Hong Kong proceedings, including two companies known as Best Leader Markets Pty Ltd, one being an Australian company and the other being a Hong Kong company.

3. On 20 January 2023, Lok J made ex parte orders in the Hong Kong proceedings which, amongst other things, imposed a proprietary injunction in respect of the two Best Leader Markets companies.

4. One of those orders was that those companies not dispose of, deal with or diminish the value of funds in a total of six nominated accounts (“the Accounts”) maintained with the three defendants to these proceedings, Australia and New Zealand Banking Group Limited, Commonwealth Bank of Australia and Westpac Banking Corporation (“the Banks”).

5. Each of the Banks has written to those representing the plaintiffs in Hong Kong, stating that none of the Accounts is operative in Hong Kong.

6. In those circumstances, the plaintiffs seek equitable discovery pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 1.4, and pursuant to the principles stated by the House of Lords in Norwich Pharmacal Co v Commissioners of Customs and Excise. ^[1]

   1. [1974] AC 133.

7. As against the Banks, the plaintiffs seek orders requiring production of documents which would show dealings on the Accounts.

8. The stated purpose of the orders sought was to assist those advising the plaintiffs to:

1. identify or clarify the identity of the individuals who operate the Accounts in connection with the alleged Ponzi Scheme;

2. determine which parties were carrying out any genuine business or participating in the alleged Ponzi Scheme; and

3. trace the proceeds of the alleged Ponzi Scheme which were deposited with the “Best Leader Finance Group”.

9. The Banks did not oppose the orders sought by the plaintiffs.

10. On 25 May 2023, I made the orders sought by the plaintiffs. The form of those orders is attached to these reasons.

11. These are my reasons for making those orders.

12. The relevant principles were stated by Lord Reid in Norwich Pharmacal as follows:

“… if through no fault of his own a person gets mixed up in the tortious acts of others so as to facilitate their wrong-doing he may incur no personal liability but he comes under a duty to assist the person who has been wronged by giving him full information and disclosing the identity of the wrongdoers. I do not think that it matters whether he became so mixed up by voluntary action on his part or because it was his duty to do what he did. It may be that if this causes him expense the person seeking the information ought to reimburse him. But justice requires that he should co-operate in righting the wrong if he unwittingly facilitated its perpetration”. ^[2]

2. At 175.

13. It is now well established that the principles expressed in Norwich Pharmacal are not limited to identity discovery, but extend to information discovery, as is sought here. ^[3]

    3. For example, Computershare Ltd v Perpetual Registrars Ltd & Ors [2000] VSC 139 at [19] (Warren J (as her Honour then was)); Austin Engineering Pty Ltd v Podulova [2023] FCA 419 at [13] (Jackson J); New Aim Pty Ltd v Leung [2021] FCA 1329 at [48] (Moshinsky J).

14. It is also now well established that Norwich Pharmacal relief may be granted in aid of foreign proceedings. ^[4]

    4. Breen v Williams (1996) 186 CLR 71 at 119-120 (Gummow J); [1996] HCA 57; Petrochemical Commercial Company International Ltd v Commonwealth Bank of Australia [2019] NSWSC 849 at [4], [5], [16] and [18] (Slattery J).

15. Based on the material before me, I was satisfied that the plaintiffs have an arguable case that a wrong has been carried out by the named defendants in the Hong Kong proceedings, and also by another company, Imperial Company Pty Ltd, which is soon to be joined as a defendant in the Hong Kong proceedings.

16. I was also satisfied that the orders were necessary to enable the plaintiffs to seek legitimate redress for that wrongdoing.

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Attachment A - Orders

Endnotes

Decision last updated: 07 June 2023