Wang v Duan

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION
ENFORCEMENT LIST

S ECI 2023 01752

BETWEEN:

NING WANG & ORS (according to the attached schedule)	Plaintiffs
v
LIANSHUANG DUAN	Defendant

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JUDGE:	Barrett AsJ
WHERE HELD:	Melbourne
DATES OF HEARING:	16, 17, 18 September 2024 and 8, 11 and 21 November 2024; written closing submissions filed by the defendant on 7 January 2025 and by the plaintiff on 4 March 2025
DATE OF JUDGMENT:	26 August 2025
CASE MAY BE CITED AS:	Wang & Ors v Duan
MEDIUM NEUTRAL CITATION:	[2025] VSC 516

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FOREIGN JUDGMENTS – Plaintiffs obtained judgments from Chinese Courts against defendant after service by public announcement – Plaintiffs not aware of, or personally served with process in, Chinese proceeding – Plaintiffs knew defendant’s email and WeChat addresses – Notice of proceedings not communicated to defendant by email or WeChat - Yin v Wu (2023) 73 VR 21 considered and applied – Defendant prima facie denied natural justice – Whether defendant served in accordance with Chinese Law – Whether defendant served in accordance with contractual provision for service – Whether principles of comity require recognition of Chinese Judgments – Held: Principles of comity give way to fundamental principles of justice, which includes natural justice – Applied Yin v Wu, Court should look unfavourably on failure to notify or serve defendant by available electronic means – Defendant was denied natural justice – Registration of foreign judgments refused.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiffs	Mr D Stamboulakis of counsel	HWL Ebsworth Lawyers
For the Defendant	Mr J D McKay of counsel with Mr O Lloyd of counsel	Boon Legal

Contents

Introduction

The evidence

Background

The parties and their connection
Mr Wang’s knowledge of Mr Duan’s location and contact details
Mr Wang’s knowledge of Mr Duan’s Hawthorn address
The Chinese Proceedings
Kunzhou Proceeding
Longshi Proceeding
Wang Proceeding

Applications for retrial

Was process served in accordance with Chinese law?

What is the Chinese law regarding service?
What was Mr Duan’s domicile?
Did Mr Wang comply with obligations of good faith in communicating with the Chinese Courts about Mr Duan’s whereabouts and contact details?
Did the Chinese Courts apply the law in effecting service by public announcement?

Legislation and Principles

Consideration

Did Mr Duan have actual notice of the Chinese Proceedings?
Would service by electronic means have brought the Chinese Proceedings to Mr Duan’s notice?
Did the failure to serve by known electronic means constitute a denial of natural justice?
Was there service pursuant to the Loan Agreements or the Repayment Agreements and Guarantees?

Conclusion

HIS HONOUR:

Introduction

This is an application for the enforcement of three foreign judgments.
From 2012, the first plaintiff (Mr Wang) and the defendant (Mr Duan) were engaged in the garment trade. After some years, relations between Mr Wang and Mr Duan soured, and in 2021 and 2022 the plaintiffs obtained three judgments in China against the defendant. The three judgments are:
(a)a judgment entered on 25 February 2021 in the Shanghai Number 2 Intermediate People’s Court, with proceeding number 1459 (2021), being an appeal in upholding a judgment of the first instance court, handed down on 27 August 2020. This is referred to as the Kunzhou Judgment;
(b)a judgment entered on 30 April 2021 in the People’s Court of Jiading District, Shanghai (‘the Jiading Court’) with proceeding number 22789 (2020). This is referred to as the Longshi Judgment; and
(c)a judgment entered on 27 July 2022 in the People’s Court of Changning District, Shanghai (‘the Changning Court’) with proceeding number 956 (2022). This is referred to as the Wang Judgment
(collectively, ‘the Chinese Judgments’).
On 28 April 2023, the plaintiffs issued an Originating Motion seeking orders for the enforcement of the Chinese Judgments in Australia. On 20 December 2023, the plaintiffs filed a Statement of Claim seeking enforcement orders, and alternatively sought orders for payment based on the primary claims. The defendant filed a Defence and the plaintiffs a Reply. On 20 May 2024, orders were made for the separate hearing of the question of enforcement which is the issue presently before this Court.
It is not necessary to describe in detail the allegations that gave rise to the Chinese Judgments, save to say that they involve alleged loans and guarantees between the relevant parties.
The parties each agree that the Chinese Judgments are prima facie enforceable. However, the defendant submits that they are unenforceable on the basis that he was denied natural justice as he was not personally served with, or aware of, any proceedings in which the Chinese Judgments were obtained (collectively, ‘the Chinese Proceedings’). The plaintiffs assert that the defendant was not denied natural justice as it can be inferred that he was aware of the Chinese Proceedings, and even if he was not aware of them, he was legally served in China by public announcement. Accordingly, the plaintiffs submit that the Chinese Judgments should be recognised in line with principles of comity.
The central issues for determination are:
(a)whether Mr Wang knew the defendant’s location or residential address, or knew of electronic means to communicate with him at the time of service of process in the Chinese Proceedings;
(b)if Mr Wang knew the defendant’s residential and email/WeChat address, whether the failure to serve process, or notify the defendant of the Chinese Proceedings, by any known means, constituted a denial of natural justice that should preclude enforcement; and
(c)whether service was effected in accordance with Chinese law (including pursuant to contract) and if so, whether that is sufficient to preclude any prima facie denial of natural justice.

The evidence

The plaintiffs rely on three affidavits affirmed by the first plaintiff, Mr Ning Wang on 28 April 2023, 19 April 2024[1] and 3 June 2024, upon which he was cross-examined. The defendant relies on five affidavits affirmed by him on 22 March 2024, 30 May 2024, 7 June 2024, 28 August 2024[2] and 13 November 2024.[3] Several further documents were also tendered.
[1]Evidentiary objections were taken to some parts of paragraphs 15 and 24 of this affidavit and resolved in a separate ruling.
[2]Paragraphs 1 to 4 and 30 to 31 only.
[3]Various objections to the evidence were dealt with during the hearing.
The parties also rely on expert evidence constituted by a report of Mr Dong Wang filed on 7 June 2024, and a report of Professor Andrew Godwin filed on 2 August 2024. The experts gave concurrent evidence at trial. A small number of further documents were tendered.
Mr Wang and Mr Duan each made submissions about each other’s credit. Having regard to the issues and documentary evidence, questions of credit are of limited consequence. There were aspects of the evidence in which each of Mr Wang and Mr Duan appeared evasive. It is unclear how much of that was a product of a language barrier, with each of them relying on translators at various times. There was also some evidence that the arrangements between the parties were, at least in part, motivated by the desire to minimise tax, which may also account for some apparent reticence to give evidence. It is not necessary to resolve such questions at a general level. I discuss below questions of credit only where they are relevant to the particular issue to be considered.

Background

The parties and their connection

Mr Wang is the first plaintiff in this proceeding and the officer in charge of the second plaintiff, Shanghai Kunzhou Industry Co Ltd, a company registered in Shanghai, China (‘Kunzhou’). Mr Wang is also the officer in charge of the third plaintiff, Shanghai Longshi Textile Co Ltd, a company registered in Shanghai, China (‘Longshi’).
The defendant, Mr Duan, was a businessman in the garment trade industry in China and operated a garment-processing business in Shanghai, China, namely, Shenzhen Cheng’ao E-Commerce Co. Ltd (‘Cheng’ao’).
Mr Wang and Mr Duan have known each other since about 2012 when both of their families were in Melbourne. They were part of the same social group of Chinese friends. Mr Duan said they were friends. Mr Wang described Mr Duan as a ‘fellow businessman’, whom he had known for over 10 years, operating in the garment trading business in Shanghai, China. However, under cross-examination, Mr Wang accepted that they were friends ‘in the past’. I take this to reflect the fact that, whatever friendship they had from 2012, has soured as a result of the present disputes.
Mr Duan gave evidence that, from 2012 onwards, his family resided in Australia but he travelled to China frequently for business. Mr Duan stated that from 2012, his wife pressed him not to travel to China so often. He said that in 2017, he made the decision that he would ‘hand over’ a lot of his China-based business to others so he could spend more time in Australia.
Mr Duan said that in 2018 he told Mr Wang that he was going to move to Australia and arrangements were made for Mr Wang, or entities controlled by him, to take over Mr Duan’s business. This is stating the matter broadly, and there is disagreement as to precisely what was intended, and the corporate structure involves a number of different entities. Mr Duan and Mr Wang’s evidence differs as to the nature of their business relationship but, generally speaking, from about early 2018, the two conducted business together. Mr Wang supplied women’s clothing to Cheng’ao, an entity at the time controlled by Mr Duan.
Having regard to the fact that these reasons relate to the separate question of registration of the foreign judgments, it is neither necessary nor appropriate to make findings as to the content or purpose of the contractual arrangements between the parties. The key issues concern Mr Wang’s knowledge of Mr Duan’s whereabouts, how he could be contacted, and whether service was effected in accordance with Chinese law. Having said that, it is helpful to describe the agreements alleged by the parties which formed the basis of the judgments entered. They are:
(a)a ‘loan’ contract dated 28 August 2018 between Mr Wang and Mr Duan (‘the August 2018 Loan’). Mr Duan admits he signed this agreement but says it was subject to, and perhaps varied by, the Co-operation Agreement described below. The August 2018 Loan does not expressly refer to Mr Duan’s address or contain any terms agreeing to an address for service;
(b)a ‘co-operation agreement’ dated 23 October 2018 between Mr Wang and Mr Duan in respect of their business relations (‘the Co-operation Agreement’). Mr Wang admits that he entered into the Co-operation Agreement but says it was abandoned or repudiated in December 2018. The Co-operation Agreement does not form the basis of any of the judgments;
(c)a ‘loan’ contract dated 14 October 2019 between Mr Wang and Mr Duan (‘the October 2019 Loan’). Mr Duan denies the agreement was ‘effectively formed’ and says the funds were never advanced. The October 2019 Loan records Mr Duan’s ‘Contact Address’ as ‘No. 1121, Lane 1288, Xinsong Road, Songjiang District, Shanghai’. It also provides that Mr Duan ‘agrees that its contact address shall serve as the legal address for service of process’
(collectively, ‘the Loan Agreements’);
(d)a ‘repayment agreement‘ dated on or about 9 December 2019 between Cheng’ao, Kunzhou and Mr Duan (‘the Kunzhou Guarantee’). Mr Duan denied ‘executing a guarantee corresponding to the Kunzhou Guarantee’, but admitted signing a document headed, ‘Kunzhou Co-operation Repayment Agreement’ which, he says, Cheng’ao complied with, but Kunzhou breached. The Kunzhou Guarantee does not expressly refer to Mr Duan’s address or contain any terms agreeing to an address for service; and
(e)a ‘repayment agreement‘ dated on or about 9 December 2019 between Cheng’ao, Longshi and Mr Duan (‘the Longshi Guarantee’). Mr Duan denied the Longshi Guarantee. The Longshi Guarantee does not refer to Mr Duan’s address or contain any terms agreeing to an address for service
(collectively, ‘the Repayment Agreements and Guarantees’).
On 10 December 2018, Mr Duan sold his residence in Shanghai. Mr Duan deposed that his Shanghai residence remained his registered address for administrative purposes and said that Mr Wang was aware of this. Mr Duan said that he spoke to Mr Wang frequently about this at the time and relied on a WeChat message from November 2018, where he referred to selling his Chinese residence. Mr Wang denies knowing this, but it is apparent from a communication with his lawyer in March 2020, that Mr Wang knew at that time Mr Duan had gone to Australia and it was unclear whether he would return. Mr Wang also agreed in cross-examination that he knew that he was not able to serve Mr Duan at any Chinese address as at November 2020.
Mr Wang acknowledged that he and his wife socialised with Mr Duan and his wife in Australia in February 2019, but Mr Wang denies that he knew of Mr Duan’s address in Australia.
As far as Mr Duan’s ongoing involvement in business in China is concerned, Mr Duan said that he moved to Australia permanently on 25 December 2019. Mr Duan relies on international movement records obtained from the Australian Department of Home Affairs which show he was in Australia between 25 December 2019 and 1 May 2022, save for three trips to China from 5 January to 15 January 2020, 12 March to 19 March 2020 and 26 October to 29 November 2020. He said that by January 2020, he no longer exerted any control over Cheng’ao. Mr Duan denied that anyone involved with Cheng’ao, including his brother, told him anything about the Chinese Proceedings, including the appeal. Mr Wang submitted that Mr Duan continued to control, or at least be aware of, Cheng’ao’s operations after 2019 by reason of his brother being in control of it. Mr Wang submitted that the inference should be drawn that Mr Duan remained in effective control of Cheng’ao, despite his evidence to the contrary.
Mr Duan’s level of knowledge of Cheng’ao’s operations is relevant because Cheng’ao was notified of the Chinese Proceedings in which judgments were entered. Mr Wang submitted that, as Cheng’ao knew of the proceedings, then it may be concluded that Mr Duan also knew of those proceedings.
I am not satisfied that Mr Duan remained in effective control of Cheng’ao, or knew of litigation brought against it. Mr Duan consistently denied that he was in control or remained involved in Cheng’ao’s operations. There is no documentary or independent evidence supporting the conclusion that he knew of the litigation by reason of any involvement in Cheng’ao. Further, having regard to Mr Duan’s denial and the absence of contrary evidence, I am not prepared to infer that he knew of the Chinese Proceedings. It is clear that Mr Duan was living in Australia at the time and he gave evidence that he had separated himself from involvement in the business and was not in communication with those in control.

Mr Wang’s knowledge of Mr Duan’s location and contact details

Mr Wang’s knowledge of Mr Duan’s whereabouts and contact details is central to the question of whether natural justice has been afforded. Mr Duan said that prior to the issue of any of the Chinese Proceedings, Mr Wang knew Mr Duan was in Australia, and knew how to contact him by email or WeChat. Mr Duan makes that submission based on the following.
First, in Mr Wang’s 24 April 2023 affidavit, he stated that his wife told him (which he believed) that Mr Duan’s ‘last departure from the People’s Republic of China was to Australia on 28 November 2020,’ and that she had seen him in Australia in March 2020 and September 2021.[4] Under cross-examination, Mr Wang agreed that his wife told him in March 2020 ‘that she had seen Mr Duan in Melbourne,’ and that he knew ‘in March 2020 that Mr Duan was in Melbourne’.
[4]Affidavit of Ning Wang affirmed on 24 April 2023, [19].
Second, on 16 January 2020, Mr Duan stated in a WeChat group message, of which Mr Wang was a participant, that ‘I came back to Australia yesterday’. On 19 March 2020, Mr Wang communicated by WeChat with his lawyer Lu Jingwei. In the course of that communication, Mr Wang said, ‘Duan has already gone to Australia, and it’s unclear if he will come back’. Under cross-examination, Mr Wang accepted that after December 2019, he never saw Mr Duan in China again. Mr Wang also accepted that he knew Mr Duan’s family were living in Australia.
Third, Mr Duan said that:
Wang and I are contacts on WeChat … Wang could have contacted me by WeChat at any time about the proceedings. However, at no time did he advise me of any proceedings.[5]
[5]Affidavit of Lianshuang Duan affirmed on 22 March 2024, [23].
Mr Wang does not contradict that evidence, and I accept it. Numerous WeChat conversations were tendered.
Fourth, Mr Wang described the communications he had with Mr Duan in the following way:
… on behalf of Kunzho and Longshi, I entered into various sales and debt repayment agreements with Duan, on behalf of Shenzhen Cheng’ao E-Commerce Co. Ltd (Cheng’ao) for the sale of women’s clothing. We communicated primarily via phone and WeChat and to the best of my recollection, in 2019, we met in person at least 10 times in Shanghai. …[6]
… throughout my business dealings with Cheng'ao, including in negotiating, agreeing, and signing the contracts under which all debts in this proceeding arise, I would correspond solely with Duan. A sample copy of my latest email records with Duan between November 2019 to February 2020 is exhibited at pages 11 to 18, followed by a certified translation at pages 19 to 26. Duan's English name is Louis Duan and he uses the business email address [email protected].[7]
[6]Affidavit of Ning Wang affirmed on 19 April 2024, [7].
[7]Ibid [7(b)] (emphasis added).
Mr Wang was also cross-examined about his email communications with Mr Duan. Mr Wang gave evidence that he had Mr Duan’s email address and he was ‘capable of emailing him at any time [he] saw fit’, but that they ‘mainly talked through phone calls’.[8] This accords with documentary evidence of email exchanges between the two from November 2019 to February 2020.
[8]Transcript of Proceedings, Wang & Ors v Duan (Supreme Court of Victoria, S ECI 2023 01752, Barrett AsJ, 16–8 September 2024 and 8, 11 and 21 November 2024) 172-3 (‘Transcript of Proceedings’).
Mr Wang was also cross-examined about phone communications with Mr Duan and agreed that ‘between mid-February 2020 and 3 April 2020 [he] could easily have called Duan on his phone and told him Kunzhou was about to commence proceedings to give him an opportunity to answer the lawsuit in the Chinese Courts’. Mr Wang said he called Mr Duan, but no records of any such calls were produced. When pressed on the issue of his failure to notify Mr Duan of the proceedings, Mr Wang’s evidence was as follows:
COUNSEL: … never at any point before 3 April 2020 did you tell Mr Duan by email, WeChat, text message, any other form of provable communication, that you were just about to issue proceedings against him in Chinese Courts?
MR WANG: Do I have to answer this question?
COUNSEL: Yes, you've got to answer the questions that I put and not ask questions of me?
MR WANG: I wasn't sure until it seemed - so correction. There was nowhere I could make sure that he was still in use of his email WeChat or his text messages.
This evidence was evasive. No reason was provided to support the conclusion that Mr Duan could not, at least in all likelihood, be contacted by email, WeChat or text from early 2020. The most that can be said is that Mr Duan was not answering calls said to have been made to him by Mr Wang, but no records of such calls have been adduced. This evidence is also contrary to Mr Wang’s submission that he believed Mr Duan remained domiciled in China and continued to conduct business there, as he had for many years previously. If Mr Wang believed that Mr Duan continued to do business in China as he had before, there is no apparent reason why Mr Wang would not believe that all of Mr Duan’s previously used contact details would not be an effective means of ongoing communication.

The ongoing ability to contact Mr Duan by electronic means is supported by evidence from Mr Wang’s wife, Kelly Huang, who, on 19 July 2023, affirmed an affidavit in support of a substituted service order in this proceeding. In that affidavit, Ms Huang said that:
(a)her husband ‘corresponded with the Defendant for business purposes using the email address [email protected]’;[9] and
(b)‘the Documents will also, in all reasonable probability, come to the Defendant’s attention by:
a. emailing the Documents to [email protected]; and
b. text messaging the Documents to 0488 526 088’.[10]
[9]Affidavit of Kelly Huang affirmed on 19 July 2023, [15(c)].
[10]Ibid [17].
It is apparent from the above evidence that, prior to the issuing of the proceedings in China, Mr Wang and Mr Duan had been communicating by email and WeChat. I am satisfied that at the time each of the Chinese Proceedings were issued, email and WeChat were known and available means of communication, and that Mr Duan could have been given notice of the Chinese Proceedings by email, WeChat or text.
Mr Duan submits that Mr Wang knew at the time of service that Mr Duan was not residing at his registered Chinese address. Mr Duan’s evidence is as follows:
… Wang was aware at the time the proceedings in China were commenced (and at all proximate times) that I was not residing at the property known as No. 1121, Lane 1288 Xinsong Road, Songjiang District, Shanghai. Wang knew that I sold the property in China in 2018.[11]
[11]Affidavit of Lianshuang Duan affirmed on 22 March 2024, [23].
Mr Duan also deposed that:
a. Before May 2018, I told Wang both verbally and via WeChat that I would sell my house. I cannot find these WeChat messages because they were sent on my previous mobile phone.
b. On 29 May 2018, Wang and his wife introduced her schoolmate, Miss Xu Yingyang, to me via WeChat to help me sell my Chinese property.[12]
[12]Affidavit of Lianshuang Duan affirmed on 7 June 2024, [5]. Mr Duan produced WeChat conversations which he says shows this group chat.
Mr Wang’s evidence is that he ‘was aware that Duan and his family would occasionally spend time in Australia’ but that he ‘did not know Duan had sold any property in China’.[13] He also said that ‘Duan and I met regularly in Shanghai for business purposes, and Duan told me he was based in Shanghai where he conducted business’.[14] It is unclear when this was said. Mr Wang stated this was said ‘at the time of the Personal Loans (referring to the August 2018 Loan and the October 2019 Loan) but that was in 2018 and 2019, after they had known each other for many years.[15] If Mr Duan ever said anything to the effect that he was ‘based in Shanghai’ presumably that would have been said at an early stage in the relationship and not many years after they first met, unless there was some reason for Mr Duan to restate where he was based. Many of the statements claimed to have been made are not said to have been made at any particular time.
[13]Affidavit of Ning Wang affirmed 3 June 2024 [10(a)]–[(b)].
[14]Ibid [10(c)].
[15]Ibid [10].
Mr Wang’s affidavit evidence is that at the time of proceedings brought by Mr Wang, Longshi and Kunzhou, he ‘believed that Duan was a Chinese citizen with a registered address and domiciled in Shanghai, China’.[16] Under cross-examination, Mr Wang stated that from April to December 2020, he ‘wasn’t sure’ where Mr Duan lived, and was not sure he was in Australia, but conceded that on 18 July 2020 he mentioned to Longshi’s lawyer that Mr Duan ‘might be in Australia’.[17] Mr Wang also agreed that he knew he was not able to serve Mr Duan ‘at any Chinese address as at November 2020’.[18] When pressed on the fact that he did not have any evidence that he told the court Mr Duan was living in Australia, Mr Wang said:
I did tell my lawyer and the court that Mr Duan lived in Australia but I don't have evidence at the moment to prove that the court knew that.[19]
[16]Ibid [12(a)(i)].
[17]Transcript of Proceedings (n 8) 302.
[18]Transcript of Proceedings (n 8) 344-5.
[19]Ibid 304.
On 10 January 2022, Mr Wang issued a proceeding (number 956 (2022)) against Mr Duan in the Changning Court in Shanghai (‘the Wang Proceeding’). Mr Wang represented himself . A transcript of the interactions Mr Wang had with the Judge on 9 February 2022 includes the following:
Plaintiff: Wang Ning …
Defendant: Duan … registered at No. 1121, Lane 1288, Xinsong Road, Songjiang District, Shanghai. Current residence is unknown.
…
Judge: What is your relationship with the defendant?
Plaintiff: We have been friends for about fifteen or sixteen years, around 2007. … We often had meals together, and our families were close. We remained in contact until the end of 2019, but there were no business dealings between us. In early 2020, the defendant went to Australia and never returned. From mutual friends, I learned that his house had been transferred to someone else.
…
Judge: How did you attempt to collect the debt?
Plaintiff: I tried to collect through WeChat and phone calls, but I lost my phone later.
…
Judge: What about your debt collection efforts?
Plaintiff: I called him until December 2019, but after that, I couldn’t reach him. A friend told me he had gone to Australia.
I am satisfied that from March 2020 at the latest, Mr Wang was aware that Mr Duan had gone to Australia and that it was unclear if he would return to China. I reach that conclusion based on the WeChat messages in January 2020 and March 2020 in which Mr Duan said he had returned to Australia, and Mr Wang said to his lawyer that Mr Duan had returned to Australia and it was unclear whether he would return to China. That is consistent with Mr Wang’s evidence that he told his lawyer and the Court that Duan lived in Australia, and also consistent with the transcript of the Wang Proceeding. There is also evidence that Mr Wang’s wife had some social contact with Mr Duan and his wife in Australia. I note that Mr Wang’s wife was not called to give evidence.
I am also satisfied that, at the time of commencement of each of the Chinese Proceedings, Mr Wang knew how to contact Mr Duan by email and WeChat. Mr Wang and Mr Duan had extensive communication by those methods and via text, up to at least 26 February 2020. Mr Wang sought substituted service by those methods in this proceeding on the basis that it would likely be effective to bring notice of the proceeding to Mr Duan’s attention.

Mr Wang’s knowledge of Mr Duan’s Hawthorn address

Mr Duan also said that Mr Wang knew Mr Duan’s residential address in Hawthorn. Mr Duan’s evidence in this regard includes the following:
[B]oth Wang and Huang knew that my family and I were living in Australia before, during and after the commencement of the Chinese proceedings and the making of court orders in China. On 17 January 2012 when my family arrived in Australia Huang picked us up at Melbourne Airport. … Wang and Huang were guests in my family home several times in 2019. In February 2019 my wife and I, and Wang and his wife, all celebrated Chinese New Year at a mutual friend’s house in Melbourne.[20]
… Wang knew that I had property in Australia and my address given that our wives were friends, he and his wife were guests in our house several times in 2019 …[21]
[20]Affidavit of Lianshuang Duan affirmed on 22 March 2024, [19].
[21]Ibid [29].
In his evidence, Mr Duan also said that:
On 11 November 2018 Wang and I had a conversation on WeChat about whether I should sell my Hawthorn East property before the construction on the property was completed. In the conversation, I told Wang that my address was 73 Harcourt Street, Hawthorn East.[22]
[22]Affidavit of Lianshuang Duan affirmed on 7 June 2024, [7(a)].
Mr Duan exhibited a copy of the WeChat conversation which contains a reference to the Hawthorn address. However, it is unclear in the conversation as to what property was being sold and the purpose of providing the Hawthorn address.
Mr Wang said that he did not know the address of Mr Duan’s property in Hawthorn. Mr Wang’s evidence is that he rarely visited Australia. He accepted that he attended at least two events with Mr Duan and his family, but says one was at Mr Duan’s previous house, and the other was at another person’s house. Under cross-examination, Mr Wang said he ‘knew [Duan] might have been in Australia but [he] didn’t know specifically where he lived, the actual address’.[23]
[23]Transcript of Proceedings (n 8) 339.
I am not satisfied that Mr Wang knew Mr Duan’s residential address in Hawthorn. Mr Wang was consistent in his oral evidence that he did not know the particular address and there is insufficient evidence to conclude otherwise.

The Chinese Proceedings

Kunzhou Proceeding

On 3 April 2020, Kunzhou commenced a proceeding (number 6784 (2020)) against Cheng’ao and Mr Duan in the Jiading Court in Shanghai (‘the Kunzhou Proceeding’).
On 8 April 2020, a postman, under instructions from the Jiading Court, attempted to serve process in the Kunzhou Proceeding on Mr Duan at his registered Shanghai address, being No. 1121, Lane 1288, Xinsong Road, Songjiang District, Shanghai. The Certificate of Delivery records a tick in the box under the headings: ‘Express Mail Return and Redirection Approval Form’, ‘Return to Original Office’ and ‘No such person at the original address’. It appears from these notes that from about 8 April 2020, the Jiading Court knew that Mr Duan was not at the address registered to him, although there is the possibility that the form conveys the information that no one matching that name was at the address at the time of attempted service. In any case, Mr Wang’s evidence is that he had told his lawyer and the Court that Mr Duan lived in Australia.
Mr Duan’s evidence is that he no longer resided at that address, and did not own the property when service was attempted, having sold it in 2018. He said he did not receive any Court documents, and did not know of the Chinese Proceedings until the proceeding for registration in this Court was served on him.
The return form also includes a section for the inclusion of Mr Duan’s mobile number which, in this case, is left blank. Mr Wang’s evidence is that he provided Mr Duan’s mobile number to his lawyer and they provided it to the Jiading Court for the purposes of service. If that is so, then the Court was provided with phone contact details for Mr Duan but apparently did not contact him that way.
On 8 April 2020, service on Cheng’ao was also attempted at a Chinese address. These attempts were unsuccessful.
On 17 April 2020, Kunzhou applied to the Jiading Court for service by public announcement. That application provides:
Application for Service by Public Announcement
…
Facts and Reasons:
The applicant, ... Kunzhou ... has filed a sales contract dispute against the defendants, ... Cheng’ao ... and Duan Lianshuang. Due to the inability to serve the civil complaint and other legal documents to the defendants via direct service, retained service, or postal service as stipulated by the Civil Procedure Law of the People's Republic of China, the applicant hereby requests the Jiading People's Court of Shanghai City to serve the civil complaint and other legal documents to the defendants via public announcement, in accordance with Article 92, Paragraph 1 of the Civil Procedure Law of the People's Republic of China: “If the whereabouts of the person to be served are unknown, or if the documents cannot be served by the other methods provided in this Section, they shall be served by public announcement”, to protect the legal rights of the applicant.
On 12 May 2020, the Jiading Court made orders for service by public announcement which states:
Due to your whereabouts being unknown, in accordance with Article 92 of the Civil Procedure Law of the People’s Republic Of China, this notice serves to deliver copies of the complaint, evidence materials, summons for the court hearing, and the civil ruling to you. From the date of issuance of this notice, the delivery will be deemed completed after sixty days. The deadline for submitting a defence statement is within fifteen days after the delivery expires, and the deadline for submitting evidence is within thirty days after the delivery period expires. Failure to provide evidence within this period will be deemed as a waiver of the right to present evidence. … Failure to appear will result in a judgment by default in accordance with the law.
On 12 August 2020, Cheng’ao accepted service of process. The person who accepted service was Mr Duan’s brother, Duan Lianjun, but Mr Duan’s evidence is that he was not involved in the business of Cheng’ao at the time and he did not know of Duan Lianjun’s acceptance of service, or of the Kunzhou Proceeding, until served with Court documents in this proceeding. Mr Duan was cross-examined on this point. Mr Duan’s evidence is that his relationship with his brother deteriorated in part because Mr Duan had transferred control of the business to Mr Wang instead of him, and also because he felt that Mr Duan abandoned his family and business colleagues to move to Australia. Mr Wang submitted that Mr Duan should be disbelieved. In the absence of any independent evidence showing that Mr Duan was made aware that the Kunzhou Proceeding had been issued, I accept Mr Duan’s evidence that he did not know of it.
On 19 August 2020, the Kunzhou Proceeding was heard in the absence of Mr Duan but with the appearance of Cheng’ao.
On 27 August 2020, judgment was handed down. The judgment describes the defendant as ‘ … living at No. 1121, Lane 1288, Xinsong Road, Songjiang District, Shanghai’. That is incorrect as, at that date, Mr Duan had sold the property and was not living there, although it did remain his registered address. Information regarding registered addresses is kept by the Population Management Office of Shanghai Municipal Public Security Bureau. The ‘Permanent Population Information Materials’ certificate issued by that office, and relied on to establish Mr Duan’s registered address, contains the statement:
This information is only used to perform the duties of state institutions, undertake legal affairs and notarization matters.
It appears from this statement that registered addresses may not be intended to reflect actual residence or domicile, but rather to facilitate formal administrative and legal processes.
The judgment also records the following:
Defendant Duan Lianshuang was served the summon through public notice, but did not appear in court to participate in the proceedings. The case is now closed.
…
During the trial the defendant Lianshuang Duan was legally summoned by this court and refused to appear in court without justifiable reasons, which is an act of ignoring the law. It should be deemed that he had [sic] waived his litigation rights such as defense [sic] and cross-examination, and he should bear certain legal consequences.
Cheng’ao appealed this decision which was heard on 2 February 2021 and rejected on 25 February 2021. The Appeal Court reiterated the matters quoted in the preceding paragraph.
Mr Duan said that the first time he knew of the Kunzhou Proceeding was when he was served with process in this proceeding in Victoria for the enforcement of this judgment. I accept this evidence.

Longshi Proceeding

On 2 November 2020, Longshi commenced a proceeding (number 22789 (2020)) against Cheng’ao (named as appellant), Li Jiayu and Mr Duan (named as defendants) in the Jiading Court in Shanghai (‘the Longshi Proceeding’).
On 16 November 2020, service of process in the Longshi Proceeding was first attempted on Mr Duan at his registered Shanghai address. The Service Acknowledgement records that service could not be effected because ‘Recipient Moved to New Address, Location Unknown’. As discussed above, Mr Duan’s evidence is that he no longer resided at that address, and did not own the property when service was attempted, having sold the property in 2018. He said he did not receive any court documents, and did not know of the Longshi Proceeding until this proceeding for registration was served on him.
Unlike in the Kunzhou Proceeding, no application for service by public announcement was produced. However, it appears that such an application was made because on 10 January 2021, a public announcement was published which included the following:
… Cheng’ao … and … Duan … This Court has accepted the case filed by … Longshi … against … Cheng’ao …, Jiayu Li and … Duan regarding a dispute over a sales contract. In accordance with the law, we hereby serve copies of the Complaint, the Notice of Response, the Notice for Evidence Submission, the Civil Ruling, and the Court Summons. From the date of this announcement, the documents shall be deemed served after 60 days. The deadlines for filing a defense [sic] and submitting evidence are within 15 and 30 days, respectively, after the expiration of the announcement period. The case is scheduled for hearing at 14:00 on 27 April 2021, in Courtroom 21 of the Judicial Centre of this Court. Failure to appear will result in a default judgment in accordance with the law.
I am satisfied that Mr Duan was not in China at the time of the public announcement.
On 27 April 2021, the Longshi Proceeding was heard in the absence of Mr Duan. On 30 April 2021, judgment was handed down which imposed liability on Mr Duan,[24] and included the following:
The three defendants have not defended themselves or provided evidence. …
By not attending the trial in court after being duly summoned, the three Defendants have disregarded the law, and should be deemed to have waived all litigation rights such as defense [sic] and cross-examination, for which they should bear a certain degree of legal consequences.
[24]On 6 January 2022, a correction was issued clarifying Duan’s liability under Item V of the judgment.

Wang Proceeding

As discussed at para [36], on January 2022 Mr Wang brought a proceeding against Mr Duan regarding the Loan Agreements.
Mr Wang relies on a delivery record which he submits shows that on 26 March 2022, service of process in the Wang Proceeding was first attempted on Mr Duan at his registered Shanghai address. The delivery record names Mr Duan and sets out his registered address. But it does not include a mobile number for Mr Duan or details of what occurred, that is, the method of service that may have been attempted. The record simply includes the words ‘Not Delivered’. Those matters are relevant to the question of whether there was service in accordance with the terms of the October 2019 Loan. Mr Wang relies on a clause of the October 2019 Loan as to Mr Duan’s service address in order to support his argument that there was no denial of procedural fairness as Mr Duan was served in accordance with the terms of that contract. That argument has less force if it is unclear what occurred. As discussed below, it is also in tension with the evidence suggesting documents were not served in accordance with the terms of any agreement, but rather, were served by the Changning Court by public announcement.
It is unclear when orders for service by public announcement were made or what material the orders were based on. Unlike in the Kunzhou Proceeding, no application for service by public announcement has been produced. Mr Duan submits that Mr Wang failed to notify the Changning Court that he could contact Mr Duan and in fact, stated to the Court, ‘plaintiff is currently unable to contact the defendant’.
On 8 March 2022, a public announcement was published in the following terms:
… Duan: This Court has accepted the case filed by … Wang … against … Duan regarding a private loan dispute. In accordance with the law, we hereby serve copies of the Complaint, Notice of Response, Notice for Evidence Civil Ruling, and Court Summons. From the date of this announcement, the documents shall be deemed served after three months. The deadlines for submitting a defense [sic] and providing evidence are within 30 days after the expiration of the announcement period. The case is scheduled for a hearing on the third day after the end of the evidence period, at 14:00 in Courtroom 3121 … Failure to appear may result in a judgment by default in accordance with the law.

Mr Duan said that he was not in China at the time of the public announcement. Mr Duan’s evidence is that he no longer resided at No. 1121, Lane 1288, Xinsong Road, Songjiang District, Shanghai, and did not own the property when service was attempted. He said he did not receive any court documents, and did not know of the Wang Proceeding until this proceeding for the registration of the Chinese Judgments was served on him.
The Wang Proceeding was heard on 11 July 2022. On 27 July 2022, judgment was handed down ordering Mr Duan to pay Mr Wang. The judgment includes the following:
Defendant: Duan Lianshuang … household register address: No. 1121, Lane 1288, Xinsong Road, Songjiang District, Shanghai, current residential address unknown. …
The defendant Duan Lianshuang has not attended the lawsuit, nor has he provided written defense [sic] or evidence materials. …
The defendant Lianshuang Duan, having been duly summoned by this court, did not respond to the action, and should be deemed to have waived the right of defense [sic].[25]
[25]Wang Ning v Duan Lianshuang, The People’s Court of Changning District, Shanghai, 956, 27 July 2022 (emphasis added).

Applications for retrial

Mr Duan has applied for retrial of each of the Chinese Proceedings.

Was process served in accordance with Chinese law?

What is the Chinese law regarding service?

Evidence as to the Chinese law relating to service was given by Professor Godwin and Mr Dong Wang (whom I will refer to as ‘Dong Wang’ to distinguish him from Mr Wang, the party) who each filed reports and gave concurrent evidence.
Their evidence is that the applicable law for service of documents in China is contained in the 2017, 2021 and 2023 versions of The Civil Procedure Law of the People’s Republic of China (‘the Civil Procedure Law of China’). The 2021 Civil Procedure Law of China was the applicable law for the Kunzhou and Longshi Proceedings, which commenced on 3 April 2020 and 2 November 2020, respectively. All of the 2017, 2021 and 2023 versions of the Civil Procedure Law of China contain the same articles in relation to service. For convenience, I will refer to the articles of the 2017 Civil Procedure Law of China. Principles and guidance in relation to service are also contained in several further sources described as Judicial Interpretation and Regulations.
The 2017 Civil Procedure Law of China contains articles for the service on a person domiciled in China, including the following relevant articles:
Article 85       Process shall be served directly on the person to be served …
Article 87 With the consent of the person to be served, a people’s court may serve process by fax, email and other means capable of confirming receipt by the person to be served, except a judgment, ruling and consent judgment.
Article 88Where direct service of process is difficult, service of process may be entrusted to another people’s court or be conducted by post …
Article 92Where the whereabouts of the person to be served is unknown or service of process is not possible by other means set out in this Section, process may be served by public announcement. Process shall be deemed serviced sixty days after the date of public announcement.
Article 267 A people’s court may serve process on a party which has no domicile within the territory of the People’s Republic of China in the following manners:
(1)… Process is served in the manners specified in the international treaty …
(2)       … through diplomatic channels.
(3) … service of process may be entrusted to the embassy or consulate of the People’s Republic of China.
(4) Process is served on a litigation representative authorized by the person to be served to receive service of process.
(5) … at the representative office … authorized to receive service of process …
(6)       … by post …
(7) … by fax, email and any other means capable of confirming receipt by the person to be served.
(8) If service of process by the aforesaid means is not possible, process shall be served by public announcement, and process shall be deemed served three months after the date of public announcement.[26]
[26]Civil Procedure Law of the People’s Republic of China (People’s Republic of China) National People’s Congress, 27 June 2017, arts 85, 87, 88, 92 and 267, (‘Civil Procedure Law of China’) (emphasis added).
‘Domicile’ is defined in art 25 of the 2017 General Provisions of the Civil Law of the People’s Republic of China and art 25 of the Civil Code of the People’s Republic of China, which is the current law, as follows:
The domicile of a natural person is the residence recorded in the household or other valid identification registration system; if a natural person’s habitual residence is different from his or her domicile, the habitual residence is deemed to be his or her domicile.[27]
[27]General Provisions of the Civil Law of the People’s Republic of China (People’s Republic of China) National People’s Congress, Order No. 66, 15 March 2017, art 25; Civil Code of the People’s Republic of China (People’s Republic of China) National People’s Congress, 29 May 2020, art 25 (emphasis added).
‘Habitual residence’ is described in art 15 of a 2012 Interpretation of the Supreme People’s Court as follows:
For a place where a natural person has continuously resided for a period of not less than one year as his or her life center at the time of the occurrence, change or termination of any foreign-related civil relationship, the people’s court may determine such place as the habitual residence as prescribed in the Law on Choice of Law for Foreign-Related Civil Relationships, excluding [time spent in another place for] medical treatment, labor dispatch, official duty and other similar circumstances.[28]
[28]Interpretation of the Supreme People’s Court on Several Issues Concerning the Application of the ‘Law of the People’s Republic of China on the Law Applicable to Foreign-Related Civil Relationship’ (People’s Republic of China) Judicial Committee of the Supreme People’s Court, No 24, 10 December 2012, art 15 (emphasis added).
Professor Godwin asserts that ‘continuous residence’ should be interpreted consistently with the concept of ‘relative continuity’ which he describes as follows:
Under the theory of “relative continuity”, the “life centre” is the core of “habitual residence” and the requirement of “continuous residence for one year or more” must operate alongside, and be interpreted to be consistent with, this concept. Accordingly, what the requirement requires is relatively continuous residence. Even if a person is sent abroad for work, undertakes short-term study, goes overseas on holiday or for medical treatment and is unable to reside in one place from start to end, so long as the residence is relatively continuous and runs for at least one year, it will not have an impact on a determination of the person’s habitual residence.[29]
[29]Professor Andrew Godwin, Service of Originating Process in the Shanghai Courts, People’s Republic of China (Expert Report, 2 August 2024) 11 [3.8] (‘Godwin Report’).
According to Professor Godwin, the factors to be taken into account in determining questions of habitual residence include: location of assets; nationality of passport; place of residence of relatives such as spouse and children; any residency permit or driver’s licence; language ability; major source of person’s economic livelihood; investment records; and subjective intention.
In addition, obligations of good faith are expressed in the following articles of the Civil Procedure Law of China:
Article 8 All parties to a civil action shall have equal procedural rights. When trying civil cases, the people’s courts shall provide safeguards and facilitation for all parties to exercise their procedural rights, and apply law equally for all parties.
Article 13 In civil procedures, the principle of good faith shall be adhered to.[30]
[30]Civil Procedure Law of China (n 26) arts 8 and 13.
Professor Godwin was asked what the obligations of good faith would require where a person had two domiciles, or moved between two countries. His evidence was:
I think once again I'd like to start with how the defendant should properly be served, and if the plaintiff, for example, had knowledge that the defendant maintained two residences and at the relevant time the defendant was overseas, then one would expect the plaintiff to pass that detail to the court for the purpose of ensuring that the defendant was properly served.
Professor Godwin was asked further questions about what the situation would be where the foreign address was unknown, but there was a registered Chinese address. That is not quite the situation here. This is not a case where someone, who is domiciled in China, travels overseas to unknown locations for unknown times. In this case, as discussed below, Mr Duan was domiciled in Australia, Mr Wang knew he was there, and knew there was at least a doubt if he would return to China.
In his evidence, Professor Godwin agreed with the proposition put to him by Mr Wang’s Counsel that:
… where you have knowledge that someone is overseas, you must then volunteer every single contact detail you have for that person …
I accept that this is the rule that applies in such circumstances.
In relation to contractually agreed address for service, it appears that there is no particular provision of the law that applies to this but considerations of good faith inform the approach that should be taken. Professor Godwin and Dong Wang gave the following evidence:
COUNSEL: One example I'm interested in, is if you'd agreed contractually to be served at a particular address but then failed to accept service at that address, that would offend principles of good faith, wouldn't it?
PROFESSOR GODWIN: By agreement, you mean, that there is a contract?
COUNSEL: A contractual agreement which says my service address is X, you then do not accept documents at that address.
PROFESSOR GODWIN: It's an interesting question because the provisions themselves don't recognise that. To my knowledge the which I know the Chinese system doesn't recognise an agent for the – or an agent for the service of process in the way in which we do in common law jurisdictions, at least as they relate to corporate entities. So I would say that that wouldn't apply here because there is nothing in the written provisions to …
COUNSEL: If we're talking solely about an individual and not a corporation, though.
PROFESSOR GODWIN: I would acknowledge that it would suggest acting in bad faith, for example, to agree on where one might be for the purpose of personal service and then to abscond or put one's self beyond the reach of the court when the time came.
COUNSEL: And Mr Wang, I saw you nodding along, I'm not sure if there was something you wanted to add there but I just thought I would give you the opportunity there was anything further you wanted to add to that last question.
DONG WANG: Okay, I just want to mention maybe in my report I didn't stress this point, so this is also linked to my interpretation of the test of lawfulness of court service. So these two examples are very interesting, one is contractual address, the other one is electronic service. So these two examples, for example, we say contractual address first. So if you set force [sic]a contractual address saying this is a service address, then domicile or whether you are overseas or not is all irrelevant because this is an obligation you set yourself in to receive the document regarding this contract. Of course including the other party's notice or the court service.
…
So for the – how to say, the good faith of the court to exhaust all the measures, so the court still needs to serve the address provided by the plaintiff in the case filing, and then it can go to the contractual address if the first step fails. The reason is that because as I explained, the fundamental principle for lawfulness of court service is efficiency and reliability. So because the defendant has agreed on something, this is the address I would like to receive a legal notice. So this party, either the defendant or the plaintiff, should bear the responsibility or take the legal consequence of failed service to that address.
COUNSEL: When you say take the consequence, does that mean that's the end of the enquiry, once they are served at that contracted address, service is valid? Is that right?
DONG WANG: Sorry?
COUNSEL: Once they are served at that contracted address that they have agreed to be served at, is that the end of the service enquiry from the perspective of Chinese law?
DONG WANG: Yes, end of it. So you can see that from my report, there are several cases of that contractual address, then send it. Then no public notice. Because obviously this is a much better address comparing the public notice, you know, the effectiveness.
The force of this evidence seems to be that where the parties have agreed between themselves to a method and/or address for service of documents, including court documents, then service may be effected by that agreed method, and if it is, there is no need for public announcement.
This does not sit easily with the fact that service, in the case of the Wang Proceeding, was effected by public announcement even though, if the plaintiffs’ position is accepted, there was an address for service in the contract and service was effected by that means. It seems from the Chinese law discussed above that service by public announcement may be effected by public announcement where all other methods of service have failed. The fact that service was by public announcement suggests that the Court, which the parties agree is responsible for service and operates on principles of efficiency, formed the view that service could not be, and had not been, effected in any other way.
The experts agreed that the relevant applicable law and process as to service in China is as follows:
(a)an overarching principle of reliability and efficiency applies to service;
(b)the court, rather than the plaintiff in a proceeding, implements the relevant means of service, with necessary assistance from the party if needed;[31]
(c)there are seven forms of service that are available for Chinese Courts to proceed, which include: personal service, document-leaving service, entrusted service, postal service, forwarding service, public-notice service and electronic service;
(d)at first instance, service should be by personal service unless it is ‘difficult’ then postal service is allowed. In practice, personal service has been deprioritised as it is often impractical and unrealistic. Accordingly, the Courts favour postal service;
(e)service by electronic means can only occur on a China domicile with the consent of the party to be served;
(f)where all other methods cannot be effectuated, the Court may employ service by public notice. This is where courts post a public notice open for a certain period after which service is deemed to have been effected; and
(g)where the parties have agreed to a mode and method of service, service may be effected in that way.
[31]Dong Wang, Expert Report of Dong Wang (Expert Report, 7 June 2024) [7.13]–[7.14]; Chenyang Zhang, Win in Chinese Courts: Practice Guide to Civil Litigation in China (Springer Nature, 2023) ch 4, 51, cited in Godwin Report (n 29) 5 [2.2].

What was Mr Duan’s domicile?

Mr Duan’s evidence regarding his connection to Australia is as follows:
… [M]y personal and family links are in Australia:
(a) I have been living in Australia since 17 January 2012, dividing my time between China and Australia until December 2019 when I moved to Australia permanently. I went to China for five days in January 2020 just before the lockdowns, six days in March 2019 and a personal trip in late October 2020.
(b) I am a Permanent Resident of Australia.
(c) My wife and children have been living in Australia since 17 January 2012. We arrived as a family.
(d) My wife and children are Australian citizens.
(e) My wife has casual employment as a carer with Flexi Support Pty Ltd.
(f) my daughter, aged 21 completed part of her primary school education in Australia, and all of her secondary education in Australia, and is currently studying at the University of Melbourne.
(g) My son aged 15, attended childcare in Australia, completed primary education in Australia and is currently attending Scotch College on a full scholarship.
(h) The only real estate in which I have an interest is our family home in Australia situated at 73 Harcourt Street, Hawthorn East …
(i) I do not have real estate or assets outside Australia.
(j) I consider Australia home.
(k) I am an Australian taxpayer.
(i) I have no intention of ever living in China again and have not been in China since December 2020.[32]
[32]Affidavit of Lianshuang Duan affirmed on 22 March 2024, [33].
Under cross-examination, Mr Duan’s evidence was:
COUNSEL: What year was that that you say you emigrated to Australia?
MR DUAN: 2012, around.
COUNSEL: And you say from 2012 you have been living in Australia?
MR DUAN (Through interpreter): I'm not too sure about how have you lived in Australia, because I travel constantly, I travel constantly.
COUNSEL: Since 2012 what have you considered your primary place of residence?
MR DUAN(Direct): Of course Australia.
COUNSEL: And have you been in the same address in Australia the whole time?
MR DUAN: No.
COUNSEL: Where have you - - -?
MR DUAN: I moved twice.
COUNSEL: When did you move?
MR DUAN (Through interpreter): The most recent move, you mean?
COUNSEL: The two times, when were they?
MR DUAN (Direct): Once in 2019, I think July 2019 which now I live.
COUNSEL: Was that into the Harcourt Street address?
MR DUAN: Yes.
COUNSEL: And you moved in, in July 2019?
MR DUAN: July around.
COUNSEL: Yes?
MR DUAN: It's a new house.
COUNSEL: A new house, lovely?
MR DUAN: I build it.
COUNSEL: Congratulations. And before that, when did you move?
MR DUAN: Before I live in Kew.
COUNSEL: Kew, and what years did you live in Kew for, and where?
MR DUAN: I think it's 2017 to 2019.
...
COUNSEL: And you hold Chinese citizenship?
MR DUAN: Yes.
COUNSEL: You have a Chinese passport?
MR DUAN: Yes.
COUNSEL: Chinese identity card?
MR DUAN: Yes.
COUNSEL: A Chinese citizen ID number?---
MR DUAN: Yes.
COUNSEL: And you had a registered address in Shanghai in China
MR DUAN: Yes.
COUNSEL: And you still have that as your registered address, don't you?
MR DUAN: No, not anymore.
COUNSEL: Can you describe what steps you took to remove that registered address?
MR DUAN: I didn't do anything.
COUNSEL: I see. So you haven't updated your registered address in China?
MR DUAN: No, no need to do that.
COUNSEL: You had a Chinese mobile phone number during 2019 and 2020?
MR DUAN: I have a number but not use.
COUNSEL: Do you still have that number?
MR DUAN: No.
COUNSEL: When did you stop using that number?
MR DUAN: I didn't stop, it just no use anymore.
COUNSEL: You have to pay for your phone services, don't you?
MR DUAN: No.
COUNSEL: Your phone services are free?
MR DUAN: Very long contracts, I think.
COUNSEL: I see. Is that contract still active?
MR DUAN: No.
COUNSEL: When did it cease?
MR DUAN: I have no idea but I don't use it anymore.
COUNSEL: When was the last time you used your Chinese number?
MR DUAN: Before I came to Australia.
COUNSEL: When was that?
MR DUAN: I think it's by the end of January 2020.
COUNSEL: So you say January 2020 was the last time you used your Chinese number?
MR DUAN: Yes.
COUNSEL: And you're certain of that?
MR DUAN: Of course, actually, I don't use the phone number, I use WeChat, the phone number is no longer (indistinct) number.
COUNSEL: So no-one can call you on that number and you don't ring anyone on the number, you don't use the phone number?
MR DUAN: I don't use it because this number, I used a long time, so I don't cancel it but I don't use it actually.
…
COUNSEL: And prior to January 2020 that was the number that you used in China, what's the phone number?
MR DUAN: It's 138 - 138, the phone number is 0806.
COUNSEL: And you'd used that for a long time while you were in China to conduct business on?
MR DUAN: Yes, yes, in China, yes.
COUNSEL: Yes. And you also used WeChat you mentioned before?
MR DUAN: Yes, that's my main - most Chinese main contact, WeChat.
COUNSEL: And that's tied to that mobile phone?
MR DUAN: Yes.
COUNSEL: And during 2019 and prior to 2019 you were regularly in China for business?
MR DUAN (Through interpreter): Most of my business was in China.
COUNSEL: Yes. And that's from at least 2005 in the garment trade?
MR DUAN: 2005, yes, yes.
COUNSEL: And you say that from about December 2019 you moved to Australia permanently?
MR DUAN (Direct): The specific date I don't remember clearly, but it should be 2012, yes.
COUNSEL: So 2012 is when you moved to Australia?
MR DUAN: Yes, I think - yes, yes, that time, early, early.
COUNSEL: You regularly travelled to China to run your business though, didn't you, you were often in China?
MR DUAN: Before 2019, yes.
COUNSEL: And that includes during 2019 as well, doesn't it?
MR DUAN: All from 2019, yes.
…
COUNSEL: In your mind you were not to return to China sometime in 2020, you had made that decision, that you were not to return to China for good?
MR DUAN (Through interpreter): No, of course, China is my motherland, I couldn't make a decision not to return to China for good, I just decided to quit the textile business.
COUNSEL: I see, so China remains your motherland and you have strong connections to China?
MR DUAN (Direct): Yes, yes.
COUNSEL: But you're simply not doing business in China anymore. Now the business that you were involved in, you made garments for your business for well-known international brands, didn't you?
MR DUAN (Through interpreter): Yes.

Mr Wang relevantly affirmed in an affidavit that:
(a)Mr Duan was at all times a Chinese National holding Chinese citizenship and a Chinese passport;
(b)Mr Duan had family connections to China, being the place where his brother and mother reside; and
(c)Mr Duan had ongoing business connections to China by reason of unresolved dealings with other persons.[33]
[33]Affidavit of Ning Wang affirmed on 24 April 2023, [23]–[24].
Mr Wang submits that, having regard to the above factors, and the fact that COVID-19 lockdowns restricted movements at the relevant time, Mr Duan was domiciled in China. Mr Wang’s submission was, at least in part, based on what Mr Wang knew or suspected of Mr Duan’s movements and property ownership and connection to China. But Mr Wang’s understanding or belief as to Mr Duan’s domicile is determinative. Domicile depends upon indicia of connection, which may include the relevant person’s subjective intention, but it does not include other people’s beliefs as to them. In relation to subjective intention, Mr Duan was cross-examined at length about liabilities he faced in China and it was suggested that Mr Duan had left China to avoid those debts. While the reason for departing may be a relevant factor in some respects, it is of limited weight in determining domicile. By that I mean, there is much evidence that Mr Duan was domiciled in Australia and that evidence would not be diminished by a finding that one of Mr Duan’s motives for moving to Australia was to avoid recovery proceedings in China.
I am satisfied that at the time of the Chinese Proceedings, Mr Duan was domiciled in Australia and not China. Of particular relevance to that conclusion is the extent of Mr Duan’s family connections to Australia, and the fact that he did not own any property in China, and that he is a permanent resident and a taxpayer in Australia.
In light of my conclusion that Mr Duan was domiciled in Australia, art 267 applies to service of process under Chinese law.[34] It is apparent from the terms of art 267 that service on a person who is not domiciled in China may only be effected by public notice, if it is not possible to serve by ‘… email and any other means capable of confirming receipt by the person to be served’.[35]

Did Mr Wang comply with obligations of good faith in communicating with the Chinese Courts about Mr Duan’s whereabouts and contact details?

[34]See para [72] above.

[35]Civil Procedure Law of China (n 26) art 267.

The obligation of good faith requires a person to inform the Court that someone is living overseas and also ‘volunteer every single contact detail you have of that person’.[36] Mr Wang relied heavily on the fact that Mr Duan retained his registered address in China, but in his email to his lawyer on 19 March 2020, Mr Wang wrote that ‘Duan has already gone back to Australia, and it’s unclear if he will come back’. There is no evidence that anything occurred after this date to change the belief that Mr Wang held in March 2020, and I am satisfied that this remained Mr Wang’s belief thereafter.
[36]Transcript of Proceedings (n 8) 416.
Under cross-examination, Mr Wang accepted that he knew that Mr Duan could not be served ‘at any Chinese address as at November 2020’. Given these facts and the principles of good faith expressed by the experts, I conclude that in seeking service of court documents, the obligations of good faith required Mr Wang to inform the Court that Mr Duan was living in Australia, and not China, and of Mr Duan’s email and WeChat addresses.
Mr Wang said he told the Jiading Court in both the Kunzhou and Longshi Proceedings that Mr Duan was in Australia and gave the Court his email and WeChat addresses. Mr Wang was consistent in his evidence that he did not know Mr Duan’s address in Hawthorn, and I accept that. Under cross-examination, Mr Wang gave evidence:
(a)that he passed on Mr Duan’s WeChat address and phone numbers to his lawyers who passed it on to the Jiading Court;
(b)that he told the Jiading Court that Mr Duan was in Australia; and
(c)that in March 2020 he told his lawyer by WeChat that Mr Duan was in Australia and his lawyer told the Court.
The delivery records and public announcements do not contain any reference to the available electronic means of contact, or to Mr Duan living in Australia, other than to say he was not at the registered address.
In the Kunzhou Proceeding:
(a)the certificate of delivery relevantly records, ‘No such person at the original address’ being the registered address;
(b)the application for service by public announcement records:
Due to the adoption of direct service and retention service as provided for in the Civil Procedure Law of the People’s Republic of China and the civil complaint and other litigation documents cannot be served on the defendant Duan Lianshuang by mail.
The applicant now applies … in accordance with the Civil Procedure of the People’s Republic of China
Paragraph 1 of Article 92 of the Law stipulates that “the whereabouts of the addressee are unknown, or this section shall be used where it cannot be served by other means, it shall be served by public notice”, and the defendant Duan Lianshuang was served on the civil in this case … ; and
(c)the public announcement records:
Due to your whereabouts being unknown, in accordance with Article 92 of the Civil Procedure Law of the People’s Republic of China, this notice serves to deliver copied of the complaint, evidence materials, summons for court hearing, and the civil ruling to you.
In the Longshi Proceeding:
(a)the records of service record: ‘return to the drop-off office’ and ‘the recipient’s migration to a new address is unknown’; and
(b)the public announcement does not refer to any basis for service by that method.
In the Wang Proceeding:
(a)the delivery record does not include any mobile phone number for Mr Duan and merely states ‘Not Delivered’;
(b)the public announcement does not refer to any basis for service by that method; and
(c)Mr Wang produced a transcript, extracted above, in which he states ‘in the beginning of 2020, [Duan] went to Australia and didn’t return’. When asked by the Judge how he pursued payment, Mr Wang replied ‘through WeChat and phone calls, but I lost my phone later’. He further said that he ‘made calls until December 2019, but then couldn’t reach him anymore’. The phrase ‘couldn’t reach him anymore’ is ambiguous. It could suggest that the WeChat and email addresses were no longer valid and in use, or it could suggest that Mr Duan was just not responding to messages that he was receiving. There is no suggestion that the WeChat and email addresses did not continue as methods of communication. Indeed, the affidavit sworn by Mr Wang’s wife in support of the substituted service application in this jurisdiction, indicates an ongoing belief that the email address and phone number remained active and would be effective as a means of communication.
The question of whether Mr Wang deliberately withheld information from the Chinese Courts is a serious one, and one that must be decided having regard to s 140 of the Evidence Act 2008 (Vic), which requires the Court to take into account the gravity of the matters alleged in determining whether the matter has been proved on the balance of probabilities. A difficulty that looms in the present case is the extent to which court documents record what actually occurred. Dong Wang’s evidence was that:
I can, frankly speaking - Chinese judgment has a big problem that in very simplified reasoning, so that's the real problem. So, not like common law cases and every details very, very careful to check and examine. But in China, the details - sometimes you can't see. So we don't know the story behind this.[37]
[37]Transcript of Proceedings (n 8) 218 (Dong Wang).
In those circumstances, it is unclear precisely what was before the Chinese Courts.
Based on Mr Wang’s evidence, I am satisfied that he informed the Chinese Courts that Mr Duan was in Australia and provided his email and WeChat addresses. The most significant evidence in that regard is his own direct evidence, which is supported by the transcript in the Wang Proceeding. But that is not to say that the Courts in each of the proceedings were aware that Mr Duan was living in, that is, domiciled in Australia and not China, as I have found. Any such confusion may have arisen because Mr Wang had beliefs about Mr Duan’s domicile or because he failed to convey the information in sufficiently clear terms. While I am not prepared to conclude that Mr Wang deliberately misled the Chinese Courts, if there was any confusion about Mr Duan’s domicile, then the consequences should rest with Mr Wang as the party responsible for ensuring the Court had all relevant information.

Did the Chinese Courts apply the law in effecting service by public announcement?

The parties disagreed as to whether service was actually effected under Chinese law, having regard to questions around whether the plaintiffs had informed the relevant Chinese Courts of Mr Duan’s whereabouts, including their knowledge of the email or WeChat addresses at which the defendant could be contacted.
Mr Wang accepts that if process was not served in accordance with Chinese law because he misled the Court (which he denies he did), then the judgments are not enforceable. Mr Duan submits that service was not effected in accordance with Chinese law and that Mr Wang did not disclose all relevant information to the Courts.
There are two possible scenarios to consider. Either the Chinese Courts knew that Mr Duan was domiciled in Australia and could be contacted by email and WeChat, or they proceeded on the basis that Mr Duan remained domiciled in China but his whereabouts were unknown.
If the Courts knew that Mr Duan was domiciled in Australia and could be contacted by electronic means, then the process set out in art 267 was available to it to effect service. That is, the Courts could have used the methods of service identified, including email or WeChat, and only if those methods were ineffective, could the Courts then have served by public announcement. It has not been contended that service was effected by email or WeChat, and Mr Duan denied he received notice by such means. In those circumstances, if the Courts knew that Mr Duan was domiciled in Australia, then service by public announcement was not available as a means of service as the precondition of failed service by other methods had not occurred. In that sense, if the Court knew Mr Duan was domiciled in Australia, the Court appears not to have applied the law. I do not consider that art 92 would cover the situation in which a person is domiciled outside of China but their whereabouts is unknown. The language of art 267 expresses a broader range of methods of service apparently designed to actually bring notice of the proceedings to the recipient, and allows a longer period of time before service is deemed to have been effected. It would be contrary to that intention to permit service by public announcement on someone domiciled outside of China where their precise whereabouts were unknown, but other means of service, such as electronic means, were available.
If, on the other hand, the Court did not know that Mr Duan was domiciled in Australia and not China, then the Court acted in accordance with the law based on the facts before it, as service by electronic means is only available with the consent of the person to be served. But this could only have occurred if the Court was not sufficiently aware that Mr Duan was no longer domiciled in China. The obligation to inform the Courts of that matter rested squarely with Mr Wang, and the consequences of any failure to adequately inform the Courts of those facts, would constitute a breach of the obligation of good faith he owed to the Courts. As Professor Godwin stated, a plaintiff has a positive duty, derived from good faith provisions, to inform the Court if it knows or suspects that the method of service being effected is futile, and to then suggest an alternative means of service.
As discussed above, I am not prepared to conclude that any such breach by Mr Wang was deliberate.

Legislation and Principles

Pursuant to s 5(1) of the Foreign Judgments Act 1991 (Cth) and the schedule to the Foreign Judgments Regulations 1992 (Cth), judgments made by Chinese Courts are not assured substantial reciprocity of treatment in Australia.[38] That is, Australian Courts are not required by statute to recognise and enforce Chinese judgments. Accordingly, the plaintiffs’ application for recognition and enforcement of the Chinese Judgments is made pursuant to common law principles. There are four requirements for a prima facie entitlement to recognition and enforcement of foreign judgments at common law, namely:
(a)the foreign court must have exercised a jurisdiction that Australian Courts will recognise (International Jurisdiction);
(b)the foreign judgment must be final and conclusive;
(c)there must be an identity of the parties; and
(d)the judgment must be for a fixed sum or debt.[39]
[38]Foreign Judgments Act 1991 (Cth) s 5(1); Foreign Judgments Regulations 1992 (Cth) sch 1.
[39]Doe v Howard [2015] VSC 75, [56]; Yin v Wu (2023) 73 VR 21, 47-48 [72].
Mr Duan accepts that these four requirements are met, and that the Chinese Judgments are prima facie enforceable. Notwithstanding, Mr Duan submits that the Chinese Judgments are not enforceable because there has been a denial of natural justice and for public policy reasons. The plaintiffs submit that there are no public policy reasons beyond the natural justice ground, and to that extent there is an equivalence between the requirements of public policy and natural justice. The primary basis upon which Mr Duan resists enforcement is that such enforcement in the circumstances would be contrary to the principles of natural justice or public policy, as the service was not effected by known and available means. Mr Duan submits:
(a)First, natural justice has traditionally been seen as imposing two requirements:
(i)each party must have an opportunity of presenting the case before an impartial tribunal; and
(ii)each party must be given due notice of the proceeding.[40]
(b)Second, where a person has no notice of a hearing, there is a prima facie denial of natural justice.
(c)Third, service in accordance with foreign service rules may, but not must, be acceptable.
(d)Fourth, once the defendant ‘asserts or proves’ a want of notice, the onus is on the plaintiffs to establish valid notice under foreign law.
(e)Fifth, the plaintiffs have not established compliance with foreign law.
[40]Boele v Norsemeter Holding AS [2002] NSWCA 363, [24] (Giles JA), [1] (Handley JA), [2] (Beazley JA) (‘Boele v Norsemeter’); Spirits International BV v Federal Treasury Enterprise (FKP) Sojuzplodoimport (2011) 91 IPR 438, 450 [50] (Rares J); Nyunt v First Property Holdings Pte Ltd (2022) 408 ALR 277, 310 [132] (Bell CJ); See also Martin Davies et al, Nygh’s Conflict of Laws in Australia (LexisNexis Butterworths, 10^th ed, 2020) [40.84].
The parties disagree as to where the onus lies. Mr Duan submits that the plaintiffs bear the onus of establishing that Mr Duan was afforded natural justice. While the plaintiffs submit that, as the Chinese Judgments are prima facie enforceable, Mr Duan bears the onus of establishing any defence. I agree that, as the Chinese Judgments are prima facie enforceable, the defendant must establish that he was not afforded natural justice. However, it is also clear that a fundamental principle of natural justice is that a person must be given a reasonable opportunity to appear before a court and present his or her case. If Mr Duan establishes that he did not know of the Chinese Proceedings, and that he could have been given notice by electronic means, then he has at least established that there has been a prima facie denial of natural justice.[41] If the matter stops there, as discussed below, the Chinese Judgments will be unenforceable. If the plaintiffs wish to displace that prima facie denial of natural justice, then they bear the burden of proving matters that displace the prima facie denial of natural justice. In that sense, the burden shifts. This is consistent with the reasoning in Yin v Wu, where the Court considered whether service by public announcement was ‘a complete answer to the defence based on denial of natural justice’.[42] That statement is predicated on an ‘answer’ being required. It is also consistent with the concept of comity. Unless the proper exercise of a foreign law is proved, there is no foreign act to recognise.
[41]Xu v Wang (2019) 58 VR 536, 558–9 [88], quoting Terrell v Terrell [1971] VR 155, 157; Violi v Commonwealth Bank of Australia [2015] NSWCA 152, [28].
[42]Yin v Wu (n 39) [95].
The parties each made submissions on the line of authority from Boele v Norsemeter Holding AS (‘Boele v Norsemeter’) to Yin v Wu.[43]The plaintiffs’ submission stated broadly is that considerations of comity require due regard to be had to valid orders for substituted service in other jurisdictions, and also to contractual terms as to addresses for service, or at least in relation to residence. Those considerations, so it was submitted, support the conclusion that Mr Duan was afforded natural justice.
[43]Ibid; Boele v Norsemeter (n 40) [28] (Giles JA), [1] (Handley JA), [2] (Beazley JA) (emphasis added).
The defendant’s submission, on the other hand, is that not only was service not effected in accordance with the rules of substituted service in China, but even if it was, there has been a denial of natural justice because the process could have been served by known and available electronic means, but was not. This submission relies heavily on the Court of Appeal decision in Yin v Wu.
In the New South Wales Court of Appeal matter Boele v Norsemeter, Giles JA (Handley and Beazley JJA agreeing) said:
In determining whether due notice has been given regard will be had to the notice provisions of the foreign court: for example, notification not by personal service but in accordance with the rules of the foreign court may be held to be consistent with affording natural justice even if not in accord with notice provisions of the forum (see Jeannot v Fuerst (1909) 25 TLR 424; Igra v Igra (1951) P 404; Terrell v Terrell (1971) VR 155).[44]
[44]Ibid (emphasis added).
In Yin v Wu, the Victorian Court of Appeal discussed the comments of Giles JA in Boele v Norsemeter and observed that:
… Giles JA did not say that any form of notification “not by personal service” but in accordance with the rules of the foreign court will satisfy the requirements of natural justice. He said that such notification “may be held to be consistent with affording natural justice”, as emphasised in the above quote. As discussed below, the use of a permitted form of service may be inconsistent with affording natural justice if it is established that the use of such a procedure was improper in the circumstances and, on that ground, the foreign judgment will not be recognised.[45]
[45]Yin v Wu (n 39) 52 [87] (emphasis added).
In Yin v Wu, the Court held that the defendant he had established a prima facie case of denial of natural justice because he had established that he had not been personally served and had no notice that the documents were ‘served’ by public notice. The Court went on to say:
However, even if the evidence had established that “service” had been effected on Yin by means of a public announcement which did not come to his attention, and that this mode of service was in accordance with proven Chinese law, a question would have arisen as to whether, on the facts of the case, service by public notice or announcement was a complete answer to the defence based on denial of natural justice. In our view, a review of the approach taken in the following cases shows that the natural justice defence nevertheless had a real prospect of success.[46]
[46]Ibid 54 [95] (emphasis added).

The Court considered whether summary judgment should have been granted or whether the argument that there had been a denial of natural justice ‘had a real prospect of success’. In Yin v Wu, the Court further stated that:
In our view, in considering whether natural justice has been provided, modern courts should move with the times in their assessment of the sufficiency of foreign modes of service which do not aim to give defendants personal notification by the many electronic means now commonly available. Courts should draw the line and look unfavourably on modes of service by foreign courts which do not attempt to give notice by such means where a defendant’s physical whereabouts are unknown but electronic notice in some form is possible.[47]
[47]Ibid 58-59 [109] (emphasis added).
The plaintiffs rely on principles of comity in support of their submission that valid substituted service orders should be given effect, and that the onus remains with the defendant to establish a defence. The plaintiffs rely on comments by Edelman J writing extra-judicially in A Conflict of Laws Companion.[48] The extracts relied on relevantly for present purposes include the following:
… a court will not be justified in refusing to recognise a foreign sovereign act merely because that act is contrary to either a principle of the domestic law of the forum state or of international law. It will only be so justified where the foreign act is contrary to a fundamental principle of justice.[49]
[48]James Edelman and Madeleine Salinger, ‘Comity in Private International Law and Fundamental Principles of Justice’ in Andrew Dickinson and Edwin Peel (eds), A Conflict of Laws Companion (Oxford University Press, 2021) 325, 327, 336–7 and 355–6.
[49]Ibid 337.
Then further:
… one instance where comity ends is where it is inconsistent with respect for fundamental principles of justice. The certainty of legal rules developed by reference to the principle of comity must give way where it would conflict with the “public policy” of the legal system, particularly the foundational principles that make that system just.[50]
[50]Ibid 355-6.
This commentary accepts that principles of comity must give way when there is conflict with ‘foundational principles that make the system just’.[51] Following this line of reasoning, the question then is whether the foreign act is contrary to fundamental principles of justice. In this case, the foreign act is entering judgment, based on service by public announcement, without actual notice to the defendant and where there were known electronic means that would have given notice to the defendant of the proceedings.
[51]Ibid.
In Assistant Commissioner Michael James Condon v Pompano Pty Ltd, Gageler J considered natural justice, its role in the judicial process, and referred to the High Court judgment Cameron v Cole, citing the judgment as follows:
“It is”, of course, “a fundamental principle of natural justice, applicable to all courts whether superior or inferior, that a person against whom a claim or charge is made must be given a reasonable opportunity of appearing and presenting his case”.[52]
[52]Assistant Commissioner Michael James Condon v Pompano Pty Ltd (2013) 252 CLR 38, 107 [184] (Gageler J) (‘Condon v Pompano’); Cameron v Cole (1944) 68 CLR 571, 589.
The content of the obligations of natural justice in each case must depend upon the circumstances. The plaintiffs rely on the decision of Boele v Norsemeter in which Giles JA considered whether substituted service, or agreed methods of service, that do not bring notice of the proceedings to a defendant could nevertheless satisfy the requirements of natural justice.[53] Principles of comity informed that decision. But that decision was delivered several years before smartphones became commonplace, and electronic means of communication became ubiquitous. The content of natural justice, and consideration of what constituted a ‘reasonable opportunity of appearing’ were different in 2002 compared to today where instant electronic communications are almost universally available.[54]
[53]Boele v Norsemeter (n 40).
[54]Condon v Pompano (n 52) 107 [184] (Gageler J); Cameron v Cole (n 52) 589.
Any practical impediments to service have been substantially diminished by the advent of electronic means of communication. So much has been acknowledged by the Victorian Court of Appeal in Yin v Wu.[55]
[55]Yin v Wu (n 39) 58-59 [109].
I consider that I should apply this reasoning in this case. There is no obvious reason why a person should not be notified by known electronic means where such means are available. As the High Court of Australia has acknowledged, natural justice requires that a party ‘must be given a reasonable opportunity of appearing and presenting his case’.[56] In a modern context, it is reasonable to require notice by known electronic means where they are available and personal service is unavailable. The fact that foreign rules provide for substituted service does not mean that it is not reasonable to require service by known electronic means. In my opinion, allowing principles of comity to prevail would be to elevate those principles above the requirements of natural justice, which, in this case, required notice by known electronic means. It is reasonable to expect that service would be effected, or at least notice would be given, in that simple and available manner so that Mr Duan had an opportunity to appear and present his case. The efficacy of such modes of notice are supported by the plaintiffs’ application for substituted service in this jurisdiction.

Consideration

[56]Condon v Pompano (n 52) 107 [184] (Gageler J).

Did Mr Duan have actual notice of the Chinese Proceedings?

Mr Duan says that, although he was deemed served by public announcement, he did not have actual notice of any of the Chinese Proceedings prior to their commencement or the commencement of the proceedings in this Court. Mr Duan said he did not have actual notice because during the Chinese Proceedings he:
(a)did not own or live at the registered Shanghai address at which service was first attempted in each of the Chinese Proceedings;
(b)was not in China at the time of the public announcements in each of the Chinese Proceedings, but was in Australia;
(c)he was no longer in control over or had any further involvement in Cheng’ao and its operations; and
(d)he did not receive any of the Court documents in any of the Chinese Proceedings and did not receive actual notice of the existence of any of the Chinese Proceedings until the commencement of this proceeding.
Mr Duan said that:
Wang and I are contacts on WeChat … Wang could have contacted me by WeChat at any time about the proceedings. However, at no time did he advise me of any proceedings.[57]
[57]Affidavit of Lianshuang Duan affirmed on 22 March 2024, [23].
Mr Wang does not contradict that evidence, and I accept it.
The plaintiffs submit that it should be inferred that Mr Duan knew of the proceedings, at least the Kunzhou and Longshi Proceedings, because of his, and his brother’s, involvement in the company Cheng’ao. Mr Duan’s evidence is that by the time of the Kunzhou and Longshi Proceedings, he no longer had any involvement in Cheng’ao and was estranged from his brother. Mr Wang gave evidence that he dealt with Mr Duan in relation to Cheng’ao and always considered that Mr Duan was running the company.
I am satisfied that Mr Duan did not receive notice of the Chinese Proceedings prior to their determination. His denials are consistent with the fact that he was not in China at the relevant times and had sold his property in China. There is insufficient evidence to persuade me on balance that he knew of the Chinese Proceedings by other means. By reason of that lack of knowledge, he was deprived of the opportunity to appear and present his case.

Would service by electronic means have brought the Chinese Proceedings to Mr Duan’s notice?

I am satisfied that notice of the Chinese Proceedings by electronic means, including email and WeChat, would have made Mr Duan aware of those Proceedings, particularly where those methods of communication were used frequently by the parties prior to the issuing of the Chinese Proceedings. That conclusion is also supported by Mr Wang’s evidence regarding support of substituted service of process in this proceeding, at a known email address and telephone number.

Did the failure to serve by known electronic means constitute a denial of natural justice?

The plaintiffs’ submission is that:
The way the Chinese law approaches its own procedures is not a matter for consideration within the confines of this recognition procedure. The only aspect that we're concerned about is whether natural justice was accorded in relation to the way in which Mr Duan had an opportunity under Chinese law to become aware of these proceedings. That's not an absolute requirement of personal service. And neither is it an absolute requirement here in Australia.
…
That's the standard that procedural fairness objection needs to get to. Even if we accept that there was an error in the Chinese court's approach to service - which I don't accept and that's heavily contested – it needs to be demonstrated that that error offends fundamental notions of justice and morality.[58]
[58]Transcript of Proceedings (n 8) 146-148.
Mr Wang submits that the proposition in Yin v Wu represents a shift towards electronic service but if available electronic service is not performed, that does not automatically mean Mr Duan was denied natural justice. I agree with this submission, as the requirements of natural justice depend on the circumstances. Procedural rules in this jurisdiction provide for substituted service and service pursuant to an agreement between the parties, and judgment may be entered based on such service.[59] However, the critical question, at least in relation to substituted service, is what methods were reasonably available and likely to bring notice of the Chinese Proceedings to Mr Duan.[60] That is the question that ordinarily informs the methods of substituted service, that may be sanctioned by the Court in this jurisdiction.[61] Mr Wang relies on the fact that it was the Chinese Courts’ responsibility for determining the appropriate form of service, but that is not determinative. If the process of service under Chinese law is contrary to principles of natural justice, then principles of natural justice will prevail. That is particularly so where, irrespective of whether Chinese law permitted service by public announcement in the circumstances, Mr Wang could have notified Mr Duan of the Chinese Proceedings that he was instrumental in bringing against him.
[59]Supreme Court (General Civil Procedure) Rules 2015 (Vic) rr 6.10 and 6.14 (‘Rules’). Note: r 6.10(1.1) of the Rules specifically contemplates service by email.
[60]Rhino Trading Pty Ltd v Lotte Enterprise Pty Ltd [2024] VSC 52, 6 [26]; Chen v Blockchain Global Ltd [2020] VSC 751, 6 [12] (‘Chen v Blockchain’).
[61]Ibid.
As discussed above, there is a degree of obscurity as to whether the Chinese Courts knew that Mr Duan was domiciled in Australia and not China. If the Chinese Courts knew that Mr Duan was domiciled in Australia and not China, then it appears it has not acted in accordance with art 267 which only permits service by public announcement after attempted service by electronic means, which would include email and WeChat. There is no suggestion that service was attempted by either of those methods which would mean that service by public announcement was not available, and its use would be contrary to Chinese law. In that respect, the requirements of comity would not apply. I also observe that it would be most unlikely on the facts stated that a Victorian court would sanction substituted service by public announcement without also at least requiring notification by email.[62] The principles of substituted service, informed as they are by principles of natural justice, require that the method of service must ‘in all reasonable probability, if not certainty, be effective in bringing knowledge of the writ to the defendant’.[63]
[62]Chen v Blockchain (n 60) 7 [12].
[63]Ibid; Porter v Freudenberg [1915] 1 KB 857, 889.
If, on the other hand, the Chinese Courts did not know that Mr Duan was domiciled in Australia, and not China, and could be contacted by email and WeChat, then that lack of knowledge is attributable to Mr Wang’s failure to fully disclose that information, which would constitute a breach of the obligation of good faith, sufficient to preclude enforcement of the judgments.
Even if service on Mr Duan by public announcement was in accordance with Chinese law, the reasoning in Yin v Wu calls for such methods of service to be looked upon unfavourably, where there were available electronic means of notification, which there undoubtedly were. The critical passage in Yin v Wu uses the language of ‘notification’ rather than ‘service’. Irrespective of the control that the Chinese Courts exercised regarding service, there was nothing to prevent Mr Wang from notifying Mr Duan, by email or WeChat, of each of the Proceedings, and if he had done so, Mr Duan’s submissions as to natural justice would have considerably less force. This is consistent with the fact that natural justice is more concerned with reasonable steps to give notice, rather than strict technical compliance with laws of service.
The failure to notify Mr Duan electronically means he was denied natural justice.

Was there service pursuant to the Loan Agreements or the Repayment Agreements and Guarantees?

The plaintiffs submit that, ‘in each of the contracts underpinning each of the Chinese Judgments Mr Duan gave his address as being his registered address in China’. Further, the plaintiffs contend that the October 2019 Loan should be characterised as an ‘extension’ of the August 2018 Loan, the Kunzhou and Longshi Guarantees, and that ‘each of these transactions and contracts are closely related’. The plaintiffs submit that Mr Duan contractually agreed and represented to the plaintiffs that his legal address for service was the same as his official registered address in Shanghai, both before and after the sale of his Chinese residence, and that at no time did the defendant seek to update his residential address.
Mr Duan contends that it is only in the terms of the October 2019 Loan that the defendant agreed that his Chinese address shall serve as his legal address for service. Notwithstanding, the August 2018 Loan, the Kunzhou Guarantee and the Longshi Guarantee do not refer to Mr Duan’s registered address as his legal address for service for process.
The October 2019 Loan provides:
Party B agrees that the contract address shall serve as the legal address for service of process.
Party B is defined as the borrower and named ‘Lianshuang DUAN’. The ‘contact address’ is defined as ‘No. 1121, Lane 1288, Xinsong Road, Songjiang District, Shanghai’.
The August 2018 Loan and the Repayment Agreements which include the Kunzhou and Longshi Guarantees, are silent on the question of service. In addition, none of these agreements, save for the October 2019 Loan, refer to Mr Duan’s Chinese address.
The plaintiffs submit that the October 2019 Loan modified the earlier agreements, to include a provision as to service of documents.[64] I do not consider that submission is sustainable. The earlier agreements are sufficiently independent that the October 2019 Loan does not expressly, or by implication, so alter the former agreements. Accordingly, only in relation to the Wang Proceeding was there a term regarding service.
[64]Howard v National Bank of New Zealand Ltd (2002) 121 FCR 366.
Mr Wang relies on the decision of Efthim AsJ in Shanghai Weijing Commercial Factoring Co. Ltd v Lianshuang Duan (‘Shanghai Weijing’).[65] In that decision, his Honour distinguished Yin v Wu on the basis that in Shanghai Weijing, there was a contractual term for service and that, as service had been effected by that method, there was no denial of natural justice, even if electronic means of service were available.[66]
[65]Shanghai Weijing Commercial Factoring Co. Ltd v LianshuangDuan (Unreported, Supreme Court of Victoria, Efthim AsJ, 24 October 2024).
[66]Ibid [27].
However, in this case, the facts are not so clear. According to the expert evidence of Dong Wang, if service was effected in accordance with a contractual term, such as service at an address, then there is no need to proceed to service by another means, such as by public announcement. This is broadly consistent with the approach taken in this jurisdiction under r 6.14 of the Supreme Court (General Civil Procedure)Rules 2015 (Vic).[67] However, in the Wang Proceeding, the only evidence of ‘service’ at the nominated address, is a delivery certificate that includes the words ‘Not Delivered’. It is unclear from this document what was done, or attempted to be done, and as a result, it is unclear whether service was effected in accordance with the terms of the Wang Agreement and applicable Chinese law. One matter that suggests service was not effected in accordance with Chinese law is that the Chinese Courts ultimately purported to effect service by public announcement. There is no explanation as to why service by public announcement would occur if there had already been service pursuant to the contract, and the fact that there was a public announcement suggests service under the contract was not effected. In those circumstances, I am not satisfied on the present material that Mr Duan was served by a contractually agreed method in accordance with Chinese law.
[67]Rules (n 59) r 6.10(2); Chen v Blockchain (n 60) 6 [13].
If I am wrong, and Mr Duan was served by a contractually agreed method, then the facts are closer to those in Shanghai Weijing.

Conclusion

Mr Duan was denied natural justice for the following reasons:
(a)the Chinese Courts purported to effect service on Mr Duan by public announcement in China. At the time of the announcements, Mr Duan was domiciled in Australia, no longer owned property in China, and did not receive notice of the Chinese Proceedings;
(b)Mr Wang knew:
(i)Mr Duan was living in Australia at the time of the announcements and that it was at least unclear whether he would be returning; and
(ii)Mr Duan’s email and WeChat addresses were likely to be effective methods of communication with Mr Duan.
(c)Mr Wang was under a duty of good faith to inform the Chinese Courts of all relevant facts in relation to service, including the fact that Mr Duan was living in Australia and that he could likely be contacted by email or WeChat; and
(d)no attempt was made by the Chinese Courts or Mr Wang to notify Mr Duan of the Chinese Proceedings by available electronic means. Further, there is insufficient evidence that process was served in accordance with a contractually agreed method.
Accordingly, the application for registration of the Chinese Judgments is refused. The parties are to provide draft orders reflecting these reasons and as to costs, if they can be agreed, otherwise I will hear the parties further.

---

SCHEDULE OF PARTIES

S ECI 2023 01752
BETWEEN:
NING WANG	First Plaintiff
SHANGHAI KUNZHOU INDUSTRY CO LTD (CHINESE COMPANY REGISTRATION NUMBER 91310112MA1GCC4A9G)	Second Plaintiff
SHANGHAI LONGSHI TEXTILE CO LTD (CHINESE COMPANY REGISTRATION NUMBER 91310108776267300Y)	Third Plaintiff
- v -
LIANSHUANG DUAN	Defendant

[2025] VSC 516

26 August 2025