Abate, in the matter of Chang Rajii v Chang Rajii

1. Pursuant to s 6 of the Cross-Border Insolvency Act 2008 (Cth) (Act), Art 21(g) of the UNCITRAL Model Law on Cross-Border Insolvency (Model Law), s 129(2) of the Bankruptcy Act 1966 (Cth) and r 1.32 of the Federal Court Rules 2011, the Certificate of Title to the property comprising Lot 9 of Folio Identifier SP89074 being the property located at 401/141-143 Elizabeth Street, Sydney NSW 2000, contained in Packet S1 produced by Anne Miller in response to an Order for Production dated 23 May 2019, be delivered up to Arnold Bloch Leibler, the solicitors for the applicant.
2. Pursuant to s 6 of the Act and Art 21(g) of the Model Law, to the extent necessary, the applicant be released from the implied undertaking not to use, other than for the purpose of Federal Court of Australia proceeding no. NSD 2118 of 2017 (Chang Proceeding), any or all of the documents produced by Anne Miller pursuant to the Order for Production issued by the applicant in the Chang Proceeding. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

GLEESON J: 1 The applicant, Mr Abate, sought two further orders ex parte pursuant to s 6 of the Cross-Border Insolvency Act 2008 (Cth) (CBI Act) and Art 21(g) of the UNCITRAL Model Law on Cross-Border Insolvency (Model Law), following upon orders made in March 2019: Abate, in the matter of Chang Rajii v Chang Rajii (No 3) [2019] FCA 577 (Abate (No 3)). 2 The first order sought was for delivery up to Mr Abate's solicitors of a Certificate of Title to property, being an apartment located at 401/141-143 Elizabeth Street, Sydney (Elizabeth St property). Mr Abate sought to obtain the Certificate of Title to enable him to complete the sale of the property. The Certificate of Title was produced to the Court in response to an Order for Production dated 23 May 2019, issued pursuant to orders made on 22 March 2019. By order 2 of those orders, the administration and realisation of the respondent's assets in Australia that were entrusted to the applicant were extended, relevantly, to include the Elizabeth St property. 3 The first order was sought pursuant to s 6 of the CBI Act, Art 21(1)(g) of the Model Law, s 129(2) of the Bankruptcy Act 1966 (Cth) (Bankruptcy Act) and r 1.32 of the Federal Court Rules 2011. 4 Section 6 of the CBI Act provides that the Model Law has the force of law in Australia. Article 21(1)(g) of the Model Law, read with s 11 of the CBI Act, provides that upon recognition of a foreign proceeding, whether main or non-main, where necessary to protect the assets of the debtor or the interests of the creditors, the Court may, at the request of the foreign representative, grant any appropriate relief, including granting any additional relief that may be available to a trustee within the meaning of s 5(1) of the Bankruptcy Act. 5 Pursuant to Art 22 of the Model Law, in granting or denying relief under Art 21, the Court must be satisfied that the interests of the creditors and other interested persons, including the debtor, are adequately protected. 6 Section 129(2) provides that the Court may, on the application of the trustee, enforce the trustee's right, pursuant to s 129(1), to possession of all of the property of the bankrupt capable of manual delivery, including all deeds, books and documents of the bankrupt. Rule 1.32 provides that the Court may make any order that the Court considers appropriate in the interests of justice. 7 Having previously ordered that the administration and realisation of all of Mr Chang's assets located in Australia, including the Elizabeth St property, be entrusted to Mr Abate, I was satisfied that the proposed order was necessary to protect the interests of the creditors of Mr Chang, those interests being to obtain a distribution of Mr Chang's assets. 8 In Abate (No 3), I noted Mr Abate's evidence that, based on his investigations, the only Australian creditor of Mr Chang is the Owners Corporation for the Elizabeth St property. The March 2019 orders provided for the full payment of the amount claimed by the Owners Corporation from the proceeds of sale of the Elizabeth St property. 9 Accordingly, in making order 1, I was satisfied that the interests of creditors and other interested persons, including Mr Chang, were adequately protected. 10 The second order sought was to release Mr Abate, to the extent necessary, from the implied undertaking not to use, other than for the purpose of this proceeding, any or all of the documents produced by Anne Miller pursuant to the Order for Production referred to above. This order was sought pursuant to s 6 of the CBI Act and Art 21(1)(g) of the Model Law. 11 The affidavit affirmed on 26 July 2019 by Mr Abate's solicitor, Mr Mitchell, contained evidence that the documents produced by Ms Miller have been inspected and found to include documents relating to assets held by Mr Chang, or companies associated with Mr Chang, in jurisdictions outside Australia. Mr Abate wishes to use the documents in proceedings to recover those assets in other jurisdictions. 12 The purpose of the implied undertaking is to avoid prejudice consequent upon the production of documents under compulsion in litigation. As explained in Hearne v Street [2008] HCA 36; (2008) 235 CLR 125 at [107]: The expression "implied undertaking" is thus merely a formula through which the law ensures that there is not placed upon litigants, who in giving discovery are suffering "a very serious invasion of the privacy and confidentiality of [their] affairs", any burden which is "harsher or more oppressive ... than is strictly required for the purpose of securing that justice is done." 13 It is not entirely obvious that the circumstances of Ms Miller's production of documents give rise to an implied undertaking but I assumed that such an obligation had arisen. The undertaking is subject to the control of the Court and can be modified or released, in special circumstances where no injustice would be occasioned to the party who has produced the documents: Springfield Nominees Pty Limited v Bridgelands Securities Limited (1992) 38 FCR 217 at 225; Liberty Funding Pty Ltd v Phoenix Capital Ltd [2005] FCAFC 3; (2005) 218 ALR 283 at [31]. 14 In my view, relevant special circumstances are Mr Abate's ongoing bankruptcy proceeding. In this regard, I have previously noted Mr Abate's obligation under Chilean law to make use of all information at his disposal in the bankruptcy proceeding: Abate, in the matter of Chang Rajii v Chang Rajii (No 2) [2018] FCA 241 at [65]. There is no reason to think that injustice would be occasioned to Ms Miller, being the party who has produced the documents. 15 On the evidence of Mr Mitchell I was satisfied that the proposed order was necessary to protect the interests of creditors of Mr Chang. 16 On the other hand, there was no reason to think that the interests of creditors or Ms Miller would be adversely affected by the proposed order. As to Mr Chang, he has no relevant interest that would tell against the release of any implied undertaking. 17 Accordingly, I was satisfied that the interests of the creditors and other interested persons, including the debtor were adequately protected, in making order 2. I certify that the preceding seventeen (17) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gleeson.