Auslink Investment Co Associates Pty Ltd v Sackl

Auslink Investment Co Associates Pty Ltd v Sackl - [2020] NSWSC 640 - NSWSC 2020 case summary — Zoe

A Court Book, comprising two lever arch folders, was prepared for the purposes of the proceedings, including extensive written submissions from Mr Silver, counsel for Mr Sackl, and Mr Freeman, counsel for Auslink.
Mr Sackl read two affidavits in support of the motion, the first dated 18 December 2019 and a further dated 30 April 2020 in reply to the affidavits filed by the respondent. He was extensively cross-examined. He also read an affidavit from his former wife, Alina Tang, dated 30 April 2020. She was also cross-examined.
The respondent read affidavits from Xi Chen, a director of Auslink, Shenghai Mo, solicitor, Patrick Dunn, solicitor, and Jianing Weng (also known as Susan Weng), a former employee of a corporation associated with Mr Sackl.
Finally, the respondent read two affidavits from Stephen Papst in which he deposes to having personally served Mr Sackl with the statement of claim dated 26 October 2018. In that claim Auslink sought unliquidated damages against Mr Sackl for false and deceptive conduct pursuant to s 236 in Sch 2 of the Competition and Consumer Act 2010 (Cth), applicable pursuant to ss 5A and 28 of the Fair Trading Act 1987 (NSW) and, in the alternative, a claim in restitution for liquidated damages. That claim was the subject of the orders made by Button J which Ms Sackl applies to have set aside.
Mr Papst was the only witness required by Mr Sackl for cross-examination.
In brief, Mr Silver submitted that the onus imposed on Mr Sackl under UCPR 36.16(2)(b) to demonstrate that it would be unjust to allow the orders to stand has been discharged, in large part because the Court would be satisfied, on the probabilities, that at all relevant times prior to judgment being entered Mr Sackl was unaware that Auslink had commenced proceedings against him. Mr Silver also submitted that the Court would be satisfied, having regard to the various matters addressed by Mr Sackl in his affidavits, that he has a defence to the claim on the merits. I note that no defence has been filed. No draft defence was tendered on the application.
Mr Freeman submitted that the Court would be satisfied that Mr Sackl was in fact personally served with the statement of claim by Mr Papst at Mr Sackl's business premises in Collins Street, Melbourne on 5 November 2018 at 1:40pm and, further, that the probabilities favour the Court finding that on 9 November 2018 he received an email, sent by Ms Chen to james@dash.com.au and james8sackl@gmail.com (both addresses associated with Mr Sackl) and copied to Ms Tang at her email address, confirming the fact of service and attaching a copy of the statement of claim in PDF format. Mr Freeman also submitted that the probabilities favour the Court finding that on 20 June 2019 Mr Sackl received an email from Steve Mo, solicitor for Auslink (also sent to the same email addresses) notifying him of the orders made by Button J that day specially fixing the hearing for the assessment of damages on 26 June 2019. Mr Mo also sent a notice of the damages hearing by mail on 26 June 2019 to the street address in Melbourne at which personal service had been effected. It would appear from an ASIC search that address ceased to be the official address for Mr Sackl's business on 1 August 2019.
Before turning to consider whether Mr Sackl has discharged the onus imposed upon him under UCPR 36.16(2) of satisfying the Court that in all the circumstances it would be unjust to allow the orders against him to stand, a question which involves an assessment, inter alia, of whether I regard his evidence that he was unaware of the proceedings as truthful, it is necessary to review, in a summary way, the nature of Auslink's claim against Mr Sackl and the circumstances in which that claim arose. What follows is derived from the statement of claim and his Honour's reasons for judgment.

[4]

The history of the proceedings

Auslink is a corporation that provides migration and education agency services to Chinese nationals who are seeking to migrate to Australia or to study in Australia.
Mr Sackl was a director of Sino Resources Group Pty Ltd ("Sino Singapore"). That company was formally registered in Singapore but was struck off the register of companies on 4 July 2016. Thereafter, it had no legal capacity to enter into any binding contractual arrangements. Mr Sackl was also the sole director and shareholder of Sino Resources Group (Aust) Pty Ltd ("Sino Australia") from 1 November 2015. That company was wound up by an order of the Federal Court of Australia on 12 October 2018.
In about January or February 2017, Ms Chen, on behalf of Auslink, entered into contractual negotiations with Mr Sackl. He was introduced to Ms Chen by Ms Weng as the Chief Executive Officer of Sino Singapore, a company which Ms Chen was told operated a "migration division" with branches all over the world. Ms Chen was also told that Sino Singapore was the parent company of Sino Australia and that both companies were managed by Mr Sackl.
At a meeting on 6 February 2017 attended by Ms Chen, Mr Sackl and Ms Wang, it was agreed that Auslink would advertise its services with a view to identifying potential clients in China and elsewhere who wished to migrate to Australia. Thereafter, Auslink would introduce their clients to Sino Singapore who would engage migration agencies to organise visas and identify Australian employers who would be willing to support the visa applications of Auslink's clients.
A Referral Agents Agreement ("the RAA") produced by Mr Sackl at the meeting was executed by Ms Chen on behalf of Auslink and by Mr Sackl on behalf of Sino Singapore. At the time of contract Ms Chen was not aware that Sino Singapore did not have the legal capacity to contract.
The RAA stipulated that Auslink would pay Sino Singapore, in advance, for the services to be provided by them at specified stages of the agreement being executed. It also provided for a refund policy of all payments made by Auslink to Sino Singapore on behalf of its clients where the specified services were not delivered by Sino Singapore.
Between 28 March 2017 and 26 April 2018, thirteen payments totalling $361,000 were received by Auslink from its clients under the RAA and paid to Sino Singapore. Three payments totalling $176,000 were deposited to Mr Sackl's personal bank account with the balance deposited to a nominated account or accounts associated with Sino Australia.
Auslink's claim for the refund of all monies advanced under the RAA for services undelivered by Sino Singapore was not met.
Auslink's claim for damages (whether liquidated or unliquidated) was based upon what was pleaded in the statement of claim as a series of false and misleading representations made by Mr Sackl in trade or commerce at the meeting on 6 February 2017, being representations upon which Auslink relied.
They included that Sino Singapore had the legal capacity to enter into the RAA; that it was a trading Corporation conducting business; that Mr Sackl was the chief executive officer of Sino Singapore and was authorised on its behalf to enter into the RAA with Auslink and to sign on its behalf and that Sino Singapore had the capacity to comply with the terms upon which payments made would be refunded if services were not delivered.
I note that in the affidavits filed on the motion, Mr Sackl puts in issue various of the matters of fact upon which the plaintiff's claim was brought, and various of the facts which were found established by Button J. He asserts that he was only ever a non-executive director of Sino Singapore and that any claim against that corporation should have been brought against the Singaporean director, Mr Ang Hock Hin, or Ms Weng. He also denies each of the false and misleading statements attributed to him. He asserts that his electronic signature was affixed to the RAA without his knowledge and that he did not attend any meeting with Ms Chen in February 2017 where the terms of the RAA were negotiated and settled. He says he has met Ms Chen only once, on an occasion prior to 6 August 2018 when he was introduced to her by his wife. He also puts in issue the construction of the RAA under which refunds were due and payable and asserts there is a triable issue as to whether the Australian Consumer Law extends to a claim which "may have arisen" in Singapore. Mr Sackl also deposes to denying any personal liability for what had become, by the date he swore his affidavit, a judgment debt in the amount of $389,069.22.
On the assumption that these contested matters of fact and law are what Mr Silver identified in his submission as demonstrating that there is a triable issue on the merits such as might attract the discretion to set aside the orders made by Button J, of considerable significance both to that question, and more generally to Mr Sackl's credit, is an email Mr Sackl agrees he sent to Ms Chen on 27 September 2018 (and from the email address james8sackl@gmail.com). In that email, referred to in the proceedings as the "refund letter", Mr Sackl confirms a willingness to refund "per our terms and conditions for the clients you have referred us and whom we have consulted and/or referred consulting assignments for". I will return to consider that email in the context of other correspondence between the parties at that time later in this judgment.
On 17 April 2019, Auslink filed a notice of motion under UCPR 16.3 and 16.6 for default judgment and an assessment of damages. That application was supported by an affidavit by Ms Chen sworn 16 April 2019 and further supported by Mr Papst's affidavit of service of 21 November 2018.
On 26 June 2019, Button J determined that the proceedings should be conducted ex parte. The matter was heard over two sitting days. Judgment was reserved on the second day. Judgment was published on 17 September 2019.

[5]

The evidence on the motion

Mr Papst's affidavit of service of 21 November 2018 is expressed in relatively formal language. He deposes to having personally served a person who identified himself as "James Sackl" at a nominated business address in Collins Street, Melbourne. In terms, Mr Papst said: At the time of service, I asked, "Are you James Sackl, the person named as the Defendant in this action?". The person served replied "Yes."
That affidavit was prepared in support of Auslink's application for default judgment and for the assessment of damages to be undertaken ex parte.
A further affidavit was obtained from Mr Papst for the purpose of these proceedings. In that affidavit, dated 20 February 2020, Mr Papst deposes to having a memory of attending the offices in Collins Street, Melbourne on 5 November 2018 when personal service on Mr Sackl was effected. He gave the following evidence: I recall that on 5 November 2018 I asked the receptionist at the Office if I could meet with James Sackl. I told the receptionist I had something for Mr Sackl that I needed to drop off. The receptionist went into the Office and returned with the man I identified as Mr Sackl. I recall that he was well dressed, but didn't wear a tie. I recall being surprised that Mr Sackl was younger than I had expected.
It appears that he was shown two photographs of Mr Sackl by Auslink's solicitor for the purposes of swearing the second affidavit. At paragraph 8 of that affidavit Mr Papst identifies the person in each of the photographs as the same person who identified himself as "James Sackl" on 5 November 2018, being the person upon whom he effected personal service of the statement of claim at that time. Mr Papst agreed in cross-examination that he was told that the photographs that he was shown by the solicitor were photographs of Mr Sackl, that is, he was not shown a photographic array of a number of people and invited to identify, if he could, the person he had served on 5 November 2018. It is not suggested that either photograph is other than a photograph of Mr Sackl at about the time of service.
In cross-examination Mr Papst confirmed that, as at November 2018, he had been working as a process server for a period of three months (since August 2018). He agreed that customarily his contact with the person to be served was relatively brief, sufficient to satisfy himself that personal service could be effected. He disagreed with the proposition that his working day would be "one long blur" and that he would not be able to remember the faces of those he had served in any one day. When it was put to him that he did not have a clear memory of what happened on 5 November 2018 before he was invited to prepare a further affidavit in February 2020, he disagreed. He gave evidence that he was able to recall the somewhat casual dress of the person he served. He said: I just sort of, I just sort of remembered. I was thinking that someone being a ‑ this is just a subconscious thinking of someone who was running a training institute would, possibly, going to be an older chap.
Mr Papst also gave evidence that he learnt that Mr Sackl was the CEO of a training institute from a business card he saw on the counter. In that regard, I note that Mr Sackl's offices in Collins Street, Melbourne were the offices of Ad Astra Institute Pty Ltd styled as an education institute in the Australian hospitality industry according to ASIC records. The ASIC Register in respect of that corporation was exhibited to Mr Dunn's affidavit of 6 March 2020. In summary, Mr Sackl was a director of that company (of which he was the sole director and secretary) upon its registration on 1 April 2016; ceased to be a director on 2 October 2018; was reappointed on 3 December 2018 and ceased again on 22 February 2019. On 28 August 2019, Ad Astra was wound up by order of the Supreme Court of Victoria and a liquidator appointed.
Mr Papst disagreed with the proposition that the only time he observed that Mr Sackl was a young man was when he was shown the photographs.
He was asked the following question: Q. And I put it to you, because this event happened many, many months after you've filed your/swore your second affidavit that you in fact do not have a fresh memory of what Mr Sackl looked like or what he was dressed liked at the time, what do you say to that? A. Well, I, I, I served that person who acknowledged his, his name. And at the time, I, I do recall the proximate age of the person. And as, as I said, it just stuck on my mind, for some reason. I was expecting someone to be older.
In Mr Sackl's affidavit of 18 December 2019 he denies being personally served with the statement of claim and says he does not know the man who identified himself to Mr Papst as "James Sackl" at the offices of Ad Astra in Collins Street Melbourne on 5 November 2018 at 1:40pm. He gave no evidence of who that person might be or who the receptionist might have approached to accept personal service on his behalf or who falsely represented himself to Mr Papst as "James Sackl" when he accepted service. Mr Sackl gave no evidence that there were other men working in the office, or anyone that might fit the description of the person Mr Papst served or, further still, anyone in the office on 5 November 2018 who shared such an uncanny resemblance to him as might explain why Mr Papst identified him as the person he served with the statement of claim when it was in fact someone who looked like him and pretended to be him.
I accept there are limitations on the reliability of identification by a single photograph or, as here, two photographs, where no photographic array is used and where the circumstances suggest that the person photographed is the person whose identity is in question, as was the case here. That said, I regard Mr Papst's evidence as worthy of acceptance. In particular, I accept his evidence that the circumstances in which he served "James Sackl" in November 2018 were sufficiently clear in his memory such that in December 2019 he was able to identify Mr Sackl as the person he served from his photograph. That evidence is of considerable weight on the question whether Mr Sackl has discharged the onus of satisfying me that he was not personally served with the statement of claim.
Mr Sackl also deposes to not having been notified by email from Ms Chen on 9 November 2018 confirming that service had been effected upon him on 5 November 2018 and having not been made aware by Mr Mo on 20 June 2019 or 26 June 2019 of Auslink's intention to seek default judgment against him or to have damages assessed ex parte. Under cross-examination (but not an affidavit) Mr Sackl said that none of the multiple email addresses to which that correspondence had been sent, first by Ms Chen within days of personal service of the statement of claim to which a PDF copy of statement of claim was attached, and then by Mr Mo as Auslink's solicitor in June 2019, were email addresses that were being used by him or accessed by him with any regularity. He did acknowledge, however, that upon being notified by Mr Dunn by email that a judgment had been entered against him, sent to the same two email addresses on 29 October 2019 (four months later), he took immediate steps to address the situation, including by asking Mr Dunn to provide him with a copy of the statement of claim, the affidavit of service and the judgment. Those documents were then sent to the email addresses in question: james8sackl@gmail.com ("the Gmail account") and james@dash.com.au ("the dash email account").
Mr Sackl gave evidence that "the dash email account" to which he copied Mr Dunn's email of 29 October 2019 (being one of the email addresses to which Ms Chen had sent confirmation of service in November 2018 and to which Mr Mo had forwarded correspondence in June 2019) ceased to be used by him in early 2018. He also gave evidence that "the Gmail account" to which the same correspondence had been sent by both Ms Chen and Mr Mo was not used regularly by him in 2018 or 2019. The explanation for why both addresses were reactivated in October 2019 in his correspondence with Mr Dunn bears close scrutiny. He said: Q. Well, the email addresses … appear on correspondence of that date both sent by you and copied to you. On what basis do you say that they were not email addresses used by you? A. On the basis that I, to the email from Mr Dunn I simply did "reply all". So it included an email address that he had sent it to which was James@dash.com.au and it was also to Soon Christopher, copied in the email. And that is the reason they appear as a carbon copy on the email address. Q. Is that your explanation for why james@dash.com.au appears in the copy line? A. That's correct, your Honour. Q. Can you explain to me then why the james8sakl@gmail.com appears in the line attached to your name as the email address from which that correspondence was sent? A. Yes, because that is the email address that I used to respond to Mr Dunn. Q. How does that evidence stand with your previous evidence that that was not an email address regularly used by you in 2019 because it was not loaded on to the server which served any of your devices? A. I would have needed to have logged in through the Gmail web application, so the Gmail website. I still maintain it wasn't an email address that was loaded on to any of my devices, your Honour. And it wasn't an email address that I checked regularly. HER HONOUR. Q. Why is it an email address you used to correspond with a solicitor? A. Because it was the email address that I was contacted via. And once this matter came to my attention it was the email address that I opted to use. Q. So you did opt to use it regularly in all of your legal dealings with Denton's after it came to your attention that default judgment had been entered against you? A. That's correct, your Honour. Q. But you maintain the evidence, do you that it was not an email address that you used at any time prior to that with any regularity? A. That's correct, your Honour.
Mr Sackl was also cross-examined about the refund letter which he sent to Ms Chen from his "Gmail account" on 27 September 2018. That letter, which I set it out in full below, is significant not only because of Mr Sackl's use of "the Gmail account" to send it, but because of what it reveals about his knowledge of Auslink's claim: Hi Cathy Confirming we are prepared to refund per our terms and conditions for the clients you have referred us and whom we have consulted and/or referred consulting assignments for. Our current process involves a 30-day review whereby we review the circumstances that triggered a refund and compare with the terms and conditions entered into by your company/the client and us. Once satisfied, a refund is usually enacted immediately after review however given the circumstances we will be forced to await the sale of properties we currently have on the market given our court-imposed restriction from encumbering these properties whilst divorce proceedings are on-going for me. I endeavour to keep you updated when properties have sold and what the settlement date/s are to be so that you may better inform your clients. If you have any questions please call me on 0490XXXXXX James
Early in his cross-examination, Mr Sackl gave evidence that at the time he sent the refund letter he knew the following:

The refund nominated by him "as per our terms and conditions" was in respect of clients Auslink had referred.
He knew Ms Chen was a director of Auslink.
He knew Auslink and a Singaporean company of which he was a director had entered into contractual relations.
He knew the terms and conditions of that agreement and that monies totalling $361,000 had been paid pursuant to the agreement into two bank accounts; one in his name and one in the name of Sino Resources Group (Aust) Pty Ltd, a company of which he was a director and shareholder.

Mr Sackl was asked how his use of "the Gmail account" to correspond with Ms Chen in September 2018 about "refunds" should be understood in light of his earlier evidence that it was an account he used only sporadically. He gave evidence that he had directed his IT contractor to divert certain "key words" to an "H in Box" to divert harassing emails from Ms Chen. In re-examination he gave the following further evidence as to why he used "the Gmail account" to send the refund letter in September 2018: Q. Could you explain again why you used that email [james8sackl@gmail.com] and not another email on that occasion? A. Sorry, the reason why I chose to use the james8sackl@gmail address was because at that point in time our IT contractor had already barred the receival and sending of emails that had certain key words in them, and one of them was, yes, the email address and the name of Ms Chen, so had I sent one out of there, it would not have sent out to her. Q. I see. You said that you sometimes‑‑ HER HONOUR: Sorry, I don't understand that. Q. So you used the james8sackl email because were you to use some other email it would have blocked Ms Chen as a sender, as a recipient? A. It would have done both, your Honour. Q. Why were you blocking a person with whom you had a commercial relationship? A. I think there was seven or eight email addresses that she was emailing on a frequent basis, I think it was several times a week, to unrelated businesses, and a decision was made that these emails were unsolicited and they were put into a storage inbox by our IT contractor.
No emails from Ms Chen (harassing or otherwise) that had been diverted from Mr Sackl's email account and held in a separate location were produced. When asked to nominate the email address used as a dedicated email for his commercial or business purposes in 2018 or 2019 he nominated: js@komma3.com.au. He claimed that was the email address supplied by him in his commercial dealings with Auslink. No email correspondence was produced in support of that assertion.
In cross-examination Ms Tang gave evidence that to her knowledge Mr Sackl used both "the Gmail account" and "the dash email account" email addresses in November 2018 but that he "blocked people" from his "Gmail account", including Ms Chen because she sent him "nasty emails".
Mr Sackl was not asked, either in further cross-examination or in re-examination, how his evidence of his knowledge of the various matters of fact in [38] above as at September 2018 was to be understood in light of his further evidence in cross-examination that while he was aware "payments had been received" from Auslink he was not aware of the amounts paid into his personal account or company account because he did not have any information about the contracts under which those payments had been made; he had no clear idea what clients had been referred by Auslink and he had no idea of the quantum of any refund claimed other than it was more than $1. He also gave evidence that after he sent the refund letter he did not have any further communication with Ms Chen concerning the refunds he was prepared to make, from which I assume he made no enquiries to determine the extent of any liability he or Sino Singapore might have had to Auslink despite telling Ms Chen in the refund letter that he was prepared to make payment, from the sale of a number of encumbered properties the subject of "divorce proceedings", after undertaking a "review of the circumstances that triggered [the] refund".

At a glance

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Judgment (6 paragraphs)

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Legislation Cited (2)

Cases Cited (2)

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