TWW Yachts Sarl v The Yacht “Loretta” (No 3)

The case of TWW Yachts Sarl v The Yacht “Loretta” (No 3) involves the applicant, TWW Yachts Sarl, seeking to join Wing Cheung Tony Fung as the second defendant in a legal proceeding against the seller of a yacht. The court was tasked with determining whether Mr. Fung, who is the beneficial owner and in control of the seller of the yacht, should be joined as a party to the proceeding to ensure the enforcement of the court’s orders for specific performance and final judgment in favour of the buyer. The Federal Court of Australia considered the application under Rule 9.05(1)(b)(i) of the Federal Court Rules 2011, which allows for the joinder of a person whose cooperation might be required to enforce a judgment.

The court examined the necessity of Mr. Fung’s involvement to facilitate the enforcement of the court’s orders. The applicant argued that without Mr. Fung’s cooperation, it might not be possible to rearrest the yacht in Hong Kong to enforce the specific performance order. The court noted that Mr. Fung had not yet been served with the court’s orders, and his potential role in the enforcement process was critical. The court acknowledged that under Hong Kong law, Mr. Fung could be served through the Hague Service Convention, and potentially by email, but found it necessary to allow the applicant to obtain evidence regarding the permissibility of email service in Hong Kong.

In its reasoning, the court highlighted the purpose of Rule 9.05(1)(b)(i) as a remedial provision to overcome potential enforcement issues that might arise when a non-party has control over the subject matter of a final order or judgment. The court emphasised that this rule is intended to ensure the effective enforcement of court orders by allowing the joinder of parties who might otherwise frustrate such enforcement. The court concluded that Mr. Fung should be joined as a party to the proceeding to ensure that the orders for specific performance and final judgment could be enforced.

In conclusion, the court granted leave to join Wing Cheung Tony Fung as the second defendant, allowing service of the writ and other documents on him in Hong Kong and by email to the solicitors for the seller. The court also ordered that the applicant could serve Mr. Fung with a further copy of the court’s orders, endorsed with a warning of potential contempt if the orders were not complied with. Additionally, the court ordered that the defendants pay the applicant’s costs associated with the relisting of the proceeding and the hearing of the interlocutory application.