Plaintiff v Defendants

2 B8 Group commenced the proceeding by writ and statement of claim in February 2021. It alleged breaches of a development agreement dated June 2015 between B8 Group, the first defendant ("GE & L International") and the fourth defendant ("Liangyan") regarding the acquisition and development of units at a property located at 7 St Georges Road, Armadale in the State of Victoria ("the Armadale property").

3 Liangdi together with a company controlled by her, the second defendant ("LDY"), filed a notice of appearance in February 2021, a defence on 26 March 2021 and a subsequent defence to the second further amended statement of claim in January 2023.

4 At the same time, LDY and Liangdi were engaged in separate Supreme Court proceedings against GE & L and Liangyan ("the Sisters' Proceeding"). Liangdi and Liangyan are sisters.

5 Shortly before the first day of trial, the present proceeding settled and B8 Group was paid the whole of its monetary claim.

6 On 1 November 2024, I gave judgment in the Sisters' Proceeding, effectively dismissing Liangdi's claim and finding in favour of Liangyan.

7 On 20 December 2024, I gave a costs judgment in the proceeding and ordered that LDY and Liangdi pay the legal costs of B8 Group on an indemnity basis. In the course of giving those reasons I stated that:

(a) the attitude and conduct of LDY and Liangdi was the catalyst for B8 Group issuing this proceeding;

(b) LDY and Liangdi filed a defence and contested this proceeding until shortly before the trial began in the Sisters' Proceeding in February 2024;

(c) LDY and Liangdi caused lengthy delay in resolving this proceeding but provided no proper or sensible reason for the delay;

(d) Liangdi's conduct was consistent with a party pursuing litigation for an ulterior motive; and

(e) LDY and Liangdi continued this proceeding in wilful disregard of known facts or clearly established law.

8 Rule 67.02 of the Rules is in the following terms:

(1) the Court may, on application by a person entitled to enforce a judgment, order a person bound by the judgment to -

(a) attend before the Court and be orally examined on the material questions; and

(b) produce any document or thing in the possession, custody or power of the person bound relating to the material questions.

(2) Where the Court makes an order under paragraph (1), it may order that the person attend to be examined before or produce the document or thing to an Associate Judge or a Judicial Registrar.

9 Applications such as the present under r 67.02 are made without notice to the person bound by the judgment. B8 Group has not notified Liangdi of the application.

10 For present purposes, the relevant judgment is the B8 Group costs order. B8 Group is a person entitled to enforce that order and Liangdi is a person bound by the order. At present, there is no agreement as to the amount of costs to be paid. Nor have the costs been taxed. Nonetheless, an untaxed costs order creates a judgment debt upon which the Court might order an examination.[1]

11 B8 Group seeks an order that Liangdi attend and be orally examined on "material questions". The documents sought in paragraph 2 of the summons are documents which relate to those questions.

12 From my reading of the affidavit material filed, it appears that:

• LDY has issued capital of only $10 and no identifiable assets in Victoria;
• Liangdi is ordinarily a resident in China and has recently sold her only asset in Victoria, a one-bedroom unit in East Hawthorn; and
• Liangdi and LDY are subject to another adverse costs order in the Sisters' Proceeding in favour of Liangyan and GE & L International. The liability under that costs order could well be significant because the proceeding began in 2020, there were interlocutory disputes and the trial ran for 13 days.

13 In these circumstances, material questions arise about, inter alia:

(a) the assets which Liangdi has at her disposal to meet the costs order in favour of B8 Group;

(b) the location of the assets;

(c) the value of the assets; and

(d) the ease of converting the assets to cash.

14 An order made under r 67.02 is to be served personally on the person bound by the judgment. As noted earlier, Liangdi normally resides in China. B8 Group requires leave to serve her in China due to the operation of r 7.08. This provides that any document other than an originating process may be served out of Australia with the leave of the Court. The Court may grant leave with any directions which the Court thinks fit.

15 Leave is necessary because service out of Australia can be seen to infringe public international law regarding comity or immunity.[2]

16 Also relevant is the coercive nature of the process in question. Courts tend to be more concerned about compulsory orders as opposed to legal process which gives a foreign party notice of an impending legal action. In my view, the orders currently sought by B8 Group do possess a coercive quality.

17 Nonetheless, I consider it is appropriate to grant B8 Group leave to serve Liangdi in the present case. I say this for several reasons. First, Liangdi has already submitted to the Court's jurisdiction by her participation in this proceeding and her initiation of the Sisters' Proceeding.

18 Second, not only did Liangdi file an appearance and defences in this proceeding but the Court determined that she was the catalyst for the proceeding and continued that proceeding for a substantial period in wilful disregard of known facts or clearly established law.

19 Thirdly, Liangdi continues to submit to the jurisdiction of the Victorian Supreme Court. Having been unsuccessful in the Sisters' Proceeding, she has filed an application for leave to appeal against the Court's orders in that case. The appeal application remains pending.

20 Fourthly, there is no real prospect of any interference with China's sovereignty in the present case. China is a signatory to the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters 1965. Civil Procedure Victoria states that "since parties to the Convention accept service of foreign documents under the Convention their sovereignty is not infringed".[3] This reasoning was applied in Re Solar Shop Australia Pty Ltd (in liq)[4] in the context of examination summonses ordered under s 596B of the Corporations Act 2001 (Cth).

21 Finally, while the Court retains a discretion about making an order under r 67.02, it usually makes such orders as a matter of course in the absence of "special circumstances".[5]

22 Unless Liangdi authorises her solicitors to accept personal service on her behalf, B8 Group will need to serve any order made under r 67.02 in accordance with Order 80 of the Rules.

23 For the reasons set out, the Court will make the orders sought in the B8 Group's summons.

LDY PTY LTD (ACN 629 727 224) (ATF THE GE & W DISCRETIONARY TRUST)

[1] Wilkie v Wilkie (No 2) [1904] ArgusLawRp 114; [1905] VLR 104 at 106, followed in The Tubby Trout Pty Ltd v Sailbay Pty Ltd (No 2) (1996) 63 FCR 530 at 533.

[2] Silman v Shtark [2016] VSC 363 at [14].

[3] LexisNexis, Civil Procedure Victoria (online at 6 May 2025) at [I 7.08.3] ("Civil Procedure Victoria").

[4] [2014] FCA 891 at [11]-[12].

[5] Brown v Stafford [1944] 1 KB 193 at [198]. See also Civil Procedure Victoria (n 3) at [I 67.01.35].