Wang v 1348 Pty Ltd

[2025] ACTSC 28

SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY

Case Title:

Wang v 1348 Pty Ltd

Citation: 

[2025] ACTSC 28

Hearing Date: 

11 February 2025

Decision Date: 

11 February 2025

Before:

Mossop J

Decision: 

See [20]

Catchwords:

PRACTICE AND PROCEDURE – COSTS – Where time estimate of matter inadequate – where defendant failed to communicate to the court or plaintiff that time estimate inadequate or hearing should not proceed – where defendant only formally indicated position at commencement of hearing – where defendant engaged in procedural ambush contrary to the requirement to assist the court in s 5A(4) of the Court Procedures Act – defendant to pay hearing and preparation costs on indemnity basis

CORPORATIONS – RECEIVERS, MANAGERS AND CONTROLLERS – where receiver had been appointed following application to wind up corporation – where proceedings not able to be finalised due to lack of preparation by defendant – receivership continued with further allowance for fees

Legislation Cited: 

Court Procedures Act 2004 (ACT), s 5A

Court Procedures Rules 2006 (ACT), rr 270, 607(1) and (3), 620(1) and (3), 715

Parties: 

Hao Wang ( Plaintiff)

1348 Pty Ltd ( Defendant)

Representation: 

Counsel

WDB Buckland ( Plaintiff)

R Markham ( Defendant)

Solicitors

Longton Legal ( Plaintiff)

Adero Law ( Defendant)

File Numbers:

SC 151 of 2023

SC 530 of 2023

SC 531 of 2023

MOSSOP J:  

Introduction

1․These proceedings were listed for hearing before me today. Precisely what was listed for hearing before me was a matter of dispute. Unfortunately, the procedural history of this matter is somewhat complex and demonstrates two things:

(a)the difficulty of the case management of civil matters of any significant complexity being dispersed amongst a variety of judges and court officers; and

(b)the problems that arise when parties fail to fulfil the requirement in s 5A(4) of the Court Procedures Act 2004 (ACT) that they “must help the court to achieve the objectives” in ss 5A(1) and (2).

2․There are two winding up applications which relate to 1348 Pty Ltd (“1348”) (proceedings SC 530/2023) and 1313 Pty Ltd (“1313”) (proceedings SC 531/2023). There are also proceedings brought by 1348 Pty Ltd against the plaintiff in the winding up proceedings, Mr Wang (proceedings SC 151/2023). The counterclaim in those proceedings includes the director of 1348, Ms Zheng, and a person who was involved in the management of 1348 and is a director of 1313, Ms Song.

3․On 22 March 2024, the Registrar made orders by consent consolidating proceedings 530 and 531 pursuant to r 270 of the Court Procedures Rules 2006 (ACT). It is not clear what was intended to follow from this order in that each proceeding was commenced by originating application and no order was required for a single application to be subsequently filed.

4․On 18 June 2024, Baker J made orders requiring that the proceedings 151, 530 and 531 be heard and determined together.

5․On 16 July 2024, Elkaim AJ made orders by consent appointing a receiver to 1348 and 1313 for purposes which included securing the property of the companies and ascertaining the assets and liabilities of the companies, including debts owed to and by Mr Wang, Ms Zheng and Ms Song. There was also an order staying each of the proceedings until further order of the court.

6․The receiver provided a report dated 27 September 2024 which indicated that there were contested claims as to the debts owed either by the companies to Mr Wang, or by Mr Wang to the companies.

7․The process of pleading and disclosure in proceedings 151 did not proceed following the orders made on 16 July 2024. There was correspondence between the parties which indicated a dispute as to how the matters should proceed, but agreement that they should be listed for further directions.

8․On 1 November 2024, proceedings were listed for directions on 5 November 2024. On 5 November 2024, the Registrar made orders in proceedings 530 that:

(1)The matters are listed for hearing in the week commencing 10 February 2025 with a one-day estimate.

(2)The parties are to file any further evidence on which they intend to rely by 13 December 2024.

9․Unfortunately, no appearances are recorded on the bench sheet, although the parties appeared to accept that counsel for the plaintiff appeared in person, his instructing solicitor was present by audiovisual link, and a solicitor appeared for the defendant.

10․There is no bench sheet recording that matters 531 or 151 were listed on 5 November 2024. It is not clear why the order of the court made on 5 November 2024 refers to “the matters” being listed for hearing when, according to the bench sheets and the orders made, only a single matter was before the court.

11․As a result of the orders made, the defendant did file further evidence in proceedings 530, being an affidavit of Ms Zheng dated 11 December 2024.

12․My best interpretation of what has occurred is that, in proceedings 530, the stay of proceedings was lifted as a result of the order listing the proceedings for hearing made on 5 November 2024. No order has been made varying the earlier stay in the other two proceedings.

13․When the matter was called today, counsel for the plaintiff sought to open on the basis that both of the winding up applications were before the court. Mr Markham, who appears for the defendant in those proceedings, subsequently submitted that the proceedings remained the subject of a stay and that the winding up proceedings could not proceed separately to proceedings 151. He provided written submissions — not previously disclosed to the plaintiff — outlining in some detail contentions that the plaintiff lacked standing because he was not in fact a creditor of the company because of claims that the company had against him for breaches of fiduciary or statutory duties. Because of the relationship between the requirement on the part of the plaintiff to demonstrate that he was a creditor, and the claims made in proceedings 151, he submitted that, in circumstances where proceedings 151 were not ready for hearing, the hearing could not proceed. He estimated that, even if the winding up proceedings were to be heard separately, they would take three to four days as a result of the need to traverse all of the factual issues relevant to whether or not the plaintiff was in fact a creditor of the company.

14․Prior to the hearing, the solicitor for the defendant had not, since the directions hearing on 5 November 2024, indicated to any representative of the plaintiff that the estimate of the proceedings was three to four days and hence inconsistent with the basis upon which the matter was listed. Further, no notice had been given that there would be an application to adjourn the proceedings. No notice had been given requiring the plaintiff for cross‑examination.

15․Notwithstanding my view that the best interpretation of the orders previously made was that proceedings 530 were listed for hearing, having regard to the time spent addressing the preliminary issues and the foreshadowed lengthy cross-examination of the plaintiff, it was clear that it would not be possible to complete the matter in the remainder of the single day allocated. The question was then whether I should commence hearing the proceedings and go part‑heard. My enquiries of the Registrar indicated that there would be a greater delay in the proceedings if it was part‑heard before me than if it was otherwise listed before an available judge, and that such a listing was possible in late April or early May.

16․There then remained three issues for me to deal with: the position of the receiver, the further directions necessary in the proceedings, and costs.

17․So far as the receiver was concerned, the parties agreed that it was appropriate for him to be allowed fees limited to a further $25,000 in relation to his role from today until the end of May 2025. As a practical matter, he has ongoing responsibility for the conduct of the businesses carried out by 1348 and is likely to take steps to recover a missing Lamborghini, which is the property of the company. If the receiver needs further powers pursuant to r 715 of the Court Procedures Rules or otherwise in order to recover that property, then an appropriate application may be made to the court.

18․In relation to directions, I will make directions to allow all matters to be heard and determined in a single hearing and ensure that that hearing is, unlike the present one, properly prepared on a common understanding of what is to be heard.

19․In relation to costs, the plaintiff sought costs of the hearing today to be paid on an indemnity basis jointly and severally by the two companies. The conduct of the defendants was clearly inconsistent with their duty under s 5A of the Court Procedures Act. They, at the very least, acquiesced to the Registrar listing the matter for hearing with a one-day estimate. They did so in circumstances where they had previously raised various different proposed directions which would be inconsistent with listing a winding up proceeding separately, and inconsistent with a one-day hearing. At no point following the 5 November 2024 hearing and prior to the hearing today did they estimate that the case would run for three or four days. At no point following the listing on 5 November 2024 did they indicate that the matter should not be listed for hearing unless proceedings 151 were also prepared and listed for hearing. They provided detailed submissions designed to preclude the matter from proceeding today, and directed towards their submission that proceedings 530 and 531 should not be determined in advance of 151, in circumstances where, as I have indicated, they previously acquiesced to a listing of one day. In summary, the defendants have engaged in a procedural ambush. Had they not chosen to proceed in that manner, but instead informed the court and the plaintiff of their position in November 2024 (or at any reasonable time subsequently) then the plaintiff would not have incurred the costs of the hearing today. It is an appropriate case in which to make a costs order on an indemnity basis.

20․The orders of the Court are:

Orders in proceedings SC 151, 530 and 531 of 2023:

(1)The stay ordered by Elkaim AJ on 16 July 2024 is lifted.

(2)The appointment of Henry McKenna as receiver of 1348 Pty Ltd (“1348”) and 1313 Pty Ltd (“1313”) is to continue in accordance with the orders of Elkaim AJ of 16 July 2024.

(3)Further remuneration for the receiver, Mr McKenna, is approved up to the amount of $25,000 (incl. GST).

(4)The matters SC 151, 530 and 531 of 2023 be listed for directions before a Registrar of the court on 6 March 2025 for the purposes of setting a hearing date for all three matters. The estimate for such a hearing is four days.

(5)Mr Wang is to file and serve (including on the receiver) an affidavit giving full and frank details on his knowledge of the whereabouts of the Lamborghini with Vehicle Identification Number (“VIN”) ZPBEA1ZL1NLA15885 by 14 February 2025.

Orders in proceeding 151 of 2023:

(6)Mr Wang is to request further and better particulars of 1348’s Amended Statement of Claim by 14 February 2025.

(7)1348 is to answer the request for further and better particulars by 21 February 2025.

(8)Mr Wang is to file and serve a Further Amended Defence by 25 February 2025.

(9)1348, Ms Zheng and Ms Song are to file and serve an Answer to Counterclaim and any Reply by 11 March 2025.

(10)The parties are to serve any notice to disclose categories of discoverable documents pursuant to r 607(1) on or before 18 March 2025.

(11)Leave is given to the parties to issue subpoenas.

(12)Any party in receipt of a notice to disclose limited discoverable documents is to file and serve, pursuant to r 607(3):

(a)its list of documents;

(b)an affidavit verifying the list; and

(c)if the party is represented by a solicitor—the solicitor’s certificate of advice in relation to the list,

on or before 4 April 2025.

(13)Any party who wishes to inspect discoverable documents is to give notice pursuant to r 620(1) by 8 April 2025.

(14)Any party who has received notice under r 620(1) is to produce for inspection the requested documents, other than documents specified in r 620(3), on or before 11 April 2025.

(15)Evidence in chief is to be by affidavit.

(16)1348 is to file and serve any affidavit evidence of any witness it proposes to rely on in chief by 18 April 2025.

(17)Mr Wang is to file and serve any affidavit evidence of any witness he proposes to rely on in chief, and in response to 1348’s evidence, by 24 April 2025.

(18)1348, Ms Zheng and Ms Song are to file and serve any affidavit evidence in reply to Mr Wang’s affidavit evidence by 30 April 2025.

Orders in proceedings 530 and 531 of 2023:

(19)1348 and 1313 are jointly and severally to pay the costs of the hearing on 11 February 2025, including the costs of preparation for that hearing, on an indemnity basis.

(20)The receiver, Mr McKenna, is authorised to pay those costs once agreed or assessed (the receiver not being responsible for the agreement or assessment of those costs).

(21)Liberty to apply for further directions on 2 days’ notice, which may be exercised by email to the Associate to Mossop J.

I certify that the preceding twenty [20] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Mossop.

Associate:

Date: