Ren v Jiang

Judgment 1BASTEN JA: This matter involves two applications for leave to appeal from judgments of Black J in the Equity Division. The first involved a summary judgment in May 2012 as a result of which the appellants were found liable to pay to the company, Wan Ze Property Development (Australia) Pty Limited, an amount of $2.3 million, and to transfer back to the company two properties valued at approximately $1 million in total, which it was said had been transferred to them in circumstances where there had been a failure to provide full consideration. 2It appears that steps are being taken to re-transfer the properties, and their status has not loomed large in the present application. 3The matter came before the Court with a number of notices of motion seeking resolution. As a result of the discussions between the parties this morning the elements by way of security for costs, and security by payment of part of the amount ordered to be paid by the trial judge, have been agreed and have resulted in proposed consent orders which I shall shortly make. 4There remain outstanding in substance only two issues; each relates to the timing of the further proceedings in this Court. The first issue is that the amount for security is not expected to be received by the first appellant until early August 2013 at which stage certain amounts will be paid by him to effect the proposed undertakings in relation to security. That situation causes each of the individual respondents concern as to incurring further expense, particularly in preparing for a hearing during a period in which they will not know whether the security is to become available or not. 5The third respondent is the liquidator of the company. His concerns are somewhat different and they revolve largely around the continuing proceedings in the Federal Court in respect of two bankruptcy notices which have been issued against each of the appellants, Mr Ren and Ms Xu. There have been applications to set aside the notices which applications are listed before Robertson J in the Federal Court in early August. The appellants are anxious that the hearings in this Court should proceed to finality as soon as possible after August, which will allow time for the provision of the relevant security, but will pre-empt any further steps being taken in the bankruptcy proceedings in the Federal Court. 6As the liquidator's counsel has noted, if the bankruptcy notices are upheld it does not necessarily follow that there will be a creditors' petition, or petitions, filed immediately. Nevertheless there are debtors, including the present respondents, who have an interest in pursuing funds, and there are no undertakings given not to take those steps immediately, although it is not to be expected that the liquidator would file a creditor's petition immediately if the proceedings in this Court were likely to be resolved within a short time. 7That brings me to the second matter. The first of the applications for leave to appeal in relation to the first judgment of Black J is, I am told, well underway in terms of preparation for hearing, although I do not have before me the relevant papers. 8The second matter which is sought to be agitated relates to orders made by Black J in March 2013, which involved the rejection of an application brought by the present appellants under s 471B of the Corporations Act 2001 (Cth). They sought to commence fresh proceedings to challenge the first hearing before Black J and his judgment, on the basis of what may compendiously be described as fraud. Black J was not satisfied that there was a serious question to be tried; the s 471B application was rejected and leave to proceed was refused. 9A notice of intention to appeal has been filed with respect to that judgment, handed down on 13 March 2013. As yet there is no application for leave to appeal, although it should have been filed by 13 June. I am told the summons is likely to be forthcoming very shortly. 10Assuming that a brief extension of time will be required, I am prepared to assume for the moment that such leave would be forthcoming, or at least would not result in an immediate application to dispose of the proceedings otherwise than by reference to their merit. It does mean however that at the moment there is no material before this Court which would allow the Court to determine whether that matter should be dealt with first by way of leave only, or by way of a further hearing under s 471B of the Corporations Act granting leave to proceed, or by way of a concurrent hearing of both leave applications and the appeal. 11Although there is always a certain attraction to a concurrent hearing, where that course would avoid the merits of the matter being addressed twice, or even three times, whether that should occur in this case would involve other factors, with which it is not possible to deal today. 12Mr Ellicott, appearing for the applicants in the summons for leave to appeal and the proposed further summons for leave to appeal, invites the Court to grant a sufficient degree of expedition to enable both matters to be heard no later than the end of October 2013. In so doing he assumes, I think, that the Court would be likely to ensure that all the matters that were ready for hearing were heard together. Because it is not possible to know whether there should be a separate leave application, or indeed a s 471B application in relation to either or both of the matters, the Court is not in a position to make any direction in that regard today. On the other hand it is obviously desirable that the further prosecution of these matters be dealt with in a co-ordinated manner so that the separate proceedings do not get too far apart, but that too is not capable of resolution until the Court has before it the foreshadowed summons for leave to appeal from the second judgment of Black J. 13In the circumstances I think it is inevitable that Mr Smallbone's submissions on behalf of the respondents will, in a practical sense, prevail: that is, there will be no hearing until at least two months after the August dates for the commitment of securities pursuant to the undertakings that have been provided in the consent orders. 14I therefore propose to make the consent orders, noting that the matter will be back before the Court in late August, but noting also that once the summons for leave to appeal in the second matter is filed it will obtain a date for directions which is likely to be no earlier than the proposed directions date in late August. 15What I would invite the appellants to do in due course is, when filing their further summons and white folder, to direct the Registrar's attention to the need to ensure that the matters remain together, and that the directions hearing, if possible, on the first return date of the summons be the next return date in respect of the summons presently before the Court in matter CA 2012/240805. A judge will need to consider how to deal with any further s 471B applications. 16Accordingly by consent I make the following orders:

1. Order that the Notice of Motion filed by the first and second respondents on 26 April 2013, and the motion filed by the appellants on 24 April 2013, be stood over until 26 August 2013.
2. Order that on or before 19 August 2013, the first and second appellants pay into court the sum of $16,000 by way of security of the costs of the respondents in respect of the first and second respondents' costs to oppose the appellants' notice of motion for s 471B leave.
3. Note the agreement of the first and second appellants, and the first and second respondents, without admission, that: (1) Upon condition that the first appellant receives the sum of $500,000 from Mr Guo Wen Qi by 5 August 2013 he will, (a) notify the respondents of the receipt of funds from Mr Guo pursuant to the undertaking he has given to the Federal Court; (b) pay into this Court the sum of $450,000 within 14 days after it is received by the first appellant from Mr Guo to be held in that account pending the outcome of all appeals and proceedings initiated by the appellants flowing from the decision of Black J of 29 June 2012, and the orders made by him on 19 July 2012 and orders of 13 March 2013, and 19 April 2013, and (c) pay into the Court the sum of $50,000 to be deposited into an interest bearing account within 14 days after it is received by the first appellant from his agreement with Mr Guo for payment of $500,000 by the end of July 2013, by way of security for costs of the first and second respondents in respect of all appeals and proceedings initiated by the appellants flowing from the aforesaid decision of and orders of Black J. (2) In the event that the first appellant does not receive the sum of $500,000 from Mr Guo by 5 August 2013 and the agreement and actions noted in note (1) above are not subsequently complied with, the first and second respondents' motion dated 26 April 2013, and the appellants' notice of motion to set aside the notice to produce issued by the first and second respondents dated 28 March 2013, are to be relisted on 26 August 2013. (3) In the event that the first appellant receives the sum of $500,000 from Mr Guo by 5 August 2013 and the agreement and actions noted in note (1) above are subsequently complied with: (a) the first and second respondents' motion dated 26 April 2013 be dismissed; (b) the notice to produce issued by the first and second respondents to the appellants dated 28 March 2013 be set aside in whole, and (c) the appellants to pay the first and second respondents' costs of their motion as agreed or assessed.
4. Direct that the appellants, if and when they file a summons seeking leave to appeal Black J's orders made this year, advise the Registrar of the need to list that summons for first return on 26 August 2013.
5. Vacate the listing of the matter for directions before the Registrar on 19 June 2013.

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