Huang v Liao

Supreme Court of NSW|2022-03-10|Before: Black J

J W Liao Pty Ltd as trustee for the Liao Family Trust (Second Defendant) Vustar Pty Ltd (Third Defendant) Peeq Pty Ltd (Fourth Defendant) MacPherson Kelley Pty Ltd (Fifth Defendant) Representation: Counsel: D Junn (Solicitor) (Plaintiffs) A Rizk (First Defendant)

Solicitors: Dixon Holmes (Plaintiffs) Broaden Legal (First Defendant) File Number(s): 2020/163163

Background facts

I now address the history of the dispute, the proceedings and this application. It appears that the underlying dispute in the proceedings concerns an alleged investment of $2.2 million made by Mr Huang in the Third Plaintiff, PEEQ Global Education Pty Ltd ("PEEQ"). The Plaintiffs claim that Ms Liao diverted those funds to the Second and Third Defendants, JW Liao Pty Ltd as trustee for the Liao Family Trust and Vustar Pty Ltd ("Vustar"). I do not propose to address those allegations further, where it is not necessary to do so in order to determine the questions in issue in this application, and it is preferable that I not address the substance of a matter which will ultimately be determined before another Judge.
On 1 June 2020, Ward CJ Eq made the Restraining Orders (Ex P3) which restrained Ms Liao from dealing with certain assets, including the Queensland Property and also ordered Ms Liao to provide certain information. Those orders were served on Ms Liao on 2 June 2020 and, on 4 June 2020, extended to 22 June 2020. Ms Liao was represented by a solicitor when the orders made on 4 June and 22 June 2020, were made. There is a dispute, which it is not necessary to resolve in this application, as to the extent of her contact with that solicitor.
By the 9 June 2020 Affidavit, Ms Liao claimed that the Queensland Property was subject to a second mortgage to the Shavell Trust and the amount outstanding was approximately $429,873. That affidavit is the subject of the ninth charge in this application. By an email dated 14 June 2020 (Ex P9), Mr Junn advised the solicitors then acting for Ms Liao that affidavits then provided failed to comply with the orders previously made by Ward CJ in Eq by failing to supply specified information.
On 22 June 2020, the Restraining Order was extended by Ward CJ in Eq until further order.
On 7 April 2021, Ms Liao appointed a new solicitor, Mr Lukas Lim, to act for her in the proceedings (Ex P2).
There is evidence that appears to support a conclusion that Ms Liao subsequently took steps to sell the Queensland Property despite the Restraining Order, consistent with Ms Liao's admission of liability in respect of the first five charges. A special condition to the contract for the sale of the Queensland Property dated 27 July 2021 evidenced knowledge of the Restraining Order, recording that the contract was conditional upon any "freeze orders placed on the property or the seller being removed, prior to settlement" (Ex P4, 115). I recognise that there is some evidence of Mr Graham Liao's involvement in the sale process, including an email dated 28 July 2021 from the estate agent sent, inter alia, to Mr Liao, although it referred to Ms Liao's request that the email be sent (Ex P4, 110). However, there are also multiple references in emails from the firm acting in the sale of the property to telephone conversations with Ms Liao in respect of the sale of the property (Ex P4, 133, 147). There are communications which, on their face, occur between the conveyancer and Ms Liao, including in Chinese (for example, Ex P4, 137, 141), and responses to emails from the conveyancer were also sent in Chinese and from Ms Liao's email address (Ex P4, 140). Other communications were apparently sent from Ms Liao's iPhone (Ex P4, 145) although I recognise that Ms Liao claims that her husband had access to that iPhone. The proceeds from the sale were deposited to a trust account in Ms Liao's name (Ex P4, 193). These matters do not sit well with a claim that Mr Liao conducted the sale process, to Ms Liao's exclusion, since he did not write or speak Chinese, without postulating an elaborate conspiracy by which Mr Liao sometimes translated his correspondence from English to Chinese and sent it from his wife's electronic devices in order to create the impression it was sent by his wife.
An email dated 1 September 2021 to the conveyancer, sent in Ms Liao's name, indicated that she was content to settle the sale of the Queensland Property on 13 September 2021 as long as she did not have to move until 7 October 2021 and NAB had released the title. That email was a response to an email from the conveyancer in Chinese addressed to Ms Liao, although Ms Liao denies that she sent the email and seeks to suggest that her husband did so. It is not necessary to determine that question to determine the contested liability issues, although it will likely be necessary to determine that question in relation to penalty.
On or about 13 September 2021, Ms Liao disposed of the Queensland Property and it is common ground that took place in breach of the Restraining Order. By the 16 November Orders and further orders made on 30 November 2021, Ward CJ in Eq required Ms Liao to file and serve an affidavit updating her assets and liabilities and identifying the account details where the proceeds of sale of the property were located. By an email dated 2 December 2021 (Ex P3, 55), the then solicitors for Ms Liao conveyed "sincere apologies for the non-compliance with orders" and provided an account number for a bank account in Guanzhou, China, where sale proceeds had been deposited.
By the 6 December 2021 Affidavit, Ms Liao claimed she did not know there was a freezing order on the Queensland Property. The eighth charge in this application alleges that affidavit was false and amounted to a contempt of Court. By an email dated 6 December 2021 (Ex P7), Mr Junn advised the solicitor then acting for Ms Liao that a further affidavit dated 6 December of Ms Liao's husband did not comply with the 16 November Orders, the further orders made by Ward CJ Eq on 30 November 2021 and the 3 December Orders, because it was not an affidavit of Ms Liao and did not contain specified information.
On 14 December 2021, the Plaintiffs filed a motion seeking declarations of contempt against Ms Liao, accompanied by a Statement of Charge, and Kunc J issued a warrant for Ms Liao's arrest, when she was in China. Ms Liao was arrested on her return from China on 13 February 2022, and brought before the Duty Judge, Parker J on that day, and his Honour ordered that she be held in remand. At the conclusion of the hearing on 14 February 2022, Henry J made orders that Ms Liao remain in custody unless security in the sum of $600,000 was provided and Ms Liao surrendered her travel documents. No such security was provided. Her Honour also directed that Ms Liao provide an updating affidavit as to her assets and liabilities by 18 February 2022 and the matter be stood over to her on 21 February 2022. Ms Liao did not comply with the order to provide such an affidavit. The matter was then listed before Henry J on 21 February 2022, further directions were made and the matter was adjourned for hearing before me, initially with an estimate of two hours, although the hearing as to liability alone ultimately took two days. I continued the order that Ms Liao remain in custody unless such security was provided, in the absence of any change in circumstances and given the apparent strength of the case against her, when the matter was listed before me for hearing on 10 March 2022.
At the hearing on 10 March 2022, I dismissed the Plaintiffs' further application to amend and expand the charges brought against Ms Liao. I proceeded, by agreement between the parties, on the basis that the hearing on 10 March 2022, continued on 23-24 March 2022, was directed to the question of liability with the question of penalty to be heard subsequently.

Affidavits

The Plaintiffs rely on the affidavit dated 14 December 2021 of their solicitor, Mr Junn which records aspects of the orders made in the proceedings and correspondence between the solicitors. The documents annexed to that affidavit include communications between Ms Liao and her conveyancing solicitors in English and Chinese and refer to conversations in respect of the sale of the Queensland Property, and, as I noted above, the contract for sale included a special condition that required the freezing order to be removed before completion, which was not satisfied. By a second affidavit dated 14 February 2022, Mr Junn referred to evidence led by Ms Liao in the proceedings and to communications relating to the sale of the Queensland Property.
Ms Liao read her affidavit dated 3 March 2022 which she said was prepared with the assistance of her solicitor, with whom she could communicate in Mandarin, and that affidavit had been translated for her by an accredited Mandarin translator.
Ms Liao there refers to her occupational history in China, to her move to Australia in 2005 and the grant of permanent residency to her in 2008. She refers to her and her then husband's purchase of the Queensland Property in 2008, and notes that it was registered in their names jointly. Her evidence is that the Queensland Property was transferred to her sole name in 2012 and (in evidence admitted with a limiting order under s 136 of the Evidence Act 1995 (NSW) as a submission) that that occurred as part of a financial settlement following her and her then husband's separation. She refers to meeting her current husband, Mr Graham Liao, to their marriage in early 2013 and to the fact that they lived at the Queensland Property until it was sold in September 2021. Ms Liao's evidence (Liao 3.3.22 [19]) is that she relied on Mr Liao "due to language barriers" and that he had "always managed all financial and legal aspects" of their life. She also claims she trusted her husband and would sign anything passed to her by her husband and that he had access to her emails.
Ms Liao acknowledges that she has developed "some basic English skills" and is able to communicate orally in simple English during daily life (Liao 3.3.22 [21]-[22]). She claims that her ability to write and read written English is limited and that she has "trouble understanding" complex or technical documents, such as legal documents, when written in English. Her evidence is that Mr Liao does not speak Mandarin and has limited understanding of Chinese in general and (in evidence admitted with a limiting order under s 136 of the Evidence Act as a matter of submission only) that this limits his ability to translate documents to her. Ms Liao also refers to her husband's business dealings and to the circumstances of the litigation involving PEEQ. It is not necessary to address the circumstances of those proceedings to determine whether Ms Liao is liable in contempt for the matters as to which she does not admit liability.
Ms Liao also refers to her engagement of legal representatives in the proceedings and claims that her daughter and mother have been paying her legal fees. Her evidence is that, until she retained her current solicitor in February 2022, the legal representatives representing her in the proceedings have not spoken Mandarin or understood Chinese (Liao 3.3.2022 [41]). She claims that she had limited communication with the solicitors previously retained in the proceedings, although she did not lead evidence from those solicitors to corroborate that evidence. She also claims to have signed documents in respect of the proceedings at her husband's request.
Ms Liao acknowledges in that affidavit that, in June 2020, she was delivered documents, although she claims she did not understand them, and that her husband told her a freezing order had been issued by the Court and she could not sell the Queensland Property. She claims that she was later told by her husband that freezing orders must be extended every 90 days. She claims to have subsequently signed a document with a lawyer to respond to the freezing order, and identifies that document as the 9 June 2020 Affidavit (Liao 3.3.22 [53]). She refers to a further conversation in May or June 2021 with her husband which led her to form the impression that she was "no longer in trouble" and did not need to have further involvement in the proceedings (Liao 3.3.22 [54]). She claims that, in July 2021, her husband told her that the freezing order was not extended and she could sell the Queensland Property, to which she responded that she did not want to do so, and refers to subsequent dealings with a real estate agent and with her husband in respect of the sale of the Queensland Property. Her evidence is that the solicitors who acted in the conveyance of that property did not explain to her the reference to the freezing order that was included in the contract for sale of the property. Ms Liao claims that, when the Queensland Property was listed for sale and until its sale, she did not understand that its sale was in breach of the Restraining Order (Liao 3.3.22 [58]). Ms Liao's evidence is that she did not write emails which related to the sale of the property, sent from her email address, and she claims that her husband did so. It will not be necessary to determine that question, which turns on Ms Liao's credit, at the liability hearing. Ms Liao also claims that her husband directed her as to which documents to sign to proceed with the sale of the Queensland Property (Liao 3.3.20 [70]).
Ms Liao's evidence is that, after the sale of the Queensland Property, her husband asked her to transfer the money to him, but she insisted on transferring "some money", in fact constituting over $825,000, to her daughter in Queensland and her brother in Hong Kong. She claimed, in March 2022, that she had not "had a chance to ask for the money to be returned to me" because of her arrest and incarceration after she returned from China to Australia (Liao 3.3.22 [76]). It is also not necessary to determine whether that evidence should be accepted, although it appears she had made numerous telephone communications between her arrest and when she was brought before the Court. She also refers to the circumstances of her travel to China in late November 2021.
Ms Liao was cross-examined at substantial length, but it is not necessary or desirable to express any view as to her credit in order to determine the question of liability, and it is preferable not to do so given that question will be central in determining the applicable penalty.
By an affidavit dated 3 March 2021, Ms Liao's daughter, Ms Chen, gave evidence seeking to establish that Ms Liao had limited written English skills and that she had lent money to her mother, and contending that she would repay her mother the sales proceeds of the Queensland Property less any monies her mother owes to her. There is no evidence that any such repayment has been sought or made. By her further affidavit dated 16 March 2022, Ms Chen again gave evidence that her mother had difficulty communicating in and understanding written English, although she accepted in cross-examination that her communications with her mother took place in Chinese, which may have limited her ability to observe her mother's communications in English. She referred to questions asked by her mother, and annexed a screenshot of those questions, although those questions appear largely to be directed to seeking advice as to matters of language, or advice as to the preferable answer to the questions, and another example which Ms Chen described as her "translating" a message appears to reflect Ms Liao's request that Ms Chen draft that message, rather than translate it.
There was also substantial other evidence in the proceedings concerning Ms Liao's background and English skills, and Ms Liao was cross-examined at length in that regard. Ms Liao does not contest, and the transcript of the proceedings before Henry J on 14 February 2022 (Ex P6) confirms, that she has at least some ability to understand and communicate, in oral English. The question of her ability to read written English is more contentious. In 2005, Ms Liao completed an application to visit Australia for tourism, where the questions were formulated in English and Chinese but her answers were largely provided in English. She there stated, inter alia that: "I am a boss and shareholder. Our company the business all well. When I visit to Australia stay 2 months, I will during enough money and my fiance [sic] will offer the Accommodation and some costs." Ms Liao denied the truth of the statements as to her role in cross-examination. She declared in that form that she had completed it with no assistance, although she also denied the truth of that statement in cross-examination; and that form also acknowledged that, if the form had been completed with the assistance of another person, the information was true and correct and had been included with her knowledge, consent and understanding. That document attached a further statement of over a page, in English, signed by Ms Liao, which recorded that she was "learning English" to address her plans for marriage to her first Australian husband. Ms Liao was also cross-examined as to her description of her occupation as "accountant", in the certificate of marriage to her first husband dated 23 October 2005, and denied the accuracy of that description of her occupation in cross-examination (Ex P5, 349).
More recently, on 20 May 2021, Ms Liao sat a citizenship test in respect of her application for Australian citizenship that was administered in English. That test, as described in a letter dated 20 April 2021 from the Department of Home Affairs (Ex C5, 355) was as follows: "The citizenship test is conducted in English, consists of 20 multi-choice questions and is computer-based. You will have 45 minutes to complete the test. If you do not complete the test within that time, a result will be given based on the questions you have completed. No extensions of time will be granted." That test was "closed book" and communication with anyone, by phone or otherwise, other than the test administrator was prohibited. In order to prepare for the test, Ms Liao was required to read a resource booklet, which was available in English and other community languages. The testable section covered material including Australian political values, the structure of Government and the law in Australia, and practice test questions were provided. On the face of it, Ms Liao would have had to read the questions and read the answers in order to choose the correct answers and achieve the pass mark of 75%, although she claims that she could only read them because she had studied the material in its Chinese version. Ms Liao passed that test, in English, because she was advised by letter of the same date that her application for Australian citizenship had been approved.
I am conscious that Ms Liao's claim not to read English, at least in respect of complex matters, is inconsistent with the fact that she has affirmed multiple affidavits in English and without the aid of an interpreter. However, there is a question, on the evidence before me, as to whether that reflects a default on the part of her former solicitors, in failing to recognise that she required an interpreter and to engage an interpreter so that she understood those affidavits before they were affirmed. I am conscious that issues also arose in Ms Liao's cross-examination as to the circumstances in which such affidavits were affirmed, with Ms Liao at times denying that she affirmed them before a solicitor, whether in person or virtually, although those affidavits recorded that they were affirmed before a solicitor, either in person or virtually. It is again not necessary to determine that question in order to determine this application.

Applicable principles

I should first note the source of the Court's jurisdiction to punish Ms Liao in contempt. Uniform Civil Procedure Rules 2005 (NSW) r 40.6 relevantly provides: 40.6 Doing Or Abstaining From Doing An Act (1) This rule applies in the following circumstances: (c) if: (i) a judgment requires a person to abstain from doing an act, and (ii) the person disobeys the judgment, but does not apply to a judgment for the payment of money (including a judgment for the payment of money into court). (2) In circumstances to which this rule applies, a judgment may be enforced by one or more of the following means: (a) committal of the person bound by the judgment …
Part 55, rule 13 of the Supreme Court Rules 1970 (NSW) in turn provides that, where a contemnor is not a corporation, the Court may punish contempt by committal to a correctional centre or fine or both; and the Court may make an order for punishment on terms, including a suspension of punishment or a suspension of punishment in case the contemnor gives security in such manner and in such sum as the Court may approve for good behaviour and performs the terms of the security.
I now turn to the applicable principles, and I have drawn on my summary of these principles in Re Mycorp Pty Ltd [2014] NSWSC 899 and the judgment of Bell P (as the Chief Justice then was) in NHB Enterprises Pty Ltd v Corry (No 7) [2021] NSWSC 741 ("NHB Enterprises") in setting out those principles. In Australasian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106; [1986] HCA 46, Gibbs CJ, Mason, Wilson and Deane JJ observed that: "Punishment for contempt serves two functions: (a) enforcement of the process and orders of the Court, disobedience to which has been described as 'civil contempt'; and (b) punishment of other acts which impede the administration of justice, such as obstructing proceedings in Court while it is sitting or publishing comments on a pending case, which have both been described as 'criminal contempt' … . The principal theoretical basis of the distinction is that disobedience to the process and orders of the Court in civil proceedings is said to be a civil wrong, a matter between party and party, enforcement being for the private benefit or interest of the party seeking enforcement … . A secondary basis for the distinction is that the main purpose of sanctions for disobedience in civil proceedings is coercive rather than punitive." Their Honours nonetheless noted (at 107-108) that there was difficulty in maintaining the decision and elaborating a certain criterion for it.
In Australian Competition and Consumer Commission v Hughes [2001] FCA 38, Tamberlin J similarly pointed to the rationale for punishment of contempt of court at [15] as follows: "Ultimately, in the case of mandatory or prohibitory orders made by it, the sanction which the Court has in order to enforce its decisions is the power to punish for contempt. This is the way in which the Court preserves respect for its role and the rule of law. … Defiance of Court orders diminishes the authority of Courts and removes the incentive of parties, if such conduct is left unpunished, to comply with the requirements of the Court." That observation was cited with approval by Tracey J in Zomojo Pty Ltd v Hird (No 5) [2014] FCA 537 at [53].
The elements which need to be established in an application seeking to establish a civil contempt arising from non-compliance with a court order were summarised by Gillard J in National Australia Bank Ltd v Juric [2001] VSC 375 at [37], in a passage followed in Advan Investments Pty Ltd v Dean Gleeson Motor Sales Ltd [2003] VSC 201 at [31], Wyszenko v Wyszenko [2012] NSWSC 732, Re MyCorp Pty Ltd above and in Humane Society International Inc v Kyodo Senpaku Kaisha Ltd (2015) 238 FCR 209; (2015) 333 ALR 713; [2015] FCA 1275 ("Humane Society") at [9], as requiring, relevantly, that an order was made by a court; the terms of the order were clear, unambiguous and capable of compliance; the alleged contemnor had knowledge of the terms of the order; and the alleged contemnor breached the terms of the order.
Proof of a specific intent to disobey the Court's order is not necessary to prove civil contempt: Australasian Meat Employees Union v Mudginberri Station Pty Ltd above at 110-114, where the Court held that a deliberate commission or omission which is in breach of an injunctive order or undertaking will constitute wilful disobedience unless it is casual, accidental or unintentional. The alleged contemnor may establish by way of exculpation that his or her default was of that character: Universal Music Australia Pty Ltd v Sharman Networks Ltd (2006) 150 FCR 110 at [15]-[18]; Anderson v Hassett [2007] NSWSC 1310 at [4]. In Markisic v Commonwealth of Australia (2007) 69 NSWLR 737; [2007] NSWCA 92, Campbell JA, giving the decision of the Court of Appeal, similarly observed (at [64])) that "proof that a contempt has been committed by breaching a court order involves proving enough to conclude that the action or inaction said to constitute the breach was deliberate, and not casual, accidental or unintentional."
The case law has also addressed issues as to the extent to which it is necessary that a person charged with content understand the relevant order. In Sun Newspapers Pty Ltd v Brisbane TV Ltd (1989) 92 ALR 535 ("Sun Newspapers") at 538, Pincus J observed that: "It does not appear to be necessary to show, in circumstances of this sort, that the person charged was aware of the full terms of the order; the cases speak of "knowledge of the order" or being "aware" of the order: see Attorney-General (NSW) v Mayas Pty Ltd (1988) 14 NSWLR 342 at 355-6 per McHugh JA (as he then was); Z Ltd v A-Z [1982] 1 QB 558H, 586C at 572 . Apart from authority, the point may be illustrated as follows. If a person sitting in court heard most, but not all, of the terms of an injunction pronounced by a judge and then promptly left to arrange matters so that what he knew to be the court's intention would not take effect, it does not seem likely that his not having heard the full terms of the order would be a defence to a charge of contempt, whether or not he was a party to the proceedings."
That decision has subsequently been applied on many occasions. In Commissioner for Fair Trading v TLC Consulting Services Pty Ltd [2011] QSC 233 at [21], the Court observed by reference to authority including Sun Newspapers that: "At common law, there is no broad rule that the accused must be proved to have been fully aware of the precise terms of the order or undertaking. In relation to a prohibitory order, it is sufficient that he or she "knows the substance of the prohibition and knowingly acts contrary to it" … or has knowledge at a level that would induce an honest, reasonable, and responsible person to check the precise terms of the order …".
In Humane Society at [18], the Court observed, with reference to Sun Newspapers and other case law, that: "The point of requiring service of a court order is to bring matters to the attention of the party in question. It is not the case that a party can avoid having to comply with a court order and thereby can avoid the potential of being found in contempt of court merely by engaging in wilful blindness to the terms of the court order."
In District Council of Cooper Pedy v Naumovicy [2020] SASC 79 at [68], the Court referred to, inter alia, Sun Newspapers as establishing that "[a] person enjoined by a court order cannot avoid being found guilty of contempt for breach of that order by engaging in wilful blindness to the terms of the order".
In Kirkpatrick v Kotis (2004) 62 NSWLR 567 at 578, Campbell J also observed that the recipient of a Court order "is expected to try to understand it and obey it" and that observation was approved in Athens v Randwick City Council (2005) 64 NSWLR 58 at 71, where Hodgson JA observed that: "It is very desirable that orders be completely self-contained and self-explanatory. However, as pointed out by Campbell J in Kirkpatrick (at 578 [55]), the recipient of an order is expected to try to understand and obey it". That decision was in turn applied in Ip v Chiang [2019] NSWSC 1549 at [49].
There was reference to the question of translation of an order in In the Marriage of Georgopoulos (1982) 8 Fam LR 807 at 809, where Evatt CJ observed that: "… I would like to comment that in this particular case, and in many which come before the court, parties have some difficulty in understanding not only the English language but also the system of Family Law which applies in Australia. In this case the person against whom contempt is alleged has required the assistance of an interpreter in appearing in court. It may be important in such a situation to ensure that copies of court orders have annexed an appropriate translation or at least that they are interpreted to the party in question. There could arise cases - I do not say this case - where the court may not be satisfied that the person knows of an order, if that order is in the English language and the person does not understand English and has not had an oral or written translation. I do not intend these comments to be an indication of my view about this particular case."
It is not necessary to address that observation here, although it is likely to be necessary to do so at the penalty stage. It is sufficient to note here that there is plainly a question why the obligation of a recipient of a Court order to understand the Court order would not extend beyond reading it to taking such steps to translate it as are necessary to read it, particularly where, as the evidence in this case showed, translation software and applications have advanced since 1982 so that texts can be translated from Chinese to English by readily available applications which are widely used. I also note that, in Deckers Outdoor Corp Pty Ltd v Farley (No 6) [2010] FCA 391, the alleged contemnor was found liable (in charges 36 and 37) for contempt of orders made in November 2007 and personally served on him, despite his evidence that he did not recall receiving them and could not read English, although without extended analysis.
It is not necessary for the applicant to establish that the alleged contemnor understood the true meaning of the terms of the order or that he or she was aware that his or her conduct constituted a breach of the order, although the construction placed by the alleged contemnor upon the order may be relevant to the question of penalty, which is not presently before me: Microsoft Corporation v Marks (No 1) (1996) 69 FCR 117 at 143; 139 ALR 99. In Louis Vuitton Malletier SA v Design Elegance Pty Ltd [2006] FCA 83; (2006) 149 FCR 494 at [6], Merkel J observed that: "Deliberate conduct which is in breach of a Court order will constitute wilful disobedience of the order, and therefore a civil contempt, unless the conduct be casual, accidental or unintentional: see Australian Meat Industry Employees' Union v Mudginberri Station Pty Ltd (1986) 161 CLR 98 at 106-107 ('Mudginberri') and 112-113. … However, as all proceedings for contempt are now regarded as criminal in nature, all of the charges must be proved beyond reasonable doubt: see Witham at 534."
In NHB Enterprises, Bell P observed (at [192]-[193]), that breach of a Court order amounts to a contempt and that "[w]here contempt is said to consist of failure to comply with a court order, it must be demonstrated that the contempt was wilful, and not merely casual, accidental or unintentional." The President observed (at [195]) that the overwhelming weight of authority is strongly in favour of the criminal standard of proof applying to such proceedings, but also noted an open question whether, in proceedings to which the Evidence Act applies, the applicable standard is that specified in s 140 which prescribes the civil standard of proof on the balance of probabilities, but having regard to the nature of the subject matter of the proceedings and the gravity of the matters alleged: Eshow v Zaia [2020] NSWCA 10 at [23]ff. It was not necessary for him to decide and it is not necessary for me to decide that question. The President also there noted (at [203]ff) that the traditional distinction between civil and criminal contempt has not been abolished.
The President also observed (at [209]ff), in an observation which is of particular significance for one charge in issue here, that: "In Furlong [v Wise & Young [2019] NSWSC 1718] at [101], Ward CJ in Eq summarised the various procedural requirements to be satisfied on a hearing of a contempt charge, noting, with reference to Lane v The Registrar of the Supreme Court of New South Wales (Equity Division) (1981) 148 CLR 245 at 257; [1981] HCA 35, that the charge must be distinctly stated and that the party bringing the charge of contempt will be held to the precise formulation of the charge. Her Honour referred to Construction, Forestry, Mining & Energy Union v BHP Steel (AIS) Pty Ltd [2001] FCA 1758 at [32], where Lee and Finn JJ said that "[u]nless and until an application is allowed to alter a particularised statement of charge, the accused is entitled to insist that he or she is only required to meet the charge as made". See also Mirus [Australia Pty Ltd v Gage [2017] NSWSC 1046] at [119]; and McDonnell v Novello [2006] NSWSC 1186 at [26]. Further, in Mahaffy [v Mahaffy (2018) 97 NSWLR 119; [2018] NSWCA 42] at [92], Simpson JA noted that a charge of contempt should specify the nature of the contempt by providing proper particulars, and that there can be no conviction for contempt by breach of an order which is ambiguous, there relying on Lewis v Ogden (1984) 153 CLR 682 at 693; [1984] HCA 26 and [Australian Consolidated Press Limited v] Morgan [(1965) 112 CLR 483 at 489; [1965] HCA 21]."
The President also there reviewed several cases relating to breach of Court orders, including Toyota Finance Australia Limited v AJI Enterprise Group Pty Ltd [2019] NSWSC 33, where the plaintiff sought an order that the defendant be dealt with for contempt of Court, and one count related to the defendant disposing of or otherwise dealing with any of ten vehicles without its prior written consent, and another count related to the defendant's alleged failure to deliver up the vehicles to the Plaintiff. The Court was (at [167]) not satisfied beyond reasonable doubt that the defendant had the requisite knowledge of the terms of the Court orders, where the orders were served by email but it was not established they came to the defendant's attention, so as to permit a conclusion that any breach of one or more of those orders was a contempt of Court. He also referred to Commonwealth Bank of Australia v Salvato (No 4) [2013] NSWSC 321, where Garling J held that the defendant was guilty of contempt as he deliberately breached, and had remained in breach of, an undertaking he had given to the Court, that he would give possession of a property, vacate the property, and hand over the keys to the Commonwealth Bank by a specified date.

Charges 1 - 5

As I noted above, in her submissions in respect of liability, Ms Liao confirmed that she did not contest the first five charges, and foreshadowed, appropriately, that separate submissions would be made as to the appropriate penalty for that charge.

Charges 6 and 7

Before turning to these charges, I should refer to wider aspects of the submissions made by Mr Junn, solicitor, who appears for the Plaintiffs. In his submissions in chief, Mr Junn referred to the background to the proceedings, the issues in dispute in them, to which I have referred above, and to the making of the Restraining Order. He contended that Ms Liao had not complied with an order to swear an affidavit providing certain information made in connection with the Restraining Order, but there is no issue as to that matter to be determined in respect of this application and I do not address it further.
These two charges raise the same issues. Charge 6 concerns an allegation that Ms Liao failed to comply with order 5 of the 16 November Orders, namely: "Order the first defendant to file and serve by close of business on 18 November 2021 an updating affidavit as to assets and liabilities including as to the ownership of the Queensland Property in which the first defendant is said to reside and the disposal of any proceeds of sale of that property."
Charge 7 concerns an allegation that Ms Liao failed to comply, and has continued to fail to comply, with Order 1 of the 3 December Orders, namely: "Direct the first defendant, by no later than 1pm today, to provide full details of the account in which the sale proceeds of the Queensland property have been deposited, including without limitation the name of the account holder, the address of the bank and any other details necessary for the plaintiff to make enquiries in relation to the deposit of the funds."
Mr Rizk, who appears for Ms Liao, rightly accepts that a contempt may be constituted by a breach of a court order. Mr Rizk submits that, to prove this charge, the Plaintiffs must prove (beyond reasonable doubt) that an order was made by a court; the order was sufficiently clear such that one can be sure beyond reasonable doubt that the order was not complied with; the order was served on the alleged contemnor or that service was for some reason dispensed with under some lawful order; the alleged contemnor had knowledge of the terms of the order; the alleged contemnor breached the order; and the alleged contemnor took a deliberate step which, even if not intended to, breached the order: Kazal v Thunder Studios Inc (California) [2017] FCAFC 111; Bellerive Homes Pty Ltd v FW Projects Pty Ltd [2019] NSWSC 193 at [38]; Re Jimmy's Recipe Pty Limited [2020] NSWSC 93 at [71]. Ms Liao accepts that she did not comply with Order 5 of the 16 November Orders and Order 1 of the 3 December Orders and those orders were sufficiently clear. He submits that the Plaintiffs must prove the remaining elements beyond reasonable doubt.
Mr Junn submits that an inference should be drawn that Ms Liao knew of the orders because she was represented by Mr Lim between April 2021 and December 2021 and he was actively corresponding with Mr Junn's firm in November and early December 2021. However, he did not identify any authority for a proposition that the knowledge of Ms Liao's solicitor could be attributed to her as her agent, in a contempt application. He also accepted in oral closing submissions that there is no direct evidence that Ms Liao's then solicitor sent a copy of the 16 November Orders or the 3 December Orders to her (T93). He submits that an "assumption" would be made in Court proceedings that service of the orders upon the solicitor was service upon Ms Liao (T93), but could not point to any authority supporting that proposition in a claim for contempt.
There was here no correspondence indicating that Mr Lim provided a copy of the orders to Ms Liao, either in English or in Chinese, and no evidence of other communications between Mr Lim and Ms Liao on any regular basis to allow the Court to draw any properly based inference that Mr Lim was in the habit of providing Ms Liao with regular reports of what occurred in the proceedings, including matters that directly affected Ms Liao's interests. I appreciate that that a solicitor would ordinarily do so, particularly in respect of a matter of importance such as a mandatory order directed to Ms Liao. However, it does not seem to me that the fact that a solicitor would ordinarily do so allows me to draw an inference that Mr Lim provided the November Order to Ms Liao or advised her of its content, with the confidence necessary to establish the charge beyond reasonable doubt or even on the balance of probabilities having regard to the serious character of an allegation of contempt. I am also not able to infer that Mr Lim had advised Ms Liao of the 3 December Orders, for the same reasons that I cannot infer that Mr Lim advised Ms Liao of the 16 November Orders, to the requisite standard of proof.
Mr Junn also relied on the 6 December Affidavit, which I address below, to support an inference that Ms Liao had actual knowledge of the 16 November Orders. I am also not able to infer, from the fact of the 6 December Affidavit, that Mr Lim had advised Ms Liao of either the 16 November Orders or the 3 December Orders, where that affidavit is directed to seeking to rebut an allegation of breach of the earlier Restraining Orders, rather than to provide any of the information that would be necessary to comply with the 16 November Orders or the 3 December Orders.
In closing submissions, Mr Rizk responds that the only evidence in support of the Plaintiffs' contention that Ms Liao knew of the 16 November Orders or the 3 December Orders is that she was legally represented when the orders were made, and that a lawyer appeared in Court on one or both of those occasions. Mr Rizk questions whether those matters, without further evidence, would be sufficient to satisfy the Court beyond reasonable doubt that she had actual knowledge of those orders. Mr Rizk also refers to other matters, which depend on an acceptance of Ms Liao's evidence, including the claim that she had limited ability to communicate with the solicitor, because of language difficulties, and limited communications with the solicitors, and her denial of knowledge of the 16 November Orders or the 3 December Orders. That evidence depends on an acceptance of Ms Liao's evidence, as to which significant credit issues may need to be determined at the penalty stage. It is not necessary to address it, where the Plaintiffs have not established the evidentiary basis for the charges.
Mr Junn did not put any alternative basis for these charges relying only on Ms Liao's knowledge of the 16 November Orders and the 3 December Orders, arising after the Statement of Charge was served in this application, or seek to sustain them on the more limited basis of a failure to comply with those orders after that date and while this application was under way. I should not reach a finding adverse to Ms Liao on that basis where that claim was not put in that way so as to allow her an opportunity to respond to it. These charges are therefore not established beyond reasonable doubt, or to the requisite standard under s 140 of the Evidence Act.

Charge 8

Charge 8 concerns an allegation that Ms Liao swore a false affidavit (the 6 December Affidavit) stating that she did not know that there was a freezing order on the Queensland Property. There is plainly a difficulty with Ms Liao's 6 December Affidavit, where she there claimed that: "My husband told me to sell the [Queensland Property] on or around July 2021. I did not know that there was a freezing order on the property. My husband managed the financial and legal matters in our relationship."
At worst, that affidavit is false, where Ms Liao now accepts, in her affidavit dated 3 March 2022, that she had at least been informed by her husband of the Restraining Order and the fact that it prevented the sale of the Queensland Property, although she also says that he later told her that it had ceased to have effect. At best, that affidavit is seriously incomplete and misleading, in omitting reference to Ms Liao's earlier knowledge of the Restraining Order and her claimed reliance on her husband's statement that it had ceased to take effect.
Mr Junn relied on Ronowska v Kus (No 2) [2012] NSWSC 817 at [64]ff ("Ronowska") in support of this charge. Pembroke J there held that the giving of false evidence amounted to contempt in the particular circumstances that its purpose was to conceal the breach of an earlier Court order and allow further time to disperse proceeds of sale of a property. However, his Honour there observed (at [65]) that punishment for contempt would "usually be inappropriate" for "mere perjury" and referred (at [66]) to the observation of Barwick CJ in Keeley v Brooking (1979) 143 CLR 162 at 169-170 that: "If it could be concluded beyond all reasonable doubt that the false swearing was with the actual or inevitable intent or consequence of frustrating or obstructing the proceedings, the party or witness could be dealt with for contempt of the tribunal. But that intent or inevitable consequence would differentiate what I might call mere perjury from contempt. The contempt would lie in the obstruction or frustration of the proceedings actually intended or necessarily consequential."
Pembroke J also there observed (at [67]) that, in order to establish contempt: "… there will usually need to be more than false evidence. In Croll v Reeves [2005] QCA 77 Keane JA, with whom McPherson JA and Fryberg J agreed, referred to "the class of case of a palpably false answer" which was "calculated to frustrate the processes of the court before whom the evidence is given". And in Re Bramblevale [1970] Ch 128 at 137, Lord Denning MR said that the contempt in that case "is not proved by showing that … he told lies". See also Borrie & Lowe, The Law of Contempt, 4th edition, LexisNexis, 2010, pp 507-508; cf McGoldrick v Citicorp Finance Pty Ltd [1990] VR 503."
The same view is expressed in the current loose leaf edition of Borrie & Lowe, The Law of Contempt. It will immediately be noted that Mr Junn relies on a case that establishes that false evidence is usually not contempt in order to establish that the (allegedly) false evidence in the 6 December Affidavit is contempt.
Mr Junn also sought to rely on the fact that Ms Liao had not called the solicitors acting for her to support an inference that her 6 December Affidavit was intended to frustrate the sale process, arising under Jones v Dunkel (1959) 101 CLR 298; [1959] HCA 8. Even putting aside the fact that allegation was not raised by the pleading or the charge, the case law establishes that there is "no or little scope" for such an inference in an application of this kind, other than in unusual circumstances which are not established here: Mirus at [122], approved in NHB Enterprises at [213]. Mr Junn's response to that difficulty was, unhelpfully, that he was not aware of that case law.
Mr Rizk responds that, even if proven, the allegation of a swearing of a false affidavit cannot amount to a contempt of court, except for circumstances where the affidavit is required to be sworn pursuant to a direct court order, and that the 6 December Affidavit was not sworn in respect of any particular court order and that this charge should therefore be dismissed. Mr Rizk refers to Coward v Stapleton (1953) 90 CLR 573 at 578-579 ("Coward"); McGoldrick v Citicorp Finance Pty Ltd [1990] VR 503 ("McGoldrick"); Witham v Holloway (No 2) [1992] NSWCA 280 ("Witham No 2") and Livingspring Pty Ltd & Ors v Ng & Ors [2007] VSC 9 ("Livingspring") in support of this submission.
The first of these decisions, Coward v Stapleton above, is concerned with the different question whether a bankrupt had refused to answer questions at a compulsory examination for the purposes of s 80 of the Bankruptcy Act (Cth). However, the Court there observed in the joint judgment (at 579) that: "It cannot be too clearly recognised that the remedy for giving answers which are false is normally a prosecution for perjury or false swearing and not a summary committal for contempt. Such a committal can be justified only by a specific finding of an evinced intention to leave a question or questions unanswered or by a finding of contempt in some other defined respect."
The second decision, McGoldrick deals with the question whether a failure to provide a truthful answer as to the location of a vehicle, in response to a Court order, was a contempt of Court. Gray J there dealt with the distinction between a refusal to answer (implicitly in the context of a Court's order to provide an answer) which would support a conviction for contempt, and a merely "false answer" which would not, and observed that "a witness who answers questions cannot be convicted of contempt on account of the falsity of the answers". That decision appears to have limited relevance here, where the 6 December Affidavit responds to the failure to comply with the earlier Restraint Order, rather than providing information in compliance with the orders of the Court.
In Witham No 2, Handley JA in turn referred to Coward and held that a finding of contempt was open in respect of the "reckless swearing of a false affidavit", notwithstanding that it also involved allegations of false swearing or perjury contrary to s 29 of the Oaths Act. That observation was again made in respect of a failure to answer questions. In Livingspring above, Cavanough J again dealt with false answers given in response to questions but followed McGoldrick in preference to the decision of the New South Wales Court of Appeal in Witham No 2, both because McGoldrick had not been cited in Witham No 2 and because he was bound to do so. It seems to me that these decisions do not advance Ms Liao's position beyond those to which I have referred above.
Mr Rizk submits that, to the extent that the swearing of the 6 December Affidavit (or the 9 June Affidavit which I address below) could amount to contempt, the Plaintiffs must prove that the affidavits are false in manner alleged in the Statement of Charge and that Ms Liao knowingly swore a false affidavit. Mr Rizk also relies on Ms Liao's evidence that she is "not certain that she swore" the 6 December affidavit, notwithstanding that it is apparently sworn by her and witnessed by a solicitor by virtual means; to the extent that she swore that affidavit, "she did not understand what she was signing"; and a claim that the affidavit was not translated for her and the explanation she was given was not consistent with the content of that affidavit; and that Ms Liao did not know that the freezing order was still in place as at 6 December 2021, although she now accepts that she had previously known that it was in place. In cross-examination, Ms Liao did advance a contention of that character, and said at various points that she had executed documents, including affidavits, because her husband asked her to do so or because she understood, for example, that they were receipts. It is not necessary to address, and it is preferable that I do not address the question of Ms Liao's knowledge as to these matters, where it is not necessary to do so to determine this charge and associated issues as to Ms Liao's credit may need to be determined at the penalty stage.
Mr Junn responded to Ms Liao's contention that she did not understand what she was signing and also advanced detailed submissions as to Ms Liao's understanding of written English. It is again not necessary to address these contentions for the purposes of this hearing, where I find below that the falsity of the 6 December Affidavit would not amount to a contempt, and the claim in respect of the falsity of the 9 June Affidavit was not sufficiently pleaded to allow a finding of contempt against Ms Liao. It may well be necessary to address these matters at the penalty hearing.
It seems to me that, if the 6 December Affidavit was false (as distinct from incomplete and misleading), it represented an attempt to displace liability for the earlier breach of the Restraining Order, which Ms Liao has now accepted. By contrast with Ronowska, it did not advance any purpose of disposing of the proceeds of sale of the Queensland Property, since that had previously occurred. There can be no realistic suggestion that Ms Liao's bare denial of knowledge of the Restraining Order impacted upon the Plaintiffs' conduct of the proceedings, since they plainly were not misled by it. Mr Rizk also pointed out that the charge in respect of the 6 December Affidavit, and the pleading of material facts to support it, did not allege anything beyond the falsity of the affidavit to support the alleged contempt and, in particular, did not make any allegation of an intent to interfere with, or the fact of interference with, the administration of justice in respect of that affidavit. I am not satisfied, to the requisite standard, that the 6 December Affidavit was intended to or likely to interfere with or frustrate the processes of the Court, so as to reach a finding of contempt in respect of it. This charge is not established beyond reasonable doubt or to the requisite standard under s 140 of the Evidence Act.

Charge 9

Charge 9 concerns an allegation that Ms Liao affirmed a false affidavit, the 9 June Affidavit, where she affirmed that the Queensland Property was subject to a mortgage to Shavell Trust and the amount outstanding was approximately $429,873.
In closing submissions, Mr Junn put the claim in respect of the falsity of the 9 June Affidavit on the basis that there was no second mortgage over the Queensland Property in favour of the Shavell Trust (T101), but neither the charge, nor the pleading of material facts to support it, had identified that the claim was made on that basis. Mr Junn also submits that the Plaintiffs had issued Notices to Produce requiring production of documents concerning the second mortgage liability in respect of the Shavell Trust and that no documents had been produced, and he sought to infer that no mortgage existed on that basis. He also referred to Ms Liao's evidence, in cross-examination, as to the mortgage owed to National Australia Bank Limited in a nominal amount. It is not necessary to address this evidence further where the charge and pleaded facts did not identify the basis on which the statement as to the Shavell Trust mortgage was falsified.
Mr Rizk responds by reference to Ms Liao's evidence in respect of the 9 June affidavit, that she is "not certain" that she swore that affidavit; to the extent she swore that affidavit, she did not understand what she was signing; she relied on her husband as to the documents that she was required to sign for the purposes of the proceedings and the contents of such documents, and that affidavit was not translated for her or its contents accurately explained to her. Again, it is not necessary or appropriate to determine those matters, where they depend on Ms Liao's credit, and it is not necessary to do so to determine this application.
Having regard to the authorities to which I referred in paragraph 41 above, this charge must be dismissed where it and the pleaded material facts did not identify how this affidavit was alleged to be false to allow Ms Liao a proper opportunity to respond to the charge.

Orders and costs

For these reasons, I will make a declaration as to Ms Liao's liability in respect of the five charges of contempt as to which she has admitted liability.
Notwithstanding that this matter has continued over three days of hearing, the Plaintiffs have not established more than the admission of liability which Ms Liao had offered them in respect of the first five charges, prior to the commencement of the hearing. In these circumstances, my preliminary view is that there should be no order as to the costs of these three days of hearing. It seems to me that no order as to costs could be made in favour of the Plaintiffs, where they have not advanced their position by incurring the substantial costs of those three days of hearing for themselves, or putting Ms Liao and the community to the costs of that hearing. It is also difficult to avoid thinking that, had the Plaintiffs retained a Counsel of appropriate seniority to bring an application of this character, they would likely have been advised that they had little prospect of establishing the matters that they sought to establish, beyond the first five charges that Ms Liao admitted, and would not have themselves incurred or put Ms Liao to the costs of this hearing. I will, however, allow the parties a further opportunity to be heard as to costs, including as to the costs of this application, at the conclusion of the penalty hearing.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 05 April 2022

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