Deng v Qi, in the matter of Qi

Federal Court of Australia|2023-06-02|Before: Goodman J

Pursuant to r 10.24 of the Federal Court Rules 2011 (Cth), until further order the applicant be granted leave to serve the creditor's petition and any other documents filed in the proceeding, by causing such documents to be sent together with a copy of this order to: (a) the WeChat profile 'luobb719'; (b) the WhatsApp account #0416685788; and (c) the email address 'Luo@luoqi.com.au'.
Pursuant to r 10.24 of the Rules, service shall be taken to have been effected on the respondent 14 days after the latest of the steps in 1(a), 1(b) and 1(c).
Costs be reserved. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

INTRODUCTION 1 On 2 June 2023, on the application of the applicant, Ms Jiajing Deng, I made orders for substituted service of the applicant's creditor's petition and other documents. These are my reasons for doing so. 2 Ms Deng has filed a creditor's petition seeking a sequestration order against the estate of the respondent, Mr Luo Qi, under s 43 of the Bankruptcy Act 1966 (Cth). Ms Deng alleges that Mr Qi gave her a personal guarantee for $2,000,000 plus interest under an agreement titled Hydrogen Opportunity Capital Agreement entered into on or about 4 January 2022. This guarantee is alleged to secure the indebtedness of Oli Private Investment Pty Ltd (the Company), of which Mr Qi was a director and shareholder, to Ms Deng. Ms Deng claims that no repayment of principal or payment of interest has been made to her pursuant to the terms of the guarantee. 3 On 9 February 2023, the Company was placed into liquidation upon a resolution of its creditors. At this time, Messrs Phillip Campbell-Wilson and John McInerney of Grant Thornton were the appointed liquidators of the Company. On 5 April 2023, Messrs Campbell-Wilson and McInerney were replaced as the Company's liquidators by Ms Poh Bee Lau and Mr Christopher John Baskerville of Jirsch Sutherland.

Leave to serve the creditor's petition 4 Ms Deng's application also sought leave to serve her creditor's petition outside Australia under r 10.43 of the Federal Court Rules (2011) (Cth). However, given the effect of r 10.42, it is unnecessary for such leave to be granted. 5 Rule 10.42 provides that service of an originating application (such as a creditor's petition) outside Australia may be effected without leave in various circumstances including, relevantly, if the proceeding arises under a law of the Commonwealth and any act or omission to which the proceeding relates was done or occurred in Australia: r 10.42(j)(i). As Ms Deng seeks an order under the Act, and the basis of this claim is the guarantee which forms part of the Agreement, which was purportedly entered into in Australia, the requirements of r 10.42(j)(i) are met.

Orders for substituted service 6 Rule 8.06 requires that an applicant personally serve an originating application on each respondent as soon as practicable and at least five days before the return date of the application. Rule 10.01 provides that a document that is to be served personally on an individual must be served by leaving the document with the individual. Rule 10.24 provides: 10.24 Substituted service If it is not practicable to serve a document on a person in a way required by these Rules, a party may apply to the Court without notice for an order: (a) substituting another method of service; or (b) specifying that, instead of being served, certain steps be taken to bring the document to the attention of the person; or (c) specifying that the document is taken to have been served: (i) on the happening of a specified event; or (ii) at the end of a specified time. 7 In the context of the present application, r 10.24 requires consideration of whether it is not practicable to effect personal service of the creditor's petition upon Mr Qi. It is not necessary for Ms Deng to prove that it is impossible or futile to effect personal service upon Mr Qi: Ford, in the matter of Careers Australia Group Ltd (in liq) v Mansfield [2022] FCA 173 at [14] (O'Bryan J). It is also not necessary to adduce evidence of a failed attempt to effect personal service, or that such service is not possible: Federal Commissioner of Taxation v Zeitouni [2013] FCA 1011; (2013) 306 ALR 603 at 616 [66] (Katzmann J). 8 Whilst it is not an express requirement of r 10.24, it is appropriate to consider whether the method of substituted service proposed would be likely to bring the document to Mr Qi's attention. If so, that is a factor in favour of making an order for substituted service. 9 Ms Deng sought orders for service of the creditor's petition and other documents filed in this proceeding, to be taken to have been effected upon the expiry of 14 days after those documents are sent with a copy of the Court's orders permitting substituted service to: (1) WeChat profile 'luobb719'; (2) WhatsApp account #0416685788; and (3) email address 'Luo@luoqi.com.au'. 10 Ms Deng gave the following evidence in support of her application for substituted service. First, as to whether it is not practicable to effect personal service upon Mr Qi, that: (1) she has attempted to contact Mr Qi by calling and messaging his known mobile telephone number, WeChat account and WhatsApp, most recently on 5 May 2023, with these communications not having been answered by Mr Qi since 12 February 2023; (2) she has caused her solicitors to write to each of Grant Thornton and Jirsch Sutherland to identify the whereabouts of Mr Qi, with these enquiries resulting in: (a) an email from Mr Campbell-Wilson of Grant Thornton received on 20 May 2023, stating that for the period of his appointment (9 February 2023 to 5 April 2023) Mr Qi had been outside Australia; and (b) a letter from Ms Lau of Jirsch Sutherland, received on 26 May 2023, stating that she and Mr Baskerville are unaware of the current whereabouts of Mr Qi; (3) she has caused her solicitors to write to Mr Qi's former solicitors, Dentons, on two occasions, again without learning Mr Qi's location; and (4) two news articles, published by The Advertiser on 19 February 2023 and The Daily Telegraph on 23 February 2023, respectively claim that "[a]lmost 100 investors have joined social media groups in a bid to track down Oli Capital boss Luo Qi, who hasn't been seen in months" and that the Company's (then) liquidators "last week told The Telegraph that Mr Qi had left Australia". 11 Secondly, as to the methods of service proposed by Ms Deng, that: (1) in their dealings prior to about 12 February 2023, Mr Qi communicated with Ms Deng via the WeChat account 'luobb719'; (2) on about 12 February 2023, Mr Qi informed Ms Deng in a WeChat message that he has a WhatsApp account. The number of this WhatsApp account was shown in the annexures to Ms Deng's affidavit evidence to be #0416685788; and (3) in her dealings with Mr Qi, she has been provided with the email address "Luo@luoqi.com.au", from which she claimed Mr Qi had sent emails to her. 12 On the basis of Ms Deng's evidence summarised above, I was satisfied that: (1) it is not practicable for Ms Deng to effect personal service upon Mr Qi in circumstances where he has apparently left Australia and his present whereabouts are unknown; and (2) it appears likely that the proposed methods of service would bring the creditor's petition (and other documents filed in this proceeding) to the attention of Mr Qi. As such, it is appropriate for service to be taken to have been effected on Mr Qi 14 days after the latest of the steps described in [9] above has been completed. I certify that the preceding twelve (12) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Goodman.

At a glance

Court

Decision date

Before

Source

Judgment (4 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (3)